EXHIBIT 10.3
WHEN RECORDED, RETURN TO:
Michael E. Woolf
O'Connor, Cavanagh, et al.
One E. Camelback Road
Suite 1100
Phoenix, Arizona 85012-1656
CONDOMINIUM DECLARATION
FOR
SEDONA GOLF RESORT & CONFERENCE CENTER, A CONDOMINIUM
CONDOMINIUM DECLARATION
FOR
SEDONA GOLF RESORT & CONFERENCE CENTER, A CONDOMINIUM
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS................................................................. 1
1.1 General Definitions................................................... 1
1.2 Defined Terms......................................................... 1
1.2.1 "Articles".................................................. 1
1.2.2 "Assessments"............................................... 1
1.2.3 "Assessment Lien"........................................... 1
1.2.4 "Association"............................................... 1
1.2.5 "Board of Directors"........................................ 1
1.2.6 "Buildings"................................................. 1
1.2.7 "Bylaws".................................................... 1
1.2.8 "Common Elements"........................................... 2
1.2.9 "Common Expenses"........................................... 2
1.2.10 "Common Expense Assessment"................................. 2
1.2.11 "Common Expense Liability".................................. 2
1.2.12 "Condominium"............................................... 2
1.2.13 "Condominium Act"........................................... 2
1.2.14 "Condominium Documents"..................................... 2
1.2.15 "Declarant"................................................. 2
1.2.16 "Declaration"............................................... 2
1.2.17 "Development Rights"........................................ 3
1.2.18 "Eligible Insurer or Guarantor"............................. 3
1.2.19 "Eligible Mortgage Holder".................................. 3
1.2.20 "Exchange Program".......................................... 3
1.2.21 "Exchange Program User"..................................... 4
1.2.22 "First Mortgage"............................................ 4
1.2.23 "First Mortgagee"........................................... 4
1.2.24 "Guests".................................................... 4
1.2.25 "Hotel Operating and Rental Pool Agreement"................. 4
1.2.26 "Hotel Facilities".......................................... 4
1.2.27 "Hotel Furnishings"......................................... 4
1.2.28 "Hotel Operator"............................................ 4
i
1.2.29 "Improvement".............................................. 4
1.2.30 "Limited Common Elements".................................. 5
1.2.31 "Member"................................................... 5
1.2.32 "Percentage Interest"...................................... 5
1.2.33 "Period of Declarant Control".............................. 5
1.2.34 "Person"................................................... 5
1.2.35 "Plat"..................................................... 5
1.2.36 "Public"................................................... 5
1.2.37 "Public Rental Residential Use"............................ 5
1.2.38 "Purchaser"................................................ 5
1.2.39 "Reciprocal Easement"...................................... 5
1.2.40 "Rules".................................................... 6
1.2.41 "Special Declarant Rights" ................................ 6
1.2.42 "Unit"..................................................... 6
1.2.43 "Unit Furnishings"......................................... 6
1.2.44 "Unit Owner"............................................... 6
1.2.45 "Year"..................................................... 7
1.2.46 "Zoning Ordinance"......................................... 7
ARTICLE 2
SUBMISSION OF PROPERTY; UNIT BOUNDARIES; ALLOCATION OF
PERCENTAGE INTERESTS, VOTES AND COMMON EXPENSE LIABILITIES.................... 7
2.1 Submission of Property.................................................. 7
2.2 Name of Condominium..................................................... 7
2.3 Name of Association..................................................... 7
2.4 Identifying Numbers of Units............................................ 7
2.5 Unit Boundaries......................................................... 7
2.6 Allocation of Common Element Interest and Common Expense Liabilities.... 8
2.7 Allocation of Votes in the Association.................................. 8
2.8 Allocation of Limited Common Elements................................... 9
ii
ARTICLE 3
EASEMENTS.................................................................... 10
3.1 Utility Easement....................................................... 10
3.2 Easements for Ingress and Egress....................................... 10
3.3 Unit Owners' Easements of Enjoyment.................................... 10
3.4 Declarant's Use for Sales Purposes..................................... 11
3.5 Declarant's Rights and Easements....................................... 12
3.6 Easement for Support................................................... 13
3.7 Common Elements Easement in Favor of the Association and
Hotel Operator..................................................... 13
3.8 Common Elements Easement in Favor of Unit Owners....................... 13
3.9 Units and Limited Common Elements Easement in Favor of
Association and Hotel Operator..................................... 14
3.10 Easement for Unintended Encroachments.................................. 14
ARTICLE 4
USE AND OCCUPANCY RESTRICTIONS............................................... 15
4.1 Public Rental Residential Use.......................................... 15
4.2 Hotel Operating and Rental Pool Agreement.............................. 15
4.3 Access to Hotel Operator............................................... 15
4.4 Hotel Facilities....................................................... 15
4.5 Compliance with Laws................................................... 16
4.6 No Acts in Contravention of Hotel Operating and Rental
Pool Agreement..................................................... 16
iii
4.7 Limitation on Right to Lease or Use Unit............................... 16
4.8 Residential Use by Unit Owners......................................... 16
4.9 Antennas............................................................... 17
4.10 Utility Service........................................................ 17
4.11 Improvements and Alterations........................................... 17
4.12 Trash Containers and Collection........................................ 18
4.13 Machinery and Equipment................................................ 18
4.14 Animals................................................................ 18
4.15 Clothes Drying Facilities.............................................. 18
4.16 Mineral Exploration.................................................... 18
4.17 Diseases and Insects................................................... 18
4.18 Trucks, Trailers, Campers and Boats.................................... 18
4.19 Motor Vehicles......................................................... 19
4.20 Towing of Vehicles..................................................... 19
4.21 Signs.................................................................. 19
4.22 Lawful Use............................................................. 19
4.23 Nuisances and Offensive Activity....................................... 19
4.24 Window Coverings....................................................... 19
4.25 Limitation on Leasing of Units......................................... 20
4.26 Furnishings............................................................ 20
iv
ARTICLE 5
MAINTENANCE AND REPAIR OF COMMON ELEMENTS AND UNITS......................... 20
5.1 Repair of Common Elements............................................. 20
5.2 Repair of Units....................................................... 20
5.3 Repair or Restoration Necessitated by Owner........................... 20
5.4 Repair and Recovery Rights of Association............................. 21
ARTICLE 6
THE ASSOCIATION; RIGHTS AND DUTIES; MEMBERSHIP.............................. 21
6.1 Rights, Powers and Duties of the Association.......................... 21
6.2 Directors and Officers................................................ 24
6.3 Rules................................................................. 24
6.4 Composition of Members................................................ 24
6.5 Personal Liability.................................................... 24
6.6 Implied Rights........................................................ 25
6.7 Voting Rights......................................................... 25
6.8 Voting Procedures..................................................... 25
6.9 Transfer of Membership................................................ 25
6.10 Suspension of Voting Rights........................................... 25
6.11 Conveyance or Encumbrance of Common Elements.......................... 26
v
ARTICLE 7
ASSESSMENTS................................................................. 26
7.1 Preparation of Budget................................................. 26
7.2 Common Expense Assessment............................................. 27
7.3 Special Assessments................................................... 28
7.4 Effect of Nonpayment of Assessments; Remedies of the Association...... 28
7.5 Subordination of Assessment Lien to Mortgages......................... 28
7.6 Exemption of Unit Owner............................................... 29
7.7 Certificate of Payment................................................ 29
7.8 No Offsets............................................................ 29
7.9 Reserve Fund.......................................................... 29
7.10 Surplus Funds......................................................... 30
7.11 Monetary Penalties.................................................... 30
7.12 Transfer Fee.......................................................... 30
7.13 Additional Reserves................................................... 30
7.14 Hotel Operating Revenues.............................................. 30
7.15 Unit Taxes............................................................ 30
7.16 Utilities............................................................. 31
ARTICLE 8
INSURANCE.................................................................... 31
8.1 Scope of Coverage...................................................... 31
vi
8.2 Fidelity Bonds.......................................................... 33
8.3 Payment of Premiums..................................................... 33
8.4 Insurance Obtained by Unit Owners....................................... 33
8.5 Payment of Insurance Proceeds........................................... 34
8.6 Certificate of Insurance................................................ 34
8.7 Delegation of Insurance Responsibility.................................. 34
ARTICLE 9
RIGHTS OF FIRST MORTGAGEES................................................... 34
9.1 Notification to First Mortgagees........................................ 34
9.2 Approval Required for Amendment to Declaration, Articles or Bylaws...... 35
9.3 Right of Inspection of Records.......................................... 36
9.4 Prior Written Approval of First Mortgagees.............................. 36
9.5 Condemnation or Insurance Proceeds...................................... 37
9.6 Limitation on Partition and Subdivision................................. 37
9.7 Conflicting Provisions.................................................. 37
ARTICLE 10
RESERVATION OF DEVELOPMENTAL AND
SPECIAL DECLARANT'S RIGHTS................................................... 38
10.1 Developmental Rights.................................................... 38
10.2 Right to Complete Improvements and Construction Easement................ 38
10.3 Offices, Model Units and Promotional Signs.............................. 38
vii
10.4 Appointment and Removal of Directors and Officers....................... 38
ARTICLE 11
GENERAL PROVISIONS......................................................... 38
11.1 Enforcement.......................................................... 38
11.2 Severability......................................................... 39
11.3 Duration............................................................. 39
11.4 Termination of Condominium........................................... 39
11.5 Amendment............................................................ 39
11.6 Remedies Cumulative.................................................. 40
11.7 Notices.............................................................. 40
11.8 Binding Effect....................................................... 40
11.9 Gender............................................................... 41
11.10 Topic Headings....................................................... 41
11.11 Survival of Liability................................................ 41
11.12 Construction......................................................... 41
11.13 Joint and Several Liability.......................................... 41
11.14 Guests and Tenants................................................... 41
11.15 Attorneys' Fees...................................................... 41
11.16 Number of Days....................................................... 41
11.17 Declarant's Right to Use Similar Name................................ 42
11.18 Notice of Violation.................................................. 42
viii
11.19 No Absolute Liability................................................ 42
Exhibits
Exhibit A Legal Description
Exhibit B Percentage Interest
Exhibit C Advance Booking/Use Rights
ix
CONDOMINIUM DECLARATION
FOR
SEDONA GOLF RESORT & CONFERENCE CENTER, A CONDOMINIUM
This Condominium Declaration for Sedona Golf Resort & Conference Center, a
condominium, is made this ____ day of _________________, 1997, by UP SEDONA,
INC., an Arizona corporation.
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. ss.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 Condominium 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 Sedona Golf Resort & Conference Center
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 "BUILDINGS" 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 Tract A on the Plat and all other
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,
including, without limitation, (i) the cost of cleaning, maintenance,
management, operation, repair and replacement of the Common Elements and all
Improvements thereon; (ii) the cost of centrally metered utilities and trash
removal which serve the Units and/or the Common Elements; (iii) the cost of
insurance premiums for fire, liability, workers' compensation, errors and
omissions and directors, officers and agents liability, and the costs of bonding
the members of the Board of Directors, (iv) the cost of compensation, wages,
materials, services, supplies and other expenses required for the
administration, operation, maintenance and repair of the Condominium, including
landscape renovation and maintenance; (v) the costs of rendering to the Unit
Owners all services required to be rendered by the Association under the
Condominium Documents; (vi) such other funds as may be necessary to provide
general operating reserves and reserves for contingencies and replacements
deemed appropriate by the Board of Directors; (vii) maintenance, repair and
other reimbursement obligations under the Reciprocal Easement attributable to
the Condominium; and (viii) the cost of any other item or items incurred by the
Association, for any reason whatsoever in connection with the Condominium, for
the common benefit of the Unit Owners.
1.2.10 "COMMON EXPENSE ASSESSMENT" means the assessment levied against
the Units pursuant to SECTION 7.2 of this Declaration.
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 real property located in Yavapai
County, Arizona, which is described in EXHIBIT A attached to this Declaration,
together with all Buildings and other Improvements located thereon.
1.2.13 "CONDOMINIUM ACT" means the Arizona Condominium Act, A.R.S.
ss.33-1201, et seq., as amended from time to time.
1.2.14 "CONDOMINIUM DOCUMENTS" means this Declaration and the
Articles, Bylaws and Rules.
1.2.15 "DECLARANT" means UP Sedona, Inc., an Arizona corporation, and
its successors and any person or entity to whom it may transfer any Special
Declarant Rights.
1.2.16 "DECLARATION" means this Condominium Declaration, as amended
from time to time.
2
1.2.17 "DEVELOPMENT RIGHTS" means any right or combination of rights
reserved by or granted to the Declarant in this Declaration to do any of the
following:
(i) Add real estate to the Condominium;
(ii) Create easements, Units, Common Elements or Limited Common
Elements within the Condominium, including without limitation the right to
enclose the patio allocated to any Unit as a Limited Common Element;
(iii) Subdivide Units, convert Units into Common Elements or
convert Common Elements into Units;
(iv) Withdraw real estate from the Condominium;
(v) Make the Condominium part of a larger condominium or
planned community;
(vi) 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 provided the amendment
does not adversely affect the rights of any Unit Owner;
(vii) Amend the Declaration during the Period of Declarant
Control to comply with (a) 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, including, without limitation, the Federal National
Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation
("FHLMC"), the Federal Housing Administration ("FHA") or the Veterans
Administration ("VA"), or (d) the rules or requirements of any federal, state or
local governmental entity or agency whose approval of the Condominium, the Plat
or the Condominium Documents is required by law or requested by Declarant.
1.2.18 "ELIGIBLE INSURER OR GUARANTOR" means an insurer or
governmental guarantor of a First Mortgage who has requested notice of certain
matters in accordance with SECTION 9.1 of this Declaration.
1.2.19 "ELIGIBLE MORTGAGE HOLDER" means a First Mortgagee who has
requested notice of certain matters from the Association in accordance with
SECTION 9.1 of this Declaration.
1.2.20 "EXCHANGE PROGRAM" means any program developed by Declarant or
an affiliate of Declarant, whether now or in the future, which entitles an Owner
to exchange its right to use and occupy its Unit under the six months advance
use rights more fully set forth on EXHIBIT "C" for the right to occupy a unit in
another resort or project owned, developed or operated by Declarant or an
3
affiliate of Declarant; however, nothing herein shall be deemed to obligate
Declarant or any of its affiliates to initiate or continue the operation of any
such Exchange Program, if one is ever initiated, and nothing herein shall
obligate any Unit Owner to participate in any such Exchange Program.
1.2.21 "EXCHANGE PROGRAM USER" means a participant in the Exchange
Program who has a reservation to use an Owner's Unit, which has been confirmed
by the Hotel Operator at least six months prior to the proposed exchange use of
the Unit.
1.2.22 "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.
1.2.23 "FIRST MORTGAGEE" means the holder of any First Mortgage.
1.2.24 "GUESTS" means those Persons who use and occupy the Units from
time to time and their permitted additional occupants, invitees and guests,
excluding Unit Owners using their Units in accordance with EXHIBIT "C".
1.2.25 "HOTEL OPERATING AND RENTAL POOL AGREEMENT" means an agreement
entered into by and between the Unit Owners and a Hotel Operator for the purpose
of operating the Condominium for Public Rental Residential Use.
1.2.26 "HOTEL FACILITIES" means that portion of the Common Elements
consisting of the front desk, restaurant, conference rooms, fitness rooms, linen
closets not included within Units, janitor closets, laundry rooms, offices,
lobby areas, mechanical rooms, parking areas, recreation areas and other areas
of the Common Elements which are required or reasonably convenient for the use
and operation of a hotel facility.
1.2.27 "HOTEL FURNISHINGS" means those furnishings, including
furniture, art work, shutters, blinds, curtains, appliances, decorations,
fixtures and other personal property installed or located within the
Condominium, but excluding the Unit Furnishings and further excluding any
fixtures or personal property owned or leased by the Hotel Operator.
1.2.28 "HOTEL OPERATOR" means a hotel manager engaged by or on behalf
of the Unit Owners pursuant to a Hotel Operating and Rental Pool Agreement to
operate and manage the condominium-hotel business for the Condominium, as such
Hotel Operator may change from time to time.
1.2.29 "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,
walkways, tennis courts, basketball hoops and poles, pools, spas, paving,
fences, walls, hedges, plants, trees, shrubs and landscaping of every type and
kind.
4
1.2.30 "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.
1.2.31 "MEMBER" means any Person who is or becomes a member of the
Association.
1.2.32 "PERCENTAGE INTEREST" means for each Unit that percentage
applicable to the Unit as more fully set forth on EXHIBIT "B" attached hereto.
1.2.33 "PERIOD OF DECLARANT CONTROL" means the time period commencing
on the date this Declaration is recorded with the County Recorder of Yavapai
County, Arizona, 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; (ii) four (4) years after all Declarants
have ceased to offer Units for sale in the ordinary course of business; or (iii)
the date Declarant records an instrument with the County Recorder of Yavapai
County relinquishing its right to appoint and remove officers and members of the
Board of Directors of the Association.
1.2.34 "PERSON" means a natural person, corporation, business trust,
estate, trust, partnership, limited liability company, association, joint
venture, government, governmental subdivision or agency, or other legal or
commercial entity.
1.2.35 "PLAT" means the Condominium Plat for Sedona Hotel Resort, a
condominium, which plat has been recorded in Book _____ of Maps, page _____,
records of Yavapai County, Arizona, and any amendments, supplements or
corrections thereto.
1.2.36 "PUBLIC" means all Persons other than a Unit Owner and family
members of such Unit Owner.
1.2.37 "PUBLIC RENTAL RESIDENTIAL USE" means use of a Unit for
commercial rental to the Public for tourist, visitor and transient traveller
accommodation.
1.2.38 "PURCHASER" means any Person, other than the Declarant, who by
means of a voluntary transfer becomes a Unit Owner, except for (i) 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 (ii) a Person who, in addition to
purchasing a Unit, is assigned any Special Declarant Right.
1.2.39 "RECIPROCAL EASEMENT" means that Reciprocal Easement Agreement
with Covenants and Restrictions Affecting Land recorded in Book 3332, page 279,
records of Yavapai County, Arizona, which establishes reciprocal rights and
obligations between the Condominium and the health club facility located
adjacent to the Condominium.
5
1.2.40 "RULES" means the rules and regulations adopted by the
Association, as amended from time to time.
1.2.41 "SPECIAL DECLARANT RIGHTS" means any right or combination of
rights reserved by or granted to the Declarant in this Declaration or by the
Condominium Act to do any of the following:
(i) Construct Improvements provided for in this Declaration or
shown on the Plat;
(ii) Exercise any Development Right;
(iii) Maintain sales offices, management offices, models, and
signs advertising the Condominium;
(iv) Use easements through the Common Elements for the purpose
of making Improvements within the Condominium; and
(v) Appoint or remove any officer of the Association or any
member of the Board of Directors during the Period of Declarant Control.
1.2.42 "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.
1.2.43 "UNIT FURNISHINGS" means those furnishings, including,
furniture, art work, shutters, blinds, curtains, appliances, decorations,
fixtures and other personal property initially installed by Declarant in each
Unit and all replacements, substitutions, supplements and additions thereto.
1.2.44 "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 Guest or lessee, tenant,
or licensee 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. ss. 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. ss. 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.
6
1.2.45 "YEAR" means a calendar year.
1.2.46 "ZONING ORDINANCE" means the Yavapai County Zoning Code
applicable to the Condominium and the applicable zoning and development
stipulations of Yavapai County, which limit the use of the Condominium for
Public Rental Residential Use.
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 real property
described on EXHIBIT "A" attached to this Declaration, together with all
Improvements situated thereon and all easements, rights and appurtenances
thereto, 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
declares that the real property described on EXHIBIT "A" attached to this
Declaration, together with all Improvements situated thereon, and all easements,
rights and appurtenances thereto, shall be held and conveyed subject to the
terms, covenants, conditions and restrictions set forth in this Declaration.
2.2 NAME OF CONDOMINIUM. The name of the Condominium created by this
Declaration is Sedona Golf Resort & Conference Center, a condominium.
2.3 NAME OF ASSOCIATION. The name of the Association is Sedona Golf Resort
& Conference Center Condominium Association.
2.4 IDENTIFYING NUMBERS OF UNITS. The identifying numbers of the Units are
as set forth on EXHIBIT "B" attached hereto.
2.5 UNIT BOUNDARIES.
2.5.1 The boundaries of each Unit are the interior unfinished surfaces
of the perimeter walls, floors, 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, floors and ceilings are part of the Unit, and
all other portions of the walls, floors and ceilings are part of the Common
Elements.
2.5.2 Any chute, flue, duct, wire, conduit, bearing wall, bearing
column or other fixture, whether located within or outside of the boundaries of
a Unit, which serve only that Unit, is a Limited Common Element allocated solely
to that Unit, and any portion serving more than one Unit or any portion of the
Common Elements is a part of the Common Elements.
7
2.5.3 Subject to the provisions of SUBSECTION 2.5.2 of this
Declaration, all spaces, interior partitions and other fixtures and Improvements
within the boundaries of a Unit are part of the Unit; provided, however, any
entryway, vestibule or foyer shown on the Plat which serves as an entrance to
more than one Unit shall not be considered part of any Unit so served but shall
instead be considered a Limited Common Element allocated to the Units so served.
2.5.4 Any shutters, awnings, window boxes, doorsteps, stoops, porches,
balconies, entryways or patios, and all exterior doors (including doors from any
entryway, vestibule or foyer) and windows or other fixtures designed to serve a
single Unit, but located outside the Unit's boundaries, are Limited Common
Elements allocated exclusively to that Unit.
2.5.5 In the event of any inconsistency or conflict between the
provisions of this ARTICLE 2 and the Plat, this ARTICLE 2 shall control.
2.5.6 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.
2.5.7 Subject to and in accordance with A.R.S. ss. 33-1222, 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.
2.6 ALLOCATION OF COMMON ELEMENT INTEREST AND COMMON EXPENSE LIABILITIES.
The allocation of undivided interests in the Common Elements and in the Common
Expenses of the Association is based upon the ratio of Declarant's initial
determination of value attributable to the initial sales offering price of each
of the Units to Declarant's initial determination of the aggregate value of all
of the Units (such aggregate value being $43,827,100). Nothing herein shall
obligate Declarant to sell any Unit for Declarant's initial determination of
value for such Unit and Units may be sold for more or less than Declarant's
initial determination of value for such units without any adjustment to the
allocation of undivided interests in the Common Elements and the Common
Expenses. The percentage interest for each Unit in the Common Elements and the
Common Expenses of the Association is set forth on EXHIBIT "B" hereto.
2.7 ALLOCATION OF VOTES IN THE ASSOCIATION. The total votes in the
Association shall be equal to the number of Units in the Condominium. The votes
in the Association shall be allocated equally among all the Units, with each
Unit having one (1) vote.
8
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 or more Units as follows:
(i) Each first floor Unit is allocated the patio adjoining the
Unit, if any, as shown on the Plat;
(ii) Each second and third floor Unit is allocated the balcony
adjoining the Unit, if any, as shown on the Plat;
(iii) Each Unit to which access is provided via an entryway,
vestibule or foyer which serves another Unit, is allocated use of such area, as
shown on the Plat, and use is exclusively limited to those Units so served.
(iv) Any chute, flue, pipe, duct, wire, conduit, bearing wall,
bearing column or other fixtures, whether located within or outside of the
boundaries of a Unit, which serve only one Unit is a Limited Common Element
allocated solely to the Unit served;
(v) If a chute, flue, pipe, duct, wire, conduit, bearing wall,
bearing column or other fixtures lies partially within and partially outside the
designated boundaries of a Unit, the portion serving only the Unit is a Limited
Common Element allocated solely to the Unit, the use of which is limited to that
Unit and any portion serving more than one Unit or a portion of the Common
Elements is a part of the Common Elements;
(vi) 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 and their use is limited to that
Unit; and
(vi) Any gas, electric or water meter which serves only one Unit
is allocated to the Unit it serves.
2.8.2 A Limited Common Element may be reallocated by an amendment to
this Declaration made in accordance with the provisions of A.R.S. ss. 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.
9
ARTICLE 3
EASEMENTS
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 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 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 created an easement for ingress and egress for
pedestrian and vehicular traffic over, through and across such 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 Hotel Operator,
the Unit Owners, Guests and their families and permitted tenants and invitees.
3.3 UNIT OWNERS' EASEMENTS OF ENJOYMENT.
3.3.1 Every Unit Owner 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:
(i) The right of the Association to adopt reasonable rules and
regulations governing the use of the Common Elements;
(ii) 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;
(iii) All rights, easements and restrictions set forth in this
Declaration including, but not limited to, the provisions of SECTION 3.3.2 and
the rights and easements granted to the Declarant by SECTIONS 3.4 AND 3.5 of
this Declaration;
(iv) The right of the Association to suspend the right of a Unit
Owner and any occupant of such Unit Owner's Unit (other than a Guest) to use the
Common Elements for any period during which the Unit Owner is in violation of
any provision of the Condominium Documents;
10
(v) The right of the Hotel Operator to make use of the Common
Elements (including exclusive use of the Hotel Facilities) in accordance with
the terms of the Hotel Operating and Rental Pool Agreement; and
(vi) The right of each Owner to make use of the Common Elements
shall be limited to those times when the Owner has the right to occupy its Unit,
and then in accordance with the terms of the Hotel Operating and Rental Pool
Agreement.
3.3.2 If a Unit is leased, rented or otherwise made available for
hotel use, the Guest and the family members residing with such Guest and any
permitted invitees and guests shall have the right to use the Common Elements
during the occupancy term, subject to any limitation established pursuant to
SECTION 3.3.3. Unless a Unit Owner is occupying a Unit as a Guest or is
exercising its rights to occupy its own Unit pursuant to the rights of occupancy
set forth in any Hotel Operating and Rental Pool Agreement then in effect, no
Unit Owner shall have the right to occupy or utilize its own Unit or the Common
Elements, it being understood that such use rights have been delegated and
assigned for the use of the Hotel Operator and Guests pursuant to the Hotel
Operating and Rental Pool Agreement.
3.3.3 The Board of Directors shall have the right to limit the number
of guests and invitees of Unit Owners and Guests who may use the Common Elements
at any one time and may restrict the use of the Common Elements by Unit Owners,
Guests and their respective guests and invitees to certain specified times. The
Board of Directors may delegate this right to restrict use of the Common
Elements to any Hotel Operator.
3.3.4 Subject to the assignment set forth in any Hotel Operating and
Rental Pool Agreement for the benefit of Guests, a Unit Owner's right and
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 instrument of conveyance, transfer,
alienation or encumbrance may not refer to such right and easement.
3.3.5 Notwithstanding anything to the contrary in this SECTION 3.3,
the right to the use of the Limited Common Elements that are allocated to one or
more but less than all of the Units shall be limited to those Persons who have
the right to use the Unit to which the Limit Common Elements are appurtenant.
3.4 DECLARANT'S USE FOR SALES PURPOSES.
3.4.1 Declarant shall have the right and an easement to maintain sales
offices, management offices and models throughout the Condominium and to
maintain one or more advertising signs on the Common Elements while the
Declarant is selling Units in the Condominium. Declarant reserves the right to
11
place models, management offices and sales offices in any Units owned 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 offices to different locations within the Condominium. Upon
the relocation of a model, management office or sales office from any area
constituting a Common Element, Declarant may remove all personal property and
fixtures therefrom.
3.4.3 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 in writing by Declarant as being
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.
3.5 DECLARANT'S 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.
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 correcting drainage of surface, roof or storm water, for so long
as Declarant has any legal obligation to correct drainage. The easement created
by this SUBSECTION 3.5.2 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 within and through the
Units for any access necessary to complete any construction, 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.
12
3.6 EASEMENT FOR SUPPORT. To the extent necessary, each Unit shall have an
easement for structural support over every other Unit in the Buildings, 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 Buildings, the Common Elements and the Limited Common
Elements.
3.7 COMMON ELEMENTS EASEMENT IN FAVOR OF THE ASSOCIATION AND HOTEL
OPERATOR. The Common Elements shall be subject to an easement in favor of the
Association and the Hotel Operator and their respective agents, employees and
independent contractors for the purpose of inspection, upkeep, maintenance,
repair and replacement of the Common Elements and for the purpose of operating
the Condominium as a hotel and exercising all rights of the Association and the
Hotel Operator and discharging all obligations of the Association and the Hotel
Operator as set forth in this Declaration or in the Hotel Operating and Rental
Pool Agreement.
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 equipment and systems,
electrical, telephone and other communication wiring and cables, plumbing lines
and fixtures, fire sprinkler lines and systems, structural systems, 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 Buildings or impair or structurally weaken the Buildings.
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 Buildings or impair or structurally
weaken the Buildings.
13
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.
3.9 UNITS AND LIMITED COMMON ELEMENTS EASEMENT IN FAVOR OF ASSOCIATION AND
HOTEL OPERATOR. The Units and the Limited Common Elements are hereby made
subject to the following easements in favor of the Association and the Hotel
Operator and their respective agents, employees and independent contractors:
3.9.1 For inspection of the Units and Limited Common Elements in order
to verify the performance of all required items of maintenance, repair and
replacement required by the terms of this Declaration or the Hotel Operating and
Rental Pool Agreement;
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 and for the purpose of enabling the Hotel Operator to
exercise and discharge its respective rights, powers and duties under any Hotel
Operating and Rental Pool Agreement.
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.
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.
14
ARTICLE 4
USE AND OCCUPANCY RESTRICTIONS
4.1 PUBLIC RENTAL RESIDENTIAL USE. All Units shall be used, improved and
devoted exclusively to Public Rental Residential Use in accordance with the
Zoning Ordinance, subject only to the Unit Owner's limited right to occupy the
Unit as described in SECTION 4.8 below. No use of any Unit shall be permitted
which violates the Zoning Ordinance.
4.2 HOTEL OPERATING AND RENTAL POOL AGREEMENT. Each Unit Owner acknowledges
and agrees that the development in which the Units are located is a
condominium-hotel project and that rights of the Unit Owner to use the Units and
the Common Elements are subject to the terms of the Hotel Operating and Rental
Pool Agreement, and that the Condominium shall be operated by the Hotel Operator
for the benefit of the Unit Owner pursuant to the terms of such Hotel Operating
and Rental Pool Agreement. Each Unit Owner shall subject its Unit to the effect
of the Hotel Operating and Rental Pool Agreement and no Unit Owner shall have
the right to use or permit its Unit to be used in any manner contrary to the
terms of the Hotel Operating and Rental Pool Agreement and this Declaration. If
at any time a Hotel Operating Rental Pool Agreement terminates or otherwise
expires without a new Hotel Operating and Rental Pool Agreement being in place
and effective, the Board of Directors shall arrange for the Condominium to be
operated as a condominium-hotel project with a rental pool for the benefit of
all Owners (the terms of such rental pool to be substantially similar to the
terms of the rental pool in effect immediately prior to termination or
expiration of the Hotel Operating and Rental Pool Agreement), and the Board of
Directors shall have the right to hire such managers and other personnel as may
be necessary and appropriate until a new Hotel Operator is engaged pursuant to a
new Hotel Operating and Rental Pool Agreement.
4.3 ACCESS TO HOTEL OPERATOR. The Hotel Operator, its employees, agents,
contractors and permittees shall at all times have access to and use of all
portions of the Condominium as are reasonably required for the operation of the
condominium-hotel from time to time, as determined by the Hotel Operator, acting
reasonably, including, without limitation, all Hotel Facilities. During the term
of any Hotel Operating and Rental Pool Agreement, the Hotel Operator shall have
the exclusive right to (i) make use of the Hotel Facilities; and (ii) make Units
available to Guests (who may also have access to the right to use those portions
of the Common Elements authorized by Hotel Operator) and no Unit Owner shall
interfere with such exclusive rights.
4.4 HOTEL FACILITIES. The Hotel Operator shall be entitled to set up and
maintain within the Common Elements any facilities as are reasonably required by
the Hotel Operator in connection with the operation of the condominium-hotel,
including, without limitation, the Hotel Facilities and any interior or exterior
signage reasonably desired by the Hotel Operator.
15
4.5 COMPLIANCE WITH LAWS. The Hotel Operator shall comply with all
governmental and other regulatory statutes, laws, bylaws, rules, regulations,
codes, ordinances and licensing requirements related to the operation of a
condominium-hotel.
4.6 NO ACTS IN CONTRAVENTION OF HOTEL OPERATING AND RENTAL POOL AGREEMENT.
All Unit Owners agree that all bylaws, rules and regulations of the Association
shall be consistent with the operation of the Condominium as a condominium-hotel
in accordance with the Hotel Operating and Rental Pool Agreement, as in effect
from time to time, and that they will not impair, interfere with or adversely
affect such operation. The Unit Owners further agree that they will not do any
act or thing and shall cause the Association to refrain from doing any act or
thing which may impair, interfere with or limit the ability of the Hotel
Operator to operate the Condominium as a condominium-hotel in accordance with
the Hotel Operating and Rental Pool Agreement.
4.7 LIMITATION ON RIGHT TO LEASE OR USE UNIT. No Unit Owner shall rent,
lease or otherwise use its Unit for any purpose, including personal use by the
Unit Owner, except as expressly permitted pursuant to SECTION 4.8 hereof and the
applicable provisions of the Hotel Operating and Rental Pool Agreement.
4.8 RESIDENTIAL USE BY UNIT OWNERS. Notwithstanding anything in this
ARTICLE 4 to the contrary, a Unit Owner may use its Unit only as follows:
4.8.1 In order to use its Unit, the Unit Owner must reserve the Unit
in accordance with and otherwise comply with the provisions of this SECTION 4.8
and EXHIBIT "C" attached hereto.
4.8.2 A Unit Owner may use its Unit only in accordance with the
advance reservation and occupancy duration provisions of EXHIBIT "C". If a Unit
Owner reserves its Unit pursuant to Paragraph 2 of EXHIBIT "C", but does not
actually use the Unit during the time reserved, the Unit Owner shall still be
deemed to have used the Unit for the time so reserved unless, at least thirty
(30) days prior to the Unit Owner's scheduled use of the Unit, the Unit Owner
cancels such reservation with the approval of the Hotel Operator. If a Unit
Owner reserves its Unit pursuant to Paragraph 3 of EXHIBIT "C" but does not
actually use the Unit during the time reserved, the Unit Owner shall still be
deemed to have used the Unit for the time so reserved unless, at least five (5)
days prior to the Unit Owner's scheduled use of the Unit, the Unit Owner cancels
such reservation with the approval of the Hotel Operator.
4.8.3 If a Unit Owner does not reserve or use the full amount of days
permitted to be used by the Unit Owner pursuant to EXHIBIT "C" in any Year, the
Unit Owner shall not be entitled to accumulate or otherwise use the unused days
in any future Year.
4.8.4 Subject to the use by Unit Owners of their Units as permitted by
this SECTION 4.8 and the rights of Declarant as set forth in SECTION 3.4, all
Units shall be made available at all times for rental to or use by the Public
16
in accordance with the terms of the Hotel Operating and Rental Pool Agreement.
The Hotel Operator may accept reservations at any time from the Public for the
use of any Unit for any future day or days; however, provided a Unit Owner has
booked the use of its Unit in accordance with the terms of EXHIBIT "C", use of
the Unit by the Unit Owner shall take precedence.
4.8.5 Each Unit Owner acknowledges that at all times while it is
occupying and making use of its Unit (or if such Unit Owner has reserved its
Unit but does not actually use the Unit during the time reserved, without having
provided the Hotel Operator prior written notice of intent not to use the Unit
as set forth in SECTION 4.8.2), the Unit Owner will not share in the Rental Pool
proceeds for the days the Unit Owner occupies, or is deemed to have occupied the
Unit.
4.8.6 Anything in this SECTION 4.8 to the contrary notwithstanding,
the Owner of a Unit designated as an Executive Unit on EXHIBIT "B" may not
reserve, use or authorize or assign to any other Person the right to use or
occupy its Executive Unit, except that the Hotel Operator may make use and allow
others to make use of such Executive Unit as part of the normal operation of the
condominium-hotel.
4.9 ANTENNAS. The Board of Directors shall regulate, to the extent
permitted under federal, state and local law, any antenna, aerial, satellite
television dish or other device for the transmission or reception of television
or radio signals or any other form of electromagnetic radiation proposed to be
erected, used or maintained outdoors on any portion of the Condominium whether
attached to a Building or structure or otherwise. To the extent permitted by
applicable law, the prior approval of the Board of Directors shall be required
for the installation, use or maintenance of any such device, which approval the
Board may condition upon the satisfaction of certain conditions including, but
not limited to, the size, placement, height, means of installation and screening
of such devices.
4.10 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, without the prior written approval of the Association, 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 Buildings
or other structures permitted under this Declaration. No provision hereof shall
be deemed to forbid the erection of temporary power or telephone structures
incident to the operation of the Condominium as a hotel or construction of
Buildings or structures permitted under this Declaration.
4.11 IMPROVEMENTS AND ALTERATIONS. No structural additions, alterations or
improvements shall be made to any Building, Common Area or within a Unit, unless
prior to the commencement of each addition, alteration or improvement, the Board
17
of Directors has given its prior written approval (which may be withheld in the
sole and absolute discretion of the Board of Directors) and, if required by the
Board of Directors, an architect or engineer, licensed in Arizona, certifies
that such addition, alteration or improvement will not impair the structural,
electrical, mechanical, plumbing or functional integrity of the Building or Unit
to or within which such addition, alteration or improvement is to be made.
4.12 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 and the Hotel Operator. The
Board of Directors or the Hotel Operator shall have the right to subscribe to a
trash service for the use and benefit of the Hotel Operator, the Association and
all Unit Owners. The Board of Directors and the Hotel Operator together may
adopt and promulgate rules and regulations regarding garbage, trash, trash
containers and collection. No incinerators shall be kept or maintained in any
Unit.
4.13 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 for such machinery and equipment as
the Hotel Operator reasonably deems necessary in order to permit the Hotel
Operator to operate the Condominium as a condominium-hotel.
4.14 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 for physical impairment, assistive animals, to the extent that a Unit
Owner or Guest or any employee or contractor of the Association or the Hotel
Operator requires the use of such assistive animals, and in any such instance,
in accordance with any Association rules and regulations which then may be in
effect.
4.15 CLOTHES DRYING FACILITIES. Outside clotheslines or other outside
facilities for drying or airing clothes shall not be erected, placed or
maintained on the Condominium.
4.16 MINERAL EXPLORATION. No portion of the Condominium shall be used in
any manner to explore for or to remove any water, oil or other hydrocarbons,
minerals of any kind, gravel, earth, or any earth substance of any kind.
4.17 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 insects.
4.18 TRUCKS, TRAILERS, CAMPERS AND BOATS. No truck, 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, except for temporary parking for Guests which must be in
accordance with applicable Association rules and regulations.
18
4.19 MOTOR VEHICLES. Except for emergency repairs, no automobile,
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, 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 and then only in accordance with parking
regulations jointly adopted by the Board of Directors and the Hotel Operator.
4.20 TOWING OF VEHICLES. The Board of Directors and the Hotel Operator
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 or any
parking regulation adopted by the Hotel Operator or the Board of Directors towed
away at the sole cost and expense of the owner of the vehicle or equipment. Any
expense incurred by the Association or the Hotel Operator in connection with the
towing of any vehicle or equipment shall be paid upon demand by the owner of the
vehicle or equipment.
4.21 SIGNS. Except for signs of the Hotel Operator incidental to the
operation of the Condominium as a hotel as reasonably determined to be
appropriate by the Hotel Operator and any "For Sale" or other advertising signs
which Declarant may elect to post in connection with its marketing of the
development, no signs (including, but not limited to, "For Sale" or "For Rent"
signs) shall be permitted on the exterior of any Unit or Building or any other
portion of the Condominium without the prior written approval of the Board of
Directors and any Hotel Operator.
4.22 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.
4.23 NUISANCES AND OFFENSIVE ACTIVITY. No nuisance shall be permitted to
exist or operate upon the Condominium, and no activity shall be conducted upon
the Condominium which is offensive or detrimental, or is an annoyance, to any
portion of the Condominium or any occupant of the Condominium. No exterior
speakers, horns, whistles, bells or other sound devices, except (i) security or
other emergency devices used exclusively for security or emergency purposes, or
(ii) sound systems used by or with the consent of the Hotel Operator for outdoor
functions and activities in connection with the operation of the Condominium as
a hotel, shall be located, used or placed on the Condominium.
4.24 WINDOW COVERINGS. No reflective materials, including, but without
limitation, aluminum foil, reflective screens or glass, mirrors or similar
items, shall be installed or placed upon the outside or inside of any windows of
a Unit or of any Limited Common Elements allocated to the Unit without the prior
19
written approval of the Board of Directors. No enclosures, drapes, blinds,
shades, screens or other items affecting the exterior appearance of a Unit or
any Limited Common Elements allocated to the Unit shall be constructed or
installed without the prior written consent of the Board of Directors.
4.25 LIMITATION ON LEASING OF UNITS. No Unit Owner may lease its Unit or
permit any Person to use its Unit or any of the Common Elements except in
accordance with this ARTICLE 4. Under no circumstances will any Unit Owner
directly or indirectly charge rent or any form of consideration for the use of
such Unit Owner's Unit except in accordance with the terms of the Hotel
Operating and Rental Pool Agreement.
4.26 FURNISHINGS. No Owner may remove, replace, substitute, alter, repair
or add to any of the Unit Furnishings or Hotel Furnishings. Redecorating and
repair, refurbishment and replacement of Unit Furnishings and Hotel Furnishings
shall be scheduled and accomplished by the Hotel Operator, in accordance with
the terms of the Hotel Operating and Rental Pool Agreement.
ARTICLE 5
MAINTENANCE AND REPAIR OF COMMON ELEMENTS AND UNITS
5.1 REPAIR OF COMMON ELEMENTS. Except as otherwise set forth in SECTION
5.3, the Association shall clean, maintain, repair and replace all Common
Elements and all Limited Common Elements. Subject to the provision of SECTION
5.3, the expense thereof shall be a Common Expense.
5.2 REPAIR OF UNITS. The repair and maintenance of the Units and the cost
of repairs, refurbishing, replacement and maintenance of all Furnishings shall
be the responsibility of the Unit Owners, each of which shall cause its Unit and
the Furnishings for such Unit to be maintained in good order and repair,
reasonable wear and tear excepted. To enable the Condominium to be properly
operated as a hotel, each Owner shall delegate its obligation under this Section
to the Hotel Operator under the Hotel Operating and Rental Pool Agreement, and
except as set forth in SECTION 5.3, all costs of such cleaning, repair,
maintenance, refurbishing and replacement of the Units and their Furnishing
shall be jointly shared by all Unit Owners, as part of the operating costs of
the hotel operation.
5.3 REPAIR OR RESTORATION NECESSITATED BY OWNER. Each Unit Owner shall be
liable to the extent permitted by Arizona law, for any damage to such Unit
Owner's Unit, any Furnishings within its Unit, or the Common Elements (including
the Improvements, landscaping, personal property or equipment) which results
from the negligence or willful conduct of the Unit Owner or its family members
or invitees (other than Guests). If the Association or Hotel Operator pays the
20
cost of any such repair, maintenance or replacements required by such act of a
Unit Owner, the Unit Owner shall pay all such costs upon demand. 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 REPAIR AND RECOVERY RIGHTS OF ASSOCIATION. It is anticipated that the
Hotel Operator will undertake the responsibility to perform the cleaning,
repair, maintenance, replacement and refurbishment of the Units, the Unit
Furnishings, Hotel Furnishings, Common Elements and Limited Common Elements,
pursuant to the terms of the Hotel Operating and Rental Pool Agreement and that
the costs thereof will be jointly charged to the Unit Owners. To the extent such
costs are included in the annual proposed operating budget submitted to the
Association by the Hotel Operator, such costs relating to the Common Elements
and Limited Common Elements shall not be included in initially establishing the
annual Assessments to be levied by the Board of Directors pursuant to SECTION
7.2; however, if at any time (i) a Hotel Operating and Rental Pool Agreement is
not in effect; or (ii) such agreement does not provide for the Hotel Operator to
pay the costs of complying with SECTIONS 5.1 AND 5.2; or (iii) the Hotel
Operator is in default under such agreement and is not paying such costs, the
Association shall be responsible for assuring compliance with SECTION 5.1 AND
5.2, and any costs incurred by the Association in performing any cleaning,
repair, maintenance, refurbishing or replacement obligations of SECTIONS 5.1 OR
5.2 shall become Common Expenses and shall be payable in accordance with the
terms of SECTION 7.21 and 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.
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. Unless the Condominium Documents
or the Condominium Act specifically require a vote of the Members, approvals or
actions to be given or taken by the Association shall be valid if given or taken
by the Board of Directors. 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 rights and
obligations of the Association under this Declaration may be assigned and
delegated to a Hotel Operator to enable the Hotel Operator to comply with its
obligations under any Hotel Operating and Rental Pool Agreement. Without
limiting the generality of the foregoing, the Association shall have the
following rights, powers and duties:
21
6.1.1 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 fifty percent (50%) of the votes in the Association.
6.1.2 The Association has the specific duty to make available, during
normal business hours, to the Declarant, Eligible Mortgage Holders, Unit Owners,
and Eligible Insurers or Guarantors, current copies of the Declaration, Bylaws,
Articles, Rules and other books, records and financial statements of the
Association as may be requested from time to time by such parties. Such requests
shall be in writing, and the Association shall have the right to charge for
copying expenses.
6.1.3 The Association shall control, manage and administer the Common
Elements for the benefit of all Unit Owners, subject to the rights granted to
the Hotel Operator under any Hotel Operating and Rental Pool Agreement.
6.1.4 The Association shall assure that the Units and the Common
Elements and all Limited Common Elements are kept and maintained in a clean,
safe and attractive condition and in a state of good and serviceable repair
(reasonable wear and tear excepted) and that all Unit Furnishings and all Hotel
Furnishings are properly maintained, repaired and replaced and if not so
maintained by the Unit Owners (or on their behalf by the Hotel Operator), the
Association is authorized to undertake all such upkeep, maintenance, repair and
replacement and recover the cost thereof from any Person(s) responsible
therefor.
6.1.5 Subject to the right of the Association to pay amounts to the
Hotel Operator as set forth in this Declaration, the Association shall collect
and receive all Assessments levied by the Association and other amounts payable
to the Association and shall pay all sums of money properly required to be paid
on account of all services, supplies and obligations pertaining to or for the
benefit of the Association.
6.1.6 The Association shall conduct all negotiations with the Hotel
Operator on behalf of the Unit Owners, including but not limited to negotiating
the terms of the Hotel Operating and Rental Pool Agreement and all extensions,
renewals, amendments, supplements and replacements thereto and perform all
reasonable obligations undertaken by the Association under any such agreement.
6.1.7 The Association may:
(i) purchase, hire or otherwise acquire personal property to
enable the Condominium to be used for hotel purposes;
22
(ii) borrow money required by it in the performance of its
duties or the exercise of its powers, including arranging an operating line of
credit, on terms and at rates of interest which are consistent with prudent
business practices;
(iii) secure the repayment of money borrowed by it, and the
payment of interest, by negotiable instrument or encumbrance of unpaid
Assessments, whether levied or not, or mortgage any property vested in it, or by
combination of those means;
(iv) invest, as it may determine, in separate accounts,
Association funds, including but not limited to reserve funds;
(v) designate by special resolution an area as Limited Common
Element and specify the Unit or Units that are to have the use of such Limited
Common Element;
(vi) do all things necessary for the enforcement of this
Declaration, the Bylaws and the Rules of the Association, and for the control,
management and administration of the Common Elements or other assets of the
Association, including removing privileges for the use of certain facilities, or
fixing and collecting fines for contravention of the Declaration, Bylaws or
Rules;
(vii) set up and maintain separate contingency reserve funds for
such purposes and in such amounts as the Board of Directors deems appropriate;
(viii) grant, revise, amend and supplement easements over Common
Elements (including but not limited to parking areas) for the benefit of any
governmental agency (including the County of Yavapai), for the use of the
general public and for the benefit of adjoining landowners, upon such terms as
the Board of Directors deems to be reasonably prudent;
(ix) hire a management company, managing agent or executive
director and establish committees to assist the Association and the Board of
Directors in performing their respective duties and responsibilities; and
(x) initiate, pursue, compromise, and settle (including
dismissal) real estate tax protests and appeals relative to the Condominium,
including individual Units, in the name of the Association and/or the individual
Unit Owners, and upon request, each Unit Owner will grant to the Association a
limited power of attorney, in the form required by any taxing authority, to
permit the Association to pursue any such real estate tax protest or appeal on
behalf of the respective Unit Owner.
23
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. Such members of the Board of Directors and officers
are not required 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
five (5) members, at least a majority 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 its 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. The Rules may, among other things, restrict and govern the use of
any area by any Guest, any Unit Owner, or by any family member or invitee of
such Unit Owner; provided, however, that the Rules may not unreasonably
discriminate among Unit Owners and shall not be inconsistent with the
Condominium Act, this Declaration, the Articles, Bylaws or any Hotel Operating
and Rental Pool Agreement, nor shall such Rules discriminate against the Hotel
Operator or unreasonably restrict the Hotel Operator from performing its duties
or exercising its rights under the Hotel Operating and Rental Pool Agreement. A
copy of the Rules as they may from time to time be adopted, amended or repealed,
shall be mailed or otherwise delivered to each Unit Owner and may be recorded.
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. A Unit Owner (including Declarant) of a Unit
shall automatically, upon becoming the Unit Owner thereof, be a Member of the
Association and shall remain a Member of the Association until such time as such
Unit Owner's ownership ceases for any reason, at which time, such Unit Owner's
membership in the Association shall automatically cease.
6.5 PERSONAL LIABILITY. Neither Declarant nor any member of the Board of
Directors or of any committee of the Association, any officer of the Association
nor any manager or other employee of the Association shall be personally liable
to any Member, or to any other person or entity, including the Association, for
any damage, loss or prejudice suffered or claimed on account of any act,
omission, error or negligence of the Declarant, the Association, the Board of
24
Directors, the manager, any representative or employee of the Association, or
any committee, committee member or officer of the Association; provided,
however, the limitations set forth in this SECTION 6.5 shall not apply to any
person who has failed to act in good faith or has engaged in wilful or
intentional misconduct.
6.6 IMPLIED RIGHTS. The Association may exercise any right or privilege
given to the Association expressly by the Condominium Documents and every other
right or privilege reasonably to be implied from the existence of any right or
privilege given to the Association by the Condominium Documents or reasonably
necessary to effectuate any such right or privilege.
6.7 VOTING RIGHTS. Subject to SECTION 6.8 below, each Unit Owner of a Unit,
including Declarant, shall be entitled to cast one (1) vote for each Unit owned
by such Unit Owner, on any Association matter which is put to a vote of the
membership in accordance with this Declaration, the Articles and/or Bylaws.
6.8 VOTING PROCEDURES. No change in the ownership of a Unit shall be
effective for voting purposes unless and until the Board of Directors is given
actual written notice of such change and is provided satisfactory proof thereof.
The vote for each such Unit must be cast as a unit, and fractional votes shall
not be allowed. In the event that a Unit is owned by more than one (1) Person
and such Unit Owners are unable to agree among themselves as to how their vote
or votes shall be cast, they shall lose their right to vote on the matter in
question. If any Member casts a vote representing a certain Unit, it will
thereafter be conclusively presumed for all purposes that such Unit Owner was
acting with the authority and consent of all other Unit Owners of the same Unit
unless objection thereto is made at the time the vote is cast. In the event more
than one (1) vote is cast by a Member for a particular Unit, none of the votes
shall be counted and all of the votes shall be deemed void.
6.9 TRANSFER OF MEMBERSHIP. The rights and obligations of any Member other
than the Declarant shall not be assigned, transferred, pledged, conveyed or
alienated in any way except upon transfer of ownership of a Unit Owner's Unit,
and then only to the transferee of ownership to the Unit. A transfer of
ownership to a Unit may be effected by deed, intestate succession, testamentary
disposition, foreclosure of a mortgage of record, or such other legal process as
now in effect or as may hereafter be established under or pursuant to the laws
of the State of Arizona. Any attempt to make a prohibited transfer shall be
void. Any transfer of ownership to a Unit shall operate to transfer the
membership appurtenant to said Unit to the new Unit Owner thereof. Each
Purchaser of a Unit shall notify the Association of its purchase within ten (10)
days after becoming the Unit Owner of a Unit.
6.10 SUSPENSION OF VOTING RIGHTS. If any Unit Owner fails to pay any
Assessments or other amounts due to the Association under the Condominium
Documents within fifteen (15) days after such payment is due or if any Unit
Owner violates any other provision of the Condominium Documents and such
violation is not cured within fifteen (15) days after the Association notifies
the Unit Owner of the violation, the Board of Directors shall have the right to
25
suspend such Unit Owner's right to vote until such time as all payments,
including interest and attorneys' fees, are brought current, and until any other
infractions or violations of the Condominium Documents are corrected.
6.11 CONVEYANCE OR ENCUMBRANCE OF COMMON ELEMENTS. The Common Elements
shall not be mortgaged, transferred, dedicated or encumbered without the prior
written consent or affirmative vote of Unit Owners representing at least eighty
percent (80%) of the votes of the Members. In addition, any conveyance,
encumbrance, judicial sale or other transfer (whether voluntary or involuntary)
of an individual interest in the Common Elements shall be void unless the Unit
to which that interest is allocated also is transferred.
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, excluding any Common Expenses which are proposed to be paid by
the Hotel Operator pursuant to the terms of the annual operating budget prepared
by the Hotel Operator for the ensuing year. The budget shall separately reflect
any Common Expenses to be assessed against less than all of the Units pursuant
to SUBSECTION 7.2.4 of this Declaration.
7.1.2 Within thirty (30) days after the adoption of a budget, the
Board of Directors shall send to each Unit Owner the budget or 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 established 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 or amended
budget by the Unit Owners shall be required.
26
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 Common
Expense Assessment for each Unit shall be determined by multiplying the total
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 SUBSECTION 7.2.4) times the applicable
Percentage Interest as set forth on EXHIBIT "B" attached hereto (the "Common
Expense Share"). If the Board of Directors determines during any fiscal year
that funds budgeted or available for that fiscal year are or will become
inadequate to meet all Common Expenses for any reason, including, without
limitation, reduced income and expense reimbursement from the operation of the
hotel, or increased Common Expenses, nonpayment of Assessments by Members, or
nonpayment of hotel operating costs (including maintenance and repairs of the
Common Elements, Unit Furnishings, Hotel Furnishings and Units by the Hotel
Operator) the Board of Directors may increase and reallocate the Common Expense
Assessment for that fiscal year and the revised Common Expense Assessment for
each Unit 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 be paid in
installments. For the period from the date upon which this Declaration is
recorded through the first day of the month following the conveyance of the
first Unit to a Purchaser, the Declarant shall be responsible for assuring that
the actual Common Expenses accrued through such date are paid.
7.2.3 Except as otherwise expressly provided for in this Declaration,
all Common Expenses 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 negligence or other
misconduct of any Unit Owner, or if any Unit Owner fails to pay when due any
amount owing to the Hotel Operator under the Hotel Operating and Rental Pool
Agreement (a "Rental Pool Delinquency"), the Association (i) shall assess any
such Common Expense exclusively against such Unit Owner to the extent not
covered by insurance; and (ii) may assess any such Rental Pool Delinquency
exclusively against such Unit Owner.
7.2.5 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.
27
7.3 SPECIAL ASSESSMENTS. In addition to Common Expense Assessments, the
Association may levy, in any fiscal year of the Association, a special
assessment applicable to that fiscal year only for the purpose of defraying, in
whole or in part, the cost of any construction, reconstruction, repair or
replacement of a capital improvement of one or more Units and/or the Common
Elements, including fixtures and personal property related thereto, or for any
other lawful Association purpose, provided that any Special Assessment 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 five (5) 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.
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 its 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 party acquiring title or coming into possession of a Unit through
foreclosure of a First Mortgage, purchase at a 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
28
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 7.5 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 itself 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 or by the abandonment or non-use of its Unit.
7.7 CERTIFICATE OF PAYMENT. The Association on written request shall issue
or cause to be issued 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 twenty (20) business
days after receipt of the request and is binding on the Association, the Board
of Directors, and every Unit Owner. In addition, upon receipt of written notice
from a Unit Owner or other interested Person, the Association shall furnish to a
Purchaser within seven (7) days after receipt of notice of a pending sale of a
Unit, a written statement setting forth the amount of the Common Expense
Assessment for the Unit and any unpaid Common Expense Assessment, fee or charge
currently due from the selling Unit Owner, together with such other information
as may be required under the Condominium Act. 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 or that
insufficient revenue is being generated by the Hotel Operator.
7.9 RESERVE FUND. To assist the Association in maintaining adequate funds
to pay any hotel operation expenses and to establish appropriate reserves
therefor, each Purchaser of a Unit from the Declarant shall pay to the
Association, immediately upon becoming the Unit Owner of the Unit, an operating
cash reserve fund payment equal to $250,000 multiplied times the Percentage
Interest attributable to the Unit as such amount is set forth on EXHIBIT "B" for
each Unit. Such amount shall not be considered as an advance payment of any
Assessments levied by the Association pursuant to this Declaration. The
Association shall make such reserve fund payment available to the Hotel Operator
following the first year's operation of the Hotel to apply against any operating
cash required to be funded by the Unit Owners pursuant to the term of the Hotel
Operating and Rental Pool Agreement.
29
7.10 SURPLUS FUNDS. Surplus funds of the Association remaining after
payment of or making provisions for Common Expenses and establishing any
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 or may be added to any
contingency or other reserve funds maintained by the Association.
7.11 MONETARY PENALTIES. In accordance with the procedures set forth in the
Bylaws, the Board of Directors shall have the right to levy reasonable monetary
penalties against a Unit Owner for violations of the Condominium Documents.
7.12 TRANSFER FEE. Each Purchaser of a Unit shall pay to the Association
immediately upon becoming the Owner of the Unit a transfer fee in such amount as
is established from time to time by the Board of Directors.
7.13 ADDITIONAL RESERVES. The Association may establish and maintain, from
Common Expense Assessments, additional reserves to provide for the replacement
and capital repairs of the Common Elements, Unit Furnishings, Hotel Furnishings
and other Improvements to the Condominium which the Association is obligated to
repair, maintain and replace. In determining whether to establish such reserves
and the amount of such reserves, the Board of Directors may take into account
the reserves provided for in SECTION 7.9 and any other reserves established by
the Hotel Operator pursuant to the Hotel Operating and Rental Pool Agreement
which are established for similar purposes. The Association may make such
additional reserves available to the Hotel Operator in order to enable the Hotel
Operator to comply with its obligations under the Hotel Operating and Rental
Pool Agreement to repair or replace Improvements, Unit Furnishings and Hotel
Furnishings.
7.14 HOTEL OPERATING REVENUES. Notwithstanding anything contained in this
ARTICLE 7 to the contrary, all or any portion of distributions otherwise due and
payable to a Unit Owner pursuant to the Hotel Operating and Rental Pool
Agreement may be collected by the Association from the Hotel Operator upon
demand and may be used by the Association to pay and offset against all or any
portion of the Assessments or other amounts due and payable by such Unit Owner
pursuant to this Declaration. The foregoing shall not, however, relieve any such
Unit Owner of its obligation to pay Assessments or any deficiencies resulting
after the application of revenues from the Hotel Operating and Rental Pool
Agreement.
7.15 UNIT TAXES. Each Unit Owner shall be responsible for all real estate
taxes attributable to its Unit and all income, sales, use, privilege, bed,
lodging and other taxes attributable to any revenue earned by such Unit Owner in
connection with participating in the rental pool arrangement or any other income
produced relative to its respective Unit. It is anticipated that the Hotel
Operator will file and remit to the appropriate governmental agencies the sales,
use, privilege, bed or lodging taxes applicable to the rental pool arrangement.
30
7.16 UTILITIES. Utility usage shall be considered a Common Expense and as
such shall be governed by the provisions of SUBSECTION 7.1 AND 7.2.
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 from generally acceptable insurance
carriers:
(i) Property insurance on the Common Elements and Units,
including Hotel Furnishings and Unit Furnishings but exclusive of all other
personal property of Unit Owners, issued under a standard form "All Risk of
Direct Physical Loss Form" in an amount equal to the maximum insurable
replacement value of the Common Elements and Units, as determined by the Board
of Directors; provided, however that the total amount of insurance after
application of any deductibles shall not be less than one hundred percent (100%)
of the current replacement cost of the insured property, exclusive of land,
excavations, foundations and other items normally excluded from a property
insurance policy.
(ii) Broad form comprehensive 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 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, and (iii) coverage for any legal liability that results from
lawsuits related to employment contracts to which the Association is a party.
(iii) Worker's compensation insurance to the extent necessary to
meet the requirements of the laws of Arizona.
(iv) Directors' and officers' liability insurance covering all
the directors and officers of the Association in such limits as the Board of
Directors may determine from time to time.
(v) 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.
31
(vi) The insurance policies purchased by the Association shall,
to the extent reasonably available, contain the following provisions:
(a) 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 membership in the Association.
(b) There shall be no subrogation with respect to the
Association, its agents, servants, and employees against Unit Owners and members
of their household.
(c) No act or omission by any Unit Owner shall void the
policy or be a condition to recovery on the policy.
(d) 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.
(e) 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.
(f) The Association shall be the insured for use and benefit
of the individual Unit Owners (designated by name if required by the insurer).
(g) For policies of hazard insurance, a standard mortgagee
clause providing that the insurance carrier shall notify the Association and
each First Mortgagee named in the policy at least thirty (30) days in advance of
the effective date of any substantial change in coverage or cancellation of the
policy.
(h) Any insurance trust agreement will be recognized by the
insurer.
(vii) Boiler explosion insurance evidenced by the standard form
of boiler machinery insurance policy and providing coverage in the minimum
amount of $50,000.00 per accident per location.
(viii) If the Condominium is located in an area identified by the
Secretary of Housing & Urban Development as an area having special flood
hazards, a "blanket policy" of flood insurance on the Condominium in the lesser
of one hundred percent (100%) of the current replacement cost of the Buildings
and any other property covered on the required form of policy or the maximum
limit of coverage available under the National Insurance Act of 1968, as
amended.
32
(ix) "Agreed Amount" and "Inflation Guard" endorsements.
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.
8.2 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 of
Directors, 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:
(i) The fidelity bonds shall name the Association as an
obligee;
(ii) 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;
(iii) The bonds shall provide that they may not be cancelled 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 shall 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.
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 its own benefit and at its own expense covering its
Unit, its personal property and providing personal liability coverage.
33
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
lienholders as their interests may appear, and the proceeds shall be disbursed
and applied as provided for in A.R.S. ss. 33-1253.
8.6 CERTIFICATE OF INSURANCE. An insurer that has issued an insurance
policy pursuant to this Article shall issue certificates or memoranda of
insurance to the Association and, on written request, to any Unit Owner or First
Mortgagee. 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 First Mortgagee to
whom a certificate or memorandum of insurance has been issued at their
respective last known addresses.
8.7 DELEGATION OF INSURANCE RESPONSIBILITY. The Association shall be deemed
to have complied with its obligations under this ARTICLE 8 if the insurance
required by the terms hereof is obtained by the Hotel Operator. Any such
insurance may include the Hotel Operator as a named insured and any such
insurance may include business interruption insurance to the extent required in
any Hotel Operating and Rental Pool Agreement.
ARTICLE 9
RIGHTS OF FIRST MORTGAGEES
9.1 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:
9.1.1 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;
9.1.2 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;
34
9.1.3 Any lapse, cancellation or material modification of any
insurance policy or fidelity bond maintained by the Association;
9.1.4 Any proposed action which requires the consent of a specified
percentage of Eligible Mortgage Holders as set forth in SECTION 9.2 of this
Declaration.
9.2 APPROVAL REQUIRED FOR AMENDMENT TO DECLARATION, ARTICLES OR BYLAWS.
9.2.1 The approval of Eligible Mortgage Holders holding First
Mortgages on Units owned by Unit Owners who 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:
(i) Voting rights;
(ii) Assessments, assessment liens or subordination of
assessment liens;
(iii) Reserves for maintenance, repair and replacement of Common
Elements;
(iv) Insurance or fidelity bonds;
(v) Responsibility for maintenance and repairs;
(vi) Expansion or contraction of the Condominium, or the
addition, annexation or withdrawal of property to or from the Condominium;
(vii) Boundaries of any Unit;
(viii) Reallocation of interests in the Common Elements or
Limited Common Elements or rights to their use;
(ix) Convertibility of Units into Common Elements or of Common
Elements into Units;
(x) Use of the Units for other than Public Rental Residential
Use;
(xi) Imposition of any restrictions on a Unit Owner's right to
sell or transfer its Unit;
(xii) A decision by the Association to establish self-management
when professional management previously had been required by an Eligible
Mortgage Holder;
35
(xiii) Restoration or repair of the Condominium (after a hazard
damage or partial condemnation) in a manner other than that specified in the
Condominium Documents;
(xiv) Any action to terminate the legal status of the Condominium
after substantial destruction or condemnation occurs;
(xv) Any provisions which expressly benefit First Mortgagees,
Eligible Mortgage Holders or Eligible Insurers or Guarantors.
9.2.2 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 First Mortgages on Units
owned by Unit Owners who 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.
9.2.3 Any First Mortgagee who receives a written request to approve
additions or amendments to the Declaration, Articles or Bylaws, 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, provided the notice was
delivered by certified or registered mail, with a return receipt requested.
9.2.4 The approvals required by this SECTION 9.2 shall not apply to
amendments that may be executed by the Declarant in the exercise of its
Development Rights.
9.3 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.
9.4 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:
9.4.1 By act or omission, seek to abandon or terminate this
Declaration or the Condominium;
36
9.4.2 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;
9.4.3 Partition or subdivide any Unit;
9.4.4 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; or
9.4.5 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 9.4 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.
9.5 CONDEMNATION OR INSURANCE PROCEEDS. No Unit Owner, or any other Person,
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.
9.6 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.
9.7 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 SECTIONS 9.2 AND 9.4 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; provided, however, that the
Declarant, without the consent of any Unit Owner or First Mortgagee being
required, shall have the right to amend this Declaration, the Plat, the Articles
or the Bylaws as set forth in SECTION 11.5.3.
37
ARTICLE 10
RESERVATION OF DEVELOPMENTAL AND
SPECIAL DECLARANT'S RIGHTS
Pursuant to the Condominium Act, Declarant reserves all of the development
and special declarant rights in the Condominium afforded under A.R.S. ss.ss.
33-1202(14) and (21), respectively, subject to the expiration deadlines set
forth below. Specifically, but without limitation, Declarant reserves the
following rights:
10.1 DEVELOPMENTAL RIGHTS. Declarant hereby reserves, during the Period of
Declarant Control, all Development Rights under A.R.S. ss. 33-1202(14).
10.2 RIGHT TO COMPLETE IMPROVEMENTS AND CONSTRUCTION EASEMENT. Declarant
hereby reserves the right, for a period of five (5) years following the
recordation of this Declaration, to complete the construction of Improvements on
the Condominium, and an easement over and through the Condominium, including all
Common Elements, for the purpose of doing so. Any damage caused to a Unit or the
Common Elements by Declarant or its agents in the use or exercise of such right
and/or easement shall be repaired by and at the expense of Declarant.
10.3 OFFICES, MODEL UNITS AND PROMOTIONAL SIGNS. Declarant reserves the
right to maintain offices for sales and management and models as provided in
SECTION 3.4 above, and to maintain signs on the Common Elements for so long as
Declarant owns one or more Units and is actively marketing the Units for sale.
10.4 APPOINTMENT AND REMOVAL OF DIRECTORS AND OFFICERS. Declarant reserves
the right to appoint and remove any officer of the Association or any member of
the Board of Directors as set forth in SECTION 6.2 above, for the time period
set forth therein.
ARTICLE 11
GENERAL PROVISIONS
11.1 ENFORCEMENT. The Association, or any Unit Owner, shall have the right
to enforce, by any proceeding at law or in equity, all restrictions, conditions,
covenants, reservations, liens and charges now or hereafter imposed by the
provisions of the Condominium Documents. Failure by the Association or by any
Unit Owner to enforce any covenant or restriction contained in the Condominium
Documents shall in no event be deemed a waiver of the right to do so thereafter.
38
11.2 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.
11.3 DURATION. The covenants and restrictions of this Declaration shall
continue in full force and effect and run with and bind the Condominium until
terminated in accordance with the provisions of SECTION 11.4.
11.4 TERMINATION OF CONDOMINIUM. The Condominium may be terminated only in
the manner provided for in the Condominium Act.
11.5 AMENDMENT.
11.5.1 Except in cases of amendments that may be executed by a
Declarant in the exercise of its Development Rights or under A.R.S. ss. 33-1220,
by the Association under A.R.S. ss.ss. 33-1206 or 33-1216(D), or by certain Unit
Owners under A.R.S. ss.ss. 33-1218(B), 33-1222, 33-1223 or 33-1228(B), or in
cases where a higher percentage is required by 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.
11.5.2 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.
11.5.3 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, (iii) 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, including without limitation, the VA, the FHA,
the FNMA or the FHLMC, or (iv) the rules or requirements of any federal, state
or local governmental entity or agency whose approval of the Condominium, the
Plat or the Condominium Documents is required by law or requested by Declarant.
11.5.4 To the extent that any First Mortgages insured by the FHA or
guaranteed by the VA are held on any of the Units at the time of amendment, and
to the extent that it is required by any regulations governing FHA/VA mortgages,
during the Period of Declarant Control, any amendment to the Declaration or the
Plat must be approved by the VA or the FHA.
11.5.5 Any amendment adopted by the Unit Owners pursuant to SUBSECTION
11.5.1 of this Declaration shall be signed by the President or Vice President of
the Association and shall be recorded with the County Recorder of each County
39
in which any portion of the Condominium is located. Any such amendment shall
certify that the amendment has been approved as required by this SUBSECTION
11.5.5. Any amendment made by the Declarant pursuant to SUBSECTION 11.5.3 of
this Declaration or the Condominium Act shall be executed by the Declarant and
shall be recorded with the County Recorder of each County in which any portion
of the Condominium is located.
11.6 REMEDIES CUMULATIVE. Each remedy provided herein is cumulative and not
exclusive.
11.7 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 11.7. 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 its correct mailing address
with the Association, and shall promptly notify the Association in writing of
any subsequent change of address.
11.8 BINDING EFFECT. 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 real property covered thereby and hereby evidences his intent
that all the restrictions, conditions, covenants, easements, 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 various subsequent and future
Unit Owners. Declarant, its successors, assigns and grantees, covenants and
agrees that no Unit and the membership in the Association and the other rights
created by the Condominium Documents related to such Unit shall be separated or
separately conveyed, and such membership and other rights shall be deemed to be
conveyed or encumbered with the respective Unit even though the description in
the instrument of conveyance or encumbrance may refer only to the Unit.
40
11.9 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.
11.10 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.
11.11 SURVIVAL OF LIABILITY. The termination of membership in the
Association shall not relieve or release any such former Unit 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 Unit Owner
or Member arising out of, or in any way connected with, such ownership or
membership and the covenants and obligations incident thereto.
11.12 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.
11.13 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.
11.14 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 Owner's 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.
Notwithstanding the foregoing, no Unit Owner shall be responsible for the acts
or omissions of any Guest who may occupy the Unit Owner's Unit.
11.15 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.
11.16 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.
41
11.17 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.
11.18 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 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. If, after the recordation of such
notice, it is determined by the Association that the violation referred to in
the notice does not exist or that the actual violation referred to in the notice
has been cured, the Association shall record a notice of compliance which shall
state the legal description of the Unit against which the Notice of Violation
was recorded, the recording data of the Notice of Violation, and shall state
that the violation referred to in the notice of violation has been cured, or if
such be the case, that it did not exist.
11.19 NO ABSOLUTE LIABILITY. No provision of the Condominium Documents
shall be interpreted or construed as imposing on any Unit Owner absolute
liability for damage to the Common Elements or the Units. A Unit Owner shall
only be responsible for damage to the Common Elements or Units caused by such
Unit Owner's negligence or intentional acts.
UP Sedona, Inc.,
an Arizona corporation
By:
--------------------------------
Name:
------------------------------
Its:
-------------------------------
42
STATE OF ARIZONA )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this _____ day of
_____________________, 1996, by __________________________, ____________________
the __________________________ of UP Sedona, Inc., an Arizona corporation, on
behalf of the corporation.
----------------------------------------
Notary Public
My commission expires:
------------------
43
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY SUBMITTED TO CONDOMINIUM
A-1
EXHIBIT B
SEDONA GOLF RESORT AND CONFERENCE CENTER
OPERATING
UNIT UNIT UNIT PERCENTAGE CASH
NUMBER TYPT DESCRIPTION INTEREST RESERVE
- ------ ---- ----------- -------- -------
1008 OB 1 1 BED 0.448353% $1,121
1009 ST 1 STUDIO 0.378533% $946
1010 OB 1 1 BED 0.448353% $1,121
1011 EX 1 EXECUTIVE 0.436488% $1,091
1012 OB 1 1 BED 0.448353% $1,121
1013 EX 1 EXECUTIVE 0.436488% $1,091
1014 OB 1 1 BED 0.448353% $1,121
1015 OB 1 1 BED 0.448353% $1,121
1016 OB 1 1 BED 0.448353% $1,121
1017 OB 1 1 BED 0.448353% $1,121
1018 OB 8 1 BED 0.455426% $1,139
1019 OB 1 1 BED 0.448353% $1,121
1020 OB 1 1 BED 0.448353% $1,121
1021 OB 1 1 BED 0.448353% $1,121
1022 OB 1 1 BED 0.448353% $1,121
1023 OB 8 1 BED 0.455426% $1,139
1024 ST 1 STUDIO 0.378533% $946
1025 ST 1 STUDIO 0.378533% $946
1026 OB 1 1 BED 0.448353% $1,121
1027 OB 3 1 BED 0.455426% $1,139
1028 OB 1 1 BED 0.448353% $1,121
1030 OB 2 1 BED 0.455426% $1,139
1032 OB 2 1 BED 0.455426% $1,139
1034 OB 1 1 BED 0.448353% $1,121
1035 OB 3 1 BED 0.455426% $1,139
1036 OB 1 1 BED 0.448353% $1,121
1037 ST 1 STUDIO 0.378533% $946
1038 ST 1 STUDIO 0.378533% $946
1039 OB 1 1 BED 0.448353% $1,121
1040 OB 1 1 BED 0.448353% $1,121
1041 ST 1 STUDIO 0.378533% $946
1042 ST 1 STUDIO 0.378533% $946
1043 OB 7 1 BED 0.455426% $1,139
1044 OB 7 1 BED 0.455426% $1,139
1052 EX 1 EXECUTIVE 0.436488% $1,091
B-1
SEDONA GOLF RESORT AND CONFERENCE CENTER
OPERATING
UNIT UNIT UNIT PERCENTAGE CASH
NUMBER TYPT DESCRIPTION INTEREST RESERVE
- ------ ---- ----------- -------- -------
1053 ST 1 STUDIO 0.378533% $946
1054 EX 1 EXECUTIVE 0.436488% $1,091
1055 EX 1 EXECUTIVE 0.436488% $1,091
1056 OB 1 1 BED 0.448353% $1,121
1057 EX 1 EXECUTIVE 0.436488% $1,091
1058 OB 1 1 BED 0.448353% $1,121
1059 OB 1 1 BED 0.448353% $1,121
1060 OB 1 1 BED 0.448353% $1,121
1061 OB 1 1 BED 0.448353% $1,121
1062 OB 8 1 BED 0.455426% $1,139
1063 OB 1 1 BED 0.448353% $1,121
1064 OB 1 1 BED 0.448353% $1,121
1065 OB 1 1 BED 0.448353% $1,121
1066 OB 1 1 BED 0.448353% $1,121
1067 OB 8 1 BED 0.455426% $1,139
1068 ST 1 STUDIO 0.378533% $946
1069 ST 1 STUDIO 0.378533% $946
1070 OB 1 1 BED 0.448353% $1,121
1071 OB 3 1 BED 0.455426% $1,139
1072 OB 1 1 BED 0.448353% $1,121
1074 OB 2 1 BED 0.455426% $1,139
1076 OB 2 1 BED 0.455426% $1,139
1078 OB 1 1 BED 0.448353% $1,121
1079 OB 3 1 BED 0.455426% $1,139
1080 OB 1 1 BED 0.448353% $1,121
1081 ST 1 STUDIO 0.378533% $946
1082 ST 1 STUDIO 0.378533% $946
1083 OB 1 1 BED 0.448353% $1,121
1084 OB 1 1 BED 0.448353% $1,121
1085 ST 1 STUDIO 0.378533% $946
1086 ST 1 STUDIO 0.378533% $946
1087 OB 7 1 BED 0.455426% $1,139
1088 OB 7 1 BED 0.455426% $1,139
2003 OB 8 1 BED 0.468432% $1,171
2005 OB 1 1 BED 0.461358% $1,153
2006 OB 10 1 BED 0.461358% $1,153
2007 ST 2 STUDIO 0.397015% $993
B-2
SEDONA GOLF RESORT AND CONFERENCE CENTER
OPERATING
UNIT UNIT UNIT PERCENTAGE CASH
NUMBER TYPT DESCRIPTION INTEREST RESERVE
- ------ ---- ----------- -------- ------
2008 OB 1 1 BED 0.461358% $1,153
2009 ST 1 STUDIO 0.391539% $979
2010 OB 1 1 BED 0.461358% $1,153
2011 OB 1 1 BED 0.461358% $1,153
2012 OB 1 1 BED 0.461358% $1,153
2013 OB 1 1 BED 0.461358% $1,153
2014 OB 1 1 BED 0.461358% $1,153
2015 OB 1 1 BED 0.461358% $1,153
2016 OB 1 1 BED 0.461358% $1,153
2017 OB 1 1 BED 0.461358% $1,153
2018 OB 8 1 BED 0.468432% $1,171
2019 OB 1 1 BED 0.461358% $1,153
2020 OB 1 1 BED 0.461358% $1,153
2021 OB 1 1 BED 0.461358% $1,153
2022 OB 1 1 BED 0.461358% $1,153
2023 OB 8 1 BED 0.468432% $1,171
2024 ST 1 STUDIO 0.391539% $979
2025 ST 1 STUDIO 0.391539% $979
2026 OB 1 1 BED 0.461358% $1,153
2027 OB 3 1 BED 0.468432% $1,171
2028 OB 1 1 BED 0.461358% $1,153
2030 OB 2 1 BED 0.468432% $1,171
2032 OB 2 1 BED 0.461358% $1,153
2034 OB 1 1 BED 0.454285% $1,136
2035 OB 3 1 BED 0.468432% $1,171
2036 OB 1 1 BED 0.454285% $1,136
2037 ST 1 STUDIO 0.391539% $979
2038 ST 1 STUDIO 0.384465% $961
2039 OB 1 1 BED 0.461358% $1,153
2040 OB 1 1 BED 0.454285% $1,136
2041 ST 1 STUDIO 0.391539% $979
2042 ST 1 STUDIO 0.384465% $961
2043 OB 7 1 BED 0.468432% $1,171
2044 OB 7 1 BED 0.461358% $1,153
2047 OB 8 1 BED 0.468432% $1,171
2049 OB 1 1 BED 0.461358% $1,153
2051 ST 2 STUDIO 0.397015% $993
B-3
SEDONA GOLF RESORT AND CONFERENCE CENTER
OPERATING
UNIT UNIT UNIT PERCENTAGE CASH
NUMBER TYPT DESCRIPTION INTEREST RESERVE
- ------ ---- ----------- -------- -------
2052 OB 1 1 BED 0.454285% $1,136
2053 ST 1 STUDIO 0.391539% $979
2054 OB 1 1 BED 0.454285% $1,136
2055 OB 1 1 BED 0.461358% $1,153
2056 OB 1 1 BED 0.454285% $1,136
2057 OB 1 1 BED 0.461358% $1,153
2058 OB 1 1 BED 0.454285% $1,136
2059 OB 1 1 BED 0.461358% $1,153
2060 OB 1 1 BED 0.454285% $1,136
2061 OB 1 1 BED 0.461358% $1,153
2062 OB 8 1 BED 0.461358% $1,153
2063 OB 1 1 BED 0.461358% $1,153
2064 OB 1 1 BED 0.454285% $1,136
2065 OB 1 1 BED 0.461358% $1,153
2066 OB 1 1 BED 0.454285% $1,136
2067 OB 8 1 BED 0.468432% $1,171
2068 ST 1 STUDIO 0.384465% $961
2069 ST 1 STUDIO 0.391539% $979
2070 OB 1 1 BED 0.454285% $1,136
2071 OB 3 1 BED 0.461358% $1,153
2072 OB 1 1 BED 0.454285% $1,136
2074 OB 2 1 BED 0.468432% $1,171
2076 OB 2 1 BED 0.468432% $1,171
2078 OB 1 1 BED 0.461358% $1,153
2079 OB 3 1 BED 0.461358% $1,153
2080 OB 1 1 BED 0.461358% $1,153
2081 ST 1 STUDIO 0.384465% $961
2082 ST 1 STUDIO 0.391539% $979
2083 OB 1 1 BED 0.454285% $1,136
2084 OB 1 1 BED 0.461358% $1,153
2085 ST 1 STUDIO 0.384465% $961
2086 ST 1 STUDIO 0.391539% $979
2087 OB 7 1 BED 0.461358% $1,153
2088 OB 7 1 BED 0.468432% $1,171
3001 ST 1 STUDIO 0.397471% $994
3002 OB 1 1 BED 0.460218% $1,151
3003 OB 8 1 BED 0.474364% $1,186
B-4
SEDONA GOLF RESORT AND CONFERENCE CENTER
OPERATING
UNIT UNIT UNIT PERCENTAGE CASH
NUMBER TYPT DESCRIPTION INTEREST RESERVE
- ------ ---- ----------- -------- -------
3004 OB 1 1 BED 0.460218% $1,151
3005 OB 1 1 BED 0.467291% $1,168
3006 OB 10 1 BED 0.467291% $1,168
3007 ST 2 STUDIO 0.402947% $1,007
3008 OB 1 1 BED 0.467291% $1,168
3009 ST 1 STUDIO 0.397471% $994
3010 OB 1 1 BED 0.467291% $1,168
3011 OB 1 1 BED 0.467291% $1,168
3012 OB 1 1 BED 0.467291% $1,168
3013 OB 1 1 BED 0.467291% $1,168
3014 OB 1 1 BED 0.467291% $1,168
3015 OB 1 1 BED 0.467291% $1,168
3016 OB 1 1 BED 0.467291% $1,168
3017 OB 1 1 BED 0.467291% $1,168
3018 OB 8 1 BED 0.474364% $1,186
3019 OB 1 1 BED 0.467291% $1,168
3020 OB 1 1 BED 0.467291% $1,168
3021 OB 1 1 BED 0.467291% $1,168
3022 OB 1 1 BED 0.467291% $1,168
3023 OB 8 1 BED 0.474364% $1,186
3024 ST 1 STUDIO 0.397471% $994
3025 ST 1 STUDIO 0.397471% $994
3026 OB 1 1 BED 0.467291% $1,168
3027 OB 3 1 BED 0.474364% $1,186
3028 OB 1 1 BED 0.467291% $1,168
3030 OB 2 1 BED 0.474364% $1,186
3032 OB 2 1 BED 0.467291% $1,168
3034 OB 1 1 BED 0.460218% $1,151
3035 OB 3 1 BED 0.474364% $1,186
3036 OB 1 1 BED 0.460218% $1,151
3037 ST 1 STUDIO 0.397471% $994
3038 ST 1 STUDIO 0.390398% $976
3039 OB 1 1 BED 0.467291% $1,168
3040 OB 1 1 BED 0.460218% $1,151
3041 ST 1 STUDIO 0.397471% $994
3042 ST 1 STUDIO 0.390398% $976
3043 OB 7 1 BED 0.474364% $1,186
B-5
SEDONA GOLF RESORT AND CONFERENCE CENTER
OPERATING
UNIT UNIT UNIT PERCENTAGE CASH
NUMBER TYPT DESCRIPTION INTEREST RESERVE
- ------ ---- ----------- -------- -------
3044 OB 7 1 BED 0.467291% $1,168
3045 ST 1 STUDIO 0.397471% $994
3046 OB 1 1 BED 0.460218% $1,151
3047 OB 8 1 BED 0.474364% $1,186
3048 OB 1 1 BED 0.460218% $1,151
3049 OB 1 1 BED 0.467291% $1,168
3050 OB 10 1 BED 0.460218% $1,151
3051 ST 2 STUDIO 0.402947% $1,007
3052 OB 1 1 BED 0.460218% $1,151
3053 ST 1 STUDIO 0.397471% $994
3054 OB 1 1 BED 0.460218% $1,151
3055 OB 1 1 BED 0.467291% $1,168
3056 OB 1 1 BED 0.460218% $1,151
3057 OB 1 1 BED 0.467291% $1,168
3058 OB 1 1 BED 0.460218% $1,151
3059 OB 1 1 BED 0.467291% $1,168
3060 OB 1 1 BED 0.460218% $1,151
3061 OB 1 1 BED 0.467291% $1,168
3062 OB 8 1 BED 0.467291% $1,168
3063 OB 1 1 BED 0.467291% $1,168
3064 OB 1 1 BED 0.460218% $1,151
3065 OB 1 1 BED 0.467291% $1,168
3066 OB 1 1 BED 0.460218% $1,151
3067 OB 8 1 BED 0.474364% $1,186
3068 ST 1 STUDIO 0.390398% $976
3069 ST 1 STUDIO 0.397471% $994
3070 OB 1 1 BED 0.460218% $1,151
3071 OB 3 1 BED 0.467291% $1,168
3072 OB 1 1 BED 0.460218% $1,151
3074 OB 2 1 BED 0.474364% $1,186
3076 OB 2 1 BED 0.474364% $1,186
3078 OB 1 1 BED 0.467291% $1,168
3079 OB 3 1 BED 0.467291% $1,168
3080 OB 1 1 BED 0.467291% $1,168
3081 ST 1 STUDIO 0.390398% $976
3082 ST 1 STUDIO 0.397471% $994
3083 OB 1 1 BED 0.460218% $1,151
B-6
SEDONA GOLF RESORT AND CONFERENCE CENTER
OPERATING
UNIT UNIT UNIT PERCENTAGE CASH
NUMBER TYPT DESCRIPTION INTEREST RESERVE
- ------ ---- ----------- -------- -------
3084 OB 1 1 BED 0.467291% $1,168
3085 ST 1 STUDIO 0.390398% $976
3086 ST 1 STUDIO 0.397471% $994
3087 OB 7 1 BED 0.467291% $1,168
3088 OB 7 1 BED 0.474364% $1,186
TOTAL 100% $250,000
B-7
EXHIBIT C
SEDONA GOLF RESORT & CONFERENCE CENTER
USE OF UNITS BY OWNERS
1. DEFINITIONS. For the purposes of this EXHIBIT C:
(a) capitalized terms used in this EXHIBIT C and not defined herein have
the meanings ascribed to such terms in the Declaration;
(b) "Day" means any period of 24 consecutive hours, commencing at 2:00
p.m. on any day and ending at 2:00 p.m. on the immediately following
day;
(c) "Public" means all persons other than the Unit Owner;
(d) "Registered Owner" means the person shown in the Official Records of
Yavapai County, Arizona as owner in fee simple of the Unit;
(e) "Unit Owner" means the Registered Owner and the spouse, children and
parents of such Registered Owner and the parents of the Registered
Owner's spouse; and where there is more than one Registered Owner, all
the Registered Owners and their spouses, children, parents and the
parents of their spouses will together constitute the "Unit Owner" for
the Unit and, where the Registered Owner is a corporation or
corporations, all directors, officers, shareholders and employees and
the spouses, children and parents of corporations constitute the "Unit
Owner" for the Unit; and "Unit Owner" will include any person
permitted by any of the foregoing to Use the Unit free of charge,
including an Exchange Program User;
(f) "Use" includes the purpose to which the Unit is put, and includes
reside, sleep, inhabit, or otherwise occupy;
(g) "Year" means a calendar year.
2. SIX MONTH ADVANCE RESERVATIONS.
(a) A Unit Owner (other than an Exchange Program User) may reserve and Use
its Unit for up to a maximum of 14 days per Year provided that the
Registered Owner (or any other person permitted by the Hotel Operator,
in its sole discretion, to reserve the use of the Unit on behalf of
the Unit Owner) first reserves the Use of the Unit by a notice in
writing to the Hotel Operator at least six months prior to the
commencement of the period in which the Unit Owner wishes to Use the
Unit.
C-1
(b) If a Unit is reserved for a stay which commences at or after 2:00 p.m.
on a Friday or a Saturday, the Unit must be reserved for Use for a
minimum of 2 Days. A Unit Owner may use the Unit no more than 4 times
per Year (including any use pursuant to Paragraph 3 below) with
respect to 2 or 3 Day stays that commence at or after 2:00 p.m. on a
Friday or a Saturday.
(c) If the Unit Owner (or any other person permitted by the Hotel
Operator, in its sole discretion, to reserve the Use of the Unit on
behalf of the Registered Owner other than an Exchange Program User)
reserves the Use of the Unit pursuant to this Paragraph 2, the Unit
Owner shall be entitled to Use such Unit during the period or periods
so reserved regardless of whether the Hotel Operator has accepted a
reservation from the Public for the Use of the Unit for the period or
periods reserved by the Registered Owner. Use shall be in accordance
with the applicable provisions of the Hotel Operating and Rental Pool
Agreement, including Section 10.3 of the Hotel Operating and Rental
Pool Agreement regarding payment for any services utilized by the Unit
Owner and payment of any restocking/cleaning charges. For purposes of
determining whether the Registered Owner participates in any rental
pool provided for in the Hotel Operating and Rental Pool Agreement (or
as operated by the Association, if no Hotel Operating and Rental Pool
Agreement is in effect), a Registered Owner will be deemed to have
Used the Unit during the period or periods so reserved, whether or not
the Unit Owner actually Uses or occupies the Unit during such period
or periods unless the Unit is available for rental to the Public and
at least 30 Days prior to the Unit Owner's scheduled Use of the Unit
the Unit Owner cancels such reservation, with the approval of the
Hotel Operator, acting reasonably.
(d) If the Unit Owner does not Use the Unit for the full 14 Days permitted
to be Used by the Unit Owner pursuant to this Paragraph 2 in any Year,
the Unit Owner will not be entitled to accumulate or otherwise use the
unused Days in any future Year.
(e) The Unit may only be reserved and Used for a total of 14 Days per Year
pursuant to this Paragraph 2, regardless of the number of Registered
Owners of the Unit or Unit Owners during such Year.
3. FIFTEEN DAY ADVANCE RESERVATION. In addition to the reservation and Use
rights set forth in Paragraph 2 above, a Unit Owner may reserve and Use the
Unit under the following terms and conditions:
(a) The Unit Owner (other than an Exchange Program User) may request that
the Hotel Operator reserve the Unit for Use by the Unit Owner no more
than 15 Days prior to the date of requested Use.
C-2
(b) If less than 80% of the Units available for rental to the Public are
booked for all Days requested as of the date the reservation is
requested and the Unit has not been reserved for Use by a Guest, the
Unit shall be reserved for Use by the Unit Owner.
(c) Use shall be in accordance with the applicable provisions of the Hotel
Operating and Rental Pool Agreement, including Section 10.3 of the
Hotel Operating and Rental Pool Agreement regarding payment for any
services and payment of any restocking/cleaning charges.
(d) If a Unit is reserved for a stay which commences at or after 2:00 p.m.
on a Friday or a Saturday, the Unit must be reserved for Use for a
minimum of 2 Days. A Unit Owner may Use the Unit no more than 4 times
per Year (including any use pursuant to Paragraph 2 above) with
respect to 2 or 3 Day stays that commence at or after 2:00 p.m. on a
Friday or a Saturday.
(e) For purposes of determining whether the Registered Owner participates
in any rental pool provided for in the Hotel Operating and Rental Pool
Agreement (or as operated by the Association, if no Hotel Operating
and Rental Pool Agreement is in effect), the Registered Owner will be
deemed to have Used the Unit for the Days so reserved whether or not
the Unit Owner actually uses or occupies the Unit during such Days
unless, at least 5 Days prior to the Unit Owner's scheduled Use of the
Unit, the Unit Owner cancels such reservation with the approval of the
Hotel Operator.
(f) The Unit may only be reserved and Used for a total of 14 Days per year
pursuant to this Paragraph 3, regardless of the number of Registered
Owners of the Unit or Unit Owners during such Year.
(g) If the Unit Owner does not Use the Unit for the full 14 Days permitted
to be Used by the Unit Owner pursuant to this Paragraph 3 in any Year,
the Unit Owner will not be entitled to accumulate or otherwise use the
unused Days in any future Year.
(h) The Registered Owner understands that there may be adverse tax
consequences in making Use of the Unit for more than 14 Days a Year
and neither Declarant nor the Hotel Operator shall have any liability
or responsibility for such tax consequences if the Registered Owner
exercises its rights under this section and Uses the Unit for more
than 14 Days per Year.
4. Subject to the Use by the Unit Owners pursuant to this EXHIBIT C, the Unit
will be available at all times for rental to the Public; the Hotel Operator
may accept reservations from the Public for the Use of the Unit for any
future Day or Days, unless the Registered Owner has already reserved that
Day or those Days pursuant to section 2 or 3 hereof.
C-3
THERE ARE TAX CONSEQUENCES TO A REGISTERED OWNER (SOME OF
WHICH MAY BE ADVERSE) THAT RESULT FROM THE USE OF A UNIT BY A
UNIT OWNER. THE REGISTERED OWNER SHOULD CONSULT ITS TAX
ADVISOR REGARDING HOW THE USE OF THE UNIT MAY AFFECT THE
REGISTERED OWNER'S TAX SITUATION.
THE REGISTERED OWNER IS RESPONSIBLE FOR MONITORING THE IMPACT ANY USE OF ITS
UNIT MAY HAVE ON THE REGISTERED OWNER'S TAXES. NEITHER DECLARANT NOR THE HOTEL
OPERATOR SHALL HAVE ANY LIABILITY OR RESPONSIBILITY FOR THE TAX CONSEQUENCES TO
A REGISTERED OWNER RESULTING FROM THE USE OF THE REGISTERED OWNER'S UNIT BY A
UNIT OWNER.
C-4