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RPVCCA_CC_SR_2015_01_20_G_Final_Tract_Map_5601_CrestridgeV CITY OF RANCHO PALOS VERDES MEMORANDUM TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS FROM: JOEL ROJAS, COMMUNITY DEVELOPMENT DIRECTOR DATE: JANUARY 20, 2015 SUBJECT: FINAL TRACT MAP NO. 71878 (a 60 -unit, senior condominium subdivision located at 5601 Crestridge Road; Crestridge Senior Condominium project, known as "Sol y Mar"); Applicant: TaylorMorrison; Location: 5601 Crestridge Road) REVIEWED: CAROLYNN PETRU, ACTING CITY MANAGER Project Manager: Eduardo`*, ;' born, AicP, Senior Planner RECOMMENDATION Staff recommends that the City Council: 1. Authorize the Mayor and City Clerk to execute and record the Affordable Housing Agreement, substantially in the form attached to this memorandum; 2. Authorize the Mayor and City Clerk to execute a Subdivision Improvement Agreement, substantially in the form attached to this memorandum; and 3. Approve Final Tract Map No. 71878. BACKGROUND In May 2013, the City Council approved a Tentative Tract Map, Conditional Use Permit, and Grading Permit, thereby allowing a 60 -unit condominium subdivision and development on a 9.76 -acre parcel on Crestridge Drive. As part of the conditions of approval, the applicant is required to pay a parkland dedication (Quimby) fee prior to recordation of the final map. TruMark was the initial developer that obtained project approval in May 2013. Subsequently, the property was sold to the current owner, TaylorMorrison, in July 2013. All project approvals and conditions of approval associated with the project remain in full force and effect, and are bearing upon TaylorMorrison. Construction of the project is currently underway. G-1 In December 2013, the applicant submitted a Final Tract Map application to the Community Development Department for approval. The approval of the Final Map is contingent upon the applicant demonstrating that all Conditions of Approval of the Tentative Tract Map and requirements of the Rancho Palos Verdes Municipal Code (RPVMC) have been met. Among other things, the applicant must pay the parkland dedication (Quimby) in -lieu fee, execute an Affordable Housing Agreement, and submit the draft CC&Rs for approval by the City. On October 7, 2014, the City Council accepted via Minute Order the parkland dedication (Quimby) fee for Final Tract Map No. 71878, pursuant to the City's parkland dedication fee formula in the amount of $1,278,322.21. In accordance with the project's conditions of approval, the fee will be submitted to the City prior to the recordation of the Final Map with the Los Angeles County Recorder's Office. CEQA CONSIDERATIONS The actions being considered today have already been reviewed and studied by the City as part of the Environmental Impact Report for the Crestridge Senior Condominium project, which was certified by the City Council on May 21, 2013 (City Council Resolution 2013-30). CODE CONSIDERATION AND ANALYSIS Affordable Housing Agreement The development project was subject to the inclusionary housing requirements of the City's Development Code. Based upon the 60 -unit project, the applicant was obligated to provide three (3) units, affordable to very low income households. The requirement was memorialized with a condition requiring an affordable housing agreement that must be recorded against the project. In accordance with Section 17.11.090 of the RPVMC, the City Attorney and the City's affordable housing consultant have prepared a draft Affordable Housing Agreement that sets forth the obligation to provide three affordable units, and specifies restrictions upon the three affordable units. In addition to requiring that three units be provided as affordable to very low income households, the agreement also includes a requirement that the units must remain affordable for a 30 year term; that the affordable unit must remain owner -occupied; and that affordable units must be similar in appearance, interior improvements, configuration and basic amenities to the market rate units in the project. Also included as part of the Affordable Housing Agreement is a Notice of Restriction, which would be recorded specifically on each of the 3 affordable units. Copies of the Affordable Housing Agreement are attached to this Report for the Council's review. If the Council finds the terms and conditions to be acceptable, Staff recommends G-2 that the City Council authorize execution of the Agreement by the Mayor prior to recordation of the Final Map with the County Recorder's Office. Covenants. Conditions and Restrictions (CC&Rs As another condition of approval, the applicant was required to execute and record Covenants, Conditions and Restrictions (CC&Rs). Since the project includes a condominium development with common areas, a Homeowners Association (HOA) will be put in place to manage the long term improvements of the development. In essence, the CC&Rs are the rules of the neighborhood, the goal of the CC&Rs is protect, preserve, and enhance property values in the community. The CC&Rs of this development also include the applicable conditions of approval that were included in the Council -adopted Resolutions. The CC&Rs are attached to this Report for informational purposes. The CC&Rs were reviewed by the City Attorney's office, who confirmed that the document complies with the conditions imposed by the City Council through Resolution 2013-31. Subdivision Improvement Agreement According to Section 16.20.140 of the RPVMC, the City Attorney prepared a Subdivision Improvement Agreement that specifies the improvements to be constructed and the period within which the improvement work shall be completed by the applicant. Furthermore, in the event the applicant fails to construct the improvements within the established time period, the Agreement specifies remedies within which the City can complete the improvement work and recover all costs and expenses from the applicant through the establishment of surety bonds. Staff will ensure that all required bonds are established prior to recordation of the Final Map with the County Recorder's Office. A copy of the Agreement is attached to this Report for the Council's review. If the Council finds the terms and conditions to be acceptable, Staff recommends that the City Council authorize execution of the Agreement by the Mayor prior to recordation of the Final Map with the County Recorder's Office. ADDITIONAL INFORMATION It is important to note that this item contains four distinct components that must be completed in a certain order, culminating with the recordation of the Final Map with the County Recorder's Office. Once the City Council approves the Final Map, the following steps will be completed in the following order, with numbers 1-3 performed on dates prior to the date the final map is recorded: 1. The applicant will submit QUIMBY fee payment to the City; 2. The City Attorney and Staff will finalize the Affordable Housing Agreement and related Notice of Restrictions, and record the Agreement; G-3 3. The City Attorney and Staff will finalize the Subdivision Improvement Agreement, and record the document; and, 4. Staff will have the Final Tract Map No. 71878 recorded. CONCLUSION Based upon the above discussion, Staff recommends that the City Council: 1) Authorize the Mayor and City Clerk to execute and record the Affordable Housing Agreement; 2) Authorize the Mayor and City Clerk to execute the Subdivision Improvement Agreement; and, 3) Approve Final Tract Map No. 71878. ALTERNATIVES In addition to Staff's recommendation, the following alternative is available to the City Council: 1. Identify changes to the Affordable Housing Agreement, and/or the Subdivision Improvement Agreement, and direct Staff to modify the documents for consideration at a future meeting. Attachments • Affordable Housing Agreement • Covenants, Conditions and Restrictions • Subdivision Improvement Agreement • Resolution 2013-31, approving the Crestridge Senior Condominium project G-4 AFFORDABLE HOUSING AGREEMENT AND NOTICE OF RESTRICTIONS G-5 AFFORDABLE HOUSING AGREEMENT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Rancho Palos Verdes 30940 Hawthorne Boulevard Attn: Director of Planning, Building and Code Enforcement This document is exempt from the payment of a recording fee pursuant to Government Code Sections 27383 and 6103 AFFORDABLE HOUSING AGREEMENT Tract 71878 THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement"), dated the _ day of , 2015, is made by and between the CITY OF RANCHO PALOS VERDES, CALIFORNIA, a California Municipal Corporation (the "City"), and TAYLOR MORRISON OF CALIFORNIA, LLC, a California limited liability company (the "Owner"). City and Owner shall be referred to collectively as the "Parties." A. Recitals. (i) Owner is the owner of certain real property (the "Site") located within the City of Rancho Palos Verdes, County of Los Angeles, State of California, as shown on the site map attached to this Agreement as Exhibit "A-1 ", and more fully described as set forth in Exhibit "A-2", both attached hereto and incorporated herein by this reference. (ii) Owner has obtained from the City Council of City the authorizations and approvals necessary to construct a housing project consisting of sixty (60) single-family condominium units (the "Project") on the Site. These approvals include Resolution No. 2013-30 and Resolution No. 2013-31, both approved by the City Council on May 21, 2013, and all other approvals generally identified in the records of City as Tentative Tract Map No. 71878 (collectively, the "Entitlements"). (iii) The residential units in the Project are all required to be age restricted to seniors age 55 years and older. (iv) The City of Rancho Palos Verdes has adopted Chapter 17.11 of City's Municipal Code establishing requirements for the construction of housing for low and moderate households. -1- 86876-000IN] 752856v5,doc G-6 (v) It is the desire of City to encourage developments designed to provide affordable dwelling units for the residents of the City. (vi) Pursuant to Chapter 17.11 of the Rancho Palos Verdes Municipal Code, Owner is required to provide three (3) new Affordable Units (defined below) within the Site. (vii) The parties desire to set forth herein the obligations of Owner regarding the provision of the Affordable Units in connection with the development of the Site. B. A rem ement. NOW, THEREFORE, City and Owner hereby agree as follows; I . Number of Affordable Units. In consideration of this Agreement and the Entitlements, Owner agrees to restrict three (3) of the new residential dwellings in the Project to sale to an Extremely Low or Very Low Income Household at no more than the Affordable Housing Price. For purposes of this Agreement; (a) Affordable Housing Price" shall have the meaning set forth in Paragraph 9 hereof (b) "Affordable Unit"; "Affordable Units" shall mean the single-family residential units within the Project that are to be sold to Eligible Purchasers at no more than the Affordable Housing Price. (c) "Director" shall mean the Director of City's Department of Planning, Building and Code Enforcement. (d) "Eligible Purchaser" shall mean an Extremely Low Income Household or Very Low Income Household that also satisfies the age restrictions set forth in the Entitlements and the Declaration of Covenants, Conditions, and Restrictions for the Project. (e) "Extremely Low Income Household" shall mean a household whose income does not exceed thirty percent (30%) of the area's median income, adjusted for family size, as determined by the HCD Regulations. (f) "HCD Regulations" shall mean the regulations adopted by the California Department of Housing and Community Development pursuant to California Health and Safety Code Sections 50052.5 and 50093. (g) "Very Low Income Household" shall mean a household whose income is greater than thirty percent (30%) but does not exceed fifty percent (50%) of the area's median income, adjusted for family size, as determined by the HCD Regulations. (h) "Total housing Costs" mean the total monthly or annual recurring expenses required of a household to obtain shelter, and includes the mortgage payment (principal and interest, based on a thirty year term), parking amenities such as a garage or carport, utilities, homeowner's association dues, taxes, mortgage insurance and any other related assessments. -2- R6876-000111752856v5.doc G-7 2. Location and Quality of Construction of the Affordable Units. The Affordable Units shall be constructed within the Site and shall be dispersed throughout the Project. No more than one (1) Affordable Unit may be located within any single building on the Site. The Affordable Units shall each be, at a minimum, a new two (2) bedroom attached residential dwelling unit of at least 1,200 square feet of habitable area, excluding the garage or a new three (3) bedroom detached residential dwelling unit of at least 1,800 square feet of habitable area, excluding the garage. The Affordable Unit shall be of a quality and contain fixtures and amenities that are generally equal to the other dwelling units that Owner is constructing in the Project, as reasonably determined by the Director. Depending upon the size of an Affordable Unit, no more than four (4) persons shall occupy a two (2) bedroom Affordable Unit, and no more than seven (7) persons shall occupy a three (3) bedroom Affordable Unit, not including children born after the date of initial sale and occupancy by a household. 3. Timing of the Provision of the Affordable Units. The Affordable Units shall be constructed and sold to Eligible Purchasers prior to the earlier of (a) the issuance of a Certificate of Occupancy for the residences constructed within the Project, or (b) the sale of no more than thirty (30) of the residences in the Project. 4. Purchaser Affordability Agreement; Duration of Affordability Requirements. The Affordable Units shall be subject to the requirements of the ?Notice of Restrictions Affecting Real Property and Right of First Refusal to Purchase Property (the "Purchaser Affordability Agreement") attached hereto as Exhibit "B" and incorporated herein by this reference, for a period of thirty (30) years, beginning on the date of the close of escrow for each Affordable Unit by an Eligible Purchaser. No leasing of an Affordable Unit by Owner is permitted. The applicable duration of the Purchaser Affordability Agreement shall be known as the "Affordability Period." AT THE CLOSE OF ESCROW FOR THE SALE OF THE AFFORDABLE UNIT, THE PURCHASER AFFORDABILITY AGREEMENT SHALL BE RECORDED IN THE OFFICE OF THE COUNTY RECORDER FOR THE COUNTY OF LOS ANGELES, SUBORDINATE ONLY TO THE GRANT DEED CONVEYING THE AFFORDABLE UNIT TO THE ELIGIBLE PURCHASER AND THE FIRST LENDER DEED OF TRUST (AS DEFINED IN THE PURCHASER AFFORDABILITY AGREEMENT). A REQUEST FOR NOTICE OF DEFAULT UNDER THE FIRST LENDER DEED OF TRUST, IN FAVOR OF THE CITY, SHALL ALSO BE RECORDED. Upon the recordation of a Purchaser Affordability Agreement for the Affordable Unit, this Agreement shall be of no further force or effect as to that unit. The parties shall execute, acknowledge and record such further documentation as is reasonably necessary to evidence the release of the Affordable Unit from the provisions of this Agreement. 5. Selection of Eligible Purchasers. The Affordable Units may be sold to EIigible Purchaser selected by Owner who meets the income and affordability requirements provided herein, upon the written approval of the proposed Eligible Purchaser by City. Owner shall not be required to sell an Affordable Unit to Eligible Purchaser referred by City, but Owner shall accept or reject any such Eligible Purchaser based upon the same evaluation criteria that Owner applies to buyers of residential units within the Project. Owner shall provide to City a written response indicating the reasons for rejection of Eligible Purchaser referred by City. -3- R6876-0001 \1 752 G-8 6. Income of Eligible Purchasers. Prior to the sale of the Affordable Unit, Owner shall submit to City a completed income computation and certification form acceptable to or otherwise provided by City certifying that the Eligible Purchaser purchasing the Affordable Unit meets the income requirements established for the Affordable Unit. Owner shall obtain an income certification form from the proposed Eligible Purchaser of the Affordable Unit and shall certify that, to the best of Owner's knowledge, the income of the proposed Eligible Purchaser is truthfully set forth in the income certification form. The Owner shall verify the income certification of the proposed Eligible Purchaser by one or more of the following methods, any of which may be specifically requested by City: (a) Obtain paycheck stubs from the proposed Eligible Purchaser's two (2) most recent pay periods. (b) Obtain a true copy of an income tax return from the proposed Eligible Purchaser for the most recent tax year in which a return was filed. (c) Obtain an income verification certification from the employer of the proposed Eligible Purchaser. (d) Obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if the proposed Eligible Purchaser receives assistance from such agencies. (e) Obtain an alternate form of income verification reasonably requested by City. A household which, at the commencement of occupancy, qualified as a Extremely Low Income Household or a Very Low Income Household, shall continue to be deemed so qualified, until such time as the Affordable Unit is sold or otherwise conveyed or transferred or is no longer owner -occupied, even if the household's income has, subsequent to the commencement of occupancy, increased to an amount above the applicable income level. 7. Ineligible Purchasers. (a) The following individuals, by virtue of their position or relationship, are ineligible to purchase an Affordable Unit: (i) All employees and officials of City or its agencies, authorities, or commission who have, by virtue of their position, policy-making authority or influence over the implementation of the inclusionary housing program, as well as the immediate relatives of such employees or officials, including spouses, children, grandchildren, parents, grandparents, brothers, sisters, fathers-in-law, mothers-in-law, sons-in-law, daughters-in-law, aunts, uncles, nieces, nephews, sisters in-law and brothers-in-law. (ii) The immediate relatives of Owner and its members, their officers, and employees, including spouses, children, grandchildren, parents, grandparents, brothers, sisters, fathers-in-law, mothers-in-law, sons-in-law, daughters-in-law, aunts, uncles, niece, nephews, sisters in-law and brothers-in-law. 4- R6876 -000M 752856v5.doc 4-86876-000l11752856v5.doc G-9 8. Determination of Sales_ Price. The Affordable Unit shall be sold to the Eligible Purchaser at a price that does not exceed the Affordable Housing Price. Notwithstanding the foregoing, the Affordable Housing Price to be paid by the Eligible Purchaser to Owner shall be that amount which is the sum of the amount the Eligible Purchaser is able to obtain as a residential home loan from an institutional lender plus any down payment made by the Eligible Purchaser. The general formula by which the Affordable Housing Price is to be determined is set forth in Exhibit "C" hereto. 9. Affordable Housing Price. The maximum Affordable Housing Price for an Affordable Unit shall be an amount equal to the price at which the Extremely Low Income Household or Very Low Income Household could qualify for a thirty (30) year loan after additional adjustments to qualifying income as set forth in Section 50052.5 of the California Health and Safety Code and the HCD Regulations, such that the monthly payments of the loan do not exceed the parameters of such Section 50052.5 and the HCD Regulations. The maximum home loan amount for an Affordable Unit shall be based upon the income of a household with the assumed family size of four persons or the actual household size purchasing the Affordable Unit. The maximum home loan amount for the Affordable Unit shall be submitted by Owner and approved by City within ten (10) business days from receipt. The parties understand and agree that the maximum Affordably Housing Price to be established by this formula is not necessarily equal to the fair market value of the Affordable Unit, and may be established at a price which is substantially below the fair market value. 10. Maintenance. Until the Affordable Unit is sold to a qualified owner occupant, Owner shall maintain or cause to be maintained the interiors and exteriors of the Affordable Unit in a decent, safe and sanitary manner, in accordance with the standard of maintenance of similar housing units within the City, and in at least as good, a condition as the dwelling units on the Site. 11, Subordination. This Agreement shall run with the land and shall be prior to and superior to all deeds of trust and liens other than those liens securing the payment of property taxes and assessments. Owner and City agree that this Agreement and the Purchaser Affordability Agreement shall not prevent or limit Owner in any manner from encumbering the Site, any portion of the Site or any improvements on the Site with any conventional mortgage, construction, bond, financing or security interest to secure financing with respect to the construction of the Site. City shall, upon request, execute any and all documents reasonably acceptable to City, which result in and cause the subordination of this Agreement to the construction financing obtained by Owner. 12. Monte. Representatives of City shall be entitled to inspect the records of Owner relating to the Affordable Unit at any time, upon reasonable notice, and to conduct an independent audit of such records. Such audit shall be at the expense of City, provided that if a default of the terms of this Agreement is discovered, the cost of the audit shall be borne by Owner. Until the Affordable Unit is occupied by a qualified owner occupant, representatives of City shall be entitled to enter the Affordable Unit, upon reasonable notice, to monitor compliance with this Agreement. -5- R687b-0U01117528560.doc G-1 0 13. Enforcement. City shall be entitled to all remedies available under the law upon the default of the terms of this Agreement by Owner, including: (a) specific performance of the teens of this Agreement; (b) disgorgement of any amounts of sales proceeds which exceed an Affordable Housing Price; and (c) an award of its actually incurred attorney's fees, specifically including the cost to City of time expended by the office of the City Attorney and other City staff and outside consultants, attorneys and other personnel involved in enforcing the terms of this Agreement. 14. Notices. Any notices, requests or approvals given under this Agreement from one Party to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepared, to the address of the other Party as stated in this paragraph, and shall be deemed to have been given at the time of personal delivery or at the time of deposit for mailing. Notices shall be sent to: CITY: Director of Planning, Building and Code Enforcement City of Rancho Palos Verdes 30940 Hawthorne Boulevard Rancho Palos Verdes, California 90275 OWNER: Taylor Morrison of California, LLC 8105 Irvine Center Drive, Suite 1450 Irvine, California 92618 15. Attorney's bees. Should either of the Parties to this Agreement incur attorney's fees in seeking the enforcement of this Agreement, whether or not a final court judgment is entered, the prevailing Party shall be entitled to reimbursement of all reasonable costs and expenses incurred by the prevailing Party in such legal proceeding, including reasonable attorneys' fees, court costs and expenses and consultant and expert witness fees and expenses. 16. Indemnification. Owner shall defend, indemnify and save harmless City, its elected and appointed officials, officers, agents and employees, from all liability from loss, damage or injury to persons or property, including the payment by Owner of any and all reasonable legal costs and attorneys' fees, in any manner arising out of the intentional or negligent acts and/or omissions of Owner pursuant to this Agreement, including, but not limited to, all consequential damages, to the maximum extent permitted by law. The indemnification obligations of Owner under this Agreement shall survive the expiration or earlier termination of this Agreement. 17, Agreement Appurtenant to Property. This Agreement is appurtenant to and shall run with the Site and be binding upon the heirs, administrators, executors, successors, assigns and transferees of the parties hereto` 18. Term. This Agreement shall terminate and be of no further force or effect when all of the following have occurred: (a) the Affordable Units are all sold to qualified Eligible Purchasers in accordance with this Agreement, (b) such Eligible Purchasers have executed the Purchaser Affordability Agreement attached hereto as Exhibit "B," and (c) the Purchaser Affordability Agreements and grant deeds conveying the Affordable Units to the Eligible -6- R6876-0001 \1 7528560.doc G-11 Purchaser have been recorded. Both Parties to this Agreement shall promptly execute, acknowledge and deliver for recordation any documents that may be reasonably necessary to remove this Agreement as an encumbrance against title to the Site. 19. Further Assurances. The Parties shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as may from time to time be necessary or appropriate to effectuate the purpose of entering into this Agreement. The City Manager is authorized to execute any further documents on behalf of City, including the Purchaser Affordability Agreement and any subordination agreements. 20. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Los Angeles, State of California. 21. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by Owner and City. 22, Assignment Prohibited. in no event shall Owner assign or transfer any portion of this Agreement without the prior express written consent of City, which consent may be given or withheld in City's sole discretion. Notwithstanding the preceding sentence, if any such assignment or transfer is to a purchaser of the entire Project, City shall not unreasonably withhold or delay its consent of the assignment. 23. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between City and Owner concerning all or any part of the subject matter of this Agreement. -7- R6876-006 I \1 752856v5.doc G-1 2 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Dated: ATTEST: City Clerk Dated: CITY OF RANCHO PALOS VERDES Mayor TAYLOR MORRISON OF CALIFORNIA, LLC ME Its: Name Exhibits: "A -l" Site Map "A-2" Legal Description "B" Purchaser Affordability Agreement "C" Illustration of Affordable Sales Price Calculation -8- R6876-000I\1752856v5.doc G-1 3 State of California County of Los Angeles On , before me, (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of Los Angeles On before me, (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature NB: REPLACE WITH NEW FORD IF EXECUTED AFTER 1/1/15 R6876-00011.17521156v5.doe (Seal) G-14 EXHIBIT A -I and A-2 SITE MAP AND LEGAL DESCRIPTION R6876 -000N 752856u5.doc G-15 EXHIBIT B Form of Eligible Purchaser Affordability Agreement R6816-000111752856v5.doc G-16 EXHIBIT C ILLUSTRATION OF AFFORDABLE SALES PRICE CALCULATION VERY LOW-INCOME EXAMPLE - 2014 Unit size: 3 -bedroom Household Size: 4 -person Maximum Household Income'.- $42,700 Median Income $64,800 Down Payment: $350 Total Annual Housing Expense Total Monthly Housing Expense Components of housing expenses (allowances): 0,00% 3.50% 5.00% 10.00% 20.00% $9,720 $9,720 $9,720 $9,720 $9,720 $810 $810 $810 $810 $810 Property taxes' $37 $39 $39 $41 $52 Homeowners association dues $350 $350 $350 $350 $350 Insurance $50 $50 $50 $50 $50 Utilities $133 $133 $133 $133 $133 Maintenance & repairs $0 $0 $0 $0 $0 mortgage insurance $39 $39 $39 $38 $0 mortgage $201 $200 199 198 $225 Total monthly housing expenses $810 $810 $810 $810 $810 mortgage interest rate 4.25% 4.25% 4.25% 4.25% 4.25% amortization period in years 30 30 30 30 30 mortgage payment $201 $200 $199 $198 $225 $40,76 mortgage amount 9 $40,570 $40,481 $40,167 $45,670 down payment $0 $1,471 $2,131 $4,463 $11,418 $40,76 Total Affordable Price 9 $42,042 $42,612 $44,630 $57,088 'Very Lo+s•-Income Limit for 2014 per California Housing and Communitv Development Memorandum dated February 28. 2014 'Very Low -Income maximum housing expense pursuant to California Health & Safem Code section 50052.5 ;Property tax estimated based upon county assessor accepting the affordable price to be the assessed value and annual taxes estimated @L IQ% of the assessed value per year. 'Utilio, Allowance calculated from the housing Authority of the County of Las Angeles Utility Allowance Schedule dated 71112014 and available at htip.•Ilw,w3w3.lacdc.orglCDCWebsiteluploadedFileslHAlUtilitv%20Allowance%20Summary%20Schedule.pdf G-17 R6876-000111752856v5.doe RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383, AND WHEN RECORDED MAIL TO: City of Rancho Palos Verdes 30940 Hawthorne Boulevard Rancho Palos Verdes, California 90275 Attn: Director of Planning, Building & Code Enforcement NOTICE OF COVENANTS AND RESTRICTIONS AFFECTING REAL PROPERTY AND OPTION TO PURCHASE PROPERTY Owner: Residence: Crestridge Road Rancho Palos Verdes, CA These Covenants, Restrictions and Option to Purchase (these "Restrictive Covenants" or "Agreement") are entered into as of this day of , by and between the CITY OF RANCHO PALOS VERDES, CALIFORNIA, a California municipal corporation (the "City"), and "Owner"). RECITALS an individual (the A. Owner is the owner of certain real property (the "Property") located within the City of Rancho Palos Verdes, County of Los Angeles, State of California, commonly known as Crestridge Road, Unit , identified by Los Angeles County Assessor's Parcel Number and more fully and legally described in Exhibit "1" attached hereto and incorporated herein by this reference. B. Taylor Morrison of California, LLC (the "Developer") is the owner of certain real property (the "Entitlement Site") located within the City of Rancho Palos Verdes, County of Los Angeles, State of California, commonly known as Tentative Tract Map No. 71878, which is more fully described as set forth in Exhibit "2" attached hereto and incorporated herein by reference. C. Pursuant to Chapter 17.11 of the Rancho Palos Verdes Municipal Code ("Affordable Housing Ordinance"), as a condition precedent to developing the Entitlement Site, Developer was required to include three (3) condominium units in the Site that will be affordable to Extremely Low and Very Low Income Households at an Affordable Sales Price. In accordance with the provisions of Chapter 17.11, Developer and City entered that certain Affordable Housing Agreement dated as of , 2015, and recorded on , 2015 as Instrument No. in the Official Records (the "Agreement"), to ensure Developer's compliance with the Affordable Housing Ordinance. D. Pursuant to the terms of the Agreement and the applicable provisions of Chapter 17.11 of the Rancho Palos Verdes Municipal Code, the use and occupancy of the Property is restricted to G-18 qualified low-income purchasers to ensure its continued availability to Extremely Low and Very Low Income Households for a period of at least thirty (30) years. E. Pursuant to the terms of the Agreement, the Property is to be further encumbered by the right, but not the obligation, of the City to purchase the Property from Owner (i) on the same terms and for the same price as any bona fide offer made to Owner to purchase the property during the term of this Restrictive Covenants and (ii) in the event of default. NOW, THEREFORE, in consideration of the benefits received by the Owner and the City, the Owner and the City agree, as follows: 1. DEFINITIONS. The following terms are specifically defined for these Restrictive Covenants and their definitions can be found in the sections indicated below" A. "Alternative Sale" - Section IOB. B. "Base Price" — Section 12A. C. "City" - First sentence of this Agreement on page 1. D. "Restrictive Covenants" - First sentence of this Agreement on page 1. E. "City's Share of Sales Proceeds" - Section 13C. F. "Eligible Purchaser" - Section 12B. G. "Eligible Transfer" - Section 11. H. "Excess Proceeds" - Section 13C. I. "Fair Market Value" — Section 9. J. "First Lender" — Section 20A. K. "First Lender Deed of Trust" — Section 20A. L. "Increased Base Price" - Section 12A. M. "Option" - Section 8. N. "Owner" - First sentence of this Agreement on page 1. O. "Owner's Share of Sales Proceeds" - Section 13B. P. "Proposed Purchaser" - Section 1 IA. Q. "Residence" - Section 2. G-19 R. "Restricted Sales Price" - Section 12. S. "Total Sales Proceeds" - Section 123 T. "Transfer" - Section 5. U. "Value of Capital Improvements" - Section 12B. 2. DESCRIPTION OF PROPERTY. These Restrictive Covenants concern the real property commonly known as Crestridge Road, Unit , Rancho Palos Verdes, California, 90275, which is more fully described in Exhibit "1" attached hereto and incorporated herein by reference (the "Residence"). 3. OWNER CERTIFICATIONS. The Owner certifies that (a) the financial and other information previously provided in order to qualify to purchase the Residence was true and correct as of the date first written above; (b) the Owner does not own any other residential property as of the date of this Agreement; and (c) the Owner shall occupy the Residence as the Owner's principal place of residence. The Owner shall be considered as occupying the Residence if the Owner is living in the Residence for at least ten (10) months out of each calendar year. The City may grant a temporary waiver of this occupancy requirement for good cause in its sole discretion. If the Residence is a two-bedroom unit, no more than four (4) persons shall occupy the Residence, or if the Residence is a three-bedroom unit, no more than seven (7) persons shall occupy the Residence, not including children born after the date of initial sale and occupancy by a household. 4. LEASING OF RESIDENCE. The Owner shall not lease the Residence for more than two (2) months during any calendar year without the prior, written consent of the City and shall not lease the Residence without providing the City with a copy of the lease at least sixty (60) days in advance of any leasing of the Residence. Any lease in violation of these Restrictive Covenants is prohibited, and shall constitute a default by the Owner hereunder. 5. TRANSFER OF RESIDENCE. "Transfer" means any sale, assignment or transfer, voluntary or involuntary, of any interest in the Residence, including, but not limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest, or an interest evidenced by a land contract by which possession of the Residence is transferred and Owner retains title. Any Transfer without satisfaction of the provisions of these Restrictive Covenants is prohibited. Transfers by gift, devise, or inheritance to an existing spouse, children, surviving joint tenant, or a spouse as part of a dissolution proceeding or in connection with marriage, shall not be considered a "Transfer" for the purposes of these Restrictive Covenants. G-20 6. REFINANCE OF RESIDENCE. A. Refinancing of First Deed of Trust. Subject to compliance with the provisions of subsection C hereof, the Owner may refinance a loan secured by a First Deed of Trust encumbering the Residence provided that the City's City Manager has previously reviewed and approved the terms and conditions thereof including, but not limited to, the principal amount of the proposed loan, the interest rate, the terms of repayment, the identity of the maker of the proposed loan, any documentation pertaining to the subordination or enforcement of this Agreement, and the costs and fees associated with the making of the proposed loan. The Owner must have received the written approval of the proposed loan by the City's City Manager prior to the date of its closing. In the event of a proposed refinance that includes a principal amount in excess of that needed to repay the loan secured by the First Deed of Trust, any approval by the City Manager shall include conditions which, in the sole discretion of the City Manager, are warranted in order to insure the continued affordability of the Residence. Any refinancing of a First Deed of Trust that has not been previously approved by the City Manager as herein above described shall constitute a default under this Agreement. B. Junior Liens. Subject to compliance with the provisions of subsection C hereof, the Owner may enter into a loan secured by a lien junior and subordinate to this Agreement provided that (i) the proceeds of each loan shall be used solely to pay for repairs or the construction of improvements to the Residence, and (ii) the City's City Manager has previously reviewed and approved the terms and conditions thereof, including, but not limited to, the principal amount of the proposed loan, the interest rate, the terms of repayment, the identity of the maker of the proposed loan, the costs and fees associated with the making of the proposed loan, and the nature and costs of the proposed repairs or the construction of improvements, to be paid with the proceeds thereof, and (iii) the Owner shall have received the written approval of the proposed loan by City's City Manager prior to the date of its closing. Without limiting the foregoing, the proceeds of the proposed loan shall not be used to pay for the construction of improvement of a luxury nature such as ground pools, spas, or interior or exterior decorative items, or improvements with an unreasonable useful life. The failure of the Owner to comply fully with the provisions of this subsection when entering into a loan that is secured by a lien junior and subordinate to this Agreement shall constitute a default under this Agreement. C. Notification Prior to Encumbrance or Hypothecation. If Owner desires to refinance any loan secured by a first lien encumbering the Residence pursuant to subsection A hereof, or to borrow funds for a new loan to be secured by a junior lien encumbering the Residence the proceeds of which are to be used to pay for repairs or the construction of improvements to the Residence pursuant to subsection B hereof, prior written approval of the City is required. The Owner must request such approval in writing at least 30 days prior to the G-21 recordation of a lien securing any such refinancing or loan, the Owner shall submit to the City in writing the following information: (a) Name and address of lender. (b) Terms of the loan, including, but not limited to, principal, interest rate, term, and loan fees. (c) Closing date of the loan. (d) Copy of any proposed escrow instructions, loan application, security agreement, Statement of Lien, and other agreements between the Owner and the lender. (e) Written documentation of compliance with the conditions for City approval as set forth in subsections A or B hereof, as applicable. (f) Other written documentation reasonably requested by the City. The City shall have 15 working days after its receipt of all of such information to approve or disapprove the proposed refinancing or loan. The subject refinancing or loan shall be deemed disapproved by the City Manager of the City if it is not approved within such 15 working day period.. 7. NOTICE OF INTENDED TRANSFER. In the event the Owner intends to Transfer or vacate the Residence, the Owner shall promptly notify the City in writing of such intent. The written notice shall be given in accordance with Section 23 of these Restrictive Covenants at least ninety (90) days prior to the actual date of the proposed Transfer or vacation of the Residence. The notice from the Owner shall be sent by certified mail, return receipt requested. CITY PURCHASE OPTION. The Owner agrees that the City shall have the option, but not the obligation, to purchase the Residence for an amount equal to the lesser of the Fair Market Value of the Residence or the Restricted Sales Price calculated pursuant to Section 12 of this Agreement (the "Option") . If the City decides to exercise its option to purchase the Residence, it shall, within thirty (30) days of receipt of the notice specified in Section 7 above, notify the Owner in accordance with Section 23 below that it chooses to exercise the Option. If the City exercises the Option, it shall purchase the Residence within ninety (90) days of the date it receives the notice specified in Section 7 above at the lesser of the Fair Market Value of the Residence or Restricted Sales Price calculated pursuant to the formula set out in Section 12. The City may, instead of purchasing the Residence itself, assign its right to purchase the Residence to a person who meets the criteria established by the City or to a governmental agency or nonprofit organization that is devoted to developing or preserving low and moderate income housing. 9. FAIR MARKET VALUE. G-22 A. For purposes of this Agreement, the term "Fair Market Value" shall have the meaning ascribed in Section 1263.320 of the California Code of Civil Procedure, as it now exists or may subsequently be amended. If it is necessary to determine the Fair Market Value of the Residence, it shall be determined by a real estate appraiser selected by the City. The appraiser shall have been previously approved by the Federal National Mortgage Association or the Federal Housing Administration and placed on their list of approved single-family housing appraisers. If possible, the appraisal shall be based upon properties sold in the market during the three-month period prior to the date of the notice of Transfer. The cost of the appraisal shall be divided equally between the City and the Owner. In the event that improvements to the Residence have been made by the Owner that increase the value of the Residence, or if damage to the Residence has occurred or deferred maintenance while the Owner owned the Residence has decreased the value of the Residence, the appraisal shall specifically ascribe a value to these adjustment factors and state what the fair market value of the Residence would be without such adjustments. Nothing in this section shall preclude the Owner and the City from establishing the fair market value of the Residence by mutual agreement in lieu of an appraisal pursuant to this section. B. If no appraisal has been conducted pursuant to Section 9A above, and it is necessary to determine the Value of Capital Improvements made to the Residence by the Owner, such determination shall be made by a real estate appraiser selected by the City. The cost of the appraisal shall be divided equally between the City and the Owner. 10. TRANSFER BY OWNER. In the event the City does not exercise its option to purchase pursuant to Section 8 above, the Owner may sell the Residence to a person of the Owner's choosing (the "Proposed Purchaser") on the terms set forth in this Section. A. Transfer to Eligible Purchaser: If the Owner Transfers the Residence in a transaction that meets the Eligible Transfer requirements of Section 11, the maximum amount that the Owner may receive for the Transfer shall be the Restricted Sales Price as defined in Section 12. B. Transfer to Ineligible Purchaser: If the Owner Transfers the Residence in a transaction that does not meet the Eligible Transfer requirements of Section 11, below ("Alternative Sale"), the gross proceeds of such sale shall be divided between the Owner and the City pursuant to the formula in Section 13 below. 11. ELIGIBLE TRANSFER. A Transfer of the Residence that meets the requirements set forth in this Section 11 shall qualify as an approved Transfer to an Eligible Purchaser ("Eligible Transfer"): A. Disclosures and Submittals: The Owner and the proposed purchaser ("Proposed Purchaser") shall provide the following information and documents to the City: Purchaser. (i) The name, address and telephone number in writing of the Proposed G-23 (ii) A signed financial statement of the Proposed Purchaser in a form acceptable to the City and any other supporting documentation requested by the City. The financial information shall be used by the City to determine the income eligibility of the Proposed Purchaser. (iii) The proposed sales contract and all other related documents that shall set forth the terms of the sale of the Residence. The documents shall include the following terms: (a) The sales price; and (b) The price to be paid by the Proposed Purchaser for the Owner's personal property, if any, and for the services of the Owner, if any. (iv) A written certification from the Owner and the Proposed Purchaser in a form acceptable to the City that the sale shall be closed in accordance with the terms of the sales contract and other documents submitted to and approved by the City. The certification shall also provide that the Proposed Purchaser or any other party has not paid and will not pay to the Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract and documents submitted to the City. The written certification shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certification submitted to the City, the City shall have the right to file an action at law or in equity to make the parties terminate and/or rescind the sale contract and/or declare the sale void, notwithstanding the fact that the sale may have closed and become final as between the Owner and the Proposed Purchaser. In any event, any costs, liabilities or obligations incurred by the Owner and the Proposed Purchaser for the return of any monies paid or received in violation hereunder or for any costs and legal expenses, shall be borne by Owner and/or the Proposed Purchaser and they shall hold the City and its designee harmless and reimburse their expenses, legal fees and costs for any action they reasonably take in good faith in enforcing the terms of this Agreement. (v) Executed Restrictive Covenants from the Proposed Purchaser with substantially the same terms as the terms of this Agreement, executed by the Proposed Purchaser in favor of the City. The recordation of the Restrictive Covenants and of a request for notice of default under the First Lender Deed of Trust, in favor of the City, shall be a condition of the City's approval of the proposed sale. The City may require the Proposed Purchaser to pay a reasonable fee to the City and reimburse it for out of pocket costs to cover the costs of administering its right and obligations under this Agreement. (vi) Upon the close of the proposed sale, a conformed copy of the recorded Restrictive Covenants, a copy of the final sales contract, settlement statement, escrow instructions, and any other document that the City may reasonably request. B. Eligibility of Purchaser: A Proposed Purchaser who meets the following requirements shall be an Eligible Purchaser: G-24 (i) Each Proposed Purchaser shall certify that he or she will occupy the Residence as his or her principal residence; and (ii) The combined maximum income for all household members of the purchaser shall not exceed fifty percent (50%) of the median yearly income adjusted for household size, for a household in Los Angeles County as published by the California Department of Housing and Community Development ("HCD"). In the event such income determinations are no longer published by HCD, or are not updated for a period of at least eighteen months, the City shall provide other income determinations which are reasonably similar in method of calculation to those previously published by HCD. 12. DETERMINATION OF SALES PRICE. The maximum sales price (the "Restricted Sales Price") that the Owner shall receive for an Eligible Transfer of the Residence shall be the Increased Base Price, as adjusted by Section 12B. A. Increased Base Price: The Base Price of the Residence means the purchase price paid by the Owner, inclusive of closing costs. The Increased Base Price of the Residence means the Base Price, increased by the percentage of increase in household income for a very low- income household of four (4) for a three-bedroom house, all at fifty percent (50%) of the median yearly income for a household in Los Angeles County, as published by HCD from time to time. The increase in household income shall be computed from the date of the original purchase of the Residence by the Owner to the date of receipt of notice to Transfer by the City or its assignee required by Section 6. In the event that such income determination is no longer published, or has not been updated for a period of at least eighteen (18) months, the City may use or develop such other reasonable method as it may choose in order to determine such increase in income. B. Adjusted Increased Base Price: The Increased Base Price shall also be adjusted for the Value of Capital Improvements. The "Value of Capital Improvements" shall mean the value of substantial structural or permanent fixed improvements that cannot be removed without substantial damage to the Residence or substantial or total loss of value of the improvements. No such valuation shall be made except for improvements: (i) made or installed by or under the direction of the Owner; (ii) approved in advance by the City or its designee; and (iii) with an initial cost of Two Thousand Dollars ($2,000) or more. The value of such improvements to be taken into account in calculation of the Increased Base Price shall be the increase in value of the Residence by reason of the improvements, and shall be determined by agreement of the City and the Owner, or, in the event of failure to agree, by appraisal pursuant to Section 8B of these Restrictive Covenants. 13. ALTERNATIVE SALE; PAYMENT TO THE CITY. If the Transfer is not to an Eligible Purchaser (i.e., an Alternative Sale), the Owner shall pay a portion of the gross proceeds of sale (the "Total Sales Proceeds") to the City pursuant to this Section. A. Disclosures and Submittals: The Owner and Proposed Purchaser shall provide the same information and documents to the City described in Section I IA above, except G-25 that the financial statement of the Proposed Purchaser described in Section 11A(ii) and the Restrictive Covenants described in Section I I(v) and (vi) shall not be required. B. Amount Retained by Owner: The selling Owner shall initially receive the lesser of the Total Sale Proceeds or the sum of (i) the Base Price of the Residence increased by the percentage increase in the Consumer Price Index for All Urban Consumers (Base Years 1982-84 = 100) for the Los Angeles -Anaheim -Riverside Consolidated Metropolitan Statistical Area (published by the United States Department of Labor, Bureau of Labor Statistics) (the "CPI") from the date of the Owner's original purchase of the Residence to the date of the Alternative Sale, plus (ii) the Value of City -approved Capital Improvements, if any. This amount shall be referred to herein as "Owner's Share of Sales Proceeds." C. Amount Paid to City: The Owner's Share of Sales Proceeds shall be subtracted from the Total Sales Proceeds and the remaining amount, if any, shall be referred to herein as the "Excess Proceeds." The City shall receive a share of the Excess Proceeds (the "City's Share of Sales Proceeds") as follows: (i) Years 1-5: If the Alternative Sale occurs in ownership years 1 through 5 (ending on the fifth anniversary of the date of these Restrictive Covenants), the City's Share of Sales Proceeds shall be seventy-five percent (75%) of the Excess Proceeds; (ii) Year 6: If the Alternative Sale occurs in ownership year 6 (ending on the sixth anniversary of the date of these Restrictive Covenants), the City's Share of Sales Proceeds shall equal fifty percent (50%) of the Excess Proceeds; Year 7: If the Alternative Sale occurs in ownership year 7 (ending on the seventh anniversary of the date of these Restrictive Covenants), the City's Share of Sales Proceeds shall equal forty percent (40%) of the Excess Proceeds; (iii) Year 8: If the Alternative Sale occurs in ownership year 8 (ending on the eighth anniversary of the date of these Restrictive Covenants), the City's Share of Sales Proceeds shall equal thirty percent (30%) of the Excess Proceeds; (iv) Year 9: If the Alternative Sale occurs in ownership year 9 (ending on the ninth anniversary of the date of these Restrictive Covenants), the City's Share of Sales Proceeds shall equal twenty percent (20%) of the Excess Proceeds; (v) Year 10: If the Alternative Sale occurs in ownership year 10 (ending on the tenth anniversary of the date of these Restrictive Covenants), the City's Share of Sales Proceeds shall equal fifteen percent (15%) of the Excess Proceeds; and (vi) Year 11: If the Alternative Sale occurs anytime during ownership year 11 through 30, inclusive, the City's Share of Sales Proceeds shall equal ten percent (10%) of the Excess Proceeds. Any portion of the Excess Proceeds not payable to the City pursuant to this Section 13C shall be retained by the Owner. D. Time of Payment of City's Share: The City's Share of Sale Proceeds shall be paid to the City on the date the Alternative Sale occurs. In the event the Owner fails to G-26 pay the City's Share of Sales Proceeds to the City when due, the City's Share of Sales Proceeds shall accrue interest at the default rate of ten percent (10%) per annum, compounded annually. 14. DEFAULTS AND REMEDIES. Upon a violation of any of the provisions of these Restrictive Covenants by the Owner, the City shall give written notice to the Owner specifying the nature of the violation. If the violation is not corrected to the satisfaction of the City within a reasonable period of time, not longer than ten (10) days after the date notice is mailed for failure to pay the City's Share of Sales Proceeds when due and not longer than thirty (30) days after the date the notice is mailed, or within such further time as the City determines is necessary to correct the violation for any other violation of these Restrictive Covenants, the City may declare a default under these Restrictive Covenants. The City shall notify the First Lender if the City has declared a default under these Restrictive Covenants. The notice to the First Lender shall indicate that the City may exercise its option to purchase the Residence pursuant to Sections 8 and 15 of these Restrictive Covenants. Upon the declaration of a default or if the Owner makes any misrepresentation in connection with receiving any benefits under these Restrictive Covenants, the City may apply to a court of competent jurisdiction for specific performance of these Restrictive Covenants, or for any such other relief at law or in equity as may be appropriate, including suit for recovery of the City's Share of Sales Proceeds plus accrued interest thereon at the default rate. In the event of any such action, City shall be entitled to an award of its actually incurred attorney's fees, specifically including the cost to City of time expended by the office of the City Attorney and other City staff and outside consultants, attorneys and other personnel involved in enforcing the terms of this Agreement. 15. PURCHASE OPTION UPON DEFAULT. A. Purchase Option: Notwithstanding, and in addition to, the remedies provided the City in Section 14, the Owner hereby grants to the City the option to purchase the Residence effective thirty (30) days after the City has given the Owner and the First Lender notice of the declaration of a default. This option to purchase is given in consideration of the economic benefits received by the Owner resulting from ownership of the Residence made possible by the City requiring the Developer to sell the Residence to the Owner at an affordable housing cost. B. Exercise of Option: The option to purchase pursuant to this Section 15 may be exercised upon a default under these Restrictive Covenants or upon default under any promissory note, deed of trust or any other lien, recorded against the Residence. The City shall have thirty (30) days after a default is declared to notify the Owner and the First Lender of its decision to exercise its option to purchase. Not later than ninety (90) days after the notice is given in accordance with Section 23 below to exercise its option pursuant to this Section 15, the City shall purchase the Residence at the lesser of. (i) its Fair Market Value; or (ii) its Restricted Sales Price. 16. NONLIABILITY OF THE CITY. G-27 In no event shall the City become in any way liable or obligated to the Owner or any successor -in -interest to the Owner by reason of its option to purchase under Sections 8 and 15, or for any failure to exercise its option to purchase under Sections 8 and 15. 17. RESTRICTIONS OF FORECLOSURE PROCEEDS. If a creditor acquires title to the Residence through a deed in lieu of foreclosure, a trustee's deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited to the creditor exceed the amount the Owner would have received by a sale in accordance with Section 11. The Owner shall instruct the holder of such excess proceeds to pay such proceeds to the City as consideration for the regulatory requirements of the City allowing the Residence to be sold to a household that would not otherwise have been able to afford it. 18. BINDING ON SUCCESSOR AND ASSIGNS; TERM OF COVENANTS. These Restrictive Covenants shall bind, and the benefit hereof shall insure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the City and its successors, until the earlier of (a) the date which is thirty (30) years from the date of these Restrictive Covenants, provided the Owner is not in default hereunder; (b) the date the Owner pays the City the City's Share pursuant to Section 13 above; or (c) the date the City exercises its options under Sections 8 or 15. 19. SUPERIORITY OF RESTRICTIVE COVENANT. The Owner covenants that he or she has not, and will not, execute any other agreement with provisions contradictory to or in opposition to the provisions hereof, and that, in any event, these Restrictive Covenants are controlling as to the rights and obligations between and among the Owner, the City and their respective successors. 20. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUST. A. Notwithstanding any other provision hereof, these Restrictive Covenants shall not diminish or affect the rights of the First Lender under the First Lender's Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Residence. For purposes of this Agreement, "First Lender" shall be the lender of a purchase money loan used for purchase of the Property, which loan is secured by a deed of trust (the "First Lender Deed of Trust") in first position on record title to the Property. B. Notwithstanding any other provision hereof, the provisions of these Restrictive Covenants shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender, or such lender's assignee or successor in interest (including but not limited to HUD, the Federal National Mortgage Association, or the Veterans Administration, if applicable), to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Borrower, provided that (i) the City has been given written notice of default under such First Lender Deed of Trust, and (ii) the City shall not have cured the default under such First Lender Deed of Trust within the 30 -day period provided in such notice sent to the Lender, or commenced to cure the default within such 30 -day period and given its firm commitment to complete the cure in form and substance acceptable to G-28 the First Lender, or notified Lender within such 30 -day period if its intent exercise its option to purchase pursuant to Section 15. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, these Restrictive Covenants shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter. 21. INVALID PROVISIONS. If any one or more of the provisions contained in these Restrictive Covenants shall for any reason be held to be invalid, illegal or unenforceable in any respect, that such provision or provisions shall be deemed severable from the remaining provisions contained in these Restrictive Covenants, and these Restrictive Covenants shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 22. CONTROLLING LAW. The terms of these Restrictive Covenants shall be interpreted under the laws of the State of California. 23. NOTICES. All notices required herein shall be sent by certified mail, return receipt requested or express delivery service with a delivery receipt and shall be deemed to be effective as date received or the date delivery was refused as indicated on the return receipt as follows: To the Owner: At the address of the Residence. To the City: City of Rancho Palos Verdes 30940 Hawthorne Boulevard Rancho Palos Verdes, California 90275 Attention: Director of Planning, Building & Code Enforcement To the First Lender: At the address shown on the First Lender Deed of Trust. The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this Section 22. IN WITNESS WHEREOF, the parties have executed these Restrictive Covenants on or as of the date first written above. CITY: G-29 CITY OF RANCHO PALOS VERDES, CALIFORNIA, a California municipal corporation M Print Name: Title: ATTEST: City Clerk G-30 G-31 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF LOS ANGELES On personally appeared before me, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it mayprove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: ❑ General Number of Pages: RIGHT THUMBPRINT OF SIGNER Top of thumb here G-32 Signer is Representing: G-33 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF LOS ANGELES On personally appeared before me, , Notary Public Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. OPTIONAL Signature of Notary Public Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer is Representing: Number of Pages: RIGHT THUMBPRINT OF SIGNER Top of thumb here G-34 EXHIBIT "1" LEGAL DESCRIPTION OF RESTRICTED PROPERTY THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: G-35 EXHIBIT "2" That certain land located in the City of Rancho Palos Verdes, County of Los Angeles, California described as follows: G-36 EXHIBIT "C" ILLUSTRATION OF AFFORDABLE SALES PRICE CALCULATION G-37 COVENANTS, CONDITIONS AND RESTRICTIONS G-38 RECORDING REQUESTED BY: WHEN RECORDED, MAIL TO: JACKSONIDeMARCO NIDUS IPECKENPAUGH (SAN) 2030 Main Street, Suite 1200 Irvine, CA 92614 (Space Above for Recorder's Use) DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS SOL Y MAR NOTE: CERTAIN DISPUTES ARISING UNDER THIS DECLARATION, INCLUDING DISPUTES CONCERNING THE DESIGN OR CONSTRUCTION OF THE COMMUNITY, SHALL BE SUBMITTED TO JUDICIAL REFERENCE, A FORM OF ALTERNATIVE DISPUTE RESOLUTION, IN ACCORDANCE WITH SECTION 12.4. If this document contains any restriction based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void, and may be removed pursuant to Section 12956.2 of the Government Code. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. 3633-120328\CCRS\1210336.3 12/9/14 G-39 TABLE OF CONTENTS DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS FOR SOL Y MAR Page ARTICLE 1 DEFINITIONS AND INTERPRETATION..................................................... 2 1.1 Definitions.........................................................................................................2 1.2 Interpretation................................................................................................... 15 1.3 Land Classifications in Phase 1...................................................................... 17 ARTICLE 2 MAINTENANCE COVENANTS AND USE RESTRICTIONS ................... 18 2.1 Repair and Maintenance.................................................................................. 18 2.2 Single -Family Dwelling.................................................................................. 23 2.3 Occupancy And Age Restrictions................................................................... 23 2.4 Further Subdivision......................................................................................... 25 2.5 Leasing and Rental.......................................................................................... 25 2.6 Resale.............................................................................................................. 26 2.7 Business and Commercial Activities.............................................................. 26 2.8 Nuisances........................................................................................................ 27 2.9 Signs................................................................................................................29 2.10 Parking and Vehicular Restrictions................................................................. 30 2.11 Animal Regulations......................................................................................... 31 2.12 Antenna and Satellite Dish Restrictions.......................................................... 32 2.13 Trash................................................................................................................34 2.14 Owner -Installed Improvements and Modifications ........................................ 34 2.15 Mechanics' Liens............................................................................................ 37 2.16 Water Supply System...................................................................................... 37 2.17 View Obstructions........................................................................................... 37 2.18 Solar Energy Systems..................................................................................... 37 2.19 Rights of Disabled........................................................................................... 38 2.20 Temporary Buildings/Dwellings..................................................................... 38 2.21 Association Property....................................................................................... 38 2.22 Uses of Community Center............................................................................. 38 2.23 Landscaping Restrictions for Community Garden .......................................... 38 2.24 Access Gate..................................................................................................... 38 2.25 Mineral Exploration and Extraction................................................................ 39 2.26 Post -Tension Concrete Slabs........................................................................... 39 ARTICLE 3 DISCLOSURES.............................................................................................. 39 3.1 No Representations or Warranties.................................................................. 39 3.2 Special Districts.............................................................................................. 40 3.3 Supplemental Real Property Taxes................................................................. 40 3.4 Association Budgets........................................................................................41 3.5 Age -Restricted Community............................................................................ 41 3633-120328\CCAS\1210336.3 12/9/14 G-40 TABLE OF CONTENTS (continued) Page 3.6 Access Facilities.............................................................................................. 41 3.7 Security and Privacy Disclaimer..................................................................... 42 3.8 Urban Environment......................................................................................... 42 3.9 Affordable Housing.........................................................................................42 62 3.10 Trails............................................................................................................... 42 3.11 Electric Power Lines, Wireless Communications Facilities, and Human 64 ARTICLE 5 Health.............................................................................................................. 42 3.12 Property Lines................................................................................................. 43 3.13 Sewer Backflow Prevention Valve................................................................. 43 3.14 Utility Improvements...................................................................................... 43 3.15 Mold................................................................................................................ 44 3.16 Natural Hazard Zone Disclosures................................................................... 44 3.17 Soil Conditions................................................................................................ 46 3.18 Prior Agricultural Use..................................................................................... 48 3.19 Environmental Conditions.............................................................................. 49 3.20 Commercial/Industrial Zone Disclosure......................................................... 49 3.21 Radon.............................................................................................................. 49 3.22 Gas and Hazardous Liquid Transmission Pipeline Notice .............................. 50 3.23 Air Quality...................................................................................................... 50 3.24 Wind................................................................................................................50 3.25 Surrounding Uses............................................................................................ 51 3.26 Open Space Areas........................................................................................... 51 3.27 Mixed Use Area.............................................................................................. 51 3.28 Airport Proximity Disclosure.......................................................................... 51 3.29 Megan's Law Notice....................................................................................... 52 3.30 Change in Plans............................................................................................... 52 3.31 No Enhanced Protection Agreement............................................................... 52 3.32 Additional Provisions...................................................................................... 52 ARTICLE 4 THE ASSOCIATION..................................................................................... 53 4.1 General Duties And Powers............................................................................ 53 4.2 Specific Duties And Powers........................................................................... 53 4.3 Standard of Care, Non-Liability...................................................................... 60 4.4 Membership.................................................................................................... 62 4.5 Voting Rights.................................................................................................. 63 4.6 Unsegregated Real Property Taxes................................................................. 64 ARTICLE 5 DESIGN REVIEW COMMITTEE................................................................. 64 5.1 Members Of Committee.................................................................................. 64 5.2 Powers and Duties........................................................................................... 65 5.3 Review of Plans and Specifications................................................................ 65 5.4 Meetings and Actions of the Design Review Committee ............................... 68 5.5 No Waiver of Future Approvals...................................................................... 68 -11- 3633-120328\CCRSU 210336.3 12/9/14 G-41 TABLE OF CONTENTS (continued) Page 5.6 Compensation of Members............................................................................. 69 5.7 Inspection of Work.......................................................................................... 69 5.8 Variances.........................................................................................................69 5.9 Pre-Approvals................................................................................................. 70 5.10 Appeals............................................................................................................70 ARTICLE 6 PROPERTY EASEMENTS AND RIGHTS ................................................... 70 6.1 Easements........................................................................................................70 6.2 Additional Easements...................................................................................... 73 6.3 Delegation of Use............................................................................................ 73 6.4 Right of Entry.................................................................................................. 73 ARTICLE 7 ASSOCIATION MAINTENANCE FUNDS AND ASSESSMENTS ........... 74 7.1 Personal Obligation to Pay Assessments........................................................ 74 7.2 Association Maintenance Funds..................................................................... 74 7.3 Purpose of Assessments.................................................................................. 75 7.4 Waiver of Use................................................................................................. 75 7.5 Limits on Annual Assessment Increases......................................................... 75 7.6 Annual Assessments....................................................................................... 77 7.7 Capital Improvement Assessments................................................................. 79 7.8 Level Assessment Procedure.......................................................................... 79 ARTICLE 8 INSURANCE.................................................................................................. 80 8.1 Duty to Obtain Insurance; Types.................................................................... 80 8.2 Waiver of Claim Against Association............................................................. 81 8.3 Right and Duty of Owners to Insure............................................................... 81 8.4 Notice of Expiration Requirements................................................................. 82 8.5 Trustee For Policies......................................................................................... 82 8.6 Actions as Trustee........................................................................................... 82 8.7 Annual Insurance Review............................................................................... 83 8.8 Required Waiver............................................................................................. 83 ARTICLE 9 DESTRUCTION OF IMPROVEMENTS...................................................... 83 9.1 Restoration of the Community........................................................................ 83 9.2 Sale of Community and Right to Partition...................................................... 84 9.3 Interior Damage.............................................................................................. 85 9.4 Notice to Owners and First Mortgagees......................................................... 85 ARTICLE 10 EMINENT DOMAIN..................................................................................... 85 10.1 Property Condemnation.................................................................................. 85 10.2 Condemnation of Association Property.......................................................... 85 10.3 Condemnation of Exclusive Use Area............................................................ 85 10.4 Condemnation of Condominiums................................................................... 86 10.5 Condemnation of Portions of Units................................................................ 86 -1ll- 3633-120328\CCRSU 210336.3 12/9/14 G-42 TABLE OF CONTENTS (continued) Page 10.6 Portions of Awards in Condemnation not Compensatory for Value of RealProperty................................................................................................... 87 10.7 Notice to Owners and First Mortgagees......................................................... 87 ARTICLE 11 RIGHTS OF MORTGAGEES........................................................................ 87 11.1 General Protections......................................................................................... 87 11.2 Additional Rights............................................................................................ 87 ARTICLE 12 ENFORCEMENT AND DISPUTE RESOLUTION ...................................... 89 12.1 Enforcement of Governing Documents.......................................................... 89 12.2 Delinquent Assessments................................................................................. 90 12.3 Enforcement of Bonded Obligations............................................................... 95 12.4 Resolution of Disputes with Declarant Parties ................................................ 96 ARTICLE 13 DURATION AND AMENDMENT............................................................. 104 13.1 Duration.........................................................................................................104 Developer Exemption.................................................................................... 13.2 Termination and Amendment....................................................................... 104 ARTICLE 14 GENERAL PROVISIONS........................................................................... 108 14.1 Mergers or Consolidations............................................................................ 108 14.2 No Public Right or Dedication...................................................................... 108 14.3 Notices...........................................................................................................108 Declarant Approval of Actions..................................................................... 14.4 Constructive Notice and Acceptance............................................................ 109 ARTICLE 15 DECLARANT'S RIGHTS AND RESERVATIONS ................................... 109 15.1 Construction Rights....................................................................................... 109 15.2 Sales and Marketing Rights.......................................................................... 110 15.3 Creating Additional Easements..................................................................... 110 15.4 Architectural Rights...................................................................................... 110 15.5 Developer Exemption.................................................................................... 111 15.6 Assignment of Rights.................................................................................... 111 15.7 Amendment to Article................................................................................... 111 15.8 Power of Attorney......................................................................................... 111 15.9 Participation in Association.......................................................................... 111 15.10 Declarant Approval of Actions..................................................................... 112 15.11 Marketing Name............................................................................................ 112 ARTICLE 16 ANNEXATION OF ADDITIONAL PROPERTY ....................................... 113 16.1 ADDITIONS BY DECLARANT................................................................. 113 16.2 Other Additions............................................................................................. 113 16.3 Added Area Rights and Obligations............................................................. 113 16.4 Notice of Addition......................................................................................... 114 16.5 De -Annexation and Amendment................................................................... 114 3633-120328\CCRSU 210336.3 12/9/14 G-43 TABLE OF CONTENTS (continued) EXHIBIT A LEGAL DESCRIPTION OF ANNEXABLE AREA EXHIBIT B ARTICLES OF INCORPORATION OF THE ASSOCIATION EXHIBIT C BYLAWS OF THE ASSOCIATION EXHIBIT D SPECIFIC MAINTENANCE OBLIGATIONS EXHIBIT E APPROXIMATE LOCATION OF COMMUNITY WALLS IN PHASE 1 -V- Page 3633-120328\CCAS\ 1210336.3 12/9/14 G-44 DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS FOR SOL Y MAR This Declaration of Covenants, Conditions, Restrictions and Reservation of Easements is made by TAYLOR MORRISON OF CALIFORNIA, LLC, a California limited liability company. The capitalized terms used in the Preamble below are defined in Article 1. PREAMBLE A. Declarant is the owner of real property ("Phase I') in the City of Rancho Palos Verdes, Los Angeles County, California, described as follows: That portion of Lot 1 of Tract No. 71878, as shown on a subdivision map Recorded in Book , at Pages to inclusive, of Maps, in the Office of the Los Angeles County Recorder, which portion is shown and described in that certain Condominium Plan for Sol Y Mar (Phase 1), Recorded on , 20_, as Instrument No. , of Official Records. The Condominium Plan referenced above depicts Units 27 to 30, inclusive, Units 37 and 38, Units 58 to 60, inclusive, Association Property and Common Area. B. In accordance with California Civil Code Section 4250(a), Declarant intends to create a "common interest development" within the meaning of California Civil Code Section 4100 of the Davis -Stirling Common Interest Development Act (the"CID Act'), which is also a "condominium project," as defined in California Civil Code Section 4125, a "planned development," as defined in California Civil Code Section 4175, and a "subdivision,"as defined in California Business and Professions Code Section 11000. Declarant intends to impose mutually beneficial restrictions under a general plan for subdividing, maintaining, improving and selling the Condominiums in the Community for the benefit of all the Condominiums pursuant to the Davis -Stirling Common Interest Development Act. The general plan of development will include forming an owners association under the California Non -Profit Mutual Benefit Corporations Law to which will be assigned the powers of (1) owning, maintaining and administering the Association Property, (2) administering and enforcing the Governing Documents, and (3) collecting and disbursing the Assessments and charges hereinafter created. Declarant will cause the corporation to be formed to exercise such powers, as required by the CID Act. The Members of the Association will be the Owners in the Community, as further provided in Article 4 herein. C. Declarant intends that the Community be developed and operated as a "senior citizen housing development" as defined in California Civil Code Section 51.3 and as "housing for older persons" in accordance with the requirements of the federal Fair Housing Act (Title 42 _ 1 _ 3633-120328\CCRS\1210336.3 12/9/14 G-45 U.S.C. Section 3601, et seq.), including the age and familial status exemptions provisions available to the Community under Title 42 U.S.C. Section 3601(b)(2), and the Fair Employment and Housing Act at California Government Code Section 12900,et seq., all as amended. D. The Community is to be held, conveyed, encumbered, leased, used and improved subject to covenants, conditions, restrictions and easements in this Declaration, all of which are in furtherance of a plan for subdividing, maintaining, improving and selling the Condominiums in the Community. All provisions of this Declaration are imposed as equitable servitudes on the Community. All covenants, conditions, restrictions and easements in this Declaration shall run with and burden the Community, and be binding on and for the benefit of all of the Community and all Persons acquiring any interest in the Community. ARTICLE 1 DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS. Unless otherwise expressly provided, the following words and phrases when used in this Declaration have the following meanings. 1.1.1 Annexable Area. Annexable Area means the real property described in ExhibitA which may be made subject to this Declaration pursuant to Article 16. Any references in this Declaration to Annexable Area are references to the Annexable Area as a whole and to portions thereof. 1.1.2 Annual Assessment Annual Assessment means a charge against the Owners and their Condominiums representing their share of the Common Expenses. The Annual Assessment is a regular assessment as described in the CID Act. Annual Assessments are composed of a General Assessment Component as defined in Section 7.6.4 and a Special Benefit Area Expenses component (where applicable) as defined in Section 7.6.5. 1.1.3 Articles of Incorporation Articles of Incorporation means the Articles of Incorporation of the Association as currently in effect. A copy of the initial filed Articles is attached for informational purposes as Exhibit B; provided, however, that the Association may amend the Articles of Incorporation from time to time without need to amend this Declaration. In such event, the amended Articles of Incorporation shall control over the version attached hereto. 1.1.4 Assessment. Assessment means any Annual Assessment, Capital Improvement Assessment, Reconstruction Assessment and Special Assessment. 1.1.5 Association. Association means Sol Y Mar Community Association, a California nonprofit corporation (formed pursuant to the California Nonprofit Mutual Benefit Corporation Law or successor statutes), and its successors -in -interest. The Association is an "association" as defined in California Civil Code Section 4080. 1.1.6 Association Maintenance Funds Association Maintenance Funds means the accounts created for Association receipts and disbursements pursuant to Article 7. -2- 3633-120328\CCRS\1210336.3 12/9/14 G-46 1.1.7 Association Property. Association Property means real or personal property designated by the Declarant or the Board as Association Property and therefore made subject to the restrictions on Association Property established in the Governing Documents. Any references in this Declaration to Association Property are references to the Association Property as a whole and to portions thereof. (a) Generally. The Association Property in a Phase consists of all the real property described as Association Property in the Condominium Plan for the Phase (except for the Units and the Common Area shown on that Plan), and the Improvements described below, and easements reserved for the Association as described below. Association Property Improvements and easements in the Community consist of the following: (1) Condominium Building, Land and Related Improvements. Each Condominium Building and the land below and surrounding the Condominium Building (but excluding the Units and Common Area shown in the applicable Condominium Plan), the components of the Condominium Building as listed in Section 1.1.24, and related Improvements such as exterior lighting fixtures and utility cabinets on building exteriors, facilities for the delivery of utilities to the Community (except for outlets that are located in the Unit), and cables and related equipment for the delivery of Telecommunications Services to the Community (except for any outlets or connectors that protrude into the airspace of the Unit). (2) Other Improvements. Perimeter landscaping, address identification signs, landscaped and irrigated areas, portions of the Community Wall, Private Streets, the Community Center, the Outdoor Recreation Area, the Community Garden, pedestrian hiking trails, walls, fences, drainage facilities, sidewalks, parkways, medians, street lights, street trees, curbs, gutters, drive approaches and landscaping, (3) Easements Granted to or Reserved for the Association. In addition, Association Property includes all of the easements for enforcement, drainage, and maintenance as reserved in the Governing Documents, or in the Map or in other Recorded instruments and granted to the Association, provided, however, the Association shall only have the responsibility for maintenance of such easements where such maintenance responsibility is given to the Association. (b) Phasing of Association Property. Section 1.1.7(a) is a descriptive listing of Association Property planned for the Community if it is constructed as planned. Some or all of the Association Property in the Community will be conveyed to the Association in subsequent Phases; Section 1.3.2 below and any Supplemental Declaration Recorded by Declarant constitute the designation of the Association Property to be made a part of Phase 1. The Association Property in the Community will be conveyed to the Association on a Phase -by -Phase basis in accordance with Declarant's development plan. In accordance with Article 16, Declarant may designate additional Association Property Improvements not listed above in one or more Phases by describing it in the Governing Documents and/or the applicable Condominium Plan, consistent with CalBRE regulations, the Budget and applicable law. -3- 3633-120328\CCRS\1210336.3 12/9/14 G-47 1.1.8 Board or Board of Directors. Board or Board of Directors means the Association's Board of Directors. 1.1.9 BRE. BRE means the California Bureau of Real Estate, and any department or agency of the California state government which succeeds to its functions. 1.1.10 Budget. Budget means a written, itemized estimate of the Association's income and Common Expenses prepared pursuant to the Bylaws. 1.1.11 Bylaws. Bylaws means the Bylaws of the Association as currently in effect. A copy of the initial form of Bylaws is attached as Exhibit C. The Bylaws in form adopted by the Board shall control over the version attached hereto without need to amend this Declaration. Moreover, the Association may from time to time amend the Bylaws without need to amend this Declaration. In all events, the amended Bylaws shall control over the version attached hereto. 1.1.12 Capital Improvement Assessment Capital Improvement Assessment means a charge against the Owners and their Condominiums representing their share of the Association's cost for installing or constructing capital Improvements on the Association Property. Capital Improvement Assessments shall be levied in the same proportion as Annual Assessments. However, Capital Improvement Assessments for a particular Special Benefit Area shall be levied in the same proportion as Annual Assessments only against Owners responsible for such Special Benefit Area. Capital Improvement Assessments are special assessments as described in California Civil Code Section 5605(b). 1.1.13 CID Act. CID Act means the Davis -Stirling Common Interest Development Act (Division 4, Part 5 of the California Civil Code at Sections 4000 to 6150) and its successor provisions. 1.1.14 City. City means the City of Rancho Palos Verdes, California, and its various departments, divisions, employees and representatives. 1.1.15 Close of Escrow. Close of Escrow means the date on which a deed is Recorded conveying a Condominium pursuant to a transaction requiring the issuance of a Public Report. 1.1.16 Common Area. Common Area means the volumes of airspace described in the Condominium Plan for each Phase, which shall be owned by Owners in each Phase as tenants-in-common. Any references in this Declaration to Common Area are references to the Common Area as a whole and to portions thereof. The Common Area in each Phase of the Community constitutes the undivided interest -in -common in a portion of the real property, in accordance with California Civil Code Section 4125. 1.1.17 Common Expenses. Common Expenses means those expenses for which the Association is responsible under this Declaration. Common Expenses include the actual and estimated costs of and reserves for maintaining, managing and operating the Association Property (including amounts this Declaration imposes on the Association for maintenance), including: -4- 3633-120328\CCRS\1210336.3 12/9/14 I • Private Streets, (a) Replacement, maintenance and operation of street lights on (b) Maintenance services for the Association Property, including landscape maintenance; (c) Compliance with the WQMP and Best Management Practices imposed on the Community, as further set forth in Section 2. 1.11 below. (d) The cost of all utilities (including sewer and water) and mechanical and electrical equipment serving the Association Property, and trash collection and removal from central receptacles; (e) The costs and fees attributable to managing and administering the Association, compensating the Manager, accountants, attorneys and employees, all insurance covering the Community and the Directors, officers and agents of the Association, and bonding the members of the Board; (f) The cost to repair damage to public utility Improvements if caused by the Association during installation, maintenance or repair of private utility Improvements; (g) Regular inspection of fire sprinkler systems in the Condominium Buildings and the cost of fire sprinkler system and fire alarm monitoring services; (h) Unpaid Special Assessments, Reconstruction Assessments and Capital Improvement Assessments; (i) Taxes paid by the Association; 0) The cost of maintaining Special Benefit Area Improvements (subject to the right to allocate the cost to the Owners of Units in the Special Benefit Area); (k) Amounts paid by the Association for discharge of any lien or encumbrance levied against the Community, and (1) All other expenses incurred by the Association for the Community, for the common benefit of the Owners. 1.1.18 Community. Community means (a) Phase 1 and (b) each Phase described in a Notice of Addition. The Community is a "condominium project" as defined in California Civil Code Section 4125, and a "common interest development" as defined in California Civil Code Section 4100. Any references in this Declaration to the Community are references to the Community as a whole and to portions thereof. If all Phases of the Community are annexed as presently planned, the Community will include 60 Units. Additional information concerning the Units in the Community is set out in the Condominium Plan for each Phase, and in the Declaration. _5_ 3633-120328\CCRS\1210336.3 12/9/14 G-49 1.1.19 Community Center. Community Center means certain recreational facilities which are planned to be constructed on the southwestern portion of the Community. If constructed as proposed, the Community Center may include a recreation and lounge center, kitchen, computer/business center, office, fitness room, bathrooms, indoor and outdoor fireplaces, outdoor living area, spa, barbeque and seating areas. 1.1.20 Community Garden. Community Garden means the outdoor garden area located at the northwestern portion of the Community. 1.1.21 Community Wall Community Wall means any perimeter walls, sound walls, retaining walls, and fences in the Community originally constructed by Declarant on Association Property that are designed by Declarant as Community Walls, and as the result of such designation, will be maintained in whole or in part by the Association as provided in this Declaration. Party Walls and other fences or walls that are maintained entirely by Owners are not Community Walls. The Community Walls in Phase 1 are shown onExhibit E. Declarant may designate additional Community Walls in a Notice of Addition or Supplemental Declaration. Community Walls in the Community in general (a) are constructed on or along a tract boundary; or (b) separate an Exclusive Use Area from Association Property or public property; or (c) are constructed entirely within Association Property, or (d) are designated as a Community Wall by Declarant in this Declaration, or in a Notice of Addition or Supplemental Declaration. Fences separating adjoining Exclusive Use Areas are Party Walls, maintained entirely by the affected Owners and are not Community Walls. The obligation to maintain Community Walls in a particular Phase will not arise until the commencement of Annual Assessments in the Phase or as otherwise directed in this Declaration, or in a Notice of Addition or Supplemental Declaration. 1.1.22 Conditions of Approval Conditions of Approval means the conditions set forth in Resolution No. 2013-31, adopted by the City on May 21, 2013, as may be revised from time to time. 1.1.23 Condominium. Condominium means an estate in real property as defined in California Civil Code Section 4125. A Condominium consists of an undivided fee simple ownership interest in the Common Area in a Phase, together with a separate ownership interest in fee in a Unit and all easements appurtenant thereto. Subject to the provisions of Section 10.5, the undivided fee simple interest in the Common Area in a Phase is appurtenant to each Unit in such Phase and is a fraction having one (1) as its numerator and the number of Units in that Phase as its denominator; and shall be held by the Owners of Condominiums in that Phase as tenants-in-common. 1.1.24 Condominium Building Condominium Building means any residential structure in the Community containing multiple Units as shown on the Condominium Plan. Each Building encloses Units shown in the applicable Condominium Plan, but the Condominium Building is not part of the Units. For purposes of interpreting this Declaration and the Condominium Plan, the Condominium Building is intended to include the following components: -6- 3633-120328\CCRS\1210336.3 12/9/14 G-50 (a) the shell (including the roof, foundation and exterior surfaces and the finishes thereon) and the core of the Condominium Building; (b) all structural support elements existing in, on, under and throughout the Condominium Building that carry roof, ceiling and upper floor loads to the foundation, including all separate or common footings, girders, columns, joists, braces, foundations, temporary and permanent tieback systems, load-bearing walls and other standard support elements, and every wall, column, floor, ceiling, footing, foundation or other vertical or horizontal Improvement in the Condominium Building, but not including any wall between rooms in a Unit which is not necessary for the structural support of the Condominium Building (for purposes hereof, any wall or other structure which carries roof, ceiling or upper floor loads is "necessary for structural support"); (c) any HVAC systems which benefit the entire Condominium Building; (d) all exterior walls and surfaces of the Condominium Building, entry doors, windows and garage doors, and the surface treatments of all of the foregoing (including siding, stone, stucco, plaster, paint and stain); (e) fixtures that are outside the boundaries of the Units, including exterior lighting fixtures and utility cabinets on Condominium Building exteriors, utility meters and the cables, pipes, conduits and other facilities for the delivery of utilities to the Community (except for outlets that are located in the Unit); (f) exterior fire extinguishers, fire sprinkler systems serving each Condominium Building, including monitoring equipment, alarms, fire sprinkler pipes and fire sprinkler heads (including portions of the system that protrude into the airspace boundaries of the Unit); (g) cables and related equipment for the delivery of Telecommunications Services to the Community (except for any outlets, connectors and portions of cables that protrude into the airspace boundaries of the Unit); and (h) the structure and surface of all patios, porches and balconies (excluding any personal property located therein or thereon); (i) all or any portion of any stairway, vault, air shaft, mechanical shaft, duct, pipe, line, main, conduit, lighting, flue and any other equipment, fixtures, machinery, system or apparatus which benefits the entire Condominium Building. 1.1.25 Condominium Plan. Condominium Plan means the Recorded plan, as currently in effect, for a Phase consisting of (a) a description or survey map of the Phase or portion thereof, which shall refer to or show monumentation on the ground, (b) a three dimensional description of the Phase or portion thereof, one or more dimensions of which may extend for an indefinite distance upwards or downwards in sufficient detail to identify the Association Property, Common Area and each Unit, and (c) a certificate consenting to the Recordation thereof signed and acknowledged by the record owner of fee title to the Phase or 3633-120328\CCRS\1210336.3 12/9/14 G-51 portion thereof, and by either the trustee or the Mortgagee of each Recorded Mortgage encumbering the Phase or portion thereof. The Condominium Plan for each Phase shall also approximately show and describe the Private Streets in the Phase. 1.1.26 County. County means Los Angeles County, California, and its various departments, divisions, employees and representatives. 1.1.27 Declarant. Declarant means TAYLOR MORRISON OF CALIFORNIA, LLC, a California limited liability company, its successors and any Person to which it shall have assigned the right to act as Declarant by an express written assignment. As used in this Section, "successor" means a Person who acquires Declarant or substantially all of Declarant's assets by sale, merger, reverse merger, consolidation, sale of stock or assets, operation of law or otherwise. Declarant shall determine in its sole discretion the time, place and manner in which it discharges its obligations and exercises the rights reserved to it under this Declaration. Declarant is a "builder" as described in California Civil Code Section 6000. 1.1.28 Declaration. Declaration means this instrument as currently in effect. 1.1.29 Design Guidelines. Design Guidelines mean the rules or guidelines setting forth procedures and standards for submission of plans for Design Review Committee approval. 1.1.30 Design Review Committee or Committee Design Review Committee or Committee means the Design Review Committee created in accordance with Article 5. 1.1.31 Exclusive Use Area Exclusive Use Area means the Association Property over which exclusive easements are reserved for the benefit of specified Owners, including the following: (a) patios, balconies, porches and yards, all as described in this Declaration and numbered, approximately depicted and assigned in the Condominium Plan; (b) placement and maintenance of air conditioner compressors and compressor pads, as numbered, approximately depicted and assigned in the Condominium Plan; and (c) internal and external telephone wiring designed to serve a single Unit but located outside the boundaries of the Unit, in accordance with California Civil Code Section 4145. The approximate locations and dimensions of the Exclusive Use Area patios, balconies, porches, yards and air conditioner compressor pad locations are depicted in the Condominium Plan for the Phase; however, the as -built location and dimensions of the Improvements constituting or defining the boundaries of the Exclusive Use Areas shall in all instances control. -8- 3633-120328\CCRS\1210336.3 12/9/14 G-52 1.1.32 Family. Family means natural individuals, related or not, who live as a single household in a Residence. Each of the individuals constituting a Family occupying a Residence must qualify under the age and occupancy requirements of this Declaration and state and federal laws governing senior housing. The Board has the power but not the obligation to provide exceptions for one or more individuals who do not otherwise qualify for permanent occupancy under applicable law. The Board may, but is not required to, make exceptions only if the Community will continue to meet all age and occupancy requirements for seniors housing under applicable law. 1.1.33 Fannie Mae. Fannie Mae means the Federal National Mortgage Association, a government-sponsored private corporation established pursuant to Title VIII of the Housing and Urban Development Act of 1968 and its successors. 1.1.34 FHA. FHA means the Federal Housing Administration of the United States Department of Housing and Urban Development and its successors. 1.1.35 FHANA Requirements. FHANA Requirements means the requirements applicable to the Community set forth in (a) the Condominium Project Approval and Processing Guide (FHA, June 30, 2011), which incorporates the requirements of Mortgagee Letters 2009-46A, 2009-46B and 2011-03, and the U.S. Department of Housing and Urban Development (HUD) Condominium Regulations of the National Housing Act, 24 CFR part 203 (in the case of FHA -insured loans); and (b) Chapter 16 of VA Pamphlet 26-7 (in the case of VA - guaranteed loans). 1.1.36 FHFA. FHFA means the Federal Housing Finance Agency, established pursuant to the Housing and Economic Recovery Act of 2008. 1.1.37 First Mortgage. First Mortgage means a Mortgage with first priority over other Mortgages on a Condominium. 1.1.38 First Mortgagee. First Mortgagee means the Mortgagee of a First Mortgage. 1.1.39 Fiscal Year. Fiscal Year means the fiscal accounting and reporting period of the Association. 1.1.40 Freddie Mac. Freddie Mac means the Federal Home Loan Mortgage Corporation created by Title II of the Emergency Home Finance Act of 1970 and its successors. 1.1.41 Ginnie Mae. Ginnie Mae means the Government National Mortgage Association administered by the United States Department of Housing and Urban Development and its successors. 1.1.42 Governing Documents, Governing Documents means this Declaration, the Articles of Incorporation, Bylaws, Design Guidelines, Rules and Regulations, Supplemental Declarations and Notices of Addition. -9- 3633-120328\CCRS\1210336.3 12/9/14 G-53 1.1.43 HUD. HUD means the United States Department of Housing and Urban Development. 1.1.44 Improvement. Improvement means any structure and any appurtenance thereto, landscaping, vegetation and the paint and surface treatments on structures. The Design Review Committee may identify additional items that are Improvements. Improvement also refers to the work of constructing an Improvement. 1.1.45 Include, Including. Whether capitalized or not, include and including means "includes without limitation" and "including without limitation," respectively. 1.1.46 Local Government Agency. Local Government Agency means the City, the County, a public school district, a public water district, and any other local or municipal governmental entity or agency, including any special assessment district, maintenance district or community facilities district. 1.1.47 Maintain, Maintenance. Whether capitalized or not, maintain and maintenance mean "maintain, repair and replace" and "maintenance, repair and replacement," respectively; provided however, that maintain or maintenance shall not include repair and replace(ment) where the context or specific language of this Declaration provides another meaning. 1.1.48 Maintenance Guidelines. Maintenance Guidelines means any current written guidelines, setting forth procedures and standards for the maintenance and operation of Association Property or the Condominiums. Maintenance Guidelines may be provided by Declarant, by the Association, or by any governmental agency. Maintenance Guidelines include any maintenance manual initially prepared at Declarant's direction and containing recommended frequency of inspections and maintenance activities for components of the Association Property or pertaining to a Condominium. 1.1.49 Manager. Manager means the Person retained by the Association to perform management functions of the Association as limited by the Governing Documents and the terms of the agreement between the Association and the Person. 1.1.50 Membership. Membership means the voting and other rights, privileges, and duties established in the Governing Documents for Association members. 1.1.51 Model Condominium. Model Condominium means a Condominium that is being used by Declarant as a sales model, office, design center, or for a similar purpose, with or without a Model Leaseback Agreement. 1.1.52 Model Condominium Sale Model Condominium Sale means the initial sale of a Model Condominium by Declarant in a transaction requiring a Final Subdivision Public Report, subject to a Model Leaseback Agreement. 1.1.53 Model Leaseback Agreement Model Leaseback Agreement means a lease or rental agreement pursuant to which the Declarant is permitted to use and occupy a -10- 3633-120328\CCRS\1210336.3 12/9/14 G-54 Model Condominium as a sales model, office, design center, or for a similar purpose, after the Close of Escrow for its sale. 1.1.54 Model Phase. Model Phase means a Phase that contains one or more Model Condominiums. A Model Phase may include one or more Production Condominiums in addition to the Model Condominiums. 1.1.55 Mortgage. Mortgage means any Recorded document, including a deed of trust, by which a Condominium, Condominiums, or Association Property is/are hypothecated to secure performance of an obligation. 1.1.56 Mortgagee. Mortgagee means a Person to whom a Mortgage is made, or the assignee, guarantor or insurerof the Mortgagee's rights under the Mortgage by a recorded instrument. For purposes of this Declaration, the term Mortgagee includes a beneficiary under a deed of trust. 1.1.57 Mortgagee Majority. Mortgagee Majority means the First Mortgagees holding First Mortgages that in the aggregate encumber at least fifty-one percent (51%) of the Condominiums that are subject to Mortgages. For purposes of any provisions of the Governing Documents which requires the vote or approval of a Mortgagee Majority, such vote or approval is determined based on one (1) vote for each Condominium encumbered by a First Mortgage held by a First Mortgagee. 1.1.58 Mortgagor. Mortgagor means a person who has mortgaged his property. For purposes of this Declaration, the term Mortgagor shall include a trustor under a deed of trust. 1.1.59 Notice and Hearing. Notice and Hearing means written notice and a hearing before the Board as provided in the Bylaws. 1.1.60 Notice of Addition. Notice of Addition means an instrument Recorded pursuant to Article 16 to annex additional real property to the Community. 1.1.61 Official Records. Official Records means the Official Records of the County. 1.1.62 Operating Fund. Operating Fund means that portion of the Common Expenses allocated for the daily operation of the Association. 1.1.63 Outdoor Recreation Area Outdoor Recreation Area means the outdoor area located at the northeastern portion of the Community. The proposed amenities for the Outdoor Recreation Area may include a patio, a community conversation and gathering stage, a sundeck, an outdoor living room, barbeque facilities, bocce ball courts and picnic tables. 1.1.64 Owner. Owner means the Person or Persons, including Declarant, holding fee simple interest to a Condominium. The term "Owner" includes sellers under executory contracts of sale but excludes Mortgagees. The term "Owner" may be expanded in a Supplemental Declaration to include other Persons. _11- 3633-120328\CCRS\1210336.3 12/9/14 G-55 1.1.65 Party Wall. Party Wall means any wall or fence that is constructed by Declarant to separate adjacent Exclusive Use Area patios (whether or not constructed on the legal property boundary). Party Walls are not Community Walls. 1.1.66 Permitted Health Care Resident Permitted Health Care Resident means either a natural person hired to provide live-in, long-term, or terminal health care to a Qualifying Resident, or a family member of a Qualifying Resident providing that care. A Permitted Health Care Resident must provide (a) care that is substantial in nature; and (b) either assistance with necessary daily activities, or medical treatment, or both. 1.1.67 Person. Person means a natural individual or any legal entity recognized under California law. When the word "person" is not capitalized, the word refers only to natural persons. 1.1.68 Phase. Phase means each of the following: (a) Phase 1, and (b) all the real property covered by a Notice of Addition for which a Public Report has been issued by the BRE. Declarant may otherwise define the term "Phase" in a Notice of Addition or Supplemental Declaration. 1.1.69 Phase 1. Phase 1 means all of the real property described in Paragraph A of the Preamble of this Declaration. 1.1.70 Private Street. Private Street means any private street and associated unassigned parking (if any) in a Phase, as approximately shown on the Condominium Plan for that Phase. 1.1.71 Production Condominium Production Condominium means a Condominium that is not a Model Condominium 1.1.72 Public Report Public Report means the Final Subdivision Public Report issued by the BRE for any Phase. 1.1.73 Qualified Permanent Resident Qualified Permanent Resident means a natural person who meets both of the following requirements: (a) was residing with the Qualifying Resident prior to the death, hospitalization, or other prolonged absence of, or the dissolution of marriage with, the Qualifying Resident; and (b) was forty-five (45) years of age or older, or was a spouse, cohabitant, or person providing primary physical or economic support to the Qualifying Resident. "Cohabitant" means persons who live together as husband and wife, or persons who are domestic partners within the meaning of California Family Code Section 297. Qualified Permanent Resident also means a disabled person or person with a disabling illness or injury who is a child or grandchild of the Qualifying Resident or a Qualified Permanent Resident, who needs to live with the Qualifying Resident or Qualified Permanent Resident because of the disabling condition, illness or injury. "Disabled" and "disabling injury or illness" have the meanings set forth in California Civil Code Section 54(b). 1.1.74 Qualifying Resident Qualifying Resident means a natural person who is fifty-five (55) years of age or older. -12- 3633-120328\CCRS\1210336.3 12/9/14 G-56 1.1.75 Reconstruction Assessment Reconstruction Assessment means a charge against the Owners and their Condominiums representing their share of the Association's cost to reconstruct any Improvements on the Association Property. Such charge shall be levied among all Owners and their Condominiums in the same proportions as Annual Assessments. Reconstruction Assessments are "special assessments" as described in California Civil Code Section 5605(b). 1.1.76 Record or File. Record or File means, concerning any document, the entry of such document in Official Records. 1.1.77 Reserve Fund. Reserve Fund means that portion of the Common Expenses allocated (a) for the future repair and replacement of, or additions to, structural elements, mechanical equipment and other major components of Association -maintained Improvements, and (b) amounts necessary to cover the deductibles under all insurance policies maintained by the Association. 1.1.78 Residence. Residence means the residential element of the Unit but does not include the garage element of the Unit. 1.1.79 Right to Repair Law. Right to Repair Law means California Civil Code Sections 895 through 945.5. 1.1.80 Right to Repair Law Claim Right to Repair Law Claim means any claim brought by one or more Owners or by the Association against one or more Declarant Parties (as defined in Section 12.4) on any design construction defect matters that are governed by the Right to Repair Law. 1.1.81 Rules and Regulations. Rules and Regulations or "Rules" means the current rules and regulations for the Community. 1.1.82 Special Benefit Area or SBA. Special Benefit Area or SBA means a group of Condominiums, the Owners of which either (a) disproportionately benefit from the existence and maintenance of specified Association Property Improvements, or (b) receive from the Association specified services not provided to all Owners. The additional administrative costs of operating each Special Benefit Area shall be a part of the Common Expenses allocated to a Special Benefit Area Assessment Component of Annual Assessments. Special Benefit Areas may be identified by Declarant in the Governing Documents when Declarant, in its sole discretion, determines that a group of Condominiums benefits more from certain Improvements or services than the Community as a whole. The Board may also designate Special Benefit Areas under circumstances authorized in the Governing Documents. Special Benefit Areas may be referred to as "cost centers" in the Ca1BRE-reviewed Budget or Public Report. 1.1.83 Special Benefit Area Assessment Component Special Benefit Area Assessment Component means that portion of the Annual Assessments of the Association that is levied against the Condominiums in and applied exclusively to a particular Special Benefit Area. A Special Benefit Area Assessment Component shall be assessed to the Condominiums designated in a Supplemental Declaration as part of a Special Benefit Area. The Special Benefit Area Assessment Component consists of those maintenance and operating costs, reserves and -13- 3633-120328\CCRS\1210336.3 12/9/14 G-57 administrative costs that are fairly allocable to the Improvements or services benefiting the Special Benefit Area. Special Benefit Area Assessment Components shall be allocated among the Condominiums in a Special Benefit Area in accordance with Section 7.6.5. 1.1.84 Special Benefit Area Operating Account Special Benefit Area Operating Account means for each Special Benefit Area, a separate Special Benefit Area Operating Account for the deposit of funds to pay that portion of the Common Expenses allocated for the daily operating costs of the Special Benefit Area. 1.1.85 Special Benefit Area Reserve Account Special Benefit Area Reserve Account means for each Special Benefit Area, a separate Special Benefit Area Reserve Account for the deposit of reserves attributable to that Special Benefit Area. 1.1.86 Special Benefit Expenses. Special Benefit Expenses means those elements of Common Expenses which are assessed only against the Condominiums in a particular Special Benefit Area. 1.1.87 Special Assessment Special Assessment means (a) a reasonable monetary penalty imposed against an Owner and the Owner's Condominium in accordance with California Civil Code 5725(b), as a disciplinary measure for the failure of an Owner to comply with the Governing Documents, or (b) a monetary charge imposed against an Owner and his Condominium in accordance with California Civil Code Section 5725(a) to recover costs incurred by the Association in the repair of damage to Association Property, all as further described in this Declaration. 1.1.88 Supplemental Declaration Supplemental Declaration means an instrument Recorded by Declarant against all or a portion of the Community in order to supplement, modify or clarify conditions, covenants, restrictions or easements established by this Declaration. A Supplemental Declaration may affect one or more Condominiums and Association Property and it may annex additional real property to the Community so long as it satisfies the requirements of a Notice of Addition in Article 16. A Supplemental Declaration may modify this Declaration, but only with respect to the real property encumbered by the Supplemental Declaration. 1.1.89 Telecommunications Facilities Telecommunications Facilities means Improvements constructed in the Community, including cables, conduits, ducts, vaults, connecting hardware, wires, poles, transmitters, towers, antennae and other devices now existing or that may be developed in the future to provide Telecommunication Services to the Community. 1.1.90 Telecommunications Services Telecommunications Services means the reception, distribution or transmission of video, audio, data, telephony, all related vertical services, and any other similar services now existing or that may be developed in the future. Declarant may expand this definition in any Supplemental Declaration. 1.1.91 Tract Map. Tract Map means the final recorded map of Tract No. 71878, Filed in Book at Pages , inclusive, of , in the Office of the Los Angeles County Recorder. -14- 3633-120328\CCRS\1210336.3 12/9/14 G-58 1.1.92 Unit. Unit means a separate interest in space as defined in California Civil Code Section 4125. Each Unit is a separate freehold estate, as separately shown, numbered and designated in the Condominium Plan. (a) Each Unit consists of a residential element and a garage element as shown in the Condominium Plan, and includes the entry door and entry door hardware and the glass portions of the windows and sliding glass doors that are constructed at Unit boundaries, the garage door (including opener and hardware), between -room walls or partitions in the Unit boundaries that are not necessary for structural support of the Condominium Building (but not any wall separating neighboring Units), elevators and elevator shafts and facilities, drop ceilings and soffits in the Unit and the space above and within them (and the forced -air units and the heating and air conditioning ducts located above the drop ceilings), and those portions of gas, water and waste pipes, ducts, chutes, conduits, wires and other utility installations that protrude into the Unit (but not fire sprinkler heads or pipes that protrude into the Unit). (b) The boundaries of each Unit are approximately shown in the Condominium Plan. In interpreting deeds, this Declaration and the Condominium Plan, the actual boundaries of each Unit shall be deemed to extend to the interior unfinished Unit -facing surfaces of the walls, floors, and ceilings encompassing the residential element and garage element of the Unit, as constructed or reconstructed in substantial accordance with the original plans for the Unit. The foregoing interpretation shall apply notwithstanding any description expressed in the deed, the Condominium Plan or the Declaration, regardless of settling or lateral movements of Improvements, and regardless of variances between Unit boundaries shown in the Condominium Plan or deed and those of the Improvement. 1.1.93 VA. VA means the Department of Veterans Affairs of the United States of America and any department or agency of the United States government which succeeds to the VA's function of issuing guarantees of notes secured by Mortgages on residential real estate. 1.1.94 WQMP. WQMP means the Water Quality Management Plan prepared for the Community and approved by the City. Its purpose is to control the discharge of pollutants from the Community into public storm drain facilities by imposing Best Management Practices (or BMPs), as defined in Section 2. 1.11 below, which must be complied with by the Association and the Owners. 1.2 INTERPRETATION. 1.2.1 General Rules. This Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for subdividing, maintaining, improving and selling the Community. As used in this Declaration, the singular includes the plural and the plural the singular. The masculine, feminine and neuter each includes the other, unless the context dictates otherwise. Any reference in this Declaration to time of performance of obligations or to elapsed time means consecutive calendar days, months or years, as applicable, unless otherwise expressly provided. -15- 3633-120328\CCRS\1210336.3 12/9/14 G-59 1.2.2 Articles, Sections and Exhibits The Article and Section headings are inserted for convenience only and may not be considered in resolving questions of interpretation or construction. Unless otherwise indicated, any references in this Declaration to articles, sections or exhibits are to Articles, Sections and Exhibits of this Declaration. Exhibits A, D and E attached to this Declaration are incorporated in this Declaration by this reference. The Articles of Incorporation and the Bylaws that are attached as Exhibits B and C are attached for informational purposes only. Either may be amended from time to time without having to amend this Declaration. In such event, the amended version shall supersede the version attached hereto. The locations and dimensions of any Improvements shown on the Exhibits attached hereto and to any Notice of Addition are approximate only and the as -built location and dimension of any such Improvements shall control. 1.2.3 Priorities and Inconsistencies If there are conflicts or inconsistencies between this Declaration and the Articles of Incorporation, Bylaws, Rules and Regulations, or a Condominium Plan, then the provisions of this Declaration shall prevail; however, the conflicting documents shall be construed to be consistent with the Declaration to the extent possible. If there are any conflicts or inconsistencies between this Declaration and any Notice of Addition, the provisions of the Notice of Addition shall prevail as to the real property encumbered thereby. 1.2.4 Supplemental Declarations. Declarant may, in connection with all or a portion of the Community, Record one (1) or more Supplemental Declarations, which shall designate the use classifications in the real property described therein, and which may supplement this Declaration with such additional covenants, conditions, restrictions and land uses as Declarant may deem appropriate for the affected real property. A Supplemental Declaration may impose additional, different or more restrictive conditions, covenants, restrictions, land uses and limitations as Declarant may deem advisable, taking into account the particular requirements of the real property affected thereby. If there is any conflict between any Supplemental Declaration and the Declaration, the Supplemental Declaration shall control as to the real property affected by such Supplemental Declaration. 1.2.5 Severability. The provisions of this Declaration are independent and severable. If for any reason, any provision of this Declaration becomes invalid, partially invalid, unenforceable, illegal, null and void, or against public policy, or if for any reason, a court of competent jurisdiction determines that any provision of this Declaration is invalid, partially invalid, unenforceable, illegal, null and void, or against public policy, the validity and enforceability of the remaining provisions of this Declaration shall remain in effect to the fullest extent permitted by law. 1.2.6 FHANA Requirements. For so long as FHA or VA are insuring or guarantying any First Mortgage in the Community, the FHANA Requirements are incorporated herein by reference and shall control and prevail over all other provisions of the Declaration to the extent of any inconsistency between them. -16- 3633-120328\CCRS\1210336.3 12/9/14 G-60 1.3 LAND CLASSIFICATIONS IN PHASE 1 1.3.1 Units. The Units in Phase 1 are shown and described in the Condominium Plan for Phase 1 and are numbered 27 to 30, inclusive, 37, 38 and 58 to 60, inclusive. 1.3.2 Association Property. The Association Property in Phase 1 consists of that portion of Lot 1 of Tract No. 71878 (excepting therefrom the Units and Common Area), all as shown and described in the Condominium Plan for Phase 1. The Association Property shall be conveyed to the Association by grant deed prior to or concurrently with the first Close of Escrow for sale of a Condominium in Phase 1. 1.3.3 Common Area. The Common Area in Phase 1 is depicted and described in the Condominium Plan for Phase 1. Each Owner of a Condominium in Phase 1 shall have an equal and undivided interest in the Common Area in Phase 1. The Common Area in Phase 1 will be owned by the Owners of Condominiums in Phase 1 as tenants in common, subject to certain reservations, exceptions and easements set forth in this Declaration and in the grant deed to each Owner. 1.3.4 Special Benefit Area **[The Units in Phase 1 are not part of a Special Benefit Area.]** **[The Units in Phase 1 are part of the Special Benefit Area]** 1.3.5 Condominium Plans for Diagrammatic Purposes Only Each Condominium Plan and the dimensions shown therein is intended to conform to California Civil Code Sections 4285 and 4290, which require, in part, concerning the land and real property described therein, the inclusion of diagrammatic plans in sufficient detail to identify each Unit, its relative location and approximate dimensions. The dimensions shown in a Condominium Plan are not intended to be sufficiently accurate to use for sales purposes, or for computation of usable floor area or the volume of any portion of a Residence or Unit shown in this Condominium Plan. The diagrammatic plans in each Condominium Plan intentionally omit information with respect to certain Improvements constructed within the Units and Association Property. The actual dimensions and area or volume of a Residence, Unit, Exclusive Use Area or Association Property shown in a Condominium Plan are all dependent on the Improvements as they were actually constructed, and there may be variances among Condominiums of the same floor plan. NO CONDOMINIUM PLAN AFFECTING ANY PORTION OF THE COMMUNITY IS A REPRESENTATION OR WARRANTY BY DECLARANT OR ITS CONSULTANTS AS TO THE ACTUAL LOCATIONS OR DIMENSIONS OF THE RESIDENCE, UNIT, EXCLUSIVE USE AREA OR ASSOCIATION PROPERTY. IN ALL INSTANCES, THE ACTUAL LOCATIONS AND DIMENSIONS OF THE IMPROVEMENTS AS CONSTRUCTED WILL CONTROL OVER LOCATIONS OR DIMENSIONS DISCLOSED IN THE CONDOMINIUM PLAN. THE ONLY RELIABLE DETERMINATION OF THE USABLE FLOOR AREA OR VOLUME OF A RESIDENCE, UNIT, EXCLUSIVE USE AREA OR ASSOCIATION PROPERTY IS A DETERMINATION MADE FROM ON- SITE MEASUREMENTS OF THE IMPROVEMENTS AS THEY ARE CONSTRUCTED. ALL DECISIONS TO PURCHASE, LEASE OR FINANCE A CONDOMINIUM, TO THE EXTENT SUCH DECISIONS TAKE INTO ACCOUNT THE DIMENSIONS OR THE USABLE FLOOR AREA OR VOLUME OF ANY RESIDENCE, UNIT, EXCLUSIVE USE -17- 3633-120328\CCRS\1210336.3 12/9/14 G-61 AREA OR ASSOCIATION PROPERTY SHOWN IN THIS CONDOMINIUM PLAN, MUST BE BASED ONLY ON THE ACTUAL DIMENSIONS OF AS -BUILT IMPROVEMENTS AS DETERMINED BY PERSONAL ON-SITE INVESTIGATION, OR THE ELECTION NOT TO MAKE SUCH INVESTIGATION. ARTICLE 2 MAINTENANCE COVENANTS AND USE RESTRICTIONS The Community shall be held, used and enjoyed subject to the following restrictions and subject to the exemptions of Declarant set forth in the Governing Documents. 2.1 REPAIR AND MAINTENANCE 2.1.1 Maintenance Obligations and Standards The specific items listed in Exhibit D to this Declaration shall be maintained by the party indicated. If an item is not listed in Exhibit D, then it shall be maintained in accordance with the general rules established in this Declaration, in the current adopted Budget and any applicable Maintenance Guidelines (provided, however, that only Declarant, and not the Association or any other Owner, shall have the right to revise, supplement or replace any written Maintenance Guidelines initially provided by Declarant). In all cases, the Association shall maintain the Association Property and each Owner shall maintain his Unit and Exclusive Use Area in accordance with the Maintenance Guidelines. (a) By Association. The Association shall maintain the Association Property and those portions of the Exclusive Use Areas that are designated for Association maintenance in Exhibit D and in the Governing Documents. The Association shall maintain everything it is obligated to maintain in a clean, sanitary and attractive condition reasonably consistent with the level and frequency of maintenance reflected in the current adopted Budget; provided, however, that the Association shall at all times at least perform the level and frequency of maintenance specified in the applicable Maintenance Guidelines. (b) By Owners. Each Owner shall maintain the interior of the Unit and those portions of the Exclusive Use Area that are designated for Owner maintenance in Exhibit D and the Governing Documents, in a clean, sanitary and attractive condition and as directed in the Governing Documents and all applicable Maintenance Guidelines. Each Owner shall immediately notify the Association of any dangerous, defective or other condition which could cause injury to person or property in such Owner's Unit or Exclusive Use Area. Unless other arrangements are approved by the Board, all Owner -installed Improvements must be maintained by the Owner who installed the Improvements. 2.1.2 Commencement of Association Maintenance Obligations The Association's obligation to maintain the Association Property in a Phase composed solely of Association Property shall commence on conveyance of such Association Property to the Association either in fee or by maintenance easement. The Association's obligation to maintain the Association Property in any Phase that includes Condominiums commences on the date on which Annual Assessments commence on the Condominiums in the Phase, unless the terms of the Governing Documents applicable to the real property on which the Association Property is _18- 3633-120328\CCRS\1210336.3 12/9/14 G-62 located provide otherwise. Until the Association is responsible for maintaining the Association Property in a particular Phase, Declarant shall maintain such Association Property. 2.1.3 Acceptance of Association Property. The Association must accept ownership of and maintenance responsibility for each portion of Association Property when title and maintenance responsibility are tendered by Declarant, whether in fee simple, by easement or otherwise, and the Association shall execute each deed and any accompanying escrow instructions if requested to do so by Declarant, and it shall execute any bond exonerations when presented if the bonded obligations are satisfied. No Owner shall interfere with the exercise of the foregoing obligations by the Association, or with the rights or obligations of Declarant. 2.1.4 Association Power to Perform Owner Obligations If an Owner fails to maintain any Improvement that the Owner is obligated to maintain, the Association has the power but not the duty to perform the maintenance at the Owner's expense. In an emergency, the Association may perform the maintenance immediately; in all other cases, the Association may perform the maintenance after Notice and Hearing. For purposes hereof, an "emergency" is any situation where the Board determines that there is an imminent threat of injury to persons or damage to property. 2.1.5 Disputes Regarding Maintenance Obligations Disputes between Owners or between any Owner and the Association regarding maintenance shall be resolved in accordance with the enforcement process described in Section 12.1. 2.1.6 Maintenance Requirements for Particular Improvements Unless specifically provided in this Declaration or in any Maintenance Guidelines, the Board shall determine, in its sole discretion, the level and frequency of maintenance of the Association Property. The Association shall be responsible for maintaining the Association Property. (a) Landscaping, Generally. All Association -maintained landscaping shall be properly maintained, evenly cut, evenly edged, free of bare or brown spots, debris and weeds above the level of the lawn. All trees and shrubs shall be trimmed so they do not impede pedestrian traffic along the walkways. All trees shall also be root -pruned to eliminate exposed surface roots and damage to sidewalks, driveways and structures. All landscaping within the Community shall be maintained so as not to exceed the height of the line illustrated and depicted on the photographs taken from the residences along Mistridge Drive and Seaside Heights Drive, which photographs are depicted on Exhibit B to the Conditions of Approval and are also on file with the City's Planning Department. (b) Drainage Improvements. The Established Drainage in the Association Property may consist of any or all of the following: earthen or concrete drainage swales, concrete channels, catch basins with underground drainage pipelines, roof -mounted gutters or downspouts, and underground drain lines (collectively, "Drainage Improvements'). The Association shall maintain in good and functional condition, including keeping free of debris and obstructions, all Drainage Improvements located in the Association Property (except those for which a public authority or utility are responsible), to safeguard the Association Property, the Condominiums and neighboring properties and storm drain system from damage and pollution. The Association shall conduct inspections to ensure that Best Management Practices for control _19- 3633-120328\CCRS\1210336.3 12/9/14 G-63 of stormwater runoff are maintained in accordance with applicable requirements of the City and the WQMP (as further set forth in Section 2. 1.11 below). (c) Established Drainage. For the purpose hereof, "Established Drainage" is defined as the drainage which exists at the time of the first Close of Escrow for the sale of a Condominium in the Community by Declarant, or as shown on any plan approved by the City and the Committee. Established Drainage includes drainage to and from property lying outside the Community. To ensure adequate drainage within the Community, it is essential that the Drainage Improvements not be modified, removed or blocked without having first made alternative drainage arrangements. Irrigation systems must be installed and maintained to prevent excess runoff and accumulation of surface water. The grading design in the Community should not be altered to redirect surface water flow toward the Units or onto adjacent property, or to trap water so that it ponds or floods. Grading modifications are subject to law, and the terms of any Recorded drainage easements. (d) Community Walls. Association Walls in Phase 1 are approximately depicted on Exhibit E and those in subsequent Phases are approximately depicted in the applicable Notices of Addition. The Association is responsible for maintaining the structural components, pilasters, footings, tubular steel and glass portions of the Community Walls, the surfaces of the Community Walls which face Association Property and public property, any other portions not designated in the Governing Documents for maintenance by Owners, and any other portions designated for Association maintenance in a Notice of Addition or Supplemental Declaration. The Association is also responsible for all portions of the Community Walls that are constructed entirely in the Association Property, or that separate Association Property from public property, or from other real property lying outside the Community. (e) Ingress and Egress Improvements The Association shall maintain all Private Streets, walkways, and other means of ingress and egress in the Association Property in accordance with the Governing Documents and applicable Maintenance Guidelines. (f) Additional Items. The Association shall also be responsible for maintaining any Improvements that a majority of the voting power of the Association designates for maintenance by the Association. Such Improvements shall be deemed Association Property and subject to provisions of the Governing Documents that are applicable to the Association Property. 2.1.7 Inspections. The Board shall periodically cause a compliance inspection of the Community to be conducted by the Design Review Committee to report any violations thereof. The Board shall also cause condition inspections of the Association Property and all Improvements thereon to be conducted in conformity with the applicable Maintenance Guidelines, and in the absence of inspection frequency recommendations in any applicable Maintenance Guidelines at least once every three (3) years, in conjunction with the inspection required for the reserve study to be conducted pursuant to the requirements of the Bylaws, to (a) determine whether the Association Property is being maintained adequately in accordance with the standards of maintenance established in Section 2.1.1, (b) identify the condition of the Association Property and any Improvements thereon, including the existence of any hazards or _20_ 3633-120328\CCRS\1210336.3 12/9/14 G-64 defects, and the need for performing additional maintenance, refurbishment, replacement, or repair, and (c) recommend preventive actions which may be taken to reduce potential maintenance costs to be incurred in the future. The Board shall, during its meetings, regularly determine whether the recommended inspections and maintenance activities set forth in any applicable Maintenance Guidelines have been followed and, if not followed, what corrective steps need to be taken to assure proper inspections and maintenance of the Association Property. The Board shall keep a record of such determinations in the Board's minutes. The Board shall keep Declarant fully informed of the Board's activities under this Section 2.1.6. The Board shall employ, consistent with reasonable cost management, such experts, contractors and consultants as are necessary to perform the inspections and make the reports required by this Section. 2.1.8 Reporting Requirements. The Association shall prepare a report of the results of the inspection required by this Section (the "Condition Inspection Report'). The Condition Inspection Report shall be furnished to Owners and Declarant within the time set for furnishing the Budget to the Owners. The Condition Inspection Report must include at least the following: (a) a description of the condition of the Association Property, including a list of items inspected, and the status of maintenance, repair and need for replacement of all such items; (b) a description of all maintenance, repair and replacement planned for the ensuing Fiscal Year and included in the Budget; (c) if any maintenance, repair or replacement is to be deferred, the reason for such deferral; (d) a summary of all reports of inspections performed by any expert or consultant employed by the Association to perform inspections; (e) a report of the status of compliance with the maintenance, replacement and repair needs identified in the inspection report for preceding years; and (f) such other matters as the Board considers appropriate. Commencing on the date of the last Close of Escrow for the sale of a Condominium in the Community and continuing until the later of the date that is ten (10) years after the last Close of Escrow in the Neighborhood, or the date of expiration of all applicable statutes of limitations or repose for the filing of a complaint or suit or other legal remedies against Declarant under the Right to Repair Law (including any tolling periods), the Board shall also furnish to Declarant (a) each Condition Inspection Report performed for the Board, whenever such inspection is performed and for whatever portion of the Association Property that is inspected, within thirty (30) days after the completion of such inspection, and (b) the most recent Condition Inspection Report prepared for any portion of the Association Property, no later than the date that is ten (10) days after the Association receives Declarant's written request. Declarant shall pay all actual costs incurred in copying and mailing of the Condition Inspection Report. -21- 3633-120328\CCRS\1210336.3 12/9/14 G-65 2.1.9 Termite Eradication. If determined by the Board to be economically feasible, the Association shall adopt an inspection and prevention program for the prevention and eradication of infestation by wood -destroying pests and organisms in the Community. If the Association adopts such a program, the Association, on no less than fifteen (15) nor more than thirty (30) days' notice, may require each Owner and the occupants of the Owner's Condominium to vacate such Condominium to accommodate the Association's efforts to eradicate such infestation. The notice must state the reason for the temporary relocation, the date and time of the beginning of treatment, the anticipated date and time of termination of treatment, and that the occupants will be responsible for their own accommodations during the temporary relocation. Any damage caused to a Condominium by such entry by the Association or by any person authorized by the Association shall be repaired by the Association as a Common Expense. All costs involved in operating the inspection and preventive program as well as repairing and replacing the Association Property and Improvements thereon when the need for such maintenance, repair or replacement is the result of wood -destroying pests or organisms are a Common Expense. 2.1.10 Damage by Owners. Each Owner is liable to the Association for all damage to the Association Property that is sustained due to the negligence or willful act of the Owner, the Owner's Family, tenants or invitees, and any other Persons who derive their use of the Association Property from the Owner or from the Owner's Family, tenants or invitees. The Association may, after Notice and Hearing, levy a Special Assessment against the Owner representing a monetary charge imposed as a means of reimbursing the Association for costs incurred by the Association in the repair of damage to Association Property and facilities for which the Owner or the Owner's Family, tenants or invitees were responsible. The amount of the Special Assessment may include (a) the amount of any deductible payable on the insured portion of the loss (if the Association elects to make a claim under its insurance policy), (b) all costs and expenses actually incurred by the Association to correct damage that is not covered by the Association's insurance or for which no claim has been made, and (c) the amount of the increase in premiums payable by the Association, to the extent the increase is directly caused by damage that was attributed to the Owner or the Owner's Family, tenants or invitees. In accordance with California Civil Code Section 5725(a), the Association shall have the power to impose a lien for the foregoing Special Assessment. If a Condominium is jointly owned, the liability of its Owners for damage to Association Property is joint and several, except to the extent that the Association and the joint Owners have otherwise agreed in writing. 2.1.11 Stormwater Pollutant Control The Community is subject to all federal, state and local requirements of the National Pollutant Discharge Elimination System ("NPDES'), adopted in accordance with the Federal Clean Water Act. In 1999, the California State Water Resources Control Board ("SWRCB') enacted a new statewide General Permit for Storm Water Discharges Associated with Construction Activity (the "General Permit'). The General Permit imposes a comprehensive series of requirements on developers and builders to file a Storm Water Pollution Prevention Plan ("SWPPP'� with the Regional Water Quality Control Board that sets forth Best Management Practices (`BMPs'� that are intended to mitigate runoff of silt and pollutants from the Community into storm drains. Some BMPs apply to activities undertaken by the Association and Owners, and the Association and the Owners are required to comply with the applicable BMPs. The SWPPP includes specific maintenance schedules for post -construction operation of the BMPs that may impose long term maintenance -22- 3633-120328\CCRS\1210336.3 12/9/14 G-66 obligations on the Association and each Owner in the Community. The BMPs are in addition to any local ordinances established by the City and any rules and regulations imposed by the Association concerning discharge of non -storm water into storm drains. 2.2 SINGLE-FAMILY DWELLING Except as provided in Section 2.7 below, the Unit shall be used as a residential dwelling for a single Family and for no other purpose. 2.3 OCCUPANCY AND AGE RESTRICTIONS Each occupied Residence shall be occupied subject to the restrictions in the Governing Documents and all of the following: 2.3.1 Permitted Residents. Subject to Section 2.3.2 below, all the occupied Residences in the Community shall be permanently occupied by one or more Qualifying Residents. For purposes of remaining in compliance with state and federal law permitting age - restricted senior housing, "permanent occupancy" shall mean that a Qualifying Resident considers the Residence to be his or her legal residence and the Qualifying Resident actually resides in the Residence for at least six (6) months during every calendar year. Furthermore, except as allowed under this Section 2.3.2 below, a Permitted Health Care Resident may occupy a Residence only while actually providing live-in, long-term, or hospice health care to a Qualifying Resident for compensation. For purposes hereof, "for compensation" shall include provision of lodging and food in exchange for care. 2.3.2 Death or Prolonged Absence of Qualifying Resident Upon the death, dissolution of marriage, or upon hospitalization or other prolonged absence of the Qualifying Resident, any Qualified Permanent Resident who is not yet fifty-five (55) years of age, but who was residing with such Qualifying Resident at the time of the death or dissolution, or on the date of commencement of hospitalization or prolonged absence of the Qualifying Resident, shall be entitled to continue to occupy the Residence. However, in no event may such Qualified Permanent Resident continue to occupy a Residence in the absence of a Qualifying Resident if such occupancy would cause the total number of Residences occupied solely by persons under fifty-five (55) years of age to exceed twenty percent (20%) of the total number of occupied Residences in the Community, as determined by the Board of Directors in accordance with applicable law. A Permitted Healthcare Resident shall be entitled to continue his or her occupancy as a permitted resident in the absence of the Qualifying Resident only if both of the following are applicable: (a) The Qualifying Resident became absent from the Community due to hospitalization or other necessary medical treatment and expects to return to his or her Residence within ninety (90) days from the date the absence began; and (b) The absent Qualifying Resident or an authorized person acting for the Qualifying Resident submits a written request to the Board of Directors stating that the Qualifying Resident desires that the Permitted Healthcare Resident be allowed to remain in order to be present when the Qualifying Resident returns to reside in the Community. Upon written request by the Qualifying Resident or an authorized person acting for the Qualifying Resident, the Board of Directors shall have the discretion to allow a Permitted Healthcare Resident to remain for a time period longer than ninety (90) days from the date that the Qualifying -23- 3633-120328\CCRS\1210336.3 12/9/14 G-67 Resident's absence began, if it appears that the Qualifying Resident will return within a period of time not to exceed an additional ninety (90) days. 2.3.3 Disabled Persons. A disabled person whose disability condition meets the criteria for occupancy as a Qualified Permanent Resident in Article I of this Declaration may also occupy the Residence, unless the Board determines that there are special circumstances to disallow such person as a Qualified Permanent Resident. Special circumstances means a condition where such person is or may be harmful to himself or herself or others. (a) For any person who is a Qualified Permanent Resident whose disabling condition ends, the Board of Directors may require the formerly disabled resident to cease residing in the Community upon receipt of six months' written notice; provided, however, that the Board of Directors may allow the person to remain a resident for up to one year after the disabling condition ends. (b) The Board of Directors may take action to prohibit or terminate occupancy by a person who is a Qualified Permanent Resident by virtue of a disability if the Board of Directors finds, based on credible and objective evidence, that the person is likely to pose a significant threat to the health or safety of others that cannot be ameliorated by means of a reasonable accommodation; provided, however, that action to prohibit or terminate the occupancy may be taken only after doing both of the following: (1) Providing reasonable notice to and an opportunity to be heard for the disabled person whose occupancy is being challenged, and reasonable notice to the co -resident parent or grandparent of that person. (2) Giving due consideration to the relevant, credible, and objective information provided in hearing. The evidence shall be taken and held in a confidential manner, pursuant to a closed session, by the Board of Directors in order to preserve the privacy of the affected persons. The affected persons shall be entitled to have present at the hearing an attorney or any other person authorized by them to speak on their behalf or to assist them in the matter. 2.3.4 Resale or Lease. Each resale or lease of a Residence in the Community is subject to the requirement that such Residence be occupied after resale or during the term of the lease by at least one (1) Qualifying Resident. Each lease or rental agreement and each purchase agreement for resale of a Residence in the Community shall contain a statement above the signature line for lessee or purchaser (as applicable) asserting that at least one (1) permanent occupant of the Residence shall be fifty-five (55) years of age or older and each other permanent occupant shall meet the qualification of this Declaration and applicable law. 2.3.5 Permanent Occupancy is Restricted Persons less than fifty-five (55) years of age who do not qualify as Qualified Permanent Residents or Permitted Health Care Residents shall not be entitled to occupy, visit or reside in any Residence for more than sixty (60) calendar days (whether consecutive or non-consecutive) in any calendar year. -24- 3633-120328\CCRS\1210336.3 12/9/14 2.3.6 Compliance With Reporting Requirements (a) Obligations of the Owner. By accepting and recording a deed to a Unit, each Owner covenants and agrees as follows: (1) To fully and truthfully respond to all requests by the Association for age and occupancy information concerning each occupant of the Owner's Residence, and to cause all occupants of the Owner's Residence to cooperate by providing such information. Owners understand and acknowledge that age and occupancy information shall be requested by the Association as part of its obligation to conduct regular age and occupancy surveys of the Community and that such surveys are required to maintain the Community's eligibility to continue operating as an age- and occupancy -restricted project under senior housing exemptions available under state and federal law; (2) In the event of the change of occupancy of any Unit in the Community, the Owner of the Unit shall immediately inform the Board in writing and shall provide to the Board the names and ages of all current occupants of the Residence, and such other information as the Board reasonably requests to verify the ages and qualifications of all occupants; (3) To ensure that all occupants of the Owner's Residence comply at all times with all provisions of this Declaration and any rules and regulations of the Association, including restrictions on age and other qualifications of permanent occupants and limiting the duration of visits by temporary occupants or those who do not meet the age and occupancy restrictions; and (4) To indemnify, defend and hold harmless the Association and Declarant from any and all claims, losses, damages and causes of action which may arise from such Owner's failure to so comply. 2.3.7 Applicable Law. This Section 2.3 is intended to be a restatement of the authority granted the Association under applicable law. All amendments, restatements and interpretations of law governing "senior citizen housing developments," and "housing for older persons," as these terms are defined under state and federal law, are deemed to amend, restate and interpret this Section 2.3. 2.4 FURTHER SUBDIVISION Except as otherwise provided in this Declaration, no Owner may physically or legally subdivide the Owner's Condominium in any manner, including dividing such Owner's Condominium into time-share estates or time-share uses. This provision does not limit the right of an Owner to rent or lease the Condominium pursuant to Section 2.6 below. 2.5 LEASING AND RENTAL. 2.5.1 Leasing or Rental to Declarant Nothing in this Declaration shall be deemed to prevent an Owner from leasing or renting the Condominium to Declarant for use as sales offices, model home, parking area or for other residential or non-residential purposes. -25- 3633-120328\CCRS\1210336.3 12/9/14 G-69 Declarant may not lease any portion of the Association Property to the Owners or the Association. 2.5.2 Leasing or Rental to Parties Unrelated to Declarant Nothing in this Declaration shall be deemed to prevent an Owner from leasing or renting the Condominium for residential occupancy by a single Family, provided that: (i) the terms of the lease or rental agreement are set out in a written lease or rental agreement; (ii) the lease or rental agreement is expressly made subject to this Declaration and the other Governing Documents of the Community; (iii) the lease or rental agreement shall be for a term of not less than thirty (30) days; (iv) the lessor or landlord shall not provide any services normally associated with transient occupancy (including hotel, inn, bed & breakfast, vacation rental, time-share or similar temporary lodging); and (v) the lease or rental agreement shall provide that all lessees, tenants, and their Families, agents and invitees are bound by the Governing Documents when present in the Community, and any violation of the Governing Documents by a lessee, tenant or their Families, agents or invitees also constitutes a default under the lease or rental agreement. 2.6 RESALE. Nothing in this Declaration shall be deemed to prevent an Owner from (a) transferring or selling the Condominium, either to a single Person, or to more than one (1) Person to be held by them as tenants-in-common, joint tenants, tenants by the entirety or as community property. 2.7 BUSINESS AND COMMERCIAL ACTIVITIES 2.7.1 Generally. No Owner or other occupant of the Community may undertake any activity in any Condominium nor use any portion of the Association Property, for any business, commercial or non-residential purposes, nor for any other purpose that is inconsistent with the Governing Documents. Such purposes include manufacturing, storage, vending, auctions, vehicle or equipment repair, entering into any lease or rental agreement under which the Unit would be occupied by numbers of persons in excess of the maximum occupancy permitted under applicable law, and transient occupancy of the Unit (such as hotel, inn, bed & breakfast, vacation rental, time-share or similar temporary lodging). Any lease or rental agreement for a term of fewer than thirty (30) days, and any lease or rental agreement pursuant to which the lessor provides any services normally associated with transient occupancy, shall be deemed to be for transient purposes and prohibited under this Declaration. All of the foregoing activities are prohibited whether they are engaged in full-time or part-time, whether they are for- profit or non-profit, and whether they are licensed or unlicensed. 2.7.2 Exceptions. This Section shall not be interpreted to prohibit any of the following: (a) The hiring of employees or contractors to provide maintenance, construction or repair services that are consistent with the Governing Documents; (b) Rental or leasing of a Unit to Declarant for use as a sales office, model homes or parking area for any period of time; Article 15; (c) Exercise by Declarant of any rights reserved to it under -26- 3633-120328\CCRS\1210336.3 12/9/14 G-70 (d) The provision of in-home health care or assisted -living services to any resident of the Community; (e) The provision of family home child care services as defined in California Health and Safety Code Section 1597.40,et seq., so long as such services comply with all applicable state and local laws, including licensing, inspection and zoning requirements.; provided, however, that the Association has the power to limit or prohibit use of parks, recreational facilities and other common amenities in the Association Property by clientele of the business; (f) Srnall home-based service businesses that comply with all of the following: (1) The operator of the business lives in the Unit on a permanent, full-time basis; (2) When conducted in the Community, business activities take place solely inside the Unit; (3) The business does not generate in-person visits by suppliers or clientele; (4) The business complies with all laws, regulations and ordinances applicable to the Community, including zoning, health and licensing requirements; (5) The business otherwise complies with the Declaration and is consistent with the residential character of the Community; (6) The operator of the business posts no business-related signage anywhere in the Community; (7) There is no visible evidence in the Community of the business; (8) The business does not generate noise or odors that are apparent outside the Residence; and (9) The business does not increase the Association's liability or casualty insurance obligation or premium. (g) Other activities that have been determined by Local Government Agencies to be consistent with the single-family residential uses in the Community, including, for example, residential care facilities that are operated in accordance with California Health and Safety Code Section 1566.5. 2.8 NUISANCES. Noxious or offensive activities are prohibited in the Community and on any public street abutting or visible from the Community. The Board is entitled to determine if any device, noise, odor, or activity constitutes a nuisance. -27- 3633-120328\CCRS\1210336.3 12/9/14 G-71 2.8.1 Nuisance Devices. Nuisance devices may not be kept or operated in the Community or on any public street abutting the Community, or exposed to the view of other Condominiums or Association Property. Nuisance devices include the following: (a) All horns, whistles, bells or other sound devices (except security devices used exclusively to protect the security of a Unit or a vehicle and its contents); (b) Noisy or smoky vehicles, power equipment (excluding lawn mowers and other equipment used in connection with ordinary landscape maintenance), and Restricted Vehicles (defined below); (c) Devices that create or emit loud noises or noxious odors; (d) Construction or demolition waste containers (except as permitted in writing by the Committee); (e) Devices that unreasonably interfere with television or radio reception to a Condominium; (f) Plants or seeds infected with noxious insects or plant diseases; or (g) The presence of any other thing in the Community which may (1) increase the rate of insurance in the Community, (2) result in cancellation of the insurance, (3) obstruct or interfere with the rights of other Owners or the Association, (4) violate any law or provisions of the Governing Documents, or (5) constitute a nuisance or other threat to health or safety under applicable law or ordinance. 2.8.2 Nuisance Activities. Nuisance activities may not be undertaken in the Community or on any public street abutting the Community, or exposed to the view of other Condominiums or Association Property without the Board's prior written approval. Nuisance activities include the following: (a) Hanging, drying or airing clothing, fabrics or unsightly articles in any place that is visible from other Condominiums, Association Property or public streets; (b) The creation of unreasonable levels of noise from parties, recorded music, radios, television or related devices, or live music performance; (c) The creation of unreasonable levels of noise from a barking dog or other animal kept in the Community (for example, chronic daily nuisance barking by a dog over extended periods of time); (d) Repair or maintenance of vehicles or mechanical equipment, except in a closed garage screened from view by other Condominiums or Association Property; (e) Outdoor fires, except in barbecue grills designed and used in such a manner that they do not create a fire hazard; or _28_ 3633-120328\CCRS\1210336.3 12/9/14 G-72 (f) Outdoor storage of bulk materials or waste materials except in temporary storage areas designated by the Committee. (g) Any activity which may (1) increase the rate of insurance in the Community, (2) result in cancellation of the insurance, (3) obstruct or interfere with the rights of other Owners, (4) violate any law or provisions of the Governing Documents, or (5) constitute a nuisance or other threat to health or safety under applicable law or ordinance. 2.9 SIGNS. Subject to California Civil Code Sections 712, 713 and 4710, and any applicable Design Guidelines, no sign, advertising device or other display of any kind shall be displayed in the Community or on any public street in or abutting the Community except for the following signs: 2.9.1 Traffic and Parking Control Entry monuments, Neighborhood identification signs, and traffic or parking control signs maintained by the Association; 2.9.2 Addressing. For each Condominium, one (1) nameplate or address identification sign which complies with Design Review Committee rules; 2.9.3 Security. For each Condominium, one (1) sign advising of the existence of security services protecting a Condominium which complies with Design Review Committee rules; 2.9.4 For Sale or Lease Signs For each Condominium, one (1) sign advertising the Condominium for sale or lease that complies with the following requirements: (a) the sign has reasonable design and dimensions (which shall not exceed eighteen (18) inches by thirty (30) inches in size), provided the sign is promptly removed at the close of the resale escrow or the lease, or upon the Owner's withdrawal of the Condominium from the resale or lease market; and (b) the sign is of a color, style and location authorized by the Design Review Committee. 2.9.5 Certain Noncommercial Signs For each Condominium, a noncommercial sign, poster, flag or banner must comply with the following requirements: (a) a noncommercial sign or poster must not be more than nine (9) square feet in size and a noncommercial flag or banner must not be more than fifteen (15) square feet in size; and (b) a noncommercial sign, poster, flag or banner may not be made of lights, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component, or include the painting of architectural surfaces. 2.9.6 Other Authorized Signs Other signs or displays authorized by the Design Review Committee, and which comply with applicable Conditions of Approval. _29_ 3633-120328\CCRS\1210336.3 12/9/14 G-73 2.10 PARKING AND VEHICULAR RESTRICTIONS 2.10.1 Definitions. The following definitions shall apply to parking and vehicular restrictions set forth in this Declaration: 2.10.2 Authorized Vehicle. An "Authorized Vehicle" is an automobile, a passenger van designed to accommodate ten (10) or fewer people, a motorcycle, or a pickup truck having a manufacturer's rating or payload capacity of one (1) ton or less. The Association has the power to identify additional vehicles as Authorized Vehicles in the Rules and Regulations in order to adapt this restriction to other types of vehicles that are not listed above. 2.10.3 Restricted Vehicles. The following vehicles are "Restricted Vehicles:" (a) large commercial -type vehicles (for example, stake bed trucks, tank trucks, dump trucks, step vans, and concrete trucks), (b) buses, limousines or vans designed to accommodate more than ten (10) people, (c) inoperable vehicles or parts of vehicles, (d) aircraft, (e) boats, jet skis and other water craft, (f) trailers (for example, trailers designed for horses, boats, motorcycles or other equipment or materials), (g) motor homes and recreational vehicles (for example, fifth -wheels, folding camping trailers, travel trailers, but not including van conversions and truck campers), (h) any vehicle or vehicular equipment deemed a nuisance by the Association, and (i) any other vehicle that is not classified as an Authorized Vehicle. If a vehicle qualifies as both an Authorized Vehicle and a Restricted Vehicle, then the vehicle is presumed to be a Restricted Vehicle, unless the vehicle is expressly authorized in writing by the Association. The Association has the power to identify additional vehicles as Restricted Vehicles in the Rules and Regulations to adapt this restriction to other types of vehicles that are not listed above. 2.10.4 Parking Restrictions. (a) Alleys. No vehicle of any kind may be parked in any alley, except for brief periods during loading or unloading. When present in the alley, vehicles must be parked or moved so that they do not interfere with normal use of the alley/motor court by other Owners or visitors. (b) Restricted Vehicles. No Restricted Vehicle may be parked, stored or kept in the Community except for periods of two (2) hours or less in any twenty-four (24) hour period during loading, unloading, or emergency repairs. However, an Owner may park a Restricted Vehicle in the garage as long as the garage is kept closed and the presence of the Restricted Vehicle does not prevent Owner's other Authorized Vehicles from being parked in the garage at the same time. (c) Garage Parking. Each Owner shall at all times maintain the garage to allow for the parking of two (2) Authorized Vehicles. The garages shall be used for parking of two (2) vehicles and storage of personal property only. No garage may be used for any dwelling, commercial, recreational, or other purpose. Garage doors must be kept closed except as necessary for entry or exit of vehicles or Persons. No vehicle may be parked, stored or left unattended in any common street except as reasonably necessary for loading and unloading of passengers or property, or as necessary for emergency repairs. -30- 3633-120328\CCRS\1210336.3 12/9/14 G-74 2.10.5 Repair, Maintenance and Restoration No Person may repair, maintain or restore any vehicle in the Community, unless the work is conducted in the garage with the garage door closed. However, no Person may carry on in any portion of the Community any vehicle repair, maintenance or restoration business. 2.10.6 Enforcement. The Board has the right and power to enforce all parking and vehicle use regulations applicable to the Community. The Board shall contract with a towing service to remove violating vehicles from the Private Streets and other portions of the Community in accordance with California Vehicle Code Section 22658 or other applicable laws. The City may, but is not required to, enforce such restrictions, rules and regulations, in addition to applicable laws and ordinances. 2.10.7 Regulation and Restriction by Board The Board has the power to: (a) establish additional rules and regulations concerning parking in the Association Property, including designating "parking," "guest parking," and "no parking" areas, (b) prohibit any vehicle parking, operation, repair, maintenance or restoration activity in the Community if it determines in its sole discretion that the activity is a nuisance, and (c) promulgate rules and regulations concerning vehicles and parking in the Community as it deems necessary and desirable. 2.10.8 Association Property Parking Spaces A minimum of thirty-one (3 1) unassigned guest parking spaces are located in the Private Streets (collectively, "Association Property Parking Spaces'). Association Property Parking Spaces are for temporary, short-term use by invitees of residents only. Association Property Parking Spaces are unreserved and unassigned, and they are available on a strict first -come -first-served for basis for invitees. However, the spaces shall not be used for long-term parking or permanent storage of any vehicle or other personal property. The Board may, but is not required to, impose additional restrictions on Association Property Parking Spaces. 2.10.9 On -Street Parking. On -street parking within the Private Streets in areas not clearly designated as a parking stall is prohibited. 2.11 ANIMAL REGULATIONS. 2.11.1 General Restrictions on Numbers and Types of Animals An Owner may keep a reasonable number, as may be determined in the Board's sole discretion, of customarily uncaged household pets within the Owner's Residence. Each Owner may also maintain a reasonable number of small caged animals, birds or fish. No other animals are permitted in the Community. No animals may be kept for commercial purposes. No animals, livestock or poultry of any kind shall be raised, bred or kept in any Residence or Exclusive Use Area, except that dogs, cats and other household pets may be kept in the Residence, provided they are not kept, bred or maintained for any commercial purpose. Notwithstanding the foregoing, no person may bring or keep in the Community any dog that satisfies the definition of "vicious dog" under the Potentially Dangerous and Vicious Dogs Law at California Food and Agriculture Code Section 31601, et seq., nor any animal that results in an annoyance or nuisance to other Owners. The Board has the power and discretion to determine whether the types or -31- 3633-120328\CCRS\1210336.3 12/9/14 G-75 numbers of any animals kept on a Condominium are a nuisance, and the Board shall have the power to abate the nuisance through any legal procedure that is available to the Association. 2.11.2 Animal Keeping Areas. Animals belonging to Owners, tenants, residents or guests in the Community must be kept in the Residence or in fenced areas of the Exclusive Use Area. No pets shall be permitted in the Association Property except as permitted by the Rules and Regulations. Whenever outside the enclosed area of the Residence, animals must be kept under the control of a Person capable of controlling the animal either on a leash or other appropriate restraint or carrier. 2.11.3 Owner Responsibility. The Owner of the Condominium shall be solely responsible for ensuring that there is no external evidence of the presence of any animals kept by the Owner or by the other residents of the Condominium (including unreasonable noise or noticeable odor). Furthermore, each Owner shall be absolutely liable to each and all other Owners, their Families, tenants, residents and guests for damages or injuries caused by any animals brought or kept in the Community by an Owner, by members of the Owner's Family, or by the Owner's guests, tenants or invitees. Each Owner shall immediately remove any excrement or clean other unsanitary conditions caused by such Owner's animals on any portion of the Community. 2.12 ANTENNA AND SATELLITE DISH RESTRICTIONS No Person may install in the Community any antenna or over -the -air receiving device except for an "Authorized Antenna." 2.12.1 Definition. An Authorized Antenna is (a) an antenna designed to receive direct broadcast satellite service, including direct -to -home satellite service, that is one (1) meter or less in diameter, (b) an antenna designed to receive video programming service, including multi -channel multipoint distribution service, instructional television fixed service, and local multipoint distribution service, and is one (1) meter or less in diameter or diagonal measurement, (c) an antenna designed to receive television broadcast signals, or (d) an antenna used to receive and transmit fixed wireless signals. The foregoing definition is not intended to prohibit cordless or wireless telephones, PDAs, computers, wireless home data networking equipment or other portable wireless data or telephony devices that do not otherwise constitute a nuisance device under the Governing Documents. 2.12.2 Additional Prohibitions. No radio station or shortwave operators of any kind shall operate from any Residence or any other portion of the Community, and no exterior radio antenna, "Citizens Band" antenna, ham radio or similar radio receiving or broadcasting device of any type shall be erected or maintained in the Community. Additionally, no video or television antenna (including a satellite dish) that has a diameter or diagonal measurement of more than thirty-six (36) inches shall be installed or maintained in the Community. 2.12.3 Masts. An Authorized Antenna may be mounted on a mast to reach the height needed to receive an acceptable quality signal, subject to local governmental agency permitting requirements for safety purposes. No mast shall be installed in such a way that it -32- 3633-120328\CCRS\1210336.3 12/9/14 G-76 overhangs the balcony railing or patio wall/fence, or any portion of the Association Property outside the Exclusive Use Area, or poses a threat of damage to property or injury to persons. 2.12.4 Preferred Installation Locations and Restrictions on Installation The Exclusive Use Area patios, porches and balconies are preferred installation locations for the Authorized Antenna, subject to applicable restrictions and prohibitions in this Declaration. The Committee may adopt reasonable restrictions on installation and use of an Authorized Antenna as part of its Design Guidelines in order to minimize visibility of the Authorized Antenna from other Condominiums. Such restrictions may designate one (1) or more additional preferred installation locations, or require camouflage such as paint (subject to the antenna manufacturer's recommendations) or screening vegetation or other Improvements. However, no restriction imposed by the Committee may (a) unreasonably delay or prevent the installation, maintenance or use of an Authorized Antenna, (b) unreasonably increase the cost of the installation, maintenance or use of an Authorized Antenna, or (c) preclude acceptable quality reception. Owners are advised that satellite receivers installed on patios, porches or balconies without a clear line of sight to the sky may not receive a usable satellite signal. However, the Association is under no obligation to permit any Person to install or relocate any Authorized Antenna or any other device to any area outside the preferred installation locations for any reason. 2.12.5 Restrictions on Installation. Every Authorized Antenna that is installed by or on behalf of an Owner or other resident must meet the definition of "Authorized Antenna" in this Section 2.10.9, the installation must meet the restrictions and requirements in this Section 2.10.9 and elsewhere in the Governing Documents, and it must be installed, if at all, within the boundaries of the Condominium. The Committee has the power to prohibit or restrict the installation of any antenna or other over -the -air receiving device that does not meet the definition of an Authorized Antenna as set forth above. (a) No Owner or other resident may install any Authorized Antenna or any other device in the Association Property, including landscaped areas, paved areas, or exterior surfaces of the Condominium Building (such as the roof, fascia, fences, walls and exterior wall surfaces). (b) Authorized Antennae may be installed in the Exclusive Use Area patio, porch or balcony on a mast or tripod as described above, but no Person may make any installation of any device that penetrates the exterior surface or water seal of any portion of the Condominium Building, or of balconies, fences, walls or railings, wherever they are located. (c) The Committee may prohibit the installation of an Authorized Antenna in a particular location (including a preferred installation location) if, in the Committee's opinion, the installation, location or maintenance of such Authorized Antenna unreasonably affects the safety of the Owners or any other Person, or for any other safety-related reason established by the Committee. Such Owner shall be solely liable to the Association and the other Owners for any damage to the Condominium Building, to individual Condominiums, and to their contents (including water damage) that results from negligent installation or installation in violation of this Section 2.10.9. -33- 3633-120328\CCRS\1210336.3 12/9/14 G-77 (d) The Association Design Review Committee shall also prohibit Owners and other residents from installing an Authorized Antenna or other device on any real property which such Owner does not own or is not entitled to exclusively use or control under the Governing Documents, including any Community Wall, the Association Property or any other property outside the Owner's Unit. (e) The Association Design Review Committee also has the power to prohibit or restrict the installation of any antenna or other over -the -air receiving device that does not meet the definition of an Authorized Antenna as set forth above. 2.12.6 Review after Installation The Committee may review the location and installation of an Authorized Antenna after it is installed. After its review, the Committee may require that the Authorized Antenna be moved to a preferred location (if one has been designated) for safety reasons or to comply with reasonable restrictions subject to this Section and applicable law. 2.12.7 Restatement of Applicable Law This Section is intended to be a restatement of the authority granted to the Committee under the law. All amendments, modifications, restatements and interpretations of the law applicable to the installation, use or maintenance of an antenna or over -the -air receiving device shall be interpreted to amend, modify, restate or interpret this Section. 2.13 TRASH. Trash and recyclables must be stored in closed sanitary containers. No trash, recyclable materials or containers may be stored in view of other Condominiums or Association Property, except that closed containers may be set out at curbside for a reasonable period of time on trash collection days (not to exceed twelve (12) hours before and after scheduled trash collection hours). At all other times, Owners must store closed trash containers in the garage, out of sight of other Condominiums and Association Property, until scheduled collection times. 2.14 OWNER -INSTALLED IMPROVEMENTS AND MODIFICATIONS 2.14.1 Outdoors. No Owner or other occupant may install on the Exclusive Use Area patio, porch or balcony, or anywhere else outside the Condominium Building any clotheslines, wiring, air conditioning equipment, heating units, water softeners, other similar Improvements, or other exterior additions or alterations to any Condominium. Barbecue equipment, to the extent permitted under the Governing Documents, must be covered with a black -colored cover when not in use. Outdoor display of the flag of the United States is permitted pursuant to California Civil Code Section 4705, as long as the flag and flag pole are located solely within, on and over the Owner's Exclusive Use Area patio, porch or balcony. 2.14.2 Association -Maintained Exterior Light Fixtures Certain lighting fixtures on Condominium Building exteriors are part of the area lighting design of the Community. The electrical service for the exterior lighting fixtures is supplied through each Owner's domestic electric meter, at the Owner's expense. The Association is responsible for repair and maintenance of the light fixture, the photocell and re-lamping. No Owner is permitted -34- 3633-120328\CCRS\1210336.3 12/9/14 G-78 to remove, modify or disconnect such fixtures, as they are intended to provide lighting for the outdoor areas. 2.14.3 Indoors. (a) Unit Boundaries Generally. No Owner may modify or attempt to modify any of the walls, floors and ceilings in the Unit except for indoor surface finishes such as paint, wall coverings and floor coverings in accordance with this Section. (b) Windows. No Person may apply paint, foil, film, or other reflective material to the glass portion of any window. This Section shall not be interpreted to prohibit the installation of blinds, shutters, curtains and other similar window coverings. Pending installation of permanent window coverings, Owners may cover windows with white sheets up to ninety (90) days after the Close of Escrow. The Board has the power, but not the duty, to promulgate Design Guidelines for window coverings that are exposed to view from the Neighborhood Association Property or other Condominiums. (c) Structural Integrity. Nothing may be done in any Condominium or in, on or to the Association Property that will impair the structural (including water seal) or acoustical integrity or fire safety of the Condominium Building, or that may alter the plumbing, electricity, fire sprinkler system or natural gas facilities serving any other Condominium, except as otherwise expressly allowed in this Declaration. Waterbeds and aquariums are permitted only if a structural engineer confirms the bed or aquarium does not exceed the load requirements of the Residence floor. (d) Noise Mitigation. Owners are prohibited from (1) puncturing, piercing or otherwise altering any wall, ceiling or floor separating the Unit from another Unit or from Association Property, nor any interior load-bearing walls, wherever located, except as may be permitted in the Design Guidelines for the hanging of art, mirrors and other similar items or as otherwise approved in writing by the Association Design Review Committee, or (2) installing any sound system, loudspeakers, entertainment system or other music-, sound- or noise - generating or amplifying device in any wall, floor or ceiling separating the Unit from another Unit or Association Property, without the prior written approval of the Association Design Review Committee. Declarant may have installed noise -mitigating floor coverings in the Residences, and noise -mitigating materials in walls or ceilings shared with an adjoining Residence. No Person may replace any Declarant -installed noise -mitigating materials or install new flooring or coverings for ceilings or walls without replacing it with materials offering the same, substantially similar or better noise mitigation as the materials that were originally installed by Declarant. Before installation, the Owner shall present the Association Design Review Committee with written documentation from a licensed engineer, architect or other consultant with qualifications reasonably acceptable to the Committee that the noise mitigating properties of the proposed flooring or wall material are the same as, substantially similar to, or better than the materials originally installed by Declarant. If materials installed by an Owner are different from the materials installed by Declarant, and they do not perform to the manufacturer's stated ratings, then the Committee may require that the materials be removed at the Owner's sole expense and replaced at the Owner's sole expense with materials identical to those installed by Declarant. -35- 3633-120328\CCRS\1210336.3 12/9/14 G-79 (e) Plumbing. The plumbing system serving a Unit is an integral part of the Condominium Building -wide system serving the other Units. Any plumbing modifications could damage the Condominium Building -wide plumbing system and possibly the entire Condominium Building. No Owner may modify or attempt to modify any part of the plumbing system, except for replacement of in -Unit kitchen and bath fixtures. Immediately report water leaks, sewer backups and overflowing tubs and sinks to the Association. Owners shall maintain in -Unit plumbing fixtures, including sinks, toilets, bath, shower, faucets, sink hardware, and drain lines for washing machine and dishwasher and gas line and vent line (if any) for dryer. Owners and tenants must regularly inspect water supply lines/hoses connected to washing machine, toilets, faucets and dishwasher for leaks and replace when necessary at Owner's expense. Do not leave running faucets or toilets unattended. Owners are also responsible for removing blockages from all drains and sewer lines serving the Unit through laterals out to the main line. Owners are responsible for damage to the Unit, to other Units and to Association Property to the extent caused by Owner or tenant failure to prevent or stop leaks or overflows in the Unit and for damage caused by negligent plumbing repairs. Residents who plan to leave the Unit unoccupied for more than 24 hours should shut off water supplies to fixtures and appliances to prevent leaks during their absence. Plumbers hired by Owners must be approved by the Association. The Board has the right and power to promulgate Rules and Regulations to supplement or revise the foregoing requirements without having to amend this Declaration. (f) Fire Sprinkler System. The fire sprinkler system within a Unit is an integral part of the fire safety system serving other Units and the Condominium Building. The sprinkler system is monitored by a third -party provider pursuant to a monitoring contract with the Association. The Association maintains the fire sprinkler and monitoring system as a part of the Association Property. Any modification or attempt to modify or disable the sprinkler or monitoring system within a Unit could affect the operation of the fire safety and monitoring system within other Units and possibly the entire Condominium Building. The sprinkler system is heat -sensitive; therefore, sprinkler heads should not be exposed to open flame or any other intense heat source. By acceptance of a deed to a Condominium, each Owner acknowledges that the Owner (and not the Declarant or the Association) shall be solely responsible for (1) any damage to the Owners' Condominium, neighboring Condominiums, or to the Association Property to the extent caused by an Owner's interference with or damage to fire sprinkler or monitoring equipment, and (2) any damage to the Owner's Condominium or contents which is caused by the activation of the sprinkler system. (g) Carbon Monoxide Detectors/Smoke Detectors/Fire-Life Safety Systems. Fire -life safety systems installed in the Condominiums may include carbon monoxide detectors, smoke detectors and fire sprinklers, among other Improvements. Owners are responsible for maintaining the carbon monoxide detectors and smoke detectors and ensuring that they are kept in working order. Owners shall not interfere with or disable the function of the sprinkler heads, pipes, pressure gauges, carbon monoxide detectors, smoke detectors or any other portion of the fire -life -safety system. By acceptance of a deed to a Condominium, each Owner acknowledges that Declarant is not responsible for any damage to the Owners' Condominium or to the Association Property to the extent caused by an Owner's failure to maintain the carbon monoxide or smoke detectors or interference with the operation of the sprinkler heads, pipes or pressure gauges, or any other portion of the fire -life safety system. -36- 3633-120328\CCRS\1210336.3 12/9/14 • 2.14.4 No Liability. Neither the Declarant nor the Association shall be liable or responsible for any damage that results from Improvements installed, constructed or modified by or at the direction of an Owner. Owners are advised to consult and use qualified consultants and contractors when installing, constructing or modifying Improvements on the Owner's Condominium. 2.15 MECHANICS' LIENS. No Owner may cause or permit any mechanic's lien to be filed against the Association Property or another Owner's Condominium for labor or materials alleged to have been furnished or delivered to such Owner. Any Owner who permits a mechanics' lien to be so filed shall cause the lien to be discharged no later than five (5) days after receipt of written notice to discharge the lien is received from the Board. If the Owner fails to remove a mechanic's lien after written notice from the Board, the Board may discharge the lien and levy a Special Assessment against the violating Owner's Condominium to recover the cost of discharge. 2.16 WATER SUPPLY SYSTEM No individual water supply, sewage disposal or water softener system is permitted on any Condominium unless such system is designed, located, constructed and equipped in accordance with the requirements, standards and recommendations of any water district having jurisdiction, the City, County, the Design Review Committee and all other applicable governmental authorities with jurisdiction. 2.17 VIEW OBSTRUCTIONS. Each Owner acknowledges that (a) there are no protected views in the Community, and no Condominium is assured the existence or unobstructed continuation of any particular view, (b) any construction, landscaping (including the growth of landscaping) or other installation of Improvements by Declarant or other Owners may impair the view from any Condominium, (c) no Owner who becomes subject to the terms hereof shall thereby obtain any view rights whatsoever, and (d) each Owner hereby consents to such view impairment. Each Owner and the Association, by accepting a deed to a Condominium or any Association Property (respectively), hereby acknowledges that any construction or installation by Declarant, the Association or an Owner under the Declaration following required approvals may impair the view of such Owner or of the Members of the Association, and each Owner and the Association on behalf of the Members hereby consent to such impairment. 2.18 SOLAR ENERGY SYSTEMS California has a strong public policy in favor of solar heating and solar energy generating systems (each, a "System'). California policies and applicable laws, including the Solar Shade Control Act (Public Resources Code Section 25980, et seq.) and the Solar Rights Act (Civil Code Section 714,et seq.) protect each Owner's right to place and maintain equipment and facilities necessary to operate a residential System, all subject to reasonable restrictions imposed by the Association. 2.18.1 Installation. Owners who elect to install a System will be subject to the Declaration, any homeowner maintenance manual, all applicable City and County ordinances and zoning regulations, the Uniform Building Code and associated law and regulations. Owners must obtain written approval from the Design Review Committee prior to installing a System. In addition, Owners are advised that Condominium ownership in the Community does not include ownership or control of any portion of the roof or other areas of the Condominium Building containing the Residence, all of which areas are owned and maintained by the Association. -37- 3633-120328\CCRS\1210336.3 12/9/14 G-81 Therefore, the Association, through its Design Review Committee, has the right under California Civil Code Sections 714 and 714.1, as the same may be amended from time to time, to impose, as a condition of issuing any such approval, reasonable construction, maintenance, indemnity and reimbursement requirements on any installation affecting the roof or any other portion of the Condominium Building and any other Association Property. 2.18.2 Impact of Neighboring Properties California law, including the Solar Shade Control Act, may in some instances restrict an Owner's free and unfettered enjoyment of a Condominium if it conflicts with the solar heating needs of an adjoining Condominium, including the location and height of Owner -installed or —placed trees, landscaping or other Improvements on the Owner's property. However, nothing in the law or the Governing Documents guarantees any Owner the absolute right to operate a System entirely free of interfering shade from pre-existing vegetation and structures on neighboring Condominiums or Association Property, and Declarant makes no such warranty that any System will remain unaffected by shade caused by pre-existing vegetation or other Improvements, or the activities of neighboring Owners or the Association, including the growth of landscaping and the height of Improvements on neighboring Condominiums, Association Property, or public property. 2.19 RIGHTS OF DISABLED. Subject to Article 5, each Owner may modify such Owner's Unit and the route over the Association Property leading to the front door of the Owner's Unit, at the Owner's sole expense to facilitate access to the Residence by persons who are blind, visually impaired, deaf or physically disabled, or to alter conditions which could be hazardous to such persons, in accordance with California Civil Code Section 4760 or any other applicable law. 2.20 TEMPORARY BUILDINGS/DWELLINGS No outbuilding, tent, shack, shed, mobile home, modular building, storage building, shipping or storage container or similar movable building or shelter may be placed upon any portion of the Community either temporarily or permanently. No automobile, trailer, mobile home, camper, motor home, recreational vehicle or other vehicle may be used as a dwelling in any portion of the Community, either temporarily or permanently. 2.21 ASSOCIATION PROPERTY. The Association Property may not be altered without the Board's prior written consent. 2.22 USES OF COMMUNITY CENTER The Community Center shall not be rented to or used by non-residents or non -owners in the Community. In addition, the Community Center shall be closed daily by no later than 10:00 p.m. 2.23 LANDSCAPING RESTRICTIONS FOR COMMUNITY GARDEN No portion of the Community Garden may be planted with any type of trees, including citrus trees, avocado trees, etc. The individual gardens within the Community Garden shall not be enclosed with any fencing taller than 42 inches in height. 2.24 ACCESS GATE. The pedestrian access point to the Community shall not contain a gate or other similar enclosure that would prevent the general public from entering the Community to access the Trails (as defined in Section3.10 below). In addition, public pedestrian -38- 3633-120328\CCRS\1210336.3 12/9/14 G-82 access shall not be impeded by any gate, fence or other similar improvement along the entire length of the Trails. The entry tower to the Community shall be limited to a height of sixteen (16) feet, as measured from adjacent finished grade to the highest point of the structure. 2.25 MINERAL EXPLORATION AND EXTRACTION No oil drilling, oil, gas or mineral development operations, oil refining, geothermal exploration or development, quarrying or mining operations of any kind may be conducted on the Community, nor are oil wells, tanks, tunnels or mineral excavations or shafts permitted upon the surface of any Condominium or within five hundred (500) feet of the surface of the Community. 2.26 POST -TENSION CONCRETE SLABS Concrete slabs for Improvements constructed in the Community may be reinforced with a grid of steel cable installed in the concrete slab and then tightened to create extremely high tension. This type of slab is commonly known as a "Post -Tension Slab." Cutting into a Post -Tension Slab for any reason (for example, to install a floor safe, to remodel plumbing, etc.) is very hazardous and may result in serious damage to the Unit, personal injury, or both. Each Owner shall determine if the Condominium Building containing the Owner's Unit has been constructed with a Post -Tension Slab and, if so agrees: (a) Owner shall not cut into or otherwise tamper with the Post -Tension Slab; (b) Owner will not permit or allow any other Person to cut into or tamper with the Post -Tension Slab so long as Owner owns any interest in the Unit; (c) Owner shall disclose the existence of the Post - Tension Slab to any Person who rents, leases or purchases the Unit from Owner; and (d) Owner shall indemnify and hold Declarant and Declarant's agents, free and harmless from and against any and all claims, damages, losses or other liability (including attorneys' fees and costs of court) arising from any breach of this covenant by Owner. ARTICLE 3 DISCLOSURES This Article discloses information obtained from third -party sources such as consultants, government and public records. No Person should rely on the ongoing accuracy or completeness of the information discussed in this Article because many of the matters discussed below are outside the control of Declarant and the Association. Accordingly, Declarant does not make any guarantee as to the accuracy or completeness of the matters disclosed below. Furthermore, Declarant is under no obligation to update or revise any matter disclosed in this Article. This Article is intended to provide Owners with information known or provided to Declarant as of the date this Declaration was Recorded, to be used as a starting point for further independent investigation. 3.1 NO REPRESENTATIONS OR WARRANTIES No representations or warranties, express or implied, have been given by Declarant, the Association or their agents, in connection with the Community, its physical condition, zoning, compliance with law, fitness for intended use, or in connection with the subdivision, sale, operation, maintenance, cost of maintenance, taxes or regulation of the Community as a condominium project, except as expressly provided in this Declaration, as submitted by Declarant to the BRE, and as provided by Declarant to the first Owner of each Condominium, or provided in the standard warranty required by the VA and FHA. -39- 3633-120328\CCRS\1210336.3 12/9/14 G-83 3.2 SPECIAL DISTRICTS. The Community lies within the boundaries of the following special districts: 3.2.1 Los Angeles County Regional Parks and Recreation Assessment District LLD No. 92-1. Los Angeles County Regional Parks and Recreation Assessment District LLD No. 92-1 is formed to finance the operation, construction and maintenance of recreational centers, regional parks, beaches, senior citizen recreation facilities, natural areas and trail systems and open spaces. District charges will appear on each Owner's property tax bill. Such districts have rights to accelerated foreclosure if assessments are delinquent for more than a specified amount of time. The amount of the special tax and any other information pertaining to any such district can be obtained from the County Assessor's office. 3.2.2 City of Rancho Palos Verdes Landscape and Lighting Maintenance District. City of Rancho Palos Verdes Landscape and Lighting Maintenance District is formed to fund the on-going operation, maintenance and servicing of median, landscaping, street trees, street lighting and traffic signals. District charges will appear on each Owner's property tax bill. Such districts have rights to accelerated foreclosure if assessments are delinquent for more than a specified amount of time. The amount of the special tax and any other information pertaining to any such district can be obtained from the County Assessor's office. 3.2.3 Other Districts. This Section is not intended to be an exhaustive list of districts that presently affect the Community. The Community may at present lie within other special tax districts, including flood control, sanitation, storm drain, medical, fire protection, public works and vector control districts, or it may be annexed to other special tax districts from time to time in the future. Owners are advised to consult the County Assessor's office for further information. 3.3 SUPPLEMENTAL REAL PROPERTY TAXES The County Assessor has the authority to reassess new homes after the Close of Escrow based on the difference between its appraised value and the home's unimproved value for the period after escrow closes. The Assessor will issue a supplemental tax bill to Owners for the difference in the taxes due based upon the reassessment. Declarant has no control over the valuation, timing or the amount of the supplemental bill resulting from the reassessment. Owner is solely responsible for the payment of the supplemental tax bill. The following notice is given pursuant to Section 1102.6c of the California Civil Code: "California property tax law requires the Assessor to revalue real property at the time the ownership of the property changes. Because of this law, you may receive one or two supplemental tax bills, depending on when your loan closes. The supplemental tax bills are not mailed to your lender. If you have arranged for your property tax payments to be paid through an impound account, the supplemental tax bills will not be paid by your lender. It is your responsibility to pay these supplemental bills directly to the Tax Collector. If you -40- 3633-120328\CCRS\1210336.3 12/9/14 • have any question concerning this matter, please call your local Tax Collector's Office." Neither Declarant nor any of its authorized agents, representatives, employees or sales people have made any representations or warranties regarding supplemental real property taxes. 3.4 ASSOCIATION BUDGETS. Initial Association budgets are prepared by an independent professional and are based on information available at the date of preparation. They have been approved by the BRE. Budgets will change from time to time due to changing maintenance requirements, geographic impacts that are not anticipated when the budgets were prepared, the demand by Owners for different, higher, or enhanced services or standards of maintenance and/or unforeseen or unanticipated circumstances. In addition, actual maintenance costs may vary from the costs allocated in the BRE -reviewed Budget; therefore, there is no representation that the initial budgets reflect actual costs of operating the Association. 3.5 AGE -RESTRICTED COMMUNITY. The Community is intended to be operated and conveyed as a "senior citizen housing development" as defined in Section 51.3 of the California Civil Code, and as "housing for older persons," in accordance with the requirements of the federal Fair Housing Amendments Act of 1988 (Title 42 U.S.C. Section 3601, et seq.), and the exemptions provided under Title 42 U.S.C. Section 3601(b)(2) and the Fair Employment and Housing Act at California Government Code Section 12900,et seq., all as amended. This Declaration imposes detailed age and occupancy restrictions on all Persons desiring to occupy the Community. Persons who do not satisfy the definition of "Qualifying Resident," "Qualified Permanent Resident," or "Permitted Health Care Resident" may own a Unit but they may not occupy it except in limited situations described in applicable law and regulations and in the Governing Documents. By accepting a deed to a Unit in the Community, each Owner acknowledges that the age and occupancy restrictions set forth in this Declaration are intended to comply to the fullest extent with applicable law and regulation, and each Owner and the Association must ensure that all occupants of the Community fully comply with all restrictions at all times. However, over time, there is no guarantee that the age and occupancy restrictions in this Declaration will remain in effect as presently written. The age and occupancy restrictions may change as a result of state or federal legislative or court action, or they may be terminated by action of a state or federal agency or court if the Association fails to provide proper enforcement of the restrictions. Therefore Declarant makes no assurances that applicable law or regulations, or the age and occupancy restrictions set forth in this Declaration, will remain unchanged throughout the life of the Community. 3.6 ACCESS FACILITIES. Vehicular and pedestrian access into the Community may be controlled by entry gates located at the Private Street entrances into the Community. There may also be controlled access pedestrian gates in the Community. There are no assurances that any entry gates will be installed or staffed. If staffing is provided, the schedule for commencing staffing operations and the hours of staffing will be subject to change as development progresses and will be affected by the construction and marketing access requirements of Declarant and the commencement of Assessments in future Phases. Until the last Close of Escrow occurs in the Community (a) the access gate may be open to the general -41- 3633-120328\CCRS\1210336.3 12/9/14 G-85 public, (b) Declarant may change the hours of access gate operation in its sole discretion without notice to accommodate construction and marketing activities, (c) interim access gate staffing may be provided or eliminated, and (d) operation of the access gate may be limited. 3.7 SECURITY AND PRIVACY DISCLAIMER Access gates and any staffing are not intended to provide security or privacy for persons, personal property or Condominiums in the Community. Neither Declarant nor the Association undertakes to provide security or privacy for the Community or Owners, nor do they make any representations or warranties concerning the security or privacy of the Community or Owners. 3.8 URBAN ENVIRONMENT. Living in an attached Condominium Building within a densely populated Community entails living in very close proximity to other persons and business, with attendant limitations on solitude. Owners will hear noise from adjacent Units within the Community, including noise from showers, bathtubs, sinks, toilets or other sources of running water. Also, Owners may hear noise from items such as vacuum cleaners, stereos or televisions, or from people running, walking or exercising. Finally, Owners can expect to hear noise from adjacent residential and commercial areas. Owners may also experience light entering the Units from street lights located in close proximity to the windows and doors of the Units. 3.9 AFFORDABLE HOUSING The City has required Declarant to offer three (3) Units in the Community for sale to a person or family of "very low income" or "extremely low income" as defined in the California Health and Safety Code and the California Code of Regulations. Declarant will require that buyers who qualify purchase their Units subject to the resale restrictions, as reflected in a recorded covenant agreement, for a period of not less than forty-five (45) years. 3.10 TRAILS. A public and private trail system is located over the open space areas in the northern portion of the Community adjacent to Units 18 to 34, inclusive, of Tract No. 71878 as well as over a portion of the Community connecting Crestridge Road to the main trail system located in the northern portion of the Community (collectively, the"Trails'l. The Trails connect to the Vista del Norte Trail and the Indian Peak Loop Trail located in the Vista Del Norte Ecological Preserve to the north of the Community. The Trails are open to the public and an easement has been dedicated to the public over the Trails on the Tract Map. The areas in and around the Trails will be subject to varying levels of pedestrian traffic, including bicycles, skateboards, people walking dogs and the like, which may cause noise, odor and other related inconveniences. The Trails are to be owned and maintained by the Association. Declarant has no control over the use, maintenance or operation of the Trails or its impact on the Community. 3.11 ELECTRIC POWER LINES, WIRELESS COMMUNICATIONS FACILITIES, AND HUMAN HEALTH Underground and overhead electric transmission and distribution lines and transformers ("Power Lines') are located within or in the vicinity of all residential communities, including this Community. The Power Lines within and in the vicinity of the Community produce electric and magnetic fields (`EMF'J. Antennas and other equipment for wireless telecommunications (for example, cellular phones) may also be located in or in the vicinity of the Community. Like all wireless communications facilities, these facilities produce radio-frequency fields ("RF'�. Numerous studies concerning the effects of EMF and/or -42- 3633-120328\CCRS\1210336.3 12/9/14 G-86 RF on human health have been undertaken over the past several years and some are ongoing. There are studies that have reported a possible relationship between EMF exposure and some health conditions, such as childhood leukemia, miscarriages, and certain neurological disorders, while other studies found no such relationship. Some studies have reported associations between RF exposure and brain cancer, while other studies found no such relationship. Additional information about EMF and RF is available from the following agencies: (a) the World Health Organization's International EMF Project website at http://www.who.int/topics/electroma_gnetic fields/enf, (b) Southern California Edison website athttps://www.sce.com/wps/portal/ home/safety/family/environmental-health (c) the U.S. National Institute of Environmental Health Sciences website at http://www.niehs.nih.gov/health/topics/a,gents/emff, (d) San Diego Gas & Electric website at http://www.sdge.com/safety/ electric-and-magnetic-fields/emf-issu_q and http://www.sdge.com/safety/electric-and-ma ng etic- fields/links-emf-resources-web: and (e) Electric and Magnetic Fields Program, athttp://www.ehib.or /g emf/; (f) Pacific Gas & Electric Company website at http://www.pge.com/ mybusiness/edusafety/systemworks/electric/emff, and (g) Sacramento Municipal Utility District website athqps://www.smud.org en/residential/education-safety/powerlines-and-equipment/electric-and-magnetic-fields.htm This list is not meant to be all inclusive. 3.12 PROPERTY LINES. The boundaries of each Condominium in the Community and the Association Property are delineated on subdivision (tract) maps, lot line adjustments, parcel maps or Condominium Plans that are public records and are available at the County Recorder's office. 3.13 SEWER BACKFLOW PREVENTION VALVE Certain Units in the Community may have been provided with sewer backflow preventors. These devices are provided in Units which have a finish floor elevation that is lower than the nearest upstream manhole rim. These devices are designed to prevent sewage from backing up into a Unit in the event of a blockage in the main sewer line in the street. The clean-out for these backflow preventors is usually in the landscaped area in front of the Unit. If for any reason a sewer line requires snaking or cleaning, the backflow preventor should be disconnected before conducting any such work to prevent the backflow preventor device from being damaged. 3.14 UTILITY IMPROVEMENTS There may be above -ground and subterranean utility Improvements such as transformers, lift stations, water or sewer facilities, telecommunications vaults and other visible Improvements necessary for the delivery of utilities or other services either on or adjacent to each Condominium. The placement of such -43- 3633-120328\CCRS\1210336.3 12/9/14 G-87 Improvements is dictated by the needs of the applicable utility or service provider, and the presence of such Improvements in the Community is in accordance with easements created prior to or during the development of the Community. Each Condominium and portions of the Association Property are subject to one or more such easements for placement of utility Improvements. No Owner may modify, remove or otherwise interfere with utility Improvements on any Condominium or other portion of the Community. 3.15 MOLD. Molds are simple, microscopic organisms, present virtually everywhere, indoors and outdoors. Mold can be any color, but is usually green, gray, brown or black. Mold requires a food source (such as paper, wood, leaves or dirt), a source of moisture and a suitable temperature (generally 40-100 degrees Fahrenheit) to grow. Individuals are exposed to molds on a daily basis, and in most instances there are no harmful effects. However, the buildup of molds in the indoor environment may contribute to serious health problems for some individuals. Due to a variety of factors, including the fact that sensitivities to various types of molds and other potential contaminants vary from person to person, there are currently no state or federal standards concerning acceptable levels of exposure to mold. Sources of indoor moisture that may lead to mold problems include, but are not limited to flooding, leaks, seepage, sprinkler spray hitting the Condominium Building, overflow from sinks or sewers, damp basement or crawl space, steam from shower or cooking, humidifiers, wet clothes drying indoors, watering house plants, and clothes dryers exhausting indoors. Each Owner should take precautions to prevent the growth of mold in the Unit from these and other sources. Preventative measures include, but are not limited to the following: (1) regularly cleaning the Unit; (2) regularly checking for accumulated moisture in corners and unventilated areas; (3) running fans, dehumidifiers and air conditioners to reduce indoor humidity; (4) stopping the source of any leak or flooding; (5) removing excess water with mops or a wet vacuum; (6) moving wet items to a dry, well ventilated area; (7) regularly cleaning and disinfecting indoor and outdoor surfaces that may contain mold; (8) having major appliances, such as furnaces, heat pumps, central air conditioners, ventilation systems and furnace -attached humidifiers inspected, cleaned and serviced regularly by a qualified professional; (9) cleaning the refrigerator, air conditioner and dehumidifier drip pans and filters regularly and ensuring that refrigerator and freezer doors seal properly; and (10) avoiding over -watering of landscaping. It is the Owner's responsibility to monitor the Condominium on a continual basis for excessive moisture, water and mold accumulation. For additional information regarding mold, please refer to the following websites: California Department of Public Health - http://www.cdph.ca.gov; Centers for Disease Control and Prevention — http://www.edc.gov/neeh; U.S. Environmental Protection Agency — http://www.epa.gov; Illinois Department of Public Health — http://www.idph.state.il.us; and Washington State Department of Health — http://www.doh.wa.gov. 3.16 NATURAL HAZARD ZONE DISCLOSURES According to the Natural Hazard Disclosure Statement, dated as of March 25, 2014, and prepared by First American Natural Hazard Disclosures (the "Natural Hazard Disclosure Statement'), all or a portion of the Community lies within the mapped boundaries of the following natural hazard zones: -44- 3633-120328\CCRS\1210336.3 12/9/14 • • • • 3.16.1 Earthquake Fault Zones. California is subject to a wide range of earthquake activity. California has many known faults as well as yet undiscovered faults. According to the Natural Hazard Disclosure Statement, the Community is not located within an Earthquake Fault Zone as defined by California Public Resources Code Section 2621.9. Owners must evaluate the potential for future seismic activity that might seriously damage an Owner's Condominium. A major earthquake, which some have predicted will occur in our lifetimes, could cause very serious damage to Units, located even many miles from the epicenter of the earthquake. A more moderate earthquake occurring on a more minor fault, or on an undiscovered fault, could also cause substantial damage. Declarant makes no representations or warranties as to the degree of earthquake risk within the Community. All Owners should read "The Homeowner's Guide to Earthquake Safety," which is published by the California Seismic Safety Commission and is available from their offices or by free download from their website at http://www.seismic.ca.gov/ and consult with the City, County, other public agencies, and appropriate experts to evaluate the potential risk. 3.16.2 Very High Fire Hazard Severity Zone According to the Natural Hazard Disclosure Statement, the Community is located within a Very High Fire Hazard Severity Zone pursuant to applicable state maps. This Zone is susceptible to fires, and the physical conditions of the area, including such factors as fuel, slope, and weather could cause fires that are more severe, more difficult to put out and, as a result, could cause more damage. Owners of Condominiums located within this Zone may have additional maintenance responsibilities to prevent or retard fires, including restrictions on constructing Improvements on the Lot, as stated in California Government Code Section 51182. These maps are updated periodically, and Declarant makes no representations, guarantees or warranties with respect to any future Very High Fire Hazard Severity Zone determinations. 3.16.3 County and City -Designated Zone Determinations. California law allows counties to establish policies and criteria stricter than those set by the State respecting, but not limited to, the permitting and development of properties found to be in or affected by the certain natural hazards. This information may be used by the local jurisdiction relative to making decisions regarding new development or additional construction. The agencies and jurisdictions which develop the official maps do not necessarily define or delineate hazards in the same way. A site can be in a hazard zone from one source and not in a hazard zone from another source. Properties that are in a mapped geologic hazard zone may require a geologic study prior to any new or additional construction. According to the Natural Hazards Disclosure Statement, the Community lies within the following: (a) Fire Zone. A County -determined mapped Fire Zone 4 of high fire hazard (having a potential for woodland and brush fires; (b) Hillside Area. A County -determined mapped Hillside Area subject to slope instability; to 100 acres; (c) Landslide. A County -determined area for landslides between 5 -45- 3633-120328\CCRS\1210336.3 12/9/14 G-89 (d) Fire Hazard Area. A City -determined Fire Hazard Area; and (e) Landslide. A City -determined area for Active, Old or Possible Landslides. 3.16.4 Military Ordnance Location Disclosure Former federal or state ordnance locations are located within one (1) mile of all or a portion of the Community. These areas were once used for military training purposes, which may contain potentially explosive munitions. Declarant has no control over the existing or potential uses, operations or maintenance of these military ordnance locations. Please refer to the Natural Hazard Disclosure Statement for further information on the military ordnance locations within the County. 3.16.5 Right to Farm. According to the Natural Hazard Disclosure Statement, the California Department of Conservation, Division of Land Resource Protection has not designated important farmland areas for the portion of the County in which the Community is located as of the date of this Declaration. Therefore, the Community may be located within one mile of a farm or ranch land. California Civil Code Section 1103.4 requires notice if a property is presently located within one mile of a parcel of real property designated as "Prime Farmland," "Farmland of Statewide Importance." "Unique Farmland," "Farmland of Local Importance," or "Grazing Land" on the most current county -level GIS "Important Farmland Map" issued by the California Department of Conservation, Division of Land Resource Protection. Owners are advised to check with the California Department of Conservation, Division of Land Resource Protection concerning when such a designation will be made. Declarant makes no representations, guarantees or warranties concerning any future farmland area determinations. 3.17 SOIL CONDITIONS. According to the Geotechnical Due Diligence Report, dated April 12, 2013, prepared by LGC Geotechnical, Inc. (the"Geotechnical Report'), the soil in the Community is expansive and in some areas it may be corrosive. A copy of the Geotechnical Report is available from the City. The basic conclusions and recommendations of the Geotechnical Report are summarized below, but the following summary is not exhaustive, and, in the event of a conflict herein with the Geotechnical Report, the Geotechnical Report will control. 3.17.1 Expansive Soils. According to the Geotechnical Report, the soils in the Community have a "medium to very high expansion potential." Expansive soil is not unusual in many areas in California. When expansive soil becomes wet, it is prone to expand, and when it dries, it is prone to shrink. This expansion and contraction may cause damage to Improvements, including cracking stucco, cracking drywall, cracking concrete or cracking, tilting, separating or lifting hardscape. In the Community, the Units and other Improvements will undergo both settlement due to compression of the underlying manmade and natural materials and will also most likely undergo lifting and separating due to the expansive soils. It is not possible to design or construct a Condominium Building or other Improvement which will completely withstand all soils movement. Some cracking of the concrete slab and stucco walls may occur and is normal. Owners should expect that the Association may need to perform regular maintenance to Declarant -installed on -grade Improvements, such as roads, retaining walls, sidewalks and curb and gutters as a result of the onsite expansive soils. The extent and -46- 3633-120328\CCRS\1210336.3 12/9/14 G-90 degree of maintenance required will in part depend upon the irrigation and landscaping practices of the Owners and the Association. For example, it may be necessary to seal cosmetic cracking in asphalt on an annual basis. Some things to consider when designing and constructing permissible Improvements are listed below: (a) Minimize Moisture Changes The best method of reducing the effects of expansive soils is to maintain a constant and moderate level of soil moisture. This is especially important adjacent to the Condominium Building and/or Unit foundation. You should carefully design and control any landscape irrigation system to minimize soil moisture changes. Prior to establishing landscaping, the soils should not be allowed to dry out, especially below a depth of approximately six (6) inches. Once any landscaping has been established, any irrigation should be limited to the minimum needed to maintain plant life. Owners should periodically water the bare soil to help maintain moisture before any Improvements are installed. Changes in the soil moisture content will increase the amount of damage caused by expansive soils including cracking stucco, cracking drywall, cracking concrete or cracking, tilting, separating or lifting hardscape. (b) Slope Creep. While horizontal and vertical movement of earth at or near tops or bottom of slopes (often described as "slope creep") is generally minor in nature and does not always occur, it may affect Improvements. Slope creep can cause Improvements and walls to tilt and crack and may cause cracking or lifting in brickwork or concrete in a manner that will allow Improvements to function yet not meet the Owner's cosmetic expectations. Professional soils and structural engineers should be retained to design and construct such Improvements to mitigate the effects of slope creep and to ensure compliance with special rules for such Improvements that are required under the applicable Building Code or other applicable regulations. If possible, Improvements should not be constructed within ten (10) feet of the edge, top or bottom of a slope. Even with professional assistance, minor lifting and cracking can occur. (c) General Construction Guidelines Owners must hire appropriate geotechnical engineers, civil engineers and contractors to accommodate these known conditions. It is essential for the contractors and engineers to understand the Community's soils conditions before designing or constructing Improvements. Owners must provide the engineers and contractors copies of the soils and grading reports. In most cases, additional testing by engineers will be required for construction Improvements. Historically, in expansive soil areas such as this, the most economical solution to the issue is to utilize an expert to design and construct your Improvement such that movement is minimized, but should movement occur it will not be visually unsightly. This usually takes the form of such things as regular, deep construction joints in concrete, the use of flexible pavers and frequent use of flexible building materials. 3.17.2 Fill Soils. Condominium Buildings constructed within the Community are located on engineered fill material over native rock and soil, details of which may be obtained from the Geotechnical Reports on file at the City. Fill soils presents special concerns. Licensed geotechnical and civil engineers were hired to design and observe the construction of the Community. However, even property that has been certified by soils consultants as "stable," will experience horizontal and vertical movement over time. In the Community, the _47_ 3633-120328\CCRS\1210336.3 12/9/14 G-91 Condominium Buildings and other Improvements will undergo both settlement due to compression of the underlying manmade and natural materials, and will also most likely undergo lifting and separating due to the expansive soils. This movement is unavoidable, and Owners must design and build any permissible Improvements with the expectation of soils movement. Otherwise, Improvements can crack, separate, lift and tilt beyond accepted tolerances. In addition to improper design and construction of Owner -installed Improvements, homeowner overwatering and homeowner drainage modifications will increase the amount of horizontal and vertical movement, and may cause damage to both Owner -installed Improvements and Improvements constructed by Declarant, including the Condominium Building structure itself. Furthermore, Condominium Buildings and other Improvements that incorporate designs and construction techniques to address soils conditions may experience cosmetic distress, even as they remain structurally sound. 3.17.3 Drainage and Irrigation. Owners must use adequate drainage and irrigation control. The construction or modification of Improvements by Owners should not result in ponding of water. Owner -installed drainage devices, including, but not limited to, area drain lines and gutters should be carefully designed and installed with professional assistance and then maintained in an unobstructed condition. Drainage devices installed by Declarant designed to serve more than one (1) Unit or the Association Property should not be altered in a manner that will redirect or obstruct the drainage through these drainage devices. All Owner - installed landscape irrigation systems should be designed, constructed, and operated to prevent excessive saturation of soils. All Owner -installed landscaping (if any) must be designed to ensure that water drains away from the Condominium Building footings and other Improvements. Obstructions such as walls should not be constructed across swales unless adequate replacement drainage Improvements have been installed or created. Planters should be lined with an impervious surface and should contain outlets to drain excess water. Owners shall maintain and keep clear of debris any drainage or facility or device constructed by Declarant. 3.17.4 Corrosive Soil. According to the Geotechnical Report, soils in the Community are anticipated to be severely corrosive to both concrete and buried metals. Corrosive soil is not unusual in many areas in California, but it requires special attention in the design and construction of Improvements that will be in long-term contact with the soils. Corrosive soils can damage buried metal Improvements and concrete because of moderate to severe levels of soluble sulfates in the soil. When designing and constructing permissible Improvements, you should follow the recommendations listed below: (a) Sulfate -Resistant Concrete. Owner should consult a qualified soils consultant prior to constructing any new concrete patios or walkways. Concrete used must be of a formulation recommended for resistance to sulfates. (b) Metal Improvements. Buried metal pipes and other metal improvements that will be in contact with soils must be wrapped in plastic or otherwise prepared per the recommendations of a qualified soils consultant. 3.18 PRIOR AGRICULTURAL USE. The Community is located on lands that were previously used for agricultural purposes. By reason of such agricultural use, Owners may be subject to dust, noise and odors and may be exposed to pesticides, herbicides, insecticides and -48- 3633-120328\CCRS\1210336.3 12/9/14 G-92 other chemicals. By acceptance of a deed to a Unit, Owner (for and on Owner's behalf, and the members of Owner's family, tenants, lessees, guests and invitees) expressly acknowledges and accepts these existing and future impacts and forever waives any and all causes of actions against the Declarant and the Association and their respective directors, officers, employees, agents, representatives and consultants for any damages or injuries which may arise from or relate to any such conditions or risks. 3.19 ENVIRONMENTAL CONDITIONS According to the Phase I Environmental Site Assessment Report for the Community prepared by Leighton and Associates, Inc. dated April 15, 2013 ("Phase I Report'), a search of selected government databases was conducted using the EDR Radius Report environmental database report system. Although the Community was not identified on the EDR Radius Report reviewed for this assessment, the database search identified thirty-nine (39) facilities within one (1) mile of the Community with potential to adversely impact the Community. Based on the distance of the facilities to the Community and the "no action status" of the facilities, there is low potential for these facilities to adversely impact the Community. For more information regarding the environmental condition of the Community, please refer to the Phase 1 report available at the City for review. 3.20 COMMERCIAL/INDUSTRIAL ZONE DISCLOSURE California Code of Civil Procedure Section 731a currently provides that, except in an action to abate a public nuisance brought in the name of the people of the State of California, no Person shall be enjoined or restrained by the injunctive process from the reasonable and necessary operation in any industrial or commercial zone or airport of any use expressly permitted therein, nor shall such use be deemed a nuisance without evidence of the employment of unnecessary and injurious methods of operation, provided any city, city and county, or county shall have established zones or districts under authority of law wherein certain manufacturing or commercial or airport uses are expressly permitted. Accordingly, Declarant discloses that according to the Natural Hazard Disclosure Report described in Section 3.16 above, the Community is located within one (1) mile of a property that is zoned by the City to allow commercial or industrial use. 3.21 RADON. Radon is a colorless, odorless radioactive gas that is produced by the natural decay of uranium, which is found in nearly all soils. Because radon is a gas, it can seep from the ground into the air in a house through openings in the ground, and its presence increases the risk of lung cancer. The U.S. Environmental Protection Agency (the "EPA's and U.S. Geological Survey have produced a map that assigns one to three zone designations based on radon potential to each county. According to the EPA, each zone designation reflects the average short-term radon measurement that can be expected to be measured in a building without the implementation of radon control measures. This map is not meant to be used to determine whether a particular home should be tested for radon, but is used to assist various government agencies and organizations in focusing their radon program resources. According to the Phase 1 Report, there is low to moderate potential for elevated levels of radon at the Community. Declarant and the Association make no representations, warranties or guarantees as to the degree of radon risk within the Community. Potential buyers and residents are advised to consult with the City or other public agencies and appropriate experts to evaluate the potential risk. Additional information may be found at http://eetd.lbl.gov/IEP/high-radon/TJSgm.htm. -49- 3633-120328\CCRS\1210336.3 12/9/14 G-93 3.22 GAS AND HAZARDOUS LIQUID TRANSMISSION PIPELINE NOTICE This notice is being provided simply to inform you that information about the general location of gas and hazardous liquid transmission pipelines is available to the public via the National Pipeline Mapping System ("NPMS'� Internet Web site maintained by the United States Department of Transportation at http://www.npms.phmsa.dot.gov/. To seek further information about possible transmission pipelines near the property, you may contact your local gas utility or other pipeline operators in the area. Contact information for pipeline operators is searchable by Zip Code and county on the NPMS Internet Web site. Gas and hazardous liquid pipelines of any size pose a potential risk to life, property and the environment if damaged or punctured. In addition, precise locations of larger gas transmission pipelines are restricted by Federal Homeland Security policies. Additional information relating to other types and sizes of pipelines and other underground utility infrastructures may be available from local pipeline operators such as: • PG&E: http://www.pge.comZpipelineplanning_; • San Diego Gas & Electric: http://sdge.com/safety/gas-safety/natural-gas-safety- map; • Sacramento Municipal Utilities District: haps://www.smud.org/en/residentiaVeducation- safety/natural-gas-pipelines/natural-gas-pipeline-map.htmand • Southern California Gas: http://www.socalgas.com/safety//pipeline-maps/. You may want to contact your local utility provider if they are not listed above. You should also review your Preliminary Title Report for pipelines right-of-way (easements) and further investigate information about pipelines by contacting the owner or operator responsible for the pipelines, consider what factors, if any, are associated with the property's proximity to pipelines, and determine whether the information you receive is acceptable before you purchase. No excavation work should be done before contacting the One - Call Center (811). 3.23 AIR QUALITY. Southern California is subject to Stage I smog alerts. Owners should take advantage of the Air Quality Management District's f A.Q.M.D.") forecasts to plan outdoor activities to avoid peak pollution by checking your television, radio or daily newspapers to find out if unhealthful air quality is expected. For more information, Owners can also call A.Q.M.D. at 1 -800 -CUT -SMOG (1-800-288-7664) or check their website atwww.agmd.gov. By acceptance of a deed to a Unit, Owners, (for and on such Owners' behalf, and the members of such Owner's family, tenants, lessees, guests and invitees) expressly acknowledge and accept the existing and possible future impacts of smog on Owners and such Owners' family and forever waive any and all causes of actions against the Declarant and their respective directors, officers, employees, agents, representatives and consultants for any damages or injuries which may arise from or relate to any such conditions or risks. 3.24 WIND. All of Southern California is subject to periods of high winds. Wind speeds in the Community may exceed that experienced in other areas of the surrounding region. -50- 3633-120328\CCRS\1210336.3 12/9/14 G-94 Owners must ensure that any Improvements an Owner installs on a Condominium are constructed or designed to withstand winds. Owners are advised to consult with experienced architects and engineers in the design and specification of any Improvements that an Owner plans to add. 3.25 SURROUNDING USES. The Community is located in an area that is experiencing rapid growth. This disclosure is intended to provide Owners with information on surrounding uses as of the date of Recordation. Uses and Improvements in the immediate vicinity of the Community include the items listed below: North of the Community. Vista Del Norte Ecological Preserve; Open Space; Public Trails. South of the Community. Crestridge Road; Peninsula Community Church; South Bay Evangelical Church; Southern California Edison Company substation. East of the Community. Mirandela Senior Apartments. West of the Community: Belmont Village assisted living residences; Congregation of Ner Tamid; radio antenna. Existing and proposed uses in surrounding areas may change without notice. Neither Declarant nor the Association has any control over uses outside the Community. Owners are advised to contact applicable local governmental agencies for updated information concerning the development plan for the surrounding community. 3.26 OPEN SPACE AREAS. The Properties are located adjacent to open space areas, which include various rural land uses. As a result of the rural character of the area in the vicinity of the Properties, Lots may be affected by wildlife, noises, odors, reptiles or insect life typically found in rural areas. Snakes, rodents, gophers, mountain lions and coyotes are some of the wildlife typically encountered in rural areas. Owners should expect to encounter insects of all types including flies, ticks, Africanized (killer) bees, mosquitoes, spiders, black and red fire ants, crickets and aphids. Declarant and the Association are not responsible for wildlife control or eradication. 3.27 MIXED USE AREA. The Community is located in a mixed use area, which means that surrounding the Community are commercial and retail establishments as well as residential developments. As a result, Owners may experience, noise, bright lights, odors, air pollution, traffic congestion, trash and other adverse impacts relating to the operation and maintenance of businesses and residences in the area. Declarant has no control over the current or future tenancies or vacancies of the commercial, retail and residential locations surrounding the Community and does not control the land use or zoning of the adjacent properties and makes no representations about future land uses on adjacent or nearby properties. 3.28 AIRPORT PROXIMITY DISCLOSURE According to online mapping services, the following airports lie within the approximate distances stated below (distances measured from the airport's reported street address to the intersection of Crestridge Road and Crenshaw Boulevard): -51- 3633-120328\CCRS\1210336.3 12/9/14 G-95 Torrance Airport 4.1 Miles Jack Northrop Field/Hawthorne Municipal Airport 12.5 Miles Compton/Woodley Airport 15.7 Miles Los Angeles International Airport 17.2 Miles Long Beach/Daugherty Field Airport 17.4 Miles Santa Monica Municipal Airport 26.2 Miles Residents of the Community may notice noise and vibration from overflying aircraft departing from or approaching these airports. 3.29 MEGAN'S LAW NOTICE. The following notice is given pursuant to Section 2079.10a of the California Civil Code: "Pursuant to Section 290.46 of the Penal Code, information about specified registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at www.meganslaw.ca.gov. Depending on an offender's criminal history, this information will include either the address at which the offender resides or the community of residence and ZIP Code in which he or she resides." Neither Declarant nor the Association makes any representations, warranties or guarantees regarding the presence or absence of registered sex offenders within the Community or in the surrounding area. Declarant and the Association have no obligation or duty to investigate existing residents or buyers to determine whether they are sex offenders. Owners are solely responsible for making their own investigation. 3.30 CHANGE IN PLANS. Declarant has the right to develop the Annexable Area with Improvements that may be different in design, size, character, style and price from those in Phase 1 or any other Phase. 3.31 NO ENHANCED PROTECTION AGREEMENT No language in this Declaration, any Notice of Addition or any Supplemental Declaration shall constitute, or be interpreted to constitute, an enhanced protection agreement `EPA'), as defined in California Civil Code Section 901. Further, no express or implied representations or warranties made by Declarant in any other writing are intended to constitute, or to be interpreted to constitute, an EPA. 3.32 ADDITIONAL PROVISIONS There may be provisions of various laws, including the Davis -Stirling Common Interest Development Act codified at California Civil Code Sections 4000, et seq. and the Federal Fair Housing Act codified at Title 42 United States Code, Section 3601, et seq., which may supplement or override the Governing Documents. -52- 3633-120328\CCRS\1210336.3 12/9/14 G-96 Declarant makes no representations or warranties regarding the future enforceability of any portion of the Governing Documents. ARTICLE 4 THE ASSOCIATION 4.1 GENERAL DUTIES AND POWERS The Association has the duties and powers enumerated and described in the Governing Documents, in addition to the general and implied powers of a nonprofit mutual benefit corporation, generally to do all things that a corporation organized under California law may lawfully do which are necessary or proper in operating for the general welfare of the Owners, subject only to the limits on the exercise of such powers listed in the Governing Documents. Unless otherwise indicated in the Articles of Incorporation, Bylaws, this Declaration, or a Supplemental Declaration, the powers of the Association may be exercised by the Board. 4.2 SPECIFIC DUTIES AND POWERS In addition to its general powers and duties, the Association has the following specific powers and duties. 4.2.1 Association Property. (a) Duty to Accept, Maintain and Manage The power and duty to accept, maintain and manage the Association Property when tendered by Declarant, all in accordance with the Governing Documents, including Section 4.1 above. The Association shall also have the power and duty to execute and deliver each deed of Association Property and any accompanying escrow instructions when requested to do so by Declarant. Once conveyed to the Association, the Association may install or remove capital Improvements on the Association Property and it may reconstruct, replace or refinish any Improvement on the Association Property, all in accordance with applicable law and the Governing Documents. Disputes with Declarant, including disputes concerning the nature, design, quality or quantity of Association Property Improvements or acceptance of maintenance thereof, shall not delay or prevent the acceptance of Association Property or the commencement of maintenance or management when tendered by Declarant. Such disputes shall be resolved in accordance with Section 12.4. (b) Release of Completion Security. The Association shall have the power and the duty, without regard to any dispute or negotiation then existing between the Association and Declarant, to immediately take any and all actions and execute any and all documents as may be required to cause the release and exoneration of the completion security for each Association Property Improvement when such security release is presented, if the secured obligations are satisfied. No Owner shall interfere with the exercise of the foregoing obligations by the Association, or with the rights or obligations of Declarant. 4.2.2 Utilities. The power and duty to obtain, for the benefit of the Community, all water, gas and electric services necessary for the Association Property. 4.2.3 Granting Rights. The power to grant exclusive or nonexclusive easements, licenses, rights of way or fee interests in the Association Property owned in fee simple by the Association, to the extent any such grant is reasonably required (a) for Improvements to serve the Community, (b) for purposes of conformity with the as -built location -53- 3633-120328\CCRS\1210336.3 12/9/14 G-97 of Improvements installed or authorized by Declarant or the Association, (c) in connection with any lawful lot line adjustment, or (d) for other purposes consistent with the intended use of the Community. This power includes the right to create and convey easements for one or more Owners over portions of the Association Property. The Association may de -annex any portion of the Community from the encumbrance of the Declaration in connection with any lawful lot line adjustment. After the Association acquires fee title to or any easement right over Association Property, the affirmative vote of members owning at least sixty-seven percent (67%) of the Condominiums in the Community shall be required before the Board may grant exclusive use of any portion of that Association Property to any member, except as provided in California Civil Code Sections 4202(a)(4) and 4600. Any measure placed before the members requesting that the Board grant exclusive use of any portion of the Association Property shall specify whether the Association will receive any monetary consideration for the grant and whether the Association or the transferee will be responsible for providing any insurance coverage for exclusive use of the Association Property. 4.2.4 Employ Personnel The power to employ Persons necessary for the effective operation and maintenance of the Association Property, including legal, management and accounting services. 4.2.5 Insurance. The power and duty to keep insurance for the Association Property in accordance with this Declaration. 4.2.6 Sewers and Storm Drains The power and duty to maintain any private sewer systems, private storm drains, or private drainage facilities in the Association Property in accordance with the Governing Documents. 4.2.7 Maintenance Guidelines The power and duty to (a) operate, maintain and inspect the Association Property and its various components in conformity with any Maintenance Guidelines and any maintenance manual, and (b) review any maintenance manual for necessary or appropriate revisions no less than annually after the Board has prepared the Budget. 4.2.8 Rules and Regulations The power, but not the duty, to adopt, amend, repeal and create exceptions to, the Rules and Regulations. (a) Standards for Enforceability. To be valid and enforceable, a Rule must satisfy all the following requirements: (1) The Rule must be in writing; (2) The Rule is within the authority of the Board conferred by law or by this Declaration, the Articles of Incorporation or the Bylaws; (3) The Rule is not inconsistent with governing law, this Declaration, the Articles of Incorporation or the Bylaws; -54- 3633-120328\CCRS\1210336.3 12/9/14 • (4) The Rule is adopted, amended or repealed in good faith and in substantial compliance with the requirements of California Civil Code Sections 4340(a) through 4370; (5) The Rule is reasonable; and (6) The Rule complies with the requirements of California Civil Code Section 4350. (b) Areas of Regulation. The Rules and Regulations may concern use of the Community, signs, parking restrictions, minimum standards of property maintenance, and any other matter under the Association's jurisdiction. (c) Limits on Regulation. The Rules and Regulations must apply uniformly to all Owners and must comply with this Declaration and all applicable state and local laws. The rights of Owners to display in or on their Units religious, holiday and political signs, symbols and decorations of the kinds normally displayed in residential condominium neighborhoods shall not be abridged. However, the Association may adopt time, place and manner restrictions for such displays if they are visible outside the Unit. No modification to the Rules and Regulations may require an Owner to dispose of personal property that was in compliance with all rules previously in force; however, this exemption shall apply only during the period of such Owner's ownership of the Condominium and it shall not apply to: (1) subsequent Owners who take title to a Condominium after the modification is adopted; or (2) clarifications to the Rules and Regulations. (d) Procedure for Adoption, Amendment and Repeal Rules or procedures concerning (1) the use of Association Property, (2) the use of a Condominium, including any aesthetic standards or Design Guidelines that affect Condominiums, (3) member discipline, including any schedule of monetary penalties for violation of the Governing Documents, (4) any procedure for the imposition of penalties, (5) any standards for delinquent assessment payment plans, (6) any procedures adopted by the Association for resolution of assessment disputes, (7) any procedures for reviewing and approving or disapproving a proposed physical change to a Condominium or to the Association Property, and (8) procedures for elections (each, a "Covered Rule') may only be adopted, amended or repealed (each, a "Rule Change') in accordance with the following procedure: (1) The Board must provide written notice ("Notice's of a proposed Rule Change to the members at least thirty (30) days before making the Rule Change, except for an Emergency Rule Change (defined below). The Notice must include the text of the proposed Rule Change and a description of the purpose and effect of the proposed Rule Change; (2) The decision on a proposed Rule Change shall be made at a Board meeting after consideration of comments made by the members of the Association; (3) The Board shall deliver Notice of the Rule Change to every member of the Association within fifteen (15) days of adoption. If the change was an Emergency Rule Change, the Notice shall include the text of the Emergency Rule Change, and the date on which the Emergency Rule Change expires; _55_ 3633-120328\CCRS\1210336.3 12/9/14 G-99 (4) If the Board determines that an immediate Rule Change is required to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the Association, it may make the change on an emergency basis ('Emergency Rule Change') and no Notice will be required. An Emergency Rule Change is effective for one hundred -twenty (120) days, unless the Emergency Rule Change provides for a shorter effective period. Any Rule Change that is adopted as an Emergency Rule Change may not be re -adopted under authority of this subpart; (5) A Notice required by this Section 4.2.8(d) is subject to California Civil Code Section 4360; (6) A Rule Change made pursuant to this Section 4.2.8(d) may be reversed as provided in California Civil Code Section 4365. (e) Exceptions to Procedure. The procedure in Section 4.2.8(d) does not apply to: (1) Rules that do not meet the definition of Covered Rules above; (2) decisions of the Board regarding maintenance of Association Property; (3) a decision on a specific matter that is not intended to apply generally; (4) a decision setting the amount of an Annual Assessment or a Special Assessment; (5) a Rule Change that is required by law if the Board has no discretion as to the substantive effect of the changes; or (6) issuance of a document that merely repeats existing law or the Governing Documents. 4.2.9 Borrowings. The power, but not the duty, to borrow money for purposes authorized by the Articles of Incorporation, Bylaws, Declaration, any Supplemental Declarations or any Notice of Addition, and to use the Association Property as security for the borrowing. 4.2.10 Contracts. The power, but not the duty, to enter into contracts. This includes contracts with Owners or other Persons to provide the Association with goods or services (including those listed in Section 1.1.17) for the benefit of the Community, or for Improvements or operations elsewhere which are identified by the Board but which the Association is not otherwise required to provide or maintain by this Declaration. 4.2.11 Telecommunications Contract Notwithstanding anything in the Governing Documents to the contrary, the Board shall have the power to enter into, accept an -56- 3633-120328\CCRS\1210336.3 12/9/14 G-100 assignment of, or otherwise cause the Association to comply with the terms and provisions of an exclusive telecommunications services contract ("Telecommunications Contract') with a telecommunications service provider ("Service Provider'), pursuant to which the Service Provider shall serve as the provider of Telecommunications Services to each Condominium in the Community. The Board shall only enter into, accept an assignment of, or otherwise cause the Association to comply with the terms of the Telecommunications Contract if the Board determines that the Telecommunications Contract is in the best interests of the Association. Although not exhaustive, the Board shall consider the following factors in making such a determination in the exercise of its business judgment: (a) Initial Term and Extensions The initial term of the Telecommunications Contract should not exceed five (5) years, and, if the Telecommunications Contract provides for automatic extensions, the length of each such extension should also not exceed five (5) years. (b) Termination. The Telecommunications Contract should provide that: (1) at least six (6) months before the end of either the initial or any extended term of the Telecommunications Contract, the entire Membership of the Association may, with the vote or written approval of more than fifty percent (50%) of all Members other than Declarant, prevent any automatic extension that the Telecommunications Contract may provide for (with or without cause), and thereby cause the Telecommunications Contract to expire, and (2) at any time with reasonable notice periods, the Board may terminate the Telecommunications Contract if, in the sole discretion of the Board, the Service Provider fails to provide quality, state-of-the- art Telecommunications Services. (c) Fees. Whether the monthly fee charged to the Association by the Service Provider for the provision of the Telecommunications Services to all of the Condominiums represents a discount from the comparable retail fees charged by the Service Provider in the general geographic area in which the Community is located, and, if so, the amount of such discount. (d) Installation of Telecommunications Facilities Whether the Service Provider is solely responsible for the installation, and the cost thereof, of all of the Telecommunications Facilities necessary to provide Telecommunications Services to each Condominium. (e) Removal of Telecommunications Facilities Whether the Service Provider has the right to remove the Telecommunications Facilities upon expiration or termination of the Telecommunications Contract. 4.2.12 Indemnification. (a) For Association Representatives To the fullest extent authorized by law, the Association has the power and duty to indemnify Board members, Association officers, Design Review Committee members, and all other Association committee members for all damages, pay all expenses incurred, and satisfy any judgment or fine levied as a result of any action or threatened action brought because of performance of an act or omission -57- 3633-120328\CCRS\1210336.3 12/9/14 G-101 within what such Person reasonably believed to be the scope of the Person's Association duties ("Official Act'). Board members, Association officers, Design Review Committee members, and all other Association committee members are deemed to be agents of the Association when they are performing Official Acts for purposes of obtaining indemnification from the Association pursuant to this Section. The entitlement to indemnification under this Declaration inures to the benefit of the estate, executor, administrator and heirs of any person entitled to such indemnification. (b) For Other Agents of the Association To the fullest extent authorized by law, the Association has the power, but not the duty, to indemnify any other Person acting as an agent of the Association for damages incurred, pay expenses incurred, and satisfy any judgment or fine levied as a result of any action or threatened action because of an Official Act. (c) Provided by Contract. The Association also has the power, but not the duty, to contract with any Person to provide indemnification in addition to any indemnification authorized by law on such terms and subject to such conditions as the Association may impose. 4.2.13 Annexing Additional Property. The power, but not the duty, to annex, pursuant to Section 16. 1, additional property to the property encumbered by this Declaration. 4.2.14 Vehicle and Parking Restrictions The power granted in Section 2.9 to identify Authorized Vehicles or Restricted Vehicles and to modify the vehicle and parking restrictions in the Governing Documents. 4.2.15 License and Use Agreements. The Association may enter into agreements with Declarant or any homeowners association having jurisdiction over the Annexable Area to share facilities located on the Association Property f`Facility') with the Owners of Units in the Annexable Area. Any such agreement shall be in form and content acceptable to Declarant, the Board of Directors (without the approval of Owners) and Declarant or the board of directors of any adjacent homeowners association and shall include provisions regarding use and sharing of maintenance costs for the Facility. 4.2.16 Landscaping. The Board has the power, but not the duty, to grant Owners revocable licenses that allow Owners to replace and/or add landscaping Improvements to any portion of the Association Property, subject to the prior written approval of the Board, any reasonable restrictions or conditions the Board may impose, and the right of the Board to revoke such license, remove the Improvements and charge the Owner for the cost of such removal. 4.2.17 Prohibited Functions. (a) Property Manager. The Association shall not hire any employees, furnish offices or other facilities, or use any Association Property for an "on-site" Manager. The Manager shall at all times be a professional manager employed as an independent contractor or agent working at its own place of business. -58- 3633-120328\CCRS\1210336.3 12/9/14 G-102 (b) Off-site Nuisances. The Association shall not use any Association funds or resources to abate any annoyance or nuisance emanating from outside the physical boundaries of the Community. (c) Political Activities. The Association shall not conduct, sponsor, participate in or expend funds or resources toward any activity, campaign or event, including any social or political campaign, event or activity which does not directly and exclusively pertain to the authorized activities of the Association. Furthermore, the Association shall not participate in federal, state or local activities or activities intended to influence a governmental action affecting areas outside the Community (for example, endorsement or support of legislative or administrative actions by a local governmental authority), nor shall it support or campaign for or against candidates for elected or appointed office or ballot proposals. There shall be no amendment of this Section so long as Declarant owns any portion of the Community. 4.2.18 Compliance with State and Federal Age Restriction Laws The Association shall ensure that the Community complies with applicable state and federal laws governing age -restricted senior housing. The Association shall develop policies and procedures directed to compliance, and it shall routinely perform all of the following: (a) Occupancy Surveys. The Association shall conduct regular age and occupancy surveys of the Community in order to determine the numbers and ages of all persons occupying Residences in the Community. The information gathered in the survey shall be based on birth certificates, affidavits, prior surveys or other proof of age deemed reliable by the Board, and which in the judgment of the Board, is reasonably necessary to ensure that the Community complies with applicable state and federal laws governing age -restricted senior housing. The Association shall also collect age and occupancy information at the time of the sale or lease of each Unit, and the Association shall update all occupancy survey information no less frequently than once every two (2) years. The Association shall have the power to carry out its duties under this Section by any legal means available, as the Board deems appropriate. (b) Summary of Survey. The Association shall at all times maintain in its records a written summary of the latest occupancy survey in order to make it available for inspection upon reasonable notice and request by any Person. The summary shall include at least the following: (i) the address of each Unit; (ii) the names and ages of each of occupant; (iii) whether each occupant is a Qualifying Resident, or a Qualified Permanent Resident or a Permitted Health Care Resident; (iv) a statement as to the source of the information gathered about each occupant; and (v) the current Owner's name and address. (c) Posted Policies. The Association shall develop additional policies and Rules and Regulations as reasonably necessary to maintain compliance with the age restrictions. The Board shall post in the Association Property written statements of its policies including a description of the Community as housing for persons fifty-five (55) years of age or older. The Association shall periodically distribute such policies and rules to the Owners and shall make copies available to Owners, tenants and mortgagees on reasonable requests. (d) Applicable Law. This Section 4.2.18 is intended to be a restatement of applicable law. All amendments, modifications, restatements and interpretations -59- 3633-120328\CCRS\1210336.3 12/9/14 G-103 of the law applicable to senior housing shall be interpreted to amend, modify, restate or interpret this Section 4.2.18. 4.2.19 Standing to Resolve Disputes The Association shall have standing to institute, defend, settle or intervene in litigation, alternative dispute resolution or administrative proceedings (each, an "Action's in its own name as the real party in interest and without joining the Owners, in matters pertaining to (a) damage to the Association Property, (b) damage to portions of the Condominiums which the Association is obligated to maintain or repair, and (c) damage to portions of the Condominiums which arises out of, or is integrally related to, damage to the Association Property or portions of the Condominiums that the Association is obligated to maintain or repair (each, a "Claim'). However, the Association shall not have standing to institute, defend, settle or intervene in any Action in any matter pertaining only to an individual Condominium and not included in clauses (b) and (c) above. The Association may, in its sole discretion, elect to institute, intervene in, continue, settle or dismiss an Action at any time. If the Association institutes or intervenes in an Action on a Claim, the Association's standing shall be exclusive, and the Owners shall thereafter be barred from instituting a new Action or maintaining a pending Action on the same Claim. The Association's election to institute or intervene in an Action on a particular Claim shall not create any affirmative obligation on the part of the Association to maintain, settle or dismiss the Action, except in the Association's sole discretion, and subject to Section 12.4. If the Association elects to settle an Action, the terms of the settlement shall be binding on the Owners, and the Owners shall be barred from instituting or continuing any other Action on the same Claim. If the Association elects to dismiss an Action, the dismissal shall be with prejudice to the institution or continuation by one or more Owners of any Action on the same Claim. 4.3 STANDARD OF CARE, NON -LIABILITY. 4.3.1 Scope of Powers and Standard of Care (a) General Scope of Powers Rights and powers conferred on the Board, the Design Review Committee or other committees or representatives of the Association by the Governing Documents are not duties, obligations or disabilities charged upon those Persons unless the rights and powers are explicitly identified as including duties or obligations in the Governing Documents or law. Unless a duty to act is imposed on the Board, the Design Review Committee or other committees or representatives of the Association by the Governing Documents or law, the Board, the Design Review Committee and the committees have the right to decide to act or not act. Any decision not to act is not a waiver of the right to act in the future. (b) Business Affairs. This Section 4.3.1(b) applies to Board member actions in connection with management, personnel, maintenance and operations, insurance, contracts and finances, and Design Review Committee member actions. Each Board member shall perform the duties of a Board member in good faith, in a manner the Board member believes to be in the best interests of the Association and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. When performing Board duties, a Board member is entitled to rely on information, opinions, reports or statements, including financial data prepared or presented by: _60_ 3633-120328\CCRS\1210336.3 12/9/14 G-104 (1) One (1) or more officers or employees of the Association whom the Board member believes to be reliable and competent in the matters presented; (2) Counsel, independent accountants or other Persons as to matters which the Board member believes to be within such Person's professional or expert competence; or (3) A committee of the Board upon which the Board member does not serve, as to matters under its designated authority, which committee the Board member believes to merit confidence, so long as, in any such case, the Board member acts in good faith, after reasonable inquiry when the need therefor is indicated by the circumstances and without knowledge that would cause such reliance to be unwarranted. This Section 4.3.1(b) is intended to be a restatement of the business judgment rule established in applicable law as it applies to the Association. All modifications and interpretations of the business judgment rule applicable to the Association shall be interpreted to modify and interpret this Section 4.3.1(b). (c) Association Governance. This Section 4.3.1 applies to Board actions and Design Review Committee decisions in connection with interpretation and enforcement of the Governing Documents, architectural and landscaping control, regulation of uses within the Community, rule making and oversight of committees. Actions taken or decisions made in connection with these matters shall be reasonable, fair and nondiscriminatory. 4.3.2 Non -liability. (a) General Rule. No Person is liable to any other Person (other than the Association or a party claiming in the name of the Association) for injuries or damage resulting from such Person's Official Acts, except to the extent that such injuries or damage result from the Person's willful or malicious misconduct. No Person is liable to the Association (or to any party claiming in the name of the Association) for injuries or damage resulting from such Person's Official Acts, except to the extent that such injuries or damage result from such Person's negligence or willful or malicious misconduct. The Association is not liable for damage to property in the Community unless caused by the negligence of the Association, the Board, the Association's officers, the Manager or the Manager's staff. (b) Non -liability of Volunteer Board Members and Officers A volunteer Board member or volunteer Association officer shall not be personally liable to any Person who suffers injury, including bodily injury, emotional distress, wrongful death or property damage or loss as a result of the tortious act or omission of the volunteer officer or Board member if all applicable conditions specified in California Civil Code Section 5800 are met. (c) Non -liability of Owners. Pursuant to California Civil Code Section 5805, no Owner shall be liable for any cause of action in tort which can be brought against the Owner solely because of the Owner's undivided interest in the Common Area so long as the Association keeps one (1) or more policies of insurance which include coverage for _C1 _ 3633-120328\CCRS\1210336.3 12/9/14 G-105 general liability of the Association in the amount required by California Civil Code Section 5805 and that insurance is in effect for the cause of action being brought. 4.4 MEMBERSHIP. 4.4.1 Generally. Every Owner shall automatically acquire a Membership in the Association and retain the Membership until such Owner's Condominium ownership ceases, at which time such Owner's Membership shall automatically cease. Ownership of a Condominium is the sole qualification for Membership. Memberships are not assignable except to the Person to whom title to the Condominium is transferred, and every Membership is appurtenant to and may not be separated from the fee ownership of the Condominium. The rights, duties, privileges and obligations of all Owners are as provided in the Governing Documents. 4.4.2 Transfer. The Membership of any Owner may not be transferred, pledged or alienated in any way, except on the transfer or encumbrance of such Owner's Condominium, and then only to the transferee or Mortgagee of the Owner's Condominium. A prohibited transfer is void and will not be reflected in the records of the Association. Any Owner who has sold the Owner's Condominium to a contract purchaser under an agreement to purchase may delegate the Owner's Membership rights to the contract purchaser. The delegation must be in writing and must be delivered to the Association before the contract purchaser may vote. The contract seller shall remain liable for all Assessments attributable to the contract seller's Condominium which accrue before title to the Condominium is transferred. If the contract seller fails or refuses to delegate the Membership rights to the contract purchaser before the Close of Escrow, the Association may record the transfer to the contract purchaser in the Association's records. However, no contract purchaser will be entitled to vote at Association meetings during the term of a purchase contract without satisfactory evidence of the delegation of the contract seller's Membership rights to the contract purchaser. The Association may levy a reasonable transfer fee against a new Owner and such Owner's Condominium (which fee shall be paid through escrow or added to the Annual Assessment chargeable to such new Owner) to reimburse the Association for the administrative cost of transferring the Membership to the new Owner on the Association's records. Such fee may not exceed the Association's actual cost involved in changing its records. 4.4.3 Classes of Membership. The Association classes of voting Membership are as follows: (a) Class A. Class A members are all Owners except Declarant for so long as a Class B Membership exists. Class A members are entitled to one (1) vote for each Condominium owned by such Class A members which is subject to Assessment. Declarant shall become a Class A member on conversion of Declarant's Class B Membership as provided below. The vote for each Condominium shall be exercised in accordance with Section 4.5, but no more than one (1) Class A vote may be cast for any Condominium. (b) Class B. The Class B Member is Declarant. The Class B Member is entitled to three (3) votes per Condominium it owns which is subject to Assessment. The Class B Membership shall convert to Class A on the earlier to occur of the following events: _C2_ 3633-120328\CCRS\1210336.3 12/9/14 G-106 (1) The second (2"d ) anniversary of the first Close of Escrow in the most recent Phase; or (2) The fourth (4th) anniversary of the first Close of Escrow in the Community. 4.5 VOTING RIGHTS. Voting rights attributable to the Units in a Phase shall be exercised only after Annual Assessments have commenced in the Phase. 4.5.1 Limits Generally. All voting rights are subject to the Governing Documents. Except as provided in Sections 4.5.2 and 12.3 of this Declaration and as provided in the Bylaws, as long as there is a Class B Membership, any provision of the Governing Documents which expressly requires the vote or written consent of a specified percentage (instead of a majority of a quorum) of the Association's voting power before action may be undertaken shall require the approval of such specified percentage of the voting power of both the Class A and the Class B Memberships. Except as provided in Section 12.3 of this Declaration and as provided in the Bylaws, on termination of the Class B Membership, any provision of the Governing Documents which expressly requires the vote or written consent of Owners representing a specified percentage (instead of a majority of a quorum) of the Association's voting power before action may be undertaken shall then require the vote or written consent of Owners representing such specified percentage of both (a) the Association's total Class A voting power, and (b) the Association's Class A voting power represented by Owners other than Declarant. All provisions of this Declaration requiring the vote or approval of a specified percentage of Owners regarding a Special Benefit Area charge shall only require the vote or approval of the requisite percentage of Owners of Units actually located in the Special Benefit Area. 4.5.2 Vote to Initiate Right to Repair Law Claim Beginning on the date of the first annual meeting of Owners, Declarant relinquishes control over the Association's ability to decide whether to initiate a Right to Repair Law Claim. This means that Declarant, current employees and agents of Declarant, Board members who are appointed by Declarant, Board members elected by a majority of votes cast by Declarant, and all other Persons whose vote or written consent is inconsistent with the intent of the preceding sentence, are prohibited from participating and voting in any decision of the Association or Owners to initiate a Right to Repair Law Claim. The Association must obtain the vote or written consent of a simple majority of the Association's voting power, excluding votes attributable to Declarant, in order to initiate a Right to Repair Law Claim. 4.5.3 Joint Ownership. When more than one (1) Person holds an interest in any Condominium ("co-owners'), each co-owner may attend any Association meeting, but only one (1) co-owner shall be entitled to exercise the single vote to which the Condominium is entitled. Co-owners owning the majority interests in a Condominium may designate in writing one (1) of their number to vote. Fractional votes shall not be allowed and the vote for each Condominium shall be exercised, if at all, as a unit. Where no voting co-owner is designated or if the designation is revoked, the vote for the Condominium shall be exercised as the co-owners owning the majority interests in the Condominium agree. Unless the Association receives a written objection in advance from a co-owner, it shall be conclusively presumed that the voting -C3- 3633-120328\CCRS\1210336.3 12/9/14 G-107 co-owner is acting with the co-owners' consent. No vote may be cast for any Condominium if the co-owners present in person or by proxy owning the majority interests in such Condominium fail to agree to the vote or other action. The nonvoting co-owner or co-owners are jointly and severally responsible for all obligations imposed on the jointly -owned Condominium and are entitled to all other benefits of ownership. All agreements and determinations lawfully made by the Association in accordance with the voting percentages established in the Governing Documents are binding on all Owners and their successors in interest. 4.6 UNSEGREGATED REAL PROPERTY TAXES To the extent not assessed to or paid by the Owners, the Association shall pay all real and personal property taxes and assessments levied on the Community. If all Condominiums in a Phase are taxed under a tax bill covering all of such Phase, then each Owner shall pay the Owner's share of any installment due under the tax bill to the Association at least ten (10) days before the delinquency date. The Association shall transmit the taxes to the appropriate tax collection agency on or before the delinquency date. The Association shall allocate taxes equally among the Owners and their Condominiums in such Phase, based on the total number of Condominiums in such Phase. The Association shall, at least forty five (45) days before the delinquency date of any tax installment, deliver to each Owner in such Phase a copy of the tax bill, along with a written notice setting forth the Owner's obligation to pay the Owner's share of the tax installment and the potential additional charges to the Owner for failure to comply. The Association shall pay the taxes on behalf of any Owner who does not pay the Owner's share. The Association shall add to the Annual Assessment of a delinquent Owner the amount of any sum advanced, plus interest at the rate of ten percent (10%) per annum and any amount necessary to reimburse the Association for any penalty or late charge actually assessed in connection with the tax bill for a Phase, which late charge results from the failure of the delinquent Owner to make timely payment of the Owner's share of the taxes. Until Close of Escrow for the sale of ninety percent (90%) of the Condominiums in the Community has occurred, this Section may not be amended without the written consent of Declarant. ARTICLE 5 DESIGN REVIEW COMMITTEE 5.1 MEMBERS OF COMMITTEE The Design Review Committee shall be composed of three (3) members. The initial members of the Design Review Committee shall be representatives of Declarant until one (1) year after the original issuance of the Public Report for Phase 1 ("First Anniversary'). After the First Anniversary, the Board may appoint and remove one (1) member of the Design Review Committee, and Declarant may, but is not obligated to, appoint and remove a majority of the members of the Design Review Committee and fill any vacancy of such majority, until the earlier to occur of (a) Close of Escrow for the sale of ninety percent (90%) of all the Condominiums in the Community and the Annexable Area, or (b) the fifth (5th) anniversary of the original issuance of the Public Report for Phase 1, after which the Board may appoint and remove all members of the Design Review Committee. Design Review Committee members appointed by the Board must be Owners, but Design Review Committee members appointed by Declarant need not be Owners. Members of the Board of Directors may serve as Design Review Committee members. -C4.- 3633-120328\CCRS\1210336.3 12/9/14 G-108 5.2 POWERS AND DUTIES. 5.2.1 General Powers and Duties. The Design Review Committee shall consider and act upon all plans and specifications submitted for its approval, including inspection of work in progress to assure conformity with plans approved by the Design Review Committee, and shall perform such other duties as the Board assigns to it. 5.2.2 Issuance of Standards. The Design Review Committee shall annually issue and update its Design Guidelines and provide notice of any requirements for Committee approval of proposed Improvements. The notice shall describe the types of proposed Improvements that require Committee approval, and it shall include a copy of the procedure used to review and approve or disapprove such proposed Improvements. The Design Guidelines may require a fee to accompany each application for approval, and may identify additional factors which the Design Review Committee will consider in reviewing submissions. The Design Review Committee may provide that fees it imposes be uniform, or that fees be determined in any other reasonable manner. The Design Review Committee may require such detail in plans and specifications submitted for its review as it deems proper, including landscape plans, floor plans, site plans, drainage plans, elevation drawings and descriptions or samples of exterior materials and colors. 5.2.3 Retaining Consultants. The Design Review Committee has the power, but not the duty, to retain licensed architects, contractors and other professionals to advise its members in connection with decisions. 5.3 REVIEW OF PLANS AND SPECIFICATIONS 5.3.1 Improvements Requiring Approval No Owner may begin construction, reconstruction, installation, removal or alteration of any outdoor Improvement in a Condominium, including landscaping, grading, excavation, filling or other alteration to the grade or level of the land, without prior Design Review Committee approval. The provisions of this Article apply to construction, installation and alteration of solar energy systems, as defined in California Civil Code Section 801.5, subject to the provisions of California Civil Code Sections 714 and 714. 1, the applicable Building Code, zoning regulations, and other laws. 5.3.2 Application Procedure. Owners who seek Committee approval shall submit plans and specifications showing the dimensions, exterior elevation, color, materials used and location of the proposed Improvements, along with an initial review fee in an amount set in writing from time to time by the Committee, along with all other deposits and review materials required under this Article (collectively, an "Application'). Until changed by the Board, the address for the submission of the Application is the Association's principal office. The form of Application used by the Design Review Committee may include spaces allowing "Adjacent Owners" to sign or initial the Application confirming that they have been notified of the application. The Design Review Committee may establish a definition of "Adjacent Owners" in its Design Guidelines. Applications will be complete and may be approved or disapproved by the Design Review Committee even if all of the Adjacent Owners do not initial the Applications so long as the Owner submitting plans and specifications (the "Applicant') certifies that the Applicant has asked the Adjacent Owners to sign the Applications. The requirement that the _65_ 3633-120328\CCRS\1210336.3 12/9/14 G-109 Applicant attempt to obtain the signatures of Adjacent Owners is intended only to provide notice of the pending application to the Adjacent Owners. It does not create in the Adjacent Owners any power to approve or disapprove the Application by signing or withholding a signature. Only the Committee may approve or disapprove an Application. The Design Review Committee shall deliver its written approval, disapproval, or request for additional information or materials to the Applicant at the address listed in the Application no later than the date that is forty-five (45) calendar days after the date on which the Design Review Committee has received the complete Application (the"Review Deadline'). If, on the Review Deadline, the Committee has failed to deliver to the Applicant its written approval, disapproval, or request for additional information or materials, then the Application shall be deemed approved, and the Manager or a representative of the Board or Committee shall at the request of the Applicant execute a written approval therefor within fifteen (15) days after receipt of such request. 5.3.3 Standard for Approval A decision on a proposed Improvement shall be consistent with California law, made in good faith and may not be unreasonable, arbitrary or capricious. If disapproved, the written decision shall include both an explanation of why the proposed Improvement is disapproved and a description of the procedure for reconsideration by the Board. The Design Review Committee shall approve an Application only if it determines that (a) installation, construction or alterations of the Improvements in the locations proposed will not be detrimental to the appearance of the Community as a whole, (b) the appearance of the proposed Improvements will be in harmony with the existing Improvements and the overall design theme in the Community, (c) installation, construction or alteration of the proposed Improvements will not detract from the beauty, wholesomeness and attractiveness of the Community or the enjoyment of the Community by the Owners, (d) maintenance of the proposed Improvements will not become a burden on the Association, and (e) the proposed Improvements are consistent with the Governing Documents. The Committee's decision on a proposed change may not violate any governing provision of law, including the Fair Employment and Housing Act, or a building code or other applicable law governing land use or public safety. The Committee may consider the impact of views from other Condominiums, reasonable privacy right claims, passage of light and air, beneficial shading and other aesthetic factors in reviewing, approving or disapproving any Application. However, neither the Declarant nor the Association warrants that any views in the Community are protected. No Condominium is guaranteed the existence or unobstructed continuation of any particular view. In review of an Application, the Committee shall not make any determination as to non -aesthetic factors such as general safety, fire protection, noise mitigation or compliance with building codes or applicable industry building standards. 5.3.4 Conditions of Approval The Design Review Committee may condition its approval of an Application for any Improvement on any one (1) or more of the following: (a) The Applicant's delivery to the Association of security acceptable to the Association against any mechanic's lien or other encumbrance which may be Recorded against the Association Property or another Owner's Condominium as a result of such work; -66- 3633-120328\CCRS\1210336.3 12/9/14 G-110 (b) The Applicant's delivery to the Association of the review fee described in Section 5.3.2 above; (c) Such changes to the Application as the Design Review Committee considers appropriate; (d) The Applicant's agreement to grant to the Association or other Owners such easements as are made reasonably necessary by the existence of the Improvement; (e) The Applicant's agreement to install water, gas, electrical or other utility meters to measure any increased utility consumption; (f) The Applicant's agreement to reimburse the Association for the cost of maintaining the Improvement (should the Association agree to accept maintenance responsibility for the Improvement as built); (g) The Applicant's agreement to complete the proposed work within a stated period of time; (h) If required by the Committee, the Applicant's deposit of adequate funds with the Association to repair or restore any Association Property that may be damaged by the Applicant or the Applicant's contractors. The Design Review Committee will determine the actual amount of the deposit in each case, but the amount shall be at least enough to cover the cost of repairing or restoring damage that is reasonably foreseeable to the Design Review Committee. The deposit shall be refundable to the extent the Design Review Committee finds that the work of Improvement is complete, and that the Association Property was not damaged or was restored at least to its condition when the work began; (i) If required by the Committee, the submission of additional plans and specifications or other information before approving or disapproving the Application. 5.3.5 Governmental Approvals. The Applicant shall meet the requirements of all applicable ordinances, codes and regulations of the City and County, including zoning laws, building and safety codes, fire codes and applicable inspection and permit requirements before making any construction, installation or alterations permitted under this Declaration. All approvals issued by the Committee are in addition to, and not in lieu of, applicable governmental approvals, which the Applicant must also obtain at his sole cost, prior to or concurrently with Committee approvals, and before commencing any work. Furthermore, governmental approvals are in addition to, and not in lieu of, Committee approvals required under the Governing Documents. No determination by any governmental agency that the Applicant has met applicable governmental requirements for a particular Improvement shall relieve the Applicant of its obligation to obtain all required Committee approvals required under this Article and the Governing Documents. 5.3.6 Matters Outside Scope of Approval The Design Review Committee's approval or disapproval of each Application shall be based solely on the aesthetic considerations listed in this Article. Approval of any Application does not constitute a finding or a warranty by the Design Review Committee that the work of Improvement described in the _67_ 3633-120328\CCRS\1210336.3 12/9/14 G-111 Application or any portion of the Application (a) incorporates good engineering practices, (b) complies with applicable law, ordinance, code, or regulation, including zoning laws, building and safety codes or fire codes, (c) complies with the requirements of any utility provider, or (d) is permissible under the terms of any easement, license, permit, Mortgage, deed of trust, or other recorded or unrecorded instrument (other than the Governing Documents) that affects the land. Nothing in this Declaration shall be construed to require Design Committee approval of any construction, reconstruction, installation, removal or alteration of an Improvement by Declarant or by the Association. 5.3.7 Exculpation of Committee By submitting an Application, each Applicant is deemed to agree that neither the Design Review Committee, nor the members thereof, nor Declarant, nor their respective agents, employees, attorneys or consultants shall be liable to any Person for: (a) Any matter outside the Committee's scope of approval as discussed in Section 5.3.6 above; (b) Any defect in any Improvement constructed by or on behalf of the Applicant pursuant to an approved Application; (c) Any loss, damage, or injury to Persons or property arising out of or in any way connected with work performed by or on behalf of the Applicant pursuant to an approved Application; or (d) Any loss, damage, or injury to Persons or property arising out of or in any way connected with the performance of the Design Review Committee's duties hereunder, unless due to willful misconduct or gross negligence. 5.4 MEETINGS AND ACTIONS OF THE DESIGN REVIEW COMMITTEE The Design Review Committee shall meet as necessary to perform its duties. As long as a majority of the members of the Design Review Committee are Declarant representatives, the Design Review Committee may, by resolution unanimously adopted in writing, designate an Owner or a Declarant representative to serve as a Design Review Committee Representative to take any action or perform any duties for and on behalf of the Design Review Committee except the granting of variances. The Design Review Committee Representative need not be a current member of the Design Review Committee. In the absence of such designation, the vote or written consent of a majority of the Design Review Committee constitutes an act of the Design Review Committee. All approvals issued by the Design Review Committee must be in writing. Verbal approvals issued by the Design Review Committee, any individual Design Review Committee member or any other representative of the Association are not valid, are not binding on the Association and may not be relied on by any Person. If within six (6) months after issuance of the approval, an Owner either does not begin work pursuant to approved plans or obtain an extension of time to begin work, the approval shall be automatically revoked and a new approval must be obtained before work can begin. 5.5 NO WAIVER OF FUTURE APPROVALS The Design Review Committee's approval of any proposals, plans and specifications or drawings for any work done or proposed _68_ 3633-120328\CCRS\1210336.3 12/9/14 G-112 in connection with any matter requiring the Design Review Committee's approval does not waive the right to withhold approval of any similar proposals, plans and specifications, drawings or matters subsequently or additionally submitted for approval. 5.6 COMPENSATION OF MEMBERS The Design Review Committee's members shall receive no compensation for services rendered, other than reimbursement for expenses incurred by them in performing their duties. 5.7 INSPECTION OF WORK The Design Review Committee or its duly authorized representative may inspect any work for which approval of plans is required under this Article ("Work'). The right to inspect includes the right to require any Owner to take such action as may be necessary to remedy (including removal of) any noncompliance with the Design Review Committee -approved plans for the Work or with the requirements of this Declaration ("Noncompliance'). 5.7.1 Time Limit for Inspections When the Work is complete, the Applicant shall immediately provide the Committee with written notice of completion on the form prescribed by the Committee. The Design Review Committee's right to inspect the Work and notify the responsible Owner of any Noncompliance shall terminate on the date that is sixty (60) calendar days after the date on which the Committee has received written notice from the Applicant on a form provided by the Committee that the Work is complete. If the Design Review Committee fails to send a written notice of Noncompliance to an Applicant before this time limit expires, the Work shall be deemed to comply with the approved Application. 5.7.2 Noncompliance. If an Improvement that requires the prior approval of the Design Review Committee is (a) commenced or completed without prior written approval by the Committee, (b) is not completed within the time limit established by the Committee in its approval, or (c) is not completed in substantial conformity with the approved Application, or (d) if no time limit is established by the Committee, the Applicant fails to complete the Work within one (1) year after the date on which the Application was approved, then a Noncompliance is deemed to exist, and then the Committee has the right, but not the obligation, to deliver a written notice of Noncompliance to the violating Owner, and the Association may, but is not required to, pursue the remedies set forth in this Section. 5.7.3 Remedy for Noncompliance The Committee shall notify the Board in writing when an Owner fails to remedy any Noncompliance within sixty (60) days after the date of the notice of Noncompliance. After Notice and Hearing, the Board shall determine whether there is Noncompliance and, if so, the nature thereof and the estimated cost of correcting or removing the same. If a Noncompliance exists, the Owner shall remedy or remove the same within a period of not more than forty-five (45) days after the date that notice of the Board ruling is given to the Owner. If the Owner does not comply with the Board ruling within that period, the Association may record a Notice of Noncompliance (if allowed by law), correct the Noncompliance and charge the Owner for the Association's costs, or commence an action for damages or injunctive relief, as appropriate, to remedy the Noncompliance. 5.8 VARIANCES. The Design Review Committee may authorize variances from compliance with any of the architectural provisions of this Declaration or the Design Guidelines -C9- 3633-120328\CCRS\1210336.3 12/9/14 G-113 including restrictions on height, size, floor area or placement of structures, or similar restrictions, when circumstances such as topography, natural obstructions, hardship, aesthetic or environmental considerations require. Variances must be evidenced in writing, must be signed by a majority of the Committee, and become effective on Recordation. After Declarant's right to appoint a majority of the Design Review Committee's members ends, the Board must approve any variance recommended by the Design Review Committee before any such variance becomes effective. If variances are granted, no violation of this Declaration shall be deemed to have occurred concerning the matter for which the variances were granted. The granting of a variance does not waive any of the provisions of this Declaration for any purpose except as to the particular property and particular provision of this Declaration covered by the variance, nor does it affect the Owner's obligation to comply with all laws affecting the use of that Owner's Condominium. The Committee's written variance shall be Recorded against the Applicant's Condominium in the Official Records. The cost of Recording the variance shall be borne solely by the Applicant. No variance shall conflict with local ordinances or any specific plan for the Community without the prior written approval of the City. 5.9 PRE -APPROVALS. The Design Review Committee may authorize pre - approval of specified types of construction activities if, in the exercise of the Design Review Committee's judgment, a pre -approval is appropriate to carry out the purposes of the Governing Documents. 5.10 APPEALS. If a proposed Improvement is disapproved, the Applicant is entitled to reconsideration by the Board of Directors at an open meeting that satisfies the requirements of California Civil Code Section 4900, et seq. This paragraph does not require reconsideration of a decision that is made by the Board, or the Design Review Committee if the Committee has the same membership as the Board. ARTICLE 6 PROPERTY EASEMENTS AND RIGHTS 6.1 EASEMENTS. 6.1.1 Maintenance and Repair. Declarant reserves for the benefit of the Association and all Association agents, officers and employees, nonexclusive easements over the Community as necessary to fulfill the obligations and perform the duties of the Association. 6.1.2 Utility Easements. Declarant reserves easements to install and maintain utilities over the Association Property for the benefit of the Owners and their Condominiums. Declarant reserves the right to grant additional easements and rights-of-way throughout the Community to utility companies and public agencies as it deems necessary for the proper development and disposal of the Community. Such right of Declarant shall expire on the Close of Escrow for the sale of the last Condominium in the Community and the Annexable Area. 6.1.3 Encroachments. Declarant reserves, for its benefit and for the benefit of all Owners and their Condominiums, a reciprocal easement appurtenant to each Condominium over the other Condominiums and the Association Property to accommodate (a) any existing -70- 3633-120328\CCRS\1210336.3 12/9/14 G-114 encroachment of any wall or any other Improvement installed by Declarant or approved by the Design Review Committee, and (b) shifting, movement or natural settling of the Condominium Building or other Improvements. 6.1.4 Easements for Public Service Use Declarant reserves easements over the Community for public services of the local government agencies, including but not limited to, the right of law enforcement and fire protection personnel to enter upon the Community to carry out their official duties. 6.1.5 Easements for Water and Utility Purposes Declarant reserves easements over the Community for public and private utility purposes, including but not limited to, the right of any public utility or mutual water district of ingress and egress over the Community to read and maintain meters, and use and maintain fire hydrants. 6.1.6 Completion of Improvements Declarant reserves the right and easement to enter the Community to complete any Improvement which Declarant considers desirable to implement Declarant's development plan. 6.1.7 Owners' Easements in Association Property. Declarant reserves, for the benefit of every Owner, and each Owner's Family, tenants and invitees, nonexclusive easements for pedestrian and vehicular access (all as applicable) over the Association Property in the Community as reasonably necessary for the use and enjoyment of each Condominium in the Community. This easement is appurtenant to and passes with title to every Condominium in the Community, but is to be exercised subject to the rights, restrictions, covenants and easements in the Governing Documents and the Association's right to reasonably restrict access to rooftops, maintenance facilities and other areas of the Association Property that are designated by the Board. 6.1.8 Community Wall Easements Declarant reserves for the benefit of the Association the following easements: (a) An easement over all Exclusive Use Areas abutting the perimeter of the Community or Association Property, consisting of a three (3) -foot wide strip of land lying along the perimeter boundary or the Community Wall (as applicable), to accommodate the footings and other structural components of any Community Wall located on or immediately adjacent to such property line, including any encroachments thereof onto the Condominium; and (b) An easement for access over such Exclusive Use Areas as reasonably necessary for maintaining the Community Walls and related Improvements. 6.1.9 Access Easements. (a) Reserved for Declarant and the Annexable Area Declarant reserves for its benefit and for the benefit of the owners of Condominiums located in the Annexable Area (whether annexed to the Community or not) easements for pedestrian and vehicular access, including construction access, over all Private Streets and sidewalks located within the Community. -71- 3633-120328\CCRS\1210336.3 12/9/14 G-115 (b) Reserved for Models. Declarant reserves for its benefit easements for pedestrian and vehicular ingress and egress over the Private Streets and through any entry gates serving the Community during business hours, seven (7) days per week, for access to those Condominiums within the Community which are used by Declarant, or its assignee, for models or sales offices, as permitted by the City. Declarant shall have the right to assign this easement, by written assignment, to any successor in interest. This easement shall terminate when the use of such Condominiums by Declarant or its assignee, for models or sales office purposes, has been permanently terminated. (c) Interim Access for Association and Owners Declarant reserves for the benefit of the Association and the Owners, a nonexclusive interim access easement ("Interim Access Easement') over the areas shown as Private Streets on the Phase 1 Plan. Declarant may grant additional Interim Access Easements in future Phases as necessary to provide legal access, in accordance with Declarant's development plan. Interim Access Easements are granted for purposes of vehicular and pedestrian access, but they create no obligation on the Association or Owners to maintain the Improvements subject to the Interim Access Easement. An Interim Access Easement created in any Phase shall be effective when described and conveyed to the Association in an instrument Recorded with the first Close of Escrow in such Phase, and shall automatically terminate when the Private Street on which that Interim Access Easement is located is conveyed in fee to the Association. An Interim Access Easement shall be subject to relocation and termination by Declarant in order to accommodate Declarant's construction activities, provided such relocation and termination (1) is set forth in a Recorded instrument signed by Declarant, and (2) does not prevent legal access to any portion of the Community. 6.1.10 Exclusive Use Areas. Declarant reserves for the benefit of specified Owners exclusive easements over the Association Property for use and enjoyment of Exclusive Use Areas as defined in this Declaration. The foregoing easements shall be conveyed by Recorded deed, and the easements so conveyed shall be appurtenant to and run with the Owner's Unit, subject to the right of the Association and its representatives to enter the Exclusive Use Areas to carry out Association maintenance and other obligations as further described in the Governing Documents. 6.1.11 Drainage Easements. Declarant reserves, for the benefit of the Community, the Owners and the Association, reciprocal nonexclusive easements for drainage of water over, across and on the Community. 6.1.12 Telecommunications Easement Declarant reserves blanket easements (collectively, "Telecommunications Easements') over the Community for access and for purposes of constructing, installing, locating, altering, operating, maintaining, inspecting, upgrading, removing and enhancing Telecommunications Facilities (collectively, "Telecommunications Purposes') for the benefit of Declarant. Such easements are freely transferable by Declarant to any other Person and their successors and assigns. No one, except for Declarant and Declarant's transferees, may use the Community for Telecommunications Purposes. All Telecommunications Facilities shall be owned, leased or licensed by Declarant, as determined by Declarant, in its sole discretion and business judgment. Transfer of the Community does not imply transfer of any Telecommunications Easements or _72_ 3633-120328\CCRS\1210336.3 12/9/14 G-116 Telecommunications Facilities. The holders of the Telecommunications Easements may not exercise the rights reserved hereunder in any manner which will unreasonably interfere with the reasonable use and enjoyment of the Community by any Owner. If the exercise of any Telecommunications Easement results in damage to the Community, then the easement holder who caused the damage shall, within a reasonable period of time, repair such damage. If Declarant has not conveyed the Telecommunications Easements in a Phase to another Person before the last Close of Escrow in the Community and the Annexable Area, then Declarant grants the Telecommunications Easements to the Association effective as of the last Close of Escrow in the Community and the Annexable Area. 6.2 ADDITIONAL EASEMENTS Declarant reserves easements over the Association Property owned in fee simple by the Association for the exclusive use by an Owner or Owners of contiguous property as a yard, recreational, gardening, and landscaping area. Subject to Section 4.2.3, any such easement may be conveyed by the Declarant before the last Close of Escrow for sale of a Condominium in the Community and the Annexable Area. Such conveyance must be approved by the Board, which approval must not be unreasonably withheld. The purpose of the easement, the portion of the Association Property affected, the Condominium to which the easement is appurtenant, and any restrictions on use of the easement area shall be identified in a Recorded grant of easement. 6.3 DELEGATION OF USE. Any Owner may delegate the Owner's right to use the Association Property in writing to the Owner's tenants, contract purchasers or subtenants who reside in such Owner's Unit, subject to regulation by the Board. 6.4 RIGHT OF ENTRY. 6.4.1 Association. The Association has the right to enter the Exclusive Use Areas and the Units to inspect and maintain the Association Property and any other Association - maintained Improvements, and take whatever corrective action it determines to be necessary or proper. Entry onto any Exclusive Use Areas and Unit under this Subsection may be made after at least three (3) days' advance written notice to the Owner of the Condominium except for emergency situations, which shall not require notice. For purposes hereof, an "emergency situation" is a situation in which there is an imminent threat of injury to persons or damage to property, as determined by the Board in the exercise of its sound business judgment. Any damage to a Unit or Exclusive Use Area that is caused by entry under this Subsection shall be repaired by the Association. 6.4.2 Declarant. The Declarant has the right to enter the Condominiums and the Association Property (a) to comply with requirements for the recordation of subdivision maps or lot line adjustments in the Community, (b) for repair of Improvements in accordance with the provisions of the Right to Repair Law, (c) to accommodate grading or construction activities, and (d) to comply with requirements of applicable governmental agencies. Declarant shall provide the applicable Owner reasonable notice before such entry, except for emergency situations, which shall not require notice. For purposes hereof, an "emergency situation" is a situation in which there is an imminent threat of injury to persons or damage to property, as determined by the Declarant. Any damage to the Community that is caused by entry under this Subsection shall be repaired by the Declarant. Unless otherwise specified in the applicable -73- 3633-120328\CCRS\1210336.3 12/9/14 G-117 initial grant deed by which Declarant has transferred ownership of the subject Condominium or subject Association Property, this right of entry shall automatically expire on the later of the date that is twelve (12) years after (a) the date this Declaration is Recorded, or (b) the date the grant deed is Recorded by which Declarant first conveyed fee title to the subject real property under authority of a Public Report. 6.4.3 Owners. Each Owner shall permit other Owners, and their representatives, to enter that Owner's Exclusive Use Area and Unit to perform installations, alterations or repairs to the mechanical or electrical services to a Unit if (a) requests for entry are made in advance, (b) entry is made at a time reasonably convenient to the Owner whose Exclusive Use Area or the Unit is to be entered, and (c) the entered Exclusive Use Area or the Unit is left in substantially the same condition as existed immediately preceding such entry. Any damage to the Exclusive Use Area or the Unit caused by entry under this Subsection shall be repaired by the entering Owner. ARTICLE 7 ASSOCIATION MAINTENANCE FUNDS AND ASSESSMENTS 7.1 PERSONAL OBLIGATION TO PAY ASSESSMENTS Each Owner shall pay to the Association all Assessments established and collected pursuant to this Declaration. The Association shall not levy or collect any Assessment that exceeds the amount necessary for the purpose for which it is levied. All Assessments, together with late payment penalties, interest, costs, and reasonable attorney fees for the collection thereof, are a charge and a continuing lien on the Condominium against which such Assessment is made. Each Assessment, together with late payment penalties, interest, costs and reasonable attorney fees, is also the personal obligation of the Person who was the Owner of the Condominium when the Assessment accrued. The personal obligation for delinquent Assessments may not pass to any new Owner ("Purchaser') unless expressly assumed by the Purchaser or unless the Purchaser has actual or constructive knowledge of such delinquent Assessments, whether by virtue of the Recordation of a Notice of Delinquent Assessment or receipt from the Association of a certificate pursuant to California Civil Code Section 4525. 7.2 ASSOCIATION MAINTENANCE FUNDS The Association shall establish no fewer than two (2) separate Association Maintenance Fund accounts into which shall be deposited all money paid to the Association and from which disbursements shall be made, as provided in this Declaration. The Association Maintenance Funds may be established as trust accounts at a banking or savings institution and shall include: (a) an Operating Fund for current Common Expenses, (b) an adequate Reserve Fund for the portion of Common Expenses allocated to (1) reserves for Improvements which the Board does not expect to repair or replace on an annual or more frequent basis, and (2) payment of deductibles under the Association's insurance policies, (c) a Special Benefit Area Operating Fund for the expenses incurred in maintenance of each Special Benefit Area; (d) a Special Benefit Area Reserve Fund for that portion of each Special Benefit Area Assessment Component of Common Expenses that is allocated to reserves for Improvements in the Special Benefit Area which the Board does not expect to repair or replace on an annual or more frequent basis, and (e) any other funds which the Association may elect to establish. All amounts deposited into the Maintenance Funds must be used solely for the purposes authorized by the Governing Documents. The Board is authorized _74._ 3633-120328\CCRS\1210336.3 12/9/14 G-118 to transfer interest and other earnings on the Reserve Fund into the Operating Fund to satisfy income taxes payable by the Community Association attributable to such interest and earnings. The signatures of either two (2) Directors of the Association or one (1) Director and one (1) officer of the Association who is not also a Director of the Association is required for the withdrawal of money from the Association's Reserve Fund. Disbursements from the particular Maintenance Funds shall be limited to specific purposes as follows: 7.2.1 Special Benefit Area Reserves Disbursements from the Special Benefit Area Reserve Fund shall be made solely for the purpose of funding Reserve expenditures attributable to the Special Benefit Area for which the fund was created. 7.2.2 Special Benefit Area Operations Disbursements from the Special Benefit Area Operating Fund shall be made solely for the purpose of funding the current operating Special Benefit Area Expenses of the Special Benefit Area for which the fund was created. 7.2.3 General Reserves. Disbursements from the Association's general Reserve Fund shall be made solely for the purpose of funding those reserve expenditures which are not budgeted to a Special Benefit Area. 7.2.4 General Operations. Disbursements from the Association's general Operating Fund shall be made for such purposes as are necessary for the discharge of the Association's responsibilities under the Governing Documents, for the common benefit of all Owners, other than those purposes specified in Sections 7.2.1 through 7.2.2 above. Nothing in this Community Declaration precludes the Association from establishing additional Maintenance Funds earmarked for specified purposes authorized by the Governing Documents. 7.3 PURPOSE OF ASSESSMENTS The Assessments shall be used exclusively to (a) promote the Owners' welfare, (b) operate, improve and maintain the Association Property, and (c) discharge any other Association obligations under this Declaration. All amounts deposited into the Association Maintenance Funds must be used solely for the common benefit of all Owners for purposes authorized by this Declaration. Disbursements from the Operating Fund generally shall be made by the Association to discharge Association responsibilities which cannot be discharged by disbursements from the Reserve Fund. However, if the Board determines that the Operating Fund contains excess funds, the Board may transfer the excess funds to any other Association Maintenance Fund. Disbursements from the Reserve Fund shall be made by the Association only for the purposes specified in this Article and in California Civil Code Sections 5510(b) and 5515. 7.4 WAIVER OF USE. No Owner may be exempt from personal liability for Assessments duly levied by the Association, nor release such Owner's Condominium from the liens and charges thereof, by waiving use and enjoyment of the Association Property or by abandoning such Owner's Condominium. 7.5 LIMITS ON ANNUAL ASSESSMENT INCREASES The following shall apply to the General Assessment Component of Annual Assessments, as well as to the applicable _75_ 3633-120328\CCRS\1210336.3 12/9/14 G-119 Special Benefit Area Assessment Component (if any), and to any other Special Benefit Area Assessment Component that may be established from time to time by the Declarant or the Association, provided that where a proposed increase is intended only for a particular Special Benefit Area Assessment Component of Annual Assessments, then only the Units in the applicable Special Benefit Area shall participate in the election processes specified below: 7.5.1 Maximum Authorized Annual Assessment For Initial Year of Operations. During the Fiscal Year in which Annual Assessments commence, the Board may levy an Annual Assessment per Condominium in an amount which exceeds one hundred twenty percent (120%) of the amount of Annual Assessments disclosed for the Community in the most current Budget filed with and approved by the BRE only if the Board first obtains the approval of Owners casting a majority of votes at a meeting or election of the Association in which more than fifty percent (50%) of the Condominiums are represented (`Increase Election'). This Section does not limit Annual Assessment increases necessary for addressing an "Emergency Situation" as defined in Section 7.5.4. 7.5.2 Maximum Authorized Annual Assessment For Subsequent Fiscal Years. During the Fiscal Years following the Fiscal Year in which Annual Assessments commence, the Board may levy Annual Assessments which exceed the Annual Assessments for the immediately preceding Fiscal Year only as follows: (a) If the increase in Annual Assessments is less than or equal to twenty percent (20%) of the Annual Assessments for the immediately preceding Fiscal Year, then the Board must either (1) have distributed the Budget for the current Fiscal Year in accordance with California Civil Code Section 5300, or (2) obtain the approval of Owners casting a majority of votes in an Increase Election; or (b) If the increase in Annual Assessments is greater than twenty percent (20%) of the Annual Assessments for the immediately preceding Fiscal Year, then the Board must obtain the approval of Owners casting a majority of votes in an Increase Election. This Section does not limit Annual Assessment increases necessary for addressing an "Emergency Situation" as defined in Section 7.5.4. 7.5.3 Supplemental Annual Assessments If the Board determines that the Association's essential functions may be properly funded by an Annual Assessment in an amount less than the maximum authorized Annual Assessment described above, it may levy such lesser Annual Assessment. If the Board determines that the estimate of total charges for the current year is or will become inadequate to meet all Common Expenses, it shall immediately determine the approximate amount of the inadequacy. Subject to the limits described in Sections 7.5.1, 7.5.2 and 7.5.4, the Board may levy a supplemental Annual Assessment reflecting a revision of the total charges to be assessed against each Condominium. 7.5.4 Emergency Situations. For purposes of Sections 7.5.1, 7.5.2 and 7.7, an "Emergency Situation" is any one of the following: (a) An extraordinary expense required by an order of a court; _76_ 3633-120328\CCRS\1210336.3 12/9/14 G-120 (b) An extraordinary expense necessary to maintain the portion of the Community for which the Association is responsible where a threat to personal safety on the Community is discovered; and (c) An extraordinary expense necessary to maintain the portion of the Community for which the Association is responsible that could not have been reasonably foreseen by the Board when preparing the Budget. Before imposing or collecting an Assessment pursuant to this Subsection (c), the Board shall adopt a resolution containing written findings regarding the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process. The resolution shall be distributed to the Owners with the notice of the assessment. 7.6 ANNUAL ASSESSMENTS. Each Annual Assessment shall constitute an aggregate of separate Assessments for each of the Maintenance Funds, reflecting an itemization of the amounts assessed and attributable to prospective deposits into the Operating Fund and Reserve Fund, and any other Maintenance Fund established by the Association. Annual Assessments shall be levied against the Owners of Units in the amounts as set forth in the Association Budget on file with the BRE. Sums sufficient to pay Common Expenses shall be assessed as Annual Assessments against the Owners of Units as follows: 7.6.1 Commencement of Annual Assessments Except as provided below, Annual Assessments shall commence on all Condominiums in a Phase on the first day of the first calendar month following the first Close of Escrow in such Phase. 7.6.2 Delayed Commencement in Model Phases without Production Condominiums. Notwithstanding Section 7.6.1 above, in a Model Phase with no Production Condominiums, the Close of Escrow for a Model Condominium Sale shall not automatically cause the commencement of Annual Assessments in the Model Phase, nor the conveyance of Association Property in the Model Phase to the Association, nor shall the Association have any obligation to maintain any Association Property in the Model Phase. On the first Close of Escrow for a Model Condominium Sale, the following provisions shall apply: (a) Annual Assessments shall commence in the Model Phase on the first day of the first calendar month following the earliest date on which a Model Leaseback Agreement in the Model Phase is no longer in effect; and (b) The Common Property in the Model Phase shall be conveyed to the Association no later than the date on which Annual Assessments commence in the Model Phase. 7.6.3 Delayed Commencement in Model Phases with Production Condominiums. Notwithstanding Section 7.6.1 above, in a Model Phase that includes Production Condominiums, the Close of Escrow for sale of one or more Model Condominiums in such Model Phase shall not automatically cause the commencement of Annual Assessments in the Model Phase, nor the conveyance of Association Property in the Model Phase to the Association, nor shall the Association have any obligation to maintain any Association Property _77_ 3633-120328\CCRS\1210336.3 12/9/14 G-121 in the Model Phase. If the first Close of Escrow in such Model Phase is for a Model Condominium Sale, then the following provisions shall apply: (a) Annual Assessments shall commence in the Model Phase on the first day of the first calendar month following the earlier to occur of (i) the date of the first Close of Escrow for sale of a Production Condominium in the Model Phase, or (ii) the earliest date on which any Model Leaseback Agreement in the Model Phase is no longer in effect; and (b) The Association Property in the Model Phase shall be conveyed to the Association no later than the earlier to occur of (i) the date of the first Close of Escrow for sale of a Production Condominium in the Model Phase, or (ii) the date on which Annual Assessments commence in the Model Phase. 7.6.4 General Assessment Component The Common Expenses of the Association exclusive of Common Expenses budgeted to a Special Benefit Area (the"General Assessment Component'), shall be allocated among all of the Units in the Community. 7.6.5 Special Benefit Area Assessment Component The Special Benefit Area Expenses of the Association, comprised of Operating and Reserve Funds budgeted to any particular Special Benefit Area (the "Special Benefit Area Assessment Component') shall be assessed to the Owners of Units designated in a Supplemental Declaration as Units to which the exclusive or disproportionate maintenance of such Special Benefit Area has been allocated. Any Supplemental Declaration covering Units subject to a Special Benefit Area Assessment Component shall: (a) identify the Special Benefit Area, if existing, or describe the Special Benefit Area, if proposed; (b) identify the Units covered by the Supplemental Declaration which are entitled to use the facilities of the Special Benefit Area or which are obligated to bear the exclusive or disproportionate maintenance of such Special Benefit Area and which shall be obligated to pay the Special Benefit Area Assessment Component attributable to such Special Benefit Area; and (c) specify the Special Benefit Area Expenses comprising the Special Benefit Area Assessment Component attributable to such Special Benefit Area. 7.6.6 Assessment and Proration Annual Assessments for fractions of a month shall be prorated. Declarant shall pay its full pro rata share of the Annual Assessments on all unsold Condominiums for which Annual Assessments have commenced. The Board shall fix the amount of the Annual Assessment against each Condominium at least thirty (30) days in advance of each Annual Assessment period. However, unless otherwise established by the Board, the initial Annual Assessments shall be assessed in accordance with the most recent Budget on file with and approved by the BRE. Written notice of any change in the amount of any Annual Assessment, Capital Improvement Assessment or Reconstruction Assessment shall be sent by first-class mail to every Owner subject thereto not less than thirty (30) nor more than sixty (60) days before the increased Assessment becomes due. 7.6.7 Apportionment of Annual Assessments All Annual Assessments shall be assessed uniformly and equally against the Owners and their Condominiums based on the number of Condominiums owned by each Owner, except that each Special Benefit Area Assessment component shall be assessed equally only against Owners responsible for such Special Benefit Area. The Board may determine that funds in the Operating Fund at the end of -78- 3633-120328\CCRS\1210336.3 12/9/14 G-122 the Fiscal Year be retained and used to reduce the following Fiscal Year's Annual Assessments. On dissolution of the Association incident to the abandonment or termination of the Community as a condominium project, any amounts remaining in any of the Maintenance Funds shall be distributed to or for the benefit of the Owners in the same proportions as such money was collected from the Owners. The Board may determine that funds remaining in a Special Benefit Area Operating Fund at the end of the Fiscal Year be retained and used to reduce the following Fiscal Year's Special Benefit Area Assessment charge. 7.6.8 Payment of Annual Assessments Each Owner shall pay Annual Assessments in installments at such frequency, in such amounts and by such methods as are established by the Board. If the Association incurs additional expenses because of a payment method selected by an Owner, the Association shall charge the additional expenses to the Owner. Each installment of Annual Assessments may be paid to the Association in one (1) check or in separate checks as payments attributable to specified Maintenance Funds. If any payment of an Annual Assessment installment (a) is less than the amount assessed and (b) does not specify the Maintenance Fund or Funds into which it should be deposited, then the amount received shall be credited in order of priority first to the Operating Fund, then to any Special Benefit Area Operating Fund until that portion of the Annual Assessment has been satisfied, then to any Special Benefit Area Reserve Fund until that portion of the Annual Assessment has been satisfied, and then any other funds established by the Association. 7.7 CAPITAL IMPROVEMENT ASSESSMENTS The Board may levy, in any Fiscal Year, a Capital Improvement Assessment or Reconstruction Assessment to defray, in whole or in part, the cost of any construction, repair or replacement of a capital Improvement or such other addition to the Association Property. No Capital Improvement Assessments in any Fiscal Year which, if added to the Capital Improvement Assessments already levied during such Fiscal Year, exceed five percent (5%) of the Association's Budgeted gross expenses for such Fiscal Year, may be levied without the vote or written consent of Owners casting a majority of votes at an Increase Election. The Board may levy, in any Fiscal Year, a Capital Improvement Assessment applicable to that Fiscal Year which exceeds five percent (5%) of the Association's Budgeted gross expenses for such Fiscal Year if such increase is necessary for addressing an Emergency Situation as defined in Section 7.5.4. 7.8 LEVEL ASSESSMENT PROCEDURE As long as Annexable Area may be added to the Community as a Phase, the Board may elect to implement a level assessment procedure in accordance with applicable BRE guidelines ('Level Assessment Procedure'), to minimize the need for frequent adjustments in the amount of the Annual Assessments during the development of the Community. Where the Level Assessment Procedure is used, the Annual Assessments for certain Phases may be less than or more than the actual Common Expenses for a given year. To implement the Level Assessment Procedure, the Board must: 7.8.1 Establish and maintain a separate account for the cumulative operating surplus ("Cumulative Surplus Fund Account'); 7.8.2 Use the Cumulative Surplus Fund Account and the funds therein only for the funding of Annual Assessments in a given Fiscal Year (as determined by the Board); _79_ 3633-120328\CCRS\1210336.3 12/9/14 G-123 7.8.3 Include in the Inspection Report referenced in Section 2.1.8 a review of the Level Assessment Procedure, to ensure that adequate Annual Assessments are being collected; and 7.8.4 Meet any other requirements which may be imposed by the BRE. ARTICLE 8 INSURANCE 8.1 DUTY TO OBTAIN INSURANCE; TYPES The Association shall obtain and keep in effect at all times the following insurance coverages: 8.1.1 Commercial General Liability. A policy of commercial general liability insurance (including coverage for medical payments), insuring the Association and the Owners against liability for bodily injury, death and property damage arising from or relating to the ownership or use of the Association Property. Such policy shall specify amounts and include protection from liability and risks as are customarily covered in similar condominium developments in the area of the Community, and shall include a severability of interest endorsement or the equivalent which shall preclude the insurer from denying the claim of an Owner because of negligent acts or omissions of other Owners, or the Association or the Association's officers and directors acting in their capacity as officers and directors. The Association's policies shall at all times specify limits no less than the minimum amounts required by California Civil Code Sections 5800 and 5805. 8.1.2 Fire and Casualty Insurance A "master" or "blanket" policy of fire and casualty insurance with extended coverage, special form, without deduction for depreciation, in an amount as near as possible to the full replacement value of all insurable Improvements on the Association Property including fixtures, to the extent they are part of the Association Property, Condominium Building service equipment and supplies, and other common personal property belonging to the Association. The policy amount shall be at least equal to such coverage as is commonly required by prudent institutional mortgage investors in the area in which the Community is located. The policy shall also cover any fixtures, equipment or other property within the Units which are to be financed by a Mortgage to be purchased by Fannie Mae or Freddie Mac, or insured by FHA (regardless of whether or not such property is part of the Association Property. The casualty insurance shall not include earthquake coverage unless the Board is directed to obtain earthquake coverage by a majority of the Association's voting power. 8.1.3 Fidelity Insurance. Fidelity insurance coverage, naming the Association as insured, for any Person handling funds of the Association, including Association officers, directors, employees, volunteers, and agents, and the Manager and its employees, whether or not such Persons are compensated for their services, in an amount not less than the estimated maximum of funds, including reserve funds, in the custody of the Person during the term of the insurance. However, the aggregate amount of the fidelity insurance coverage may not be less than the sum equal to three (3) months of Annual Assessments on all Condominiums in the Community, plus reserve funds. The insurance policies or bonds shall provide that they _80_ 3633-120328\CCRS\1210336.3 12/9/14 G-124 may not be cancelled or substantially modified (including cancellation for non-payment of premium) without at least 10 days' prior written notice to the Association. 8.1.4 Requirements of Federal Agencies Notwithstanding anything in the Governing Documents to the contrary, the amount, term and coverage of any policy of insurance required under this Article 8 (including the endorsements, the amount of the deductible, the named insureds, the loss payees, standard mortgage clauses, notices of changes or cancellations, and the insurance company rating) shall also satisfy the minimum requirements established for this type of development (if applicable) by FHA, VA, Fannie Mae, Ginnie Mae, Freddie Mac and FHFA, and any successor to those entities, so long as any of those entities is a Mortgagee or Owner of a Condominium in the Community, except to the extent such coverage is not reasonably available or has been waived in writing by the entity requiring the insurance coverage. If the above entities have not established requirements on any policy required hereunder, the term, amount and coverage of such policy shall, subject to Section 8.1.1 above, be no less than that which is customary for similar policies on similar projects in the area of the Community. 8.1.5 Flood Insurance. If the Community is located in an area which has been officially identified by the Secretary of Housing and Urban Development as having special flood hazards and for which flood insurance has been made available under the National Flood Insurance Program (NFIP), the Association must carry at all times a "master" or "blanket" policy of flood insurance on the Association Property in an amount deemed appropriate by the Association, but not less than the lessor of. (a) the maximum coverage available under NFIP for all Association Property in the Community to the extent the Association Property is located in an area having special floor hazards; or (b) 100% of current replacement cost of all Association Property located in such area. 8.1.6 Other Insurance. Such other insurance insuring other risks customarily insured by associations managing condominium projects similar in construction, location and use. Such additional insurance may include general liability insurance and director's and officer's errors and omissions insurance in the minimum amounts established in California Civil Code Sections 5800 and 5805. 8.1.7 Beneficiaries. The Association's insurance shall be kept for the benefit of the Association, the Owners and the Mortgagees, as their interests may appear as named insureds, subject, however, to loss payment requirements established in this Declaration. 8.2 WAIVER OF CLAIM AGAINST ASSOCIATION All policies of insurance kept by or for the benefit of the Association and the Owners must provide that the Association and the Owners waive and release all claims against one another, the Board and Declarant, to the extent of the insurance proceeds available, whether or not the insurable damage or injury is caused by the negligence or breach of any agreement by any of the Persons. 8.3 RIGHT AND DUTY OF OWNERS TO INSURE Each Owner is responsible for insuring the Owner's personal property and all other property and Improvements in the Owner's Condominium for which the Association has not purchased insurance in accordance with Section 8.1. Each Owner shall obtain and keep in effect at all times a policy of insurance _81- 3633-120328\CCRS\1210336.3 12/9/14 G-125 on form HO -6 or equivalent in at least the minimum amounts specified by Fannie Mae. Nothing in this Declaration precludes any Owner from carrying any public liability insurance he considers desirable; however, Owners' policies may not adversely affect or diminish any coverage under any of the Association's insurance policies. Duplicate copies of Owners' insurance policies shall be deposited with the Association on request. If any loss intended to be covered by the Association's insurance occurs and the proceeds payable are reduced due to insurance carried by any Owner, such Owner shall assign the proceeds of the Owner's insurance to the Association, to the extent of such reduction, for application to the same purposes as the reduced proceeds are to be applied. 8.4 NOTICE OF EXPIRATION REQUIREMENTS If available, each of the Association's insurance policies must contain a provision that the policy may not be canceled, terminated, materially modified or allowed to expire by its terms, without at least ten (10) days' prior written notice to the Board and Declarant, and to each Owner and Mortgagee, insurer and guarantor of a First Mortgage who has filed a written request with the carrier for such notice and every other Person in interest who requests such notice of the insurer. In addition, fidelity insurance shall provide that it may not be canceled or substantially modified without at least ten (10) days' prior written notice to any insurance trustee named pursuant to Section 8.5 and to each Fannie Mae servicer who has filed a written request with the carrier for such notice. 8.5 TRUSTEE FOR POLICIES The Association is trustee of the interests of all named insureds under the Association's insurance policies. Unless an insurance policy provides for a different procedure for filing claims, all claims must be sent to the insurance carrier or agent by certified mail and be clearly identified as a claim. The Association shall keep a record of all claims made. All insurance proceeds under any Association insurance policies must be paid to the Board as trustees. The Board has the exclusive authority to negotiate loss settlements with insurance carriers, with participation, to the extent the Board desires, of First Mortgagees who have filed written requests within ten (10) days of receipt of notice of any damage or destruction as provided in Section 9.4. The Board is authorized to make a settlement with any insurer for less than full coverage for any damage, so long as the Board acts in accordance with the standard of care established in this Declaration. Any two (2) officers of the Association may sign a loss claim form and release form in connection with the settlement of a loss claim, and such signatures are binding on all the named insureds. A representative chosen by the Board may be named as an insured, including a trustee with whom the Association may enter into an insurance trust agreement and any successor to such trustee, who shall have exclusive authority to negotiate losses under any insurance policy and to perform such other functions necessary to accomplish this purpose. 8.6 ACTIONS AS TRUSTEE. Except as otherwise specifically provided in this Declaration, the Board has the exclusive right to bind the Association and the Owners to all matters affecting insurance carried by the Association, the settlement of a loss claim, and the surrender, cancellation and modification of all such insurance. Duplicate originals or certificates of all policies of fire and casualty insurance kept by the Association and of all renewals thereof, together with proof of payment of premiums, shall be delivered by the Association to all Owners and Mortgagees who requested them in writing. -82- 3633-120328\CCRS\1210336.3 12/9/14 G-126 8.7 ANNUAL INSURANCE REVIEW. The Board shall review the Association's insurance policies at least annually to determine the amount of the casualty and fire insurance referred to in Section 8.1. If economically feasible, the Board shall obtain a current appraisal of the full replacement value of the Improvements in the Association Property except foundations and footings, without deduction for depreciation, from a qualified independent insurance appraiser, before each such annual review. 8.8 REQUIRED WAIVER All of the Association's insurance policies insuring against physical damage must provide, if reasonably possible, for waiver of - 8.8.1 £ 8.8.1 Subrogation of claims against the Owners and tenants of the Owners; 8.8.2 Any defense based on coinsurance; 8.8.3 Any right of setoff, counterclaim, apportionment, proration or contribution due to other insurance not carried by the Association; 8.8.4 Any invalidity, other adverse effect or defense due to any breach of warranty or condition caused by the Association, any Owner or any tenant of any Owner, or arising from any act or omission of any named insured or the respective agents, contractors and employees of any insured; 8.8.5 Any right of the insurer to repair, rebuild or replace, and, if the Improvement is not repaired, rebuilt or replaced following loss, any right to pay under the insurance an amount less than the replacement value of the Improvements insured; 8.8.6 Notice of the assignment of any Owner of the Owner's interest in the insurance by virtue of a conveyance of any Condominium; 8.8.7 Any right to require any assignment of any Mortgage to the insurer; 8.8.8 Any denial of an Owner's claim because of negligence or willful acts by the Association or other Owners; and 8.8.9 Prejudice of the insurance by any acts or omissions of Owners that are not under the Association's control. ARTICLE 9 DESTRUCTION OF IMPROVEMENTS 9.1 RESTORATION OF THE COMMUNITY. Except as otherwise authorized by the Owners, if any portion of the Community which the Association is responsible for maintaining is destroyed, the Association shall restore the same to its former condition as promptly as practical and in accordance with applicable law and City codes and approvals, including plan checks, permits and fee payments. The Association shall use the proceeds of its insurance for reconstruction or repair of the Community unless otherwise authorized in this Declaration or by the Owners. The Board shall commence such reconstruction promptly. The Community shall be reconstructed or rebuilt substantially in accordance with the original -83- 3633-120328\CCRS\1210336.3 12/9/14 G-127 construction plans if they are available, unless changes recommended by the Design Review Committee have been approved by at least a majority of the Owners. If the insurance proceeds amount to at least ninety percent (90%) of the estimated cost of restoration and repair, the Board shall levy a Reconstruction Assessment to provide the additional funds necessary for such reconstruction. If the insurance proceeds amount to less than ninety percent (90%) of the estimated cost of restoration and repair, the Board may levy a Reconstruction Assessment and proceed with the restoration and repair only if both of the following conditions (`Conditions To Reconstruction') have been satisfied: (a) the levy of a Reconstruction Assessment to pay the costs of restoration and repair of the Community is approved by the Owners, and (b) within one (1) year after the date on which the destruction occurred, the Board Records a certificate of the resolution authorizing the restoration and repair ("Reconstruction Certificate'). If either of the Conditions to Reconstruction does not occur after a destruction for which insurance proceeds available for restoration and repair are less than ninety percent (90%) of the estimated cost of restoration and repair, then the Board shall deposit the funds in the Operating Fund. 9.2 SALE OF COMMUNITY AND RIGHT TO PARTITION No Owner shall have the right to partition of the Owner's interest in the Condominium and there shall be no judicial partition of the Community, or any part thereof, except as provided in California Civil Code Section 4610. For purposes of Subsection 4 of Section 4610, partition may occur only if all of the following conditions are satisfied: (a) either or both of the Conditions to Reconstruction described in Section 9.1 have failed to occur; (b) within six (6) months after the date on which destruction occurred, restoration or repair has not actually commenced; and (c) the Owners of at least sixty seven percent (67%) of the Condominiums in the Community and a Mortgagee Majority approve the partition. In such event, the Association shall prepare, execute and Record, as promptly as practical, the certificate stating that a majority of the Board may properly exercise an irrevocable power of attorney to sell the Community for the benefit of the Owners and execute such other documents and instruments as may be necessary for the Association to consummate the sale of the Community at the highest and best price obtainable, either in its damaged condition, or after damaged structures have been razed. Such certificate shall be conclusive evidence of such authority for any Person relying thereon in good faith. The net proceeds of such sale and the proceeds of any insurance carried by the Association shall be divided proportionately among the Owners, such proportions to be determined in accordance with the relative appraised fair market valuation of the Condominiums as of a date immediately before such destruction (or condemnation), expressed as percentages, and computed by dividing such appraised valuation of each Condominium by the total of such appraised valuations of all Condominiums in the Community. The Board is authorized to hire one (1) or more appraisers for such purpose and the cost of such appraisals shall be a Common Expense of the Association. However, the balance then due on any valid Mortgage shall be first paid in order of priority before the distribution of any proceeds to an Owner whose Condominium is so encumbered. Nothing in this Declaration prevents partition of a co -tenancy in any Condominium. Except as provided above, each Owner and the successors of each Owner, whether by deed, gift, devise, or by operation of law, for their own benefit and for the Condominiums and for the benefit of all other Owners, specifically waive and abandon all rights, interests and causes of action for a judicial partition of the tenancy in common ownership of the Community and do further covenant that no action for such judicial partition shall be instituted, prosecuted or reduced to judgment. -84- 3633-120328\CCRS\1210336.3 12/9/14 G-128 9.3 INTERIOR DAMAGE. Except for any casualty or damage covered by insurance kept by the Association, restoration and repair of any damage to the interior of any individual Unit, including all fixtures, cabinets and improvements therein, together with restoration and repair of all interior paint, wall coverings and floor coverings, must be made by and at the individual expense of the Owner of the Unit so damaged. If a determination to rebuild the Community after partial or total destruction is made, as provided in this Article, such interior repair and restoration shall be completed as promptly as practical and in a lawful and workmanlike manner, in accordance with plans approved by the Design Review Committee as provided in this Declaration. 9.4 NOTICE TO OWNERS AND FIRST MORTGAGEES The Board, immediately on having knowledge of any damage or destruction affecting a material portion of the Association Property owned in fee simple by the Association, shall promptly notify all Owners and Mortgagees, insurers and guarantors of First Mortgages on Condominiums in the Neighborhood who have filed a written request for such notice with the Board. ARTICLE 10 EMINENT DOMAIN The term "taking" as used in this Article means inverse condemnation by exercise of the power of eminent domain or by sale under threat of the exercise of the power of eminent domain. The Board shall represent the Owners in any proceedings, negotiations, settlements, or agreements regarding takings. All takings proceeds shall be payable to the Association for the benefit of the Owners and their Mortgagees, and shall be distributed to such Owners and Mortgagees as provided in this Article. 10.1 PROPERTY CONDEMNATION If (a) there is a taking of an interest in all or part of the Community such that the ownership, operation and use of the Community in accordance with this Declaration is substantially and adversely affected, and (b) within one hundred twenty (120) days after the effective date of the taking the Owners of Units (1) not taken, or (2) only partially taken but capable of being restored to at least ninety-five percent (95%) of their floor area and to substantially their condition before the taking (collectively, the "Remaining Units') do not by affirmative vote of at least one third (1/3) of their voting power approve the continuation of the Community and the repair, restoration and replacement to the extent feasible of the Association Property and the Remaining Units, then, after obtaining the consent of a Mortgagee Majority, the Board shall proceed with the sale of that portion of the Community which was not taken and distribute the net proceeds of such sale after deducting any incidental fees and expenses, in the same proportion and manner as provided in Section 9.2. 10.2 CONDEMNATION OF ASSOCIATION PROPERTY If there is a taking of the Association Property (other than Exclusive Use Area) or any interest therein, then the award in condemnation shall be paid to the Association and shall be deposited in the Operating Fund, unless the Association Property is located in a Special Benefit Area, in which case the award shall be paid to the corresponding Special Benefit Operating Fund. 10.3 CONDEMNATION OF EXCLUSIVE USE AREA If there is a taking of all or any portion of an Exclusive Use Area, the award in condemnation shall be paid to the Owner of -85- 3633-120328\CCRS\1210336.3 12/9/14 G-129 the Condominium to which the taken Exclusive Use Area was appurtenant; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. 10.4 CONDEMNATION OF CONDOMINIUMS If there is a taking of a Condominium, the award in condemnation shall be paid to the Owner of the Condominium; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. 10.5 CONDEMNATION OF PORTIONS OF UNITS 10.5.1 Minor Takings Within Limits. If (a) there is a taking of a portion of one or more Units such that the intended use of the Units as residential dwellings is not substantially and adversely affected, and (b) restoration of such Units can be accomplished at a cost less than or equal to the sum of (1) the amount of the condemnation awards for such takings plus (2) any amounts the Owners of the taken Units wish to contribute to restoration plus (3) an amount less than or equal to five percent (5%) of the Budgeted gross expenses of the Association for that Fiscal Year (collectively, the "Allowable Cost'), then the Board shall contract for such restoration and levy a Reconstruction Assessment in an amount equal to the Allowable Cost minus the amount of the condemnation awards and Owners' contributions, and the condemnation awards, Owners' contributions and Reconstruction Assessment shall be applied to such restoration. If the restoration is accomplished at a cost less than the amount of the condemnation awards, then that portion of the condemnation awards which exceeds the restoration costs shall be paid to the Owners of the partially taken Units in proportion to the decreases in the fair market values of their Condominiums; however, such awards shall first be applied to the balance then due on any Mortgages encumbering such Owners' Condominiums, in order of priority. 10.5.2 Minor Takings Exceeding Limits If (a) there is a taking of a portion of one or more Units such that the intended use of the Units as residential dwellings is not substantially and adversely affected, and (b) restoration cannot be accomplished at a cost less than or equal to the Allowable Cost, then the Board shall call a special meeting of the Owners. If more than fifty percent (50%) of the voting power of the Association is represented at such special meeting, either in person or by proxy, and a majority of the votes cast at such special meeting are in favor of levying a Reconstruction Assessment in an amount equal to the restoration costs minus the sum of the amount of the condemnation awards and the amounts the Owners of the taken Units wish to contribute to such restoration, then the Board shall contract for such restoration and levy a Reconstruction Assessment, and the condemnation awards, Owners' contributions and Reconstruction Assessment shall be applied to such restoration. 10.5.3 Major Takings. If neither Section 10.5.1 nor Section 10.5.2 applies to the taking of a Unit, then the award in condemnation shall be paid to the Owners of the taken Units; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. The Board shall have the remaining portions of the taken Units razed. The remaining portions of the taken Units and appurtenant Exclusive Use Areas shall become part of the Association Property, and the Owners of such taken Units in any Phase, by acceptance of the award allotted to them in taking proceedings, relinquish (a) to the other Owners in such Phase, on the basis of their relative _86_ 3633-120328\CCRS\1210336.3 12/9/14 G-130 ownership of the Common Area therein, such Owners' undivided interest in the Common Area, and (b) to the Association, the remaining portions of the Units and the appurtenant Exclusive Use Areas. Each Owner relinquishing the Owner's interest in the Common Area pursuant to this Section shall, at the Board's request and at the Association's expense, execute and acknowledge such deeds and other instruments which the Board considers necessary or convenient to evidence such relinquishment. Each Owner of a taken Unit is not liable for Assessments under this Declaration which accrue on or after the date such Owner accepts the Owner's condemnation award. 10.6 PORTIONS OF AWARDS IN CONDEMNATION NOT COMPENSATORY FOR VALUE OF REAL PROPERTY. Those portions of awards in condemnation which do not directly compensate Owners for takings of real property (for example, awards for takings of personal property, relocation expenses, moving expenses, or other allowances of a similar nature intended to facilitate relocation) shall be paid to the Owners whose personal property is taken, or whose relocation is intended to be facilitated. 10.7 NOTICE TO OWNERS AND FIRST MORTGAGEES The Board, on learning of any taking affecting a Unit or a material portion of the Community, or any threat thereof, shall promptly notify all Owners and First Mortgagees. ARTICLE 11 RIGHTS OF MORTGAGEES 11.1 GENERAL PROTECTIONS. No amendment or violation of this Declaration defeats or renders invalid the rights of the Mortgagee under any Mortgage encumbering one (1) or more Condominiums made in good faith and for value, provided that after the foreclosure of any such Mortgage, the foreclosed Condominium(s) will remain subject to this Declaration. 11.2 ADDITIONAL RIGHTS. To induce the VA, FHA, Freddie Mac, Ginnie Mae and Fannie Mae to participate in the financing of the sale of Condominiums, the following provisions are added hereto (and to the extent these added provisions conflict with any other provisions of the Governing Documents, these added provisions control): 11.2.1 Right of First Refusal Any "right of first refusal" created or purported to be created by the Governing Documents shall not apply to nor adversely affect the rights of a First Mortgagee to (a) foreclose or take title to a Condominium pursuant to the remedies in the First Mortgage, or (b) accept a deed or assignment in lieu of foreclosure in the event of default by a Mortgagor, or (c) sell or lease a Condominium acquired by the First Mortgagee through any of the remedies described in (a) or (b). 11.2.2 Required Mortgagee Approvals A Mortgagee Majority must approve any amendment of any of the Governing Documents which is of a material adverse nature to First Mortgagees, as further described in Section 13.2.1. 11.2.3 Deemed Approval Each First Mortgagee who receives proper written notices from the Association by certified or registered mail with a return receipt requested of any matter requiring the approval of a Mortgagee Majority is deemed to have approved that matter if _87_ 3633-120328\CCRS\1210336.3 12/9/14 G-131 that First Mortgagee does not submit a written response within sixty (60) days after the notice is delivered to the First Mortgagee. 11.2.4 Notices. Each Mortgagee, insurer and guarantor of a Mortgage encumbering one (1) or more Condominiums, upon filing a written request for notification with the Board, is entitled to written notification from the Association of. (a) any proposed amendment to the Governing Documents affecting a change in (i) the boundaries of any Unit, (ii) the interest in the Common Area appurtenant to any Unit or the liability for Common Expenses, (iii) the number of Association votes appurtenant to any Unit, or (iv) the purposes to which any Unit or the Association Property are restricted, (b) any proposed termination of the status of the Community as a "condominium project" as defined in California Civil Code Section 4125, (c) any condemnation or casualty loss which affects either a material portion of the Community or the Condominium(s) securing the respective First Mortgage, (d) any delinquency of sixty (60) days or more in the performance of any obligation under the Governing Documents, including the payment of Assessments or charges owed by the Owner(s) of the Condominium(s) securing the Mortgage, which notice each Owner hereby consents to and authorizes, (e) a lapse, cancellation, or material modification of any policy of insurance or fidelity bond kept by the Association, and (f) any proposed action that requires the consent of a specified percentage of First Mortgagees. 11.2.5 First Mortgagee Rights Confirmed No provision of this Declaration or any other Governing Document gives any Owner or any other party priority over any rights of a First Mortgagee pursuant to its Mortgage concerning payment to the Owner of insurance proceeds or condemnation awards for losses to or taking of a Condominium or any portion of the Association Property. 11.2.6 Unpaid Pre -Foreclosure Assessments. The transfer of fee interest in a Condominium as the result of the exercise of the power of sale or a judicial foreclosure involving a default under the First Mortgage shall extinguish the lien of unpaid Assessments which were due and payable prior to the date of the transfer, and the transferee shall take title to the Condominium free and clear of all claims for such unpaid Assessments. 11.2.7 Availability of Association Documents Notwithstanding any requirements of the Bylaws, upon request by a First Mortgagee, insurer or guarantor of a First Mortgage or prospective purchaser, the Association shall make available for inspection, during normal business hours, those documents listed in California Civil Code Section 4525. Notwithstanding the foregoing, within a reasonable time after receipt of written request by a First Mortgagee, insurer or guarantor of a First Mortgage or prospective purchaser, the Association shall prepare and furnish to such First Mortgagee, insurer or guarantor of such First Mortgage or prospective purchaser an audited financial statement of the Association for the immediately preceding fiscal year. The Association shall have the right to be reimbursed by any First Mortgagee, insurer or guarantor of a First Mortgage or prospective purchaser making such a request for reasonable costs associated with furnishing an audited financial statement, and the reasonable costs associated with preparing an audited financial statement if the Association is not otherwise obligated to prepare such audited financial statement. _88- 3633-120328\CCRS\1210336.3 12/9/14 G-132 ARTICLE 12 ENFORCEMENT AND DISPUTE RESOLUTION 12.1 ENFORCEMENT OF GOVERNING DOCUMENTS All violations of the Governing Documents, except for: (a) those governed by Sections 12.2 or 12.3, or (b) those subject to the Right to Repair Law (and accordingly subject to resolution through Declarant's nonadversarial contractual provisions and alternative dispute resolution provisions commencing at Section 12.4 below), or California Civil Code Section 6000, et seq. (the "Calderon Act'), shall be resolved as follows: 12.1.1 Right to Enforce. The Board, the Association, the Declarant and any Owner may enforce the Governing Documents as described in this Article, subject to California Civil Code Sections 5900, et seq. and 5925, et seq. Each Owner has a right of action against the Association for the Association's failure to comply with the Governing Documents. Each remedy provided for in this Declaration is cumulative and not exclusive or exhaustive. 12.1.2 Violations Identified by the Association If the Board or the Design Review Committee determines that there is a violation of the Governing Documents, other than nonpayment of any Assessment, then the Board shall give written notice to the responsible Owner identifying (a) the condition or violation complained of, and (b) the length of time the Owner has to remedy the violation including, if appropriate, the length of time the Owner has to submit plans to the Design Review Committee and the length of time the Owner has to complete the work proposed in the plans submitted to the Design Review Committee. This requirement shall apply notwithstanding the fact that this Declaration may duplicate City ordinances or regulations. If an Owner does not perform corrective action within the allotted time, the Board, after Notice and Hearing, may remedy such condition or violation complained of, and the cost thereof shall be charged to the Owner as a Special Assessment. If the violation involves nonpayment of any Assessment, then the Board may collect such delinquent Assessment pursuant to the procedures established in Section 12.2. 12.1.3 Violations Identified by an Owner. If an Owner alleges that another Person is violating the Governing Documents (other than nonpayment of any Assessment), the complaining Owner must first submit the matter to the Board for Notice and Hearing before the complaining Owner may resort to alternative dispute resolution, as required by California Civil Code Section 5925, et seq. or litigation for relief. 12.1.4 Legal Proceedings. Failure to comply with any of the terms of the Governing Documents by any Person is grounds for relief which may include an action to recover damages, injunctive relief, foreclosure of any lien, or any combination thereof, however, the procedures established in California Civil Code Sections 5900,et seq. and 5925, et seq. and in Sections 12.1.2 and 12.1.3 must first be followed, if they apply. 12.1.5 Additional Remedies. After Notice and Hearing, the Board may impose any of the remedies provided for in the Bylaws. The Board may adopt a schedule of reasonable fines or penalties which, in its reasonable discretion, the Board may assess against a Person for the failure of such Person to comply with the Governing Documents. Such fines or penalties may only be assessed pursuant to California Civil Code Sections 5850 and 5855. After _89_ 3633-120328\CCRS\1210336.3 12/9/14 G-133 Notice and Hearing, the Board may direct the officers of the Association to Record a notice of noncompliance (if allowed by law) against a Condominium owned by any Owner who has violated any provision of this Declaration. The notice shall include a legal description of the Condominium and shall specify the provision of this Declaration that was violated, the violation committed, and the steps required to remedy the noncompliance. Once the noncompliance is remedied or the non -complying Owner has taken such other steps as reasonably required by the Board, the Board shall direct the officers of the Association to Record a notice that the noncompliance has been remedied. 12.1.6 No Waiver. Failure to enforce any provision of this Declaration does not waive the right to enforce that provision, or any other provision of this Declaration. 12.1.7 Limit on Expenditures. The Association may not incur litigation expenses, including attorneys' fees, or borrow money to fund litigation, where the Association initiates legal proceedings or is joined as a plaintiff in legal proceedings, unless the Association first obtains the consent of a majority of the Association's voting power (excluding the voting power of any Owner who would be a defendant in such proceedings) and, if applicable, complies with the requirements of California Civil Code Sections 5900,et seq. and 5925, et seq. Such approval is not necessary if the legal proceedings are initiated (a) to enforce the use restrictions contained in Article 2, (b) to enforce the architectural and landscaping control provisions contained in Article 5, (c) to collect any unpaid Assessments levied pursuant to the Governing Documents, (d) for a claim, other than a Right to Repair Law Claim, the total value of which is less than Five Hundred Thousand Dollars ($500,000), or (e) as a cross-complaint in litigation to which the Association is already a party. If the Association decides to use or transfer Reserve Funds or borrow funds to pay for any litigation, the Association must notify the Owners of the decision by mail. Such notice shall provide an explanation of why the litigation is being initiated or defended, why Operating Funds cannot be used, how and when the Reserve Funds will be replaced or the loan will be repaid, and a proposed budget for the litigation. The notice must state that the Owners have a right to review an accounting for the litigation which will be available at the Association's office. The accounting shall be updated monthly. If the Association action to incur litigation expenses or borrow money to fund litigation concerns a Right to Repair Law Claim, then the voting requirements of both Sections 4.5.2 and 12.1.7 must be met. 12.1.8 City. The City has the right, but not the obligation, to enforce any of the provisions of the Declaration. 12.2 DELINQUENT ASSESSMENTS 12.2.1 Delinquency. Assessments are delinquent if not paid within fifteen (15) days after the due date established by the Association. Assessments not paid within thirty (30) days after the due date, plus all reasonable costs of collection (including attorneys' fees) and late charges bear interest at the maximum rate permitted by law commencing thirty (30) days after the due date until paid. The Association may also require the delinquent Owner to pay a late charge in accordance with California Civil Code Section 5650. The Association need not accept any tender of a partial payment of an Assessment and all costs and attorneys' fees _90- 3633-120328\CCRS\1210336.3 12/9/14 G-134 attributable thereto. Acceptance of any such tender does not waive the Association's right to demand and receive full payment. 12.2.2 Creation and Release of Lien (a) Priority of Lien. All liens levied in accordance with this Declaration shall be prior and superior to (1) any declaration of homestead Recorded after the Recordation of this Declaration, and (2) all other liens, except (A) all taxes, bonds, Assessments and other levies which, by law, would be superior thereto, and (B) the lien or charge of any First Mortgage made in good faith and for value and Recorded before the date on which the "Notice of Delinquent Assessment" (described in this Section) against the assessed Condominium was Recorded. (b) Notice Before Creating Lien. Before the Association may place a lien on an Owner's Condominium to collect a past due Assessment, the Association shall send written notice ("Notice of Intent to Lien'), at least thirty (30) days before Recording the lien, to the Owner by certified mail which contains the following information: (1) the Association's fee and penalty procedure, (2) an itemized statement of the charges owed by the Owner, including the principal owed, any late charges, any interest, the method of calculation, and any attorneys' fees, (3) the collection practices used by the Association, (4) a statement that the Association may recover reasonable costs of collecting past due Assessments, (5) a statement that the Owner has the right to inspect the Association's records, pursuant to California Corporations Code Section 8333, (6) the following statement in 14 -point boldface type or all capital letters: "IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS, IT MAY BE SOLD WITHOUT COURT ACTION," (7) a statement that the Owner shall not be liable to pay the charges, interest and costs of collection if it is determined the Assessment was paid on time to the Association, (8) a statement that the Owner has the right to request a meeting with the Board, as provided by California Civil Code Section 5705(b) and Section 12.2.2(g) below, (9) a statement concerning the Owner's right to dispute the Assessment debt by submitting a written request for dispute resolution to the Association pursuant to the Association's "meet and confer" program required in California Civil Code Section 5900,et seq., and (10) a statement concerning the Owner's right to request alternative dispute resolution with a neutral third party pursuant to California Civil Code Section 5925 before the Association may initiate foreclosure against the Owner's separate interest, except that binding arbitration shall not be available if the Association intends to initiate a judicial foreclosure. (c) Dispute Resolution Before Recording Lien Before Recording a Notice of Delinquent Assessment, the Association shall offer the Owner and, if the Owner so requests, participate in dispute resolution under the Association's "meet and confer" program. (d) Dispute Resolution Before Foreclosure Before initiating a foreclosure for delinquent Assessments, the Association shall offer the Owner and, if the Owner so requests, shall participate in dispute resolution under the Association's "meet and confer" program or alternative dispute resolution with a neutral third party. The decision to pursue resolution or a particular type of alternative dispute resolution is the Owner's choice, except that binding arbitration is not available if the Association intends to initiate a judicial foreclosure. _91 _ 3633-120328\CCRS\1210336.3 12/9/14 G-135 (e) Board Approval. The decision to Record a Notice of Delinquent Assessment shall be made only by the Board and may not be delegated to an Association agent. The Board must approve the decision by a majority vote of the Board members in an open meeting. The Board shall record the vote in the minutes of that meeting. (f) Dispute by Owner. An Owner may dispute the Notice of Intent to Lien by submitting to the Board a written explanation of the reasons for the Owner's dispute. The Board shall respond in writing to the Owner within fifteen (15) days after the date of the postmark of the explanation, if the explanation is mailed within fifteen (15) days after the postmark of the Notice of Intent to Lien. (g) Owner's Right to Request Meeting. An Owner may submit a written request to meet with the Board to discuss a payment plan for the debt noticed in Section 12.2.2(b) above. The Association shall provide the Owner with the standards for payment plans, if any exist. The Board shall meet with the Owner in executive session within forty-five (45) days after the date of the postmark of the request, if the request is mailed within fifteen (15) days after the date of the postmark of the Notice of Intent to Lien, unless there is no regularly scheduled Board meeting within that period, in which case the Board may designate a committee of one or more members to meet with the Owner. (h) Notice of Delinquent Assessment The lien becomes effective on Recordation by the Board or its authorized agent of a Notice of Delinquent Assessment ("Notice of Delinquent Assessment') securing the payment of any Assessment or installment thereof levied by the Association against any Condominium Owner, as provided in California Civil Code Section 5650, et seq. The Notice of Delinquent Assessment must identify (1) the amount of the Assessment and other authorized charges and interest, including the cost of preparing and Recording the Notice of Delinquent Assessment, (2) the amount of collection costs incurred, including reasonable attorneys' fees, (3) a sufficient description of the Condominium that has been assessed, (4) the Association's name and address, (5) the name of the Owner of the Condominium that has been assessed, and (6) if the lien is to be enforced by non judicial foreclosure, the name and address of the trustee authorized by the Association to enforce the lien by sale. The Notice of Delinquent Assessment must be signed by an authorized Association officer or agent and must be mailed in the manner required by California Civil Code Section 2924b to the Owner of record of the Condominium no later than ten (10) calendar days after Recordation. The lien relates only to the individual Condominium against which the Assessment was levied and not to the Community as a whole. (i) Service on Owner's Legal Representative In addition to the requirements of California Civil Code Section 2924, a Notice of Delinquent Assessment shall be served by the Association on the Owner's legal representative as provided in California Code of Civil Procedure Section 415. 10, et seq. 0) Secondary Addresses. Upon receipt of an Owner's written request identifying a secondary address for purposes of collection notices, the Association shall send an additional copy of any Notice of Intent to Lien, Notice of Delinquent Assessment or other Notice given under Section 12.2.2 to the secondary address provided. The Association shall notify Owners of their right to submit secondary addresses to the Association, when the -92- 3633-120328\CCRS\1210336.3 12/9/14 G-136 Association issues its pro forma operating budget under California Civil Code Sections 5300 and 5305. The Owner's request must be in writing and mailed to the Association in a manner which indicates the Association has received it. The Owner may identify or change a secondary address at any time, provided that, if a secondary address is identified or changed during the collection process, the Association shall only be required to send Notices to the indicated secondary address from the point the Association receives the request. (k) Exceptions. Assessments described in California Civil Code Section 5725(b) and California Code of Regulations Section 2792.26(c) may not become a lien against an Owner's Condominium enforceable by the sale of the Condominium under California Civil Code Sections 2924, 2924b and 2924c. (1) Release of Lien. Within twenty-one (2 1) days after payment of the full amount claimed in the Notice of Delinquent Assessment, or other satisfaction thereof, the Board shall cause to be Recorded a Notice of Satisfaction and Release of Lien (Notice of Release's stating the satisfaction and release of the amount claimed. The Association shall provide the Owner with a copy of the Notice of Release or any other notice that the full amount claimed in the Notice of Delinquent Assessment has been satisfied. The Board may require the Owner to pay a reasonable charge for preparing and Recording the Notice of Release. Any purchaser or encumbrancer who has acted in good faith and extended value may rely on the Notice of Release as conclusive evidence of the full satisfaction of the sums identified as owed in the Notice of Delinquent Assessment. 12.2.3 Enforcement of Liens. The Board shall enforce the collection of amounts due under this Declaration by one (1) or more of the alternative means of relief afforded by this Declaration, subject to the restrictions in California Civil Code Sections 5705, 5715 and 5720. (a) The lien on a Condominium may be enforced by foreclosure and sale of the Condominium after the Owners failure to pay any Assessment, or installment thereof, as provided in this Declaration. (b) The decision to initiate foreclosure after Recording a Notice of Delinquent Assessment shall be made only by the Board and may not be delegated to an Association agent. The Board shall approve the decision by a majority vote of the Board members in an executive session. The Board shall record the vote in the minutes of the next Board meeting open to all members. The Board shall maintain the confidentiality of the Owner or Owners by identifying the matter in the minutes by the Unit number, rather than the name of the Owner or Owners. A Board vote to approve foreclosure of a lien shall take place at least 30 days before any public sale. (c) The Board shall provide notice by personal service to an Owner who occupies the Unit or to the Owner's legal representative, if the Board votes to foreclose on the Unit. The Board shall provide written notice to an Owner who does not occupy the Unit by first-class mail, postage prepaid, at the most current address shown on the Association's books. Unless the Owner provides written notification of a different mailing address to the Association, the address of the Owner's Unit may be treated as the Owner's mailing address. -93- 3633-120328\CCRS\1210336.3 12/9/14 G-137 (d) The sale shall be conducted in accordance with the provisions of the California Civil Code applicable to the exercise of powers of sale in Mortgages, or in any manner permitted by law. The Association (or any Owner if the Association refuses to act) may sue to foreclose the lien if (1) at least thirty (30) days have elapsed since the date on which the Notice of Delinquent Assessment was Recorded, and (2) at least ten (10) days have elapsed since a copy of the Notice of Delinquent Assessment was mailed to the Owner affected thereby. The Association may bid on the Condominium at foreclosure sale, using as a credit bid the amounts secured by its lien plus trustee's fees and expenses, Association funds, or funds borrowed for such purpose, and acquire and hold, lease, mortgage and convey the same. On completion of the foreclosure sale, the Association or the purchaser at the sale may file suit to secure occupancy of the defaulting Owner's Condominium, and the defaulting Owner shall be required to pay the reasonable rental value for the Condominium during any period of continued occupancy by the defaulting Owner or any persons claiming under the defaulting Owner. A nonjudicial foreclosure to collect delinquent Assessments shall be subject to the right of redemption within 90 days after the sale, as provided in California Civil Code Section 5715(b). (e) A suit to recover a money judgment for unpaid Assessments may be brought without foreclosing or waiving any lien securing the same, subject to the provisions of California Civil Code Section 5655, but this provision or any suit to recover a money judgment does not affirm the adequacy of money damages. Any recovery resulting from a suit at law or in equity initiated pursuant to this Section may include reasonable attorneys' fees as fixed by the court. 12.2.4 Priority of Assessment Lien Mortgages Recorded before a Notice of Delinquent Assessment have lien priority over the Notice of Delinquent Assessment. Sale or transfer of any Condominium does not affect the Assessment lien, except that the sale or transfer of any Condominium pursuant to judicial or non judicial foreclosure of a First Mortgage extinguishes the lien of such Assessments as to payments which became due before such sale or transfer. No sale or transfer relieves such Condominium from liens for any Assessments thereafter becoming due. No Person who obtains title to a Condominium pursuant to a judicial or non judicial foreclosure of the First Mortgage is liable for the share of the Common Expenses or Assessments chargeable to such Condominium which became due before the acquisition of title to the Condominium by such Person. Such unpaid share of Common Expenses or Assessments is a Common Expense collectible from all Owners including such Person. The Association may take such action as is necessary to make any Assessment lien subordinate to the interests of the California Department of Veterans Affairs under its Cal -Vet loan contracts as if the Cal -Vet loan contracts were First Mortgages. 12.2.5 Alternative Dispute Resolution An Owner may dispute the Assessments imposed by the Association as provided in this Declaration and in California Civil Code Sections 5600, et seq. If it is determined through dispute resolution pursuant to the Association's "meet and confer" program required in this Declaration or alternative dispute resolution with a neutral third party pursuant to California Civil Code Section 5925,et seq., that the Association Recorded a Notice of Delinquent Assessment in error, the Association shall promptly reverse all late charges, fees, interest, attorney's fees, costs of collection, costs imposed for the Notice prescribed in Section 5660, and costs of Recordation and release of the lien authorized under Section 5720(b) and pay all costs related to the dispute resolution or alternative -94- 3633-120328\CCRS\1210336.3 12/9/14 G-138 dispute resolution. An Owner may not use alternative dispute resolution under this Section more than two (2) times in any single calendar year, and not more than three (3) times within any five (5) calendar years unless the Owner and the Association mutually agree to use alternative dispute resolution when this limit is exceeded. 12.2.6 Receivers. In addition to the foreclosure and other remedies granted to the Association in this Declaration, each Owner, by acceptance of a deed to such Owner's Condominium, conveys to the Association all of such Owner's right, title and interest in all rents, issues and profits derived from and appurtenant to such Condominium, subject to the right of the Association to collect and apply such rents, issues and profits to any delinquent Assessments owed by such Owner, reserving to the Owner the right, before any default by the Owner in the payment of Assessments, to collect and retain such rents, issues and profits as they may become due and payable. On any such default, the Association may, on the expiration of thirty (30) days following delivery to the Owner of the "Notice of Delinquent Assessment" described in this Declaration, either in person, by agent or by receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness secured by the lien described in this Declaration, (a) enter in or on and take possession of the Condominium or any part thereof, (b) in the Association's name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and (c) apply the same, less allowable expenses of operation, to any delinquencies of the Owner, and in such order as the Association may determine. The entering upon and taking possession of the Condominium, the collection of rents, issues and profits and the application thereof, shall not cure or waive any default or notice of default under this Declaration or invalidate any act done pursuant to such notice. 12.2.7 Compliance with Law. To the extent that any provision in this Section 12.2 conflicts with the provisions of the CID Act, the statutory provisions shall control and shall be interpreted to amend, modify, restate or interpret this Section 12.2. 12.3 ENFORCEMENT OF BONDED OBLIGATIONS If (a) the Association Property Improvements in any Phase are not completed before the BRE issues a Public Report, and (b) the Association is an obligee under a bond or other arrangement (a"Bond') required by the BRE to secure performance of Declarant's commitment to complete such Improvements, then the following provisions of this Section will apply: 12.3.1 Consideration by the Board The Board shall consider and vote on the question of action by the Association to enforce the obligations under the Bond concerning any such Improvement for which a Notice of Completion has not been filed within sixty (60) days after the completion date specified for that Improvement in the Declarant's "Planned Construction Statement" which is appended to the Bond. If the Association has given an extension in writing for the completion of any Association Property Improvement, then the Board shall be directed to consider and vote on the aforesaid question if a Notice of Completion has not been filed within thirty (30) days after the end of the extension. 12.3.2 Consideration by the Owners A special meeting of Owners for the purpose of voting to override a decision by the Board not to initiate action to enforce the obligations under the Bond or on the Board's failure to consider and vote on the question shall be held no fewer than thirty-five (35) nor more than forty-five (45) days after the Board receives a -95- 3633-120328\CCRS\1210336.3 12/9/14 G-139 petition for such a meeting signed by Owners representing five percent (5%) of the Association's total voting power. A vote of a majority of the Association's voting power (excluding Declarant) to take action to enforce the obligations under the Bond shall be deemed to be the decision of the Association, and the Board shall thereafter implement such decision by initiating and pursuing appropriate action in the Association's name. 12.4 RESOLUTION OF DISPUTES WITH DECLARANT PARTIES 12.4.1 In General. This Section 12.4 sets out the procedure for the resolution of disputes between an Owner and/or the Association, on the one hand, and the Declarant, Declarant's affiliated and related entities, and each of their respective employees, officers, directors, agents, representatives, contractors, subcontractors, consultants, agents, vendors, suppliers, design professionals, insurers and any other person whom the Association or any Owner contends is responsible for any of the matters described in Section 12.4.2 below, on the other hand (each, a "Declarant Party'). The dispute resolution procedures in this Section 12.4 do not replace Declarant's customer or warranty service procedures, and Owners and the Association are encouraged to resolve disputes through those procedures prior to initiating any procedures hereunder. 12.4.2 Applicability. ANY AND ALL CLAIMS, CONTROVERSIES, BREACHES OR DISPUTES BY OR BETWEEN THE ASSOCIATION OR ANY OWNER(S), ON THE ONE HAND, AND DECLARANT, ON THE OTHER HAND, ARISING OUT OF OR RELATED TO THE PURCHASE AGREEMENT, THE CONDOMINIUM, RESIDENCE, ASSOCIATION PROPERTY, THE COMMUNITY OF WHICH THE CONDOMINIUM, RESIDENCE AND ASSOCIATION PROPERTY ARE A PART, THE SALE AND CONVEYANCE OF CONDOMINIUMS, RESIDENCES AND ASSOCIATION PROPERTY BY DECLARANT, OR ANY TRANSACTION RELATED HERETO, WHETHER SUCH DISPUTE IS BASED ON CONTRACT, TORT, STATUTE, OR EQUITY, INCLUDING WITHOUT LIMITATION, ANY DISPUTE OVER: (a) THE DISPOSITION OF ANY DEPOSITS; (b) BREACH OF CONTRACT; (c) NEGLIGENT OR INTENTIONAL MISREPRESENTATION OR FRAUD; (d) NONDISCLOSURE; (e) BREACH OF ANY ALLEGED DUTY OF GOOD FAITH AND FAIR DEALING; (f) ALLEGATIONS OF LATENT OR PATENT DESIGN OR CONSTRUCTION DEFECTS, INCLUDING WITHOUT LIMITATION, PURSUANT TO CIVIL CODE SECTION 895, ET SEQ. (THE "RIGHT TO REPAIR ACT'), BUT ONLY TO THE EXTENT NOT FIRST RESOLVED BY THE ACT DISPUTE PROCEDURES OF THE RIGHT TO REPAIR ACT (AS DEFINED IN SECTION (i) BELOW). _96_ 3633-120328\CCRS\1210336.3 12/9/14 G-140 (g) THE COMMUNITY, INCLUDING WITHOUT LIMITATION, THE PLANNING, SURVEYING, DESIGN, ENGINEERING, GRADING, SPECIFICATIONS, CONSTRUCTION OR OTHER DEVELOPMENT OF THE COMMUNITY, OR THE PARCEL/TRACT OF WHICH THE COMMUNITY IS A PART; (h) DECEPTIVE TRADE PRACTICES; OR (i) ANY OTHER MATTER ARISING OUT OF OR RELATED TO THE INTERPRETATION OF ANY TERM OR PROVISION OF THE PURCHASE AGREEMENT BETWEEN DECLARANT AND ANY OWNER, OR ANY DEFENSE GOING TO THE FORMATION OR VALIDITY OF THE PURCHASE AGREEMENT, OR ANY PROVISION OF THE PURCHASE AGREEMENT, INCLUDING DEPOSIT DISPUTES, THIS ARBITRATION PROVISION, ALLEGATIONS OF UNCONSCIONABILITY, FRAUD IN THE INDUCEMENT, OR FRAUD IN THE EXECUTION, WHETHER SUCH DISPUTE ARISES BEFORE OR AFTER THE CLOSE OF ESCROW, (EACH A"DISPUTE'), SHALL BE ARBITRATED PURSUANT TO THE FEDERAL ARBITRATION ACT IN ACCORDANCE WITH THE BINDING ARBITRATION PROCESS DESCRIBED IN SECTION 12.4.5 BELOW. 12.4.3 Right to Repair Act California Civil Code Section 895, et seq., contained in Part 2 of Division 2, Title 7 of the California Civil Code (`Right to Repair Act') governs standards and procedures for the resolution of construction defect matters in residential developments and became effective as of January 1, 2003. The legislative intent of the Right to Repair Act is, in part, to "improve the procedures for the administration of civil justice, including standards and procedures for early disposition of construction defects." The Right to Repair Act seeks to afford homeowners, homeowners associations and builders the opportunity for quick and fair resolution of construction defect claims. The Right to Repair Act (a) establishes statutory definitions and "functionality standards" for construction defects based upon how a home, common areas and their respective components should function (Performance Standards'); (b) divides the Performance Standards into categories such as water intrusion, structural and soils related issues, fire protection issues, plumbing and sewer issues, electrical systems and other areas of construction; (c) specifies that the components of a home must meet the Performance Standards for specified periods that range from one (1) year to ten (10) years as set forth in the Right to Repair Act; (d) excuses a builder from its obligations under the Right to Repair Act if a homeowner or Association (as applicable) fails to properly maintain the home or Association Property (as applicable), fails to promptly notify the builder of damage, fails to permit builder access to inspect the home or Association Property, or if damage to a component is caused by a third party or act of nature or under certain other circumstances specified in the Right to Repair Act; (e) provides builders an absolute right to repair violations of the Performance Standards before the homeowner or Association (as applicable) may file a suit or initiate alternative dispute resolution; (f) establishes specific "pre -litigation" or "non -adversarial" procedures for handling claims for the violation of the Performance Standards (California Civil Code Sections 910 through 938, inclusive) ("Act Dispute Procedures') and strict time periods for a homebuilder to respond to a claim; and (g) requires builders to maintain and provide to homeowners or the Association (as applicable) under certain circumstances specified information such as plans, specifications, reports and maintenance guidelines. -97- 3633-120328\CCRS\1210336.3 12/9/14 G-141 12.4.4 Notice of Declarant's Election of Act Dispute Procedures for Resolution of Certain Disputes. (a) Certain Disputes with Owners Although the Right to Repair Act at California Civil Code Section 914 allows Declarant to "opt out" of the Act Dispute Procedures and to require the use of alternative non -adversarial contractual provisions for the resolution of Disputes governed by the Right to Repair Act (each, a "Right to Repair Act Claim'), Declarant has elected to use the Act Dispute Procedures for the resolution of Right to Repair Act Claims brought by Owners (and, except as provided by Section 12.4.5(0) below, Right to Repair Act Claims brought by the Association) before they are submitted to binding arbitration. If, for any reason, a Right to Repair Act Claim is not resolved after submittal for resolution under the Act Dispute Procedures, then it may be submitted for resolution in accordance with the binding arbitration procedure set forth in Section 12.4.5 below. Declarant also requires the other parties defined as "Declarant Parties" in Section 12.4 above to (i) comply with the Right to Repair Act pursuant to the terms of its contracts with such parties, and (ii) cooperate in good faith with Declarant in resolving Right to Repair Act Claims. Declarant has notified each initial Owner of a Condominium that Declarant will be bound by the Act Dispute Procedures for the resolution of Right to Repair Act Claims regarding the Condominiums. Section 12.4.3 above provides notice of the existence of the Act Dispute Procedures and a notice that the Act Dispute Procedures impact the legal rights of each Owner and the Association, as required by California Civil Code Section 912(f). (b) Applicability of California Civil Code Section 6000 to Certain Disputes with Association. Notwithstanding Section 12.4.4 above, and as permitted under California Civil Code Section 914, Declarant has elected to use, in lieu of the Act Dispute Procedures defined in Section 12.4.4 above, the pre -litigation procedures of California Civil Code Section 6000, together with the access and repair protocol commencing in California Civil Code Section 915 as its alternative "Nonadversarial Contractual Procedures" for the resolution of Right to Repair Act Claims and other Disputes between the Association and Declarant concerning matters which involve the Community, the Association Property, or any other areas of the Community that the Association is required to maintain, repair or replace, as set forth in this Declaration and the other Governing Documents. Except as modified herein (and specifically, Subsection 12.4.5(0) below, allowing access and repair rights to Declarant Parties) or as may be precluded by California Civil Code Section 910,et seq., Association and Declarant agree that all Right to Repair Act Claims and other Disputes within the purview and scope of California Civil Code Section 6000 shall be submitted for resolution under the Declarant's Nonadversarial Contractual Procedures prior to the commencement of the arbitration proceedings described in Section 12.4.5 below. Therefore, prior to the commencement of arbitration proceedings on matters described in this Section 12.4.4(b), the Association shall serve on Declarant a "Notice of Commencement of Legal Proceedings" as set forth in California Civil Code Section 6000, as may be amended from time to time. However, because Declarant has elected to utilize the provisions of the Right to Repair Act, pursuant to California Civil Code Section 910, et seq., such access and repair protocol shall take precedence and, to the extent allowed by law, be part of and included within the pre -litigation procedures of California Civil Code Section 6000 to avoid duplication. _98- 3633-120328\CCRS\1210336.3 12/9/14 G-142 12.4.5 ARBITRATION OF DISPUTES THIS ARBITRATION PROVISION SHALL BE DEEMED TO BE A SELF-EXECUTING ARBITRATION PROVISION. ANY DISPUTE CONCERNING THE INTERPRETATION OR THE ENFORCEABILITY OF THIS ARBITRATION PROVISION, INCLUDING WITHOUT LIMITATION, ITS REVOCABILITY OR VOIDABILITY FOR ANY CAUSE, ANY CHALLENGES TO THE ENFORCEMENT OR THE VALIDITY OF THE PURCHASE AGREEMENT BETWEEN DECLARANT AND ANY OWNER, OR ANY AGREEMENT BETWEEN DECLARANT AND THE ASSOCIATION, OR THIS ARBITRATION PROVISION, OR THE SCOPE OF ARBITRABLE ISSUES UNDER THIS ARBITRATION PROVISION, AND ANY DEFENSE RELATING TO THE ENFORCEMENT OF THIS ARBITRATION PROVISION, INCLUDING WITHOUT LIMITATION, WAIVER, ESTOPPEL, OR LACHES, SHALL BE DECIDED BY AN ARBITRATOR IN ACCORDANCE WITH THIS ARBITRATION PROVISION AND NOT BY A COURT OF LAW. (a) Rules and Procedures. Disputes shall be resolved by and pursuant to the arbitration rules and procedures of Judicial Arbitration and Mediation Services ("JAMS') in effect at the time the request for arbitration is submitted so long as the rules and procedures are equivalent to the rules and procedures of the American Arbitration Association ("AAA's. In the event JAMS is for any reason unwilling or unable to serve as the arbitration service, then the parties shall select another reputable arbitration service with rules and procedures equivalent to the rules and procedures of the AAA. If the parties are unable to agree on an alternative service, then either party may petition any court of competent jurisdiction in the county in which the Community are located to appoint such an alternative service, which shall be binding on the parties. The rules and procedures of such alternative service in effect at the time the request for arbitration is submitted must be equivalent to the rules and procedures of the AAA and shall be followed. (b) Federal Arbitration Act Association and each Owner, on behalf of themselves and their successors and assigns, expressly acknowledge that the purchase, sale and/or conveyance of the real property and Improvements herein involves and concerns interstate commerce and is governed by the provisions of the Federal Arbitration Act (9 U.S.C. Section 1, et seq.) now in effect and as the same may from time to time be amended, to the exclusion of any different or inconsistent state or local law, ordinance, regulation, or judicial rule. Accordingly, any and all Disputes as defined in Section 12.4.1 shall be arbitrated — which arbitration shall be mandatory and binding — pursuant to the Federal Arbitration Act. (c) Enforceability. These arbitration provisions shall inure to the benefit of, and be enforceable by, Owners, the Association and Declarant Parties for the resolution of Disputes defined above. The parties contemplate the inclusion of such parties in any arbitration of a Dispute and agree that the inclusion of such parties will not affect the enforceability of these arbitration provisions. (d) Disputes under Purchase Agreement In the event any Dispute arises under the terms of the purchase agreement or in the event of the bringing of any arbitration action by a party hereto against another party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other party arising out of the purchase _99- 3633-120328\CCRS\1210336.3 12/9/14 G-143 agreement, then all fees and costs shall be borne separately between the parties, including but not limited to all attorneys' fees and expert witness costs resulting from the Dispute. The foregoing provision does not modify any provision of any contract between Declarant and any third party requiring indemnification or establishing a different allocation of fees and costs between Declarant Parties and such third party. In the event a Declarant Party is the prevailing party, the individual signing the purchase agreement, whether on the individual's behalf or on behalf of an entity or non -natural person, entity shall also be personally liable for Declarant's fees and costs as aforesaid notwithstanding any indication that such individual is signing in a corporate capacity. (e) Remedies Available. The arbitrator shall be authorized to provide all recognized remedies available in law or in equity for any cause of action that is the basis of the arbitration. (f) Final Decision. The decision of the arbitrator shall be final and binding. Association and/or Owner and Declarant Parties expressly agree that should either party fail to satisfy the arbitrator's decision within thirty (30) days of receipt of notice of the decision, then an application to confirm, vacate, modify, or correct an award rendered by the arbitrator shall be filed in any court of competent jurisdiction in the County in which the Community are located. (g) Effect of State or Local Laws To the extent that any state or local law, ordinance, regulation, or judicial rule is inconsistent with any provision of the rules of the arbitration service under which the arbitration proceeding shall be conducted, the latter rules shall govern the conduct of the proceeding. (h) Joinder. The participation by any party, or any party whom Association and/or any Owner contends is responsible for a Dispute, in any judicial proceeding concerning this arbitration provision or any matter arbitrable hereunder shall not be asserted or accepted as a reason to delay, to refuse to participate in arbitration, or to refuse to compel arbitration, including instances in which the judicial proceeding involves parties not subject to this arbitration provision and/or who cannot otherwise be compelled to arbitrate. (i) Filing Fees and Costs. The filing fees to initiate the arbitration shall be advanced by Declarant, based on the particular claim in accordance with the JAMS, or AAA equivalent fee schedule. The fees and costs of the arbitration and/or the arbitrator shall be borne equally by the parties to the arbitration; provided, however, that the fees and costs of the arbitration and/or the arbitrator ultimately shall be allocated and borne as determined by the arbitrator. Notwithstanding the foregoing, the parties shall each be solely responsible for their own attorneys' fees and expert witness costs. 0) Neutral. The arbitrator appointed to serve shall be a neutral and impartial individual. (k) Venue. The venue of the arbitration shall be in the County where the Community is located unless the parties agree in writing to another location. _100- 3633-120328\CCRS\1210336.3 12/9/14 G-144 (1) Severability. If any provision of this arbitration provision shall be determined to be unenforceable or to have been waived, the remaining provisions shall be deemed to be severable therefrom and enforceable according to their terms. (m) Discovery. The parties to the arbitration shall have the right to conduct a reasonable amount of discovery, including written discovery, depositions and inspections and testing, all as approved and coordinated by the arbitrator. (n) Notification. Association and any Owner agrees to provide Declarant with written notice of any matters relating to a Dispute as soon as is reasonably possible after Association or an Owner becomes aware, or should have become aware, of such matters and Dispute. Notice to Declarant under this Subsection does not constitute notice of a claim, or any other notice, under the Right to Repair Act. (o) Cooperation; Access; Repair. Association and each Owner, on behalf of themselves, successors and assigns, expressly agree to provide Declarant, Declarant Parties and their representatives, contractors, and others as Declarant may request, with prompt, reasonable cooperation, which may, for example, include access to all portions of the Community, Association Property, Condominium and/or Residence, in order to facilitate Declarant's investigation regarding a Dispute including, without limitation, for purposes of inspecting, testing, repairing, replacing, correcting, or otherwise addressing matters related to the Dispute. If the Dispute arises out of or relates to the planning, surveying, design, engineering, grading, specifications, construction, or other development of the Community, Association Property, Condominium and/or Residence, Declarant Parties are hereby granted the irrevocable right, but are under no obligation, to inspect, repair and/or replace any and all affected parts of the Community, Association Property, Condominium and/or Residence. The right, but not obligation, to access, inspect, repair and/or replace any and all affected parts of the Community, Association Property, Condominium and/or Residence may be exercised by the applicable Declarant Party at any time prior to the initiation of arbitration proceedings as set forth above. (p) NOTICE. BY ACCEPTING ANY AND ALL DEEDS TO ASSOCIATION PROPERTY, INDIVIDUAL GRANT DEEDS AND/OR ACKNOWLEDGEMENT OF RECEIPT OF THE GOVERNING DOCUMENTS, ASSOCIATION AND EACH OWNER, ALONG WITH DECLARANT, AGREE TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THIS SECTION 12.4.4(b) DECIDED BY NEUTRAL ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT AND THE CALIFORNIA ARBITRATION ACT, TO THE EXTENT THE CALIFORNIA ARBITRATION ACT IS NOT INCONSISTENT WITH THE FEDERAL ARBITRATION ACT, AND ASSOCIATION, EACH OWNER AND DECLARANT PARTIES ARE GIVING UP ANY RIGHTS ASSOCIATION, EACH OWNER AND DECLARANT PARTIES MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. IN ADDITION, ASSOCIATION, EACH OWNER AND DECLARANT ARE GIVING UP THEIR RESPECTIVE JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THIS ARBITRATION AGREEMENT. IF ASSOCIATION, ANY OWNER AND/OR DECLARANT OR OTHER DECLARANT PARTY REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS -101- 3633-120328\CCRS\1210336.3 12/9/14 G-145 PROVISION, SAID REFUSING PARTY MAY BE COMPELLED TO ARBITRATE UNDER THE FEDERAL ARBITRATION ACT AND THE CALIFORNIA ARBITRATION ACT, THE EXTENT THE CALIFORNIA ARBITRATION ACT IS NOT INCONSISTENT WITH THE FEDERAL ARBITRATION ACT. THE PARTIES' AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. 12.4.6 Affirmative Defenses Applicable to Disputes Each Declarant Party shall have available to it, without limitation, the following non-exclusive list of affirmative defenses in response to a claimed violation of the provisions of the Right to Repair Act, or any other standards, laws, ordinances, rules or regulations, pursued by the Association or any Owner under this Section 12.4. (a) Unforeseen Acts of Nature. To the extent any obligation, damage, loss or liability is caused by an unforeseen act of nature which caused the Improvement not to meet the standard. For purposes of this Section, an "unforeseen act of nature" means a weather condition, earthquake, or manmade event such as war, terrorism, or vandalism, in excess of the design criteria expressed by the applicable building codes, regulations, and ordinances in effect at the time of original construction. (b) Failure to Mitigate. To the extent any obligation, damage, loss or liability is caused by the unreasonable failure to minimize or prevent those damages in a timely manner, including the failure to allow reasonable and timely access for inspections and repairs under this section. This includes the failure to give timely notice to the Declarant after discovery of a violation, but does not include damages due to the untimely or inadequate response of Declarant Parties to the claim. (c) Failure to Maintain. To the extent any obligation, damage, loss or liability is caused by an Owner, his/her agent, employee, subcontractor, independent contractor, or consultant by virtue of their failure to follow Declarant's or manufacturer's Maintenance Guidelines, or commonly accepted maintenance practices. (d) Alterations, Misuse, Abuse or Neglect To the extent any obligation, damage, loss or liability is caused by any Owner, his/her agent's or an independent third party's alterations, ordinary wear and tear, misuse, abuse, or neglect, or by the Improvement's use for something other than its intended purpose. (e) Statutes of Limitation. To the extent that the time period for filing actions bars filing a claim concerning the claimed violation. (f) Release of Declarant Party. As to a particular violation for which Declarant or a Declarant Party has obtained a valid release. (g) Successful Repair by Declarant Parry. To the extent that the repair was successful in correcting the particular violation of the applicable standard. (h) Wear and Tear. To the extent that the claimed damage was caused by or due to ordinary wear and tear. -102_ 3633-120328\CCRS\1210336.3 12/9/14 G-146 (i) Materials Furnished or Installed by Owner. Any damage caused by or due to materials or Improvements furnished or installed by or at the request of Owner, including any work done by anyone other than the applicable Declarant Party or the employees, agents, or subcontractors expressly selected by the Declarant Party. 0) Variations in Natural Materials Variations in natural materials, such as stone, marble, wood grain and color of stained wood used in cabinets, paneling, siding, doors and wood trim. These variations are inherent characteristics of natural materials and are not a defect. (k) Failure to Give Timely Notice Any defect, loss or damage caused or made worse by Owner's failure to timely notify Declarant of any such defect, loss or damage. (1) Refusal to Allow Repair. Any defect, loss or damage caused by the Owner's failure and refusal to allow reasonable and timely access for inspections and/or repairs. (m) Owner or Third Party Negligence Any defect, loss or damage caused or made worse by the negligence of Owner (or his/her agents, employees, subcontractors, independent contractors or consultants) or a third party (such as a guest or invitee). 12.4.7 Exceptions. The procedures described in this Section 12.4 shall not apply to any action taken by the Association against Declarant for delinquent Assessments, which shall be governed by Section 12.2 entitled "Delinquent Assessments", or in any action involving any Association Property Improvement bonds, which shall be governed by the provisions of Section 12.3 entitled "Enforcement of Bonded Obligations." 12.4.8 Admissibility of Communications Any and all communications by and between the parties, whether written or oral, which are delivered by the parties or their attorneys or other representatives in an effort to settle the claim shall be considered communications undertaken in the course of effecting a settlement or compromise and as such shall not be admissible as the admission on the part of any party or any representative or agent of the party to be utilized for any such purpose in any action or proceeding. 12.4.9 Statute of Limitations. Nothing herein shall be considered to reduce or extend any applicable statute of limitations. 12.4. 10 Legal Proceeding Against Declarant Parties Not later than thirty (30) days prior to the filing of any legal proceeding by the Association against any of the Declarant Parties for alleged damage to Association Property, or other Improvements that the Association is obligated to maintain or repair, the Board shall provide written notice to each Mortgagee, insurer and guarantor of a First Mortgage encumbering one (1) or more Condominiums, who has filed a written request with the Board for such notice, and each Member of the Association. This notice shall specify all of the following: (a) that a meeting will take place to discuss problems that may lead to the filing of a legal proceeding; (b) the options, including civil actions, that are available to address the problems; and, (c) the time and place of this meeting. In addition, the notice also shall specify the following: -103- 3633-120328\CCRS\1210336.3 12/9/14 G-147 (a) a good faith estimate of the costs to repair the alleged defects prepared by a licensed contractor who has submitted a bid to perform the necessary repair work; (b) how the necessary repairs will be funded; (c) the name of the attorney whom the Association is contemplating retaining and an estimate of the attorney's fees, consultant's fees and any other costs to be incurred to prosecute such proceedings; (d) how such fees and costs will be funded; (e) each Member's duty to disclose to prospective purchasers the alleged defects; and (f) the potential impact the proceedings may have on the marketability and availability of financing and/or insurance for the Condominiums in the Community. Notwithstanding the foregoing, if the Association has reason to believe that the applicable statute of limitations will expire before the Association files the legal proceeding, the Association may give the notice, as described above, within thirty (30) days after the filing of the legal proceeding. 12.4.11 Covenant Regarding Proceeds If the Association or any Owner prevail in a Dispute, and the judgment thereon or settlement terms thereof includes a monetary award, then the proceeds of the award shall be first applied to the remediation of the condition that gave rise to the Dispute. 12.4.12 No Enhanced Protection Agreement Nothing in this Declaration constitutes an "enhanced protection agreement" under California Civil Code Section 901 or alternative nonadversarial contractual provisions under California Civil Code Section 914, and nothing herein diminishes the rights and obligations of Owner, Association and Declarant under the nonadversarial dispute resolution procedures set forth in California Civil Code Sections 910 through 938 with respect to any Right to Repair Act Claim. ARTICLE 13 DURATION AND AMENDMENT 13.1 DURATION. This Declaration shall continue in full force unless a declaration of termination satisfying the requirements of an amendment to this Declaration established in Section 13.2 is Recorded. 13.2 TERMINATION AND AMENDMENT. 13.2.1 Amendment Approval Notice of the subject matter of a proposed amendment to this Declaration in reasonably detailed form must be included in the notice of any Association meeting or election at which a proposed amendment is to be considered. To be effective, a proposed amendment (other than an amendment by Declarant or by the Board, as -104- 3633-120328\CCRS\1210336.3 12/9/14 G-148 described in Sections 13.2.7 or 13.2.8 respectively) must be (a) adopted by the vote, in person or by proxy, or written consent of Owners representing not less than (1) sixty-seven percent (67%) of the voting power of each Class of the Association and (2) sixty-seven percent (67%) of the Association's voting power represented by Owners other than Declarant, provided that the specified percentage of the Association's voting power necessary to amend a specific provision of this Declaration may not be less than the percentage of affirmative votes prescribed for action to be taken under the provision that is the subject of the proposed amendment, and (b) approved by the requisite percentage of First Mortgagees for the (1) amendments described in Section 13.2.1, and (2) termination of the Declaration as described in Section 13.2.4. 13.2.2 Mortgagee Consent In addition to the consents required by Section 13.2.1, a Mortgagee Majority must approve any amendment to this Declaration, any Notice of Addition and any Supplemental Declaration which is of a material adverse nature to First Mortgagees, including the following: (a) Any amendment concerning any of the following: (1) Voting rights; (2) Increases in Assessments that raise the existing Assessment by more than 25%, Assessment liens or the priority of Assessment liens; (3) Reductions in reserves for maintenance, repair and replacement of the Association Property; (4) Responsibility for maintenance and repairs; (5) Reallocation of interest in the Common Area, liability for Common Expenses, or rights to use the Association Property; (6) Redefinition of any Unit or Exclusive Use Area boundaries; (7) Convertibility of Units into Association Property or vice versa; (8) Expansion or contraction of the Community or the addition, annexation or deannexation of real property to or from the Community; transfer that Owner's Unit; (9) Hazard or fidelity insurance requirements; (10) Imposing restrictions on leasing of Units; (11) Imposing restrictions on a Unit Owner's right to sell or -105- 3633-120328\CCRS\1210336.3 12/9/14 G-149 (12) Any decision by the Association to establish self management if professional management had been required previously by the Governing Documents or a First Mortgagee; (13) Restoration or repair of the Community (after damage or partial condemnation) in a manner (a) other than that specified in this Declaration or (b) that deviates from the original Development Plan; or (14) Any provisions that expressly benefit Mortgagees. (b) Any amendment which affects or purports to affect the validity or priority of Mortgages or the rights or protection granted to Mortgagees, insurers or guarantors of Mortgages. (c) Any amendment which would require a Mortgagee after it has acquired a Condominium through foreclosure to pay more than its proportionate share of any unpaid Assessment or Assessments accruing before such foreclosure. (d) Any amendment which would or could result in a Mortgage being canceled by forfeiture, or in a Condominium not being separately assessed for tax purposes. (e) Any amendment relating to (i) the insurance provisions in Article 8, (ii) the application of insurance proceeds in Article 9, or (iii) the disposition of any money received in any taking under condemnation proceedings. (f) Any amendment which would or could result in partition or subdivision of a Condominium in any manner inconsistent with this Declaration. (g) Any amendment which would subject any Owner to a right of first refusal or other such restriction, if such Condominium is proposed to be transferred. (h) The termination of the legal status of the Community as a "condominium project" as defined in California Civil Code Section 4125 after substantial destruction or condemnation. 13.2.3 Amendment of Right to Repair Law Provisions Neither this Section 13.2.3 nor Sections 1.1.48, 1.1.78, 1.1.80, 2.1.5, 3.31, 4.2.7, 4.5, 12.1.7, 12.4, 13.2.7, 13.2.7 or 15.7 may be amended without the prior written approval of Declarant until the expiration of all applicable statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against Declarant or its affiliates under the Right to Repair Law (including tolling periods). 13.2.4 Termination Approval Termination of this Declaration or the status of the Community as a "condominium project" as defined in California Civil Code Section 4125 requires approval of (a) sixty-seven percent (67%) of the First Mortgagees, (b) the Owners as provided in Section 13.2.1, and (c) Declarant (until the expiration of all applicable statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against Declarant -106- 3633-120328\CCRS\1210336.3 12/9/14 G-150 or its affiliates under the Right to Repair Law); provided however, in the event a material portion of the Community is affected by either damage or destruction (as described in Article 9) or a taking (as described in Article 10), then any election to terminate the status of the Community as a "condominium project" as defined in California Civil Code Section 4125 requires approval of a Mortgagee Majority and the Owner and Declarant approvals described above. 13.2.5 Notice to Mortgagees. Each Mortgagee of a First Mortgage on a Condominium in the Community which receives proper written notice of a proposed amendment or termination of this Declaration, any Notice of Addition or Supplemental Declaration with a return receipt requested is deemed to have approved the amendment or termination if the Mortgagee fails to submit a response to the notice within thirty (30) days after the Mortgagee receives the notice. 13.2.6 Certificate. A copy of each amendment must be certified by at least two (2) Association officers. The amendment becomes effective when a Certificate of Amendment is Recorded. The certificate, signed and sworn to by two (2) Association officers that the requisite number of Owners and Mortgagees have approved the amendment, when Recorded, is conclusive evidence of that fact. The Association shall keep in its files for at least four (4) years the record of all such approvals. The certificate reflecting any termination or amendment which requires the written consent of any of the First Mortgagees must include a certification that the requisite approval of such First Mortgagees was obtained or deemed given in accordance with Section 11.2.3. 13.2.7 Amendment or Termination by Declarant (a) Before First Closing. Notwithstanding any other provisions in this Article, (i) Declarant may unilaterally amend or terminate this Declaration for any purpose, until the first Close of Escrow in the Community, and (ii) Declarant may unilaterally amend or terminate a Notice of Addition or Supplemental Declaration for any purpose, until the first Close of Escrow in the real property affected by the Notice of Addition or Supplemental Declaration to be amended or terminated. Amendment or termination shall not be effective until Declarant has Recorded in the Official Records an instrument signed and acknowledged by Declarant. (b) Minor Corrections. Notwithstanding any other provisions of this Article, Declarant (as long as Declarant owns any portion of the Community or the Annexable Area) may unilaterally amend this Declaration, a Notice of Addition or a Supplemental Declaration by Recording a written instrument signed by Declarant to: (1) conform this Declaration, the Notice of Addition or the Supplemental Declaration to the rules, regulations or requirements of FHFA, VA, FHA, BRE, Fannie Mae, Ginnie Mae, Freddie Mac or the County or City, (2) amend, replace or substitute any exhibit to correct typographical or engineering errors, (3) include any exhibit that was inadvertently omitted at the time of Recording, (4) comply with any City, County, State or Federal laws or regulations, (5) correct typographical errors, (6) supplement this Declaration with provisions which pertain to rights and obligations of Declarant, the Association or Owners arising under the Right to Repair Law, (7) re -Phase any portion of the Community, and (8) change any exhibit or portion of an exhibit to conform to as - built conditions. -107- 3633-120328\CCRS\1210336.3 12/9/14 G-151 Nothing in this Section 13.2.7 may be amended or terminated without the prior written approval of Declarant. 13.2.8 Minor Corrections by the Board The Board may amend this Declaration, or a Notice of Addition or Supplemental Declaration for the reasons stated in clauses (2), (3), (4), (5) or (8) of Section 13.2.7(b) by Recording a written instrument signed by two officers of the Association certifying that the Board approved the amendment for the purposes described therein. However, until the end of all applicable statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against Declarant or its affiliates under the Right to Repair Law (including tolling periods), the Board must obtain the prior written approval of Declarant to any amendment approved by the Board, or any other amendment by the Board or Association that affects the rights of Declarant under the Right to Repair Law, this Declaration or any Supplemental Declaration or Notice of Addition, or for any amendment by the Board concerning matters discussed in Articles 3 or 15. 13.2.9 Amendments Requiring City Approval Proposed amendments to this Declaration, a Notice of Addition or a Supplemental Declaration which revise any language required by the Conditions of Approval for the Community, shall be submitted for review to the City Attorney and the Development Services Director or designee, and shall be approved by the City Attorney and the City Council prior to the amendments being valid. No later than the date that is thirty (30) calendar days after its receipt of a proposed amendment, the City shall deliver written notice of its approval or disapproval of the proposed amendment to the party who delivered the proposed amendment to the City. If the City fails to deliver such written notice within such 30 -calendar day period, the City shall be deemed to have approved the proposed amendment. ARTICLE 14 GENERAL PROVISIONS 14.1 MERGERS OR CONSOLIDATIONS In a merger or consolidation of the Association with another association, the property, rights and obligations of the Association may, by operation of law, be transferred to another surviving or consolidated association or, alternatively, the property, rights and obligations of another association may, by operation of law, be added to the property, rights and obligations of the Association as a surviving corporation pursuant to a merger. The surviving or consolidated association may administer and enforce the covenants, conditions and restrictions established by this Declaration governing the Community, together with the covenants and restrictions established on any other property, as one (1) plan. Any such merger or consolidation requires the prior written approval of the VA. 14.2 NO PUBLIC RIGHT OR DEDICATION Nothing in this Declaration is a gift or dedication of all or any part of the Community to the public, or for any public use. 14.3 NOTICES. Except as otherwise provided in this Declaration, notice to be given to an Owner must be in writing and may be delivered personally to the Owner. Personal delivery of such notice to one (1) or more co -Owners, or any general partner of a partnership owning a Condominium, constitutes delivery to all Owners. Personal delivery of such notice to any officer or agent for the service of process on a corporation or limited liability company constitutes -108- 3633-120328\CCRS\1210336.3 12/9/14 G-152 delivery to the corporation or limited liability company. Such notice may also be delivered by regular United States mail, postage prepaid, addressed to the Owner at the most recent address furnished by such Owner to the Association or, if no such address has been furnished, to the street address of such Owner's Condominium. Such notice is deemed delivered three (3) business days after the time of such mailing, except for notice of a meeting of Owners or of the Board, in which case the notice provisions of the Bylaws control. Any notice to be given to the Association may be delivered personally to any member of the Board, or sent by United States mail, postage prepaid, addressed to the Association at such address as may be fixed and circulated to all Owners. 14.4 CONSTRUCTIVE NOTICE AND ACCEPTANCE Every Person who owns, occupies or acquires any right, title, estate or interest in or to any Condominium or other portion of the Community consents and agrees to every limit, restriction, easement, reservation, condition and covenant contained in this Declaration, whether or not any reference to these restrictions is in the instrument by which such Person acquired an interest in the Community. As soon as practicable before sale or transfer of title to a Condominium or other separate interest in the Community or execution of a real property sales contract therefor, the Owner of the Condominium or other separate interest shall provide to the purchaser copies of the Governing Documents listed in California Civil Code Section 4525 and its successor statutes. ARTICLE 15 DECLARANT'S RIGHTS AND RESERVATIONS If there is a conflict between any other portion of the Governing Documents and this Article, this Article shall control. 15.1 CONSTRUCTION RIGHTS Until Declarant no longer owns any portion of the Community or the Annexable Area, Declarant has the right, without obtaining the approval of the Association, to (a) subdivide or re -subdivide the portions of the Community owned by Declarant, (b) complete or modify Improvements in the Association Property, or in any portion of the Community or Annexable Area that is owned or leased solely or partially by Declarant, (c) alter Improvements and Declarant's construction plans and designs, (d) modify Declarant's development plan for the Community and the Annexable Area, including designating and redesignating Phases, reshaping the Condominiums and Association Property, and constructing dwellings of larger or smaller sizes, values, and of different types. Declarant may temporarily erect barriers, close off and restrict access to portions of the Association Property as reasonably necessary to allow Declarant to exercise the rights reserved in this Section so long as an Owner's access to that Owner's Condominium is not eliminated. For purposes of compliance with the FHA/VA Requirements described in Section 1.2.6 above, Declarant's right to change the overall Development Plan or to elect not to construct planned Condominiums or Association Property Improvements, shall be exercised, if at all, only if all of the following are satisfied: 15.1.1 Declarant determines that continuing with the existing Development Plan is economically infeasible; and -109- 3633-120328\CCRS\1210336.3 12/9/14 G-153 15.1.2 Such determination shall be made no later than the tenth anniversary of the first Close of Escrow in the Community; and 15.1.3 The change concerns only those portions of the Community or Annexable Area that are still owned by Declarant; and 15.1.4 Declarant obtains all required approvals from the BRE prior to making such change. 15.2 SALES AND MARKETING RIGHTS Declarant shall have the following rights related to sales and marketing, all of which may be exercised unilaterally by Declarant in Declarant's sole discretion. The rights reserved in this Section will terminate on the date of the last Close of Escrow for sale of a Condominium in the Community and Annexable Area. 15.2.1 Marketing and Sales Facilities Declarant's rights under this Declaration include the right to install and maintain such structures, displays, signs, billboards, flags and sales offices in the Community, and the right to use any land, Units or mobile homes owned or leased by Declarant in the Community for model home purposes, or for the operation of real estate sales offices or leasing offices, all as may be reasonably necessary to conduct the business of completing construction and disposing of the Condominiums by sale, resale, lease or otherwise. 15.2.2 Use of Association Property. Declarant and its prospective purchasers of Condominiums are entitled to the nonexclusive use of the Association Property without further cost for access, ingress, egress, use or enjoyment, to (a) show the Community to prospective purchasers, (b) dispose of the Community as provided in this Declaration, and (c) develop and sell the Annexable Area. Declarant, its employees, agents and prospective purchasers are also entitled to the nonexclusive use of private streets, drives and walkways for ingress, egress and vehicle parking as necessary in connection with the marketing and sale of the Condominiums. Neither Declarant, nor its employees, agents nor prospective purchasers shall make any use of the Association Property that will unreasonably interfere with the use and enjoyment thereof by the Owners. 15.3 CREATING ADDITIONAL EASEMENTS At any time before the Close of Escrow for a Condominium, Declarant reserves the unilateral right to establish on that Condominium additional licenses, easements, reservations and rights-of-way to itself, to utility companies, or to others as Declarant determines are reasonably necessary to the proper development and disposal of the Community and Annexable Area. 15.4 ARCHITECTURAL RIGHTS Declarant and any Person to whom Declarant may assign all or a portion of its exemption under this Declaration need not seek or obtain Design Review Committee approval of any Improvements constructed anywhere on the Community by Declarant or such Person. Declarant may exclude portions of the Community from jurisdiction of the Design Review Committee in the applicable Notice of Addition or Supplemental Declaration. Declarant, may, at its option, establish an additional design review committee for any area exempted from the jurisdiction of the Design Review Committee. -110- 3633-120328\CCRS\1210336.3 12/9/14 G-154 15.5 DEVELOPER EXEMPTION Declarant is exempt from the application of Article 2 of this Declaration and from all other restrictions on the use and enjoyment of real property and all maintenance covenants that are established for Owners under this Declaration, or in a Notice of Addition, a Supplemental Declaration or in any other Governing Documents, except to the extent that a particular provision expressly includes Declarant among the parties covered thereby. 15.6 ASSIGNMENT OF RIGHTS. Declarant may assign any or all of its rights and exemptions under this Article 15, and any other Declarant rights, exemptions, appointment powers, veto powers or easements in the Governing Documents to any successor in interest to any portion of Declarant's interest in the Community by a Recorded written assignment. 15.7 AMENDMENT TO ARTICLE. No amendment may be made to this Article without the prior written approval of Declarant for so long as Declarant owns any portion of the Community or the Annexable Area. 15.8 POWER OF ATTORNEY. Each Owner of a Condominium in the Community, by accepting a deed to a Condominium, shall be deemed to have (a) agreed and acknowledged that the Owners own no interest in the Annexable Area, (b) agreed and acknowledged that the Annexable Area may be developed, if at all, by Declarant in its sole and absolute discretion, in accordance with Declarant's development plans, and (c) constituted and irrevocably appointed Declarant, for so long as Declarant owns all or any portion of the Annexable Area, as his attorney-in-fact, for the Owner and each of the Owner's Mortgagees, optionees, grantees, licensees, trustees, receivers, lessees, tenants, judgment creditors, heirs, legatees, devisees, administrators, executors, legal representatives, successors and assigns, whether voluntary or involuntary, and thereby to have conveyed a power of attorney coupled with an interest to Declarant as the Owner's attorney-in-fact to prepare, execute, acknowledge and Record any instrument for all or any portion of the Annexable Area, or any amendment to or restatement of the Condominium Plan, as Declarant deems to be reasonably necessary to correct errors, to conform to as -built conditions, or to bring the Condominium Plan into compliance with any City, County, State or Federal law or regulations. However, nothing set forth herein shall be deemed or construed as an agreement by Declarant that any Owner shall be entitled to any participation in or discretion over the preparation and Recordation of an instrument for all or any portion of the Annexable Area. The acceptance or creation of any Mortgage or other encumbrance, whether or not voluntary, created in good faith, or given for value, shall be accepted or created subject to each of the power of attorney provisions in this Section. 15.9 PARTICIPATION IN ASSOCIATION The Association shall provide Declarant with written notice of the transfer of any Condominium and all notices and other documents to which a Mortgagee is entitled pursuant to this Declaration, provided that Declarant shall not be required to make written request for such notices and other documents. Commencing on the date on which Declarant no longer has a representative on the Board, the Association shall provide Declarant with written notice of all meetings of the Board that any Owner is entitled to attend (each, an "Open Meeting') as if Declarant were an Owner, and Declarant shall be entitled to have a representative ("Declarant's Representative') present at all Open Meetings. However, the Board has the power to withhold information from the Declarant's Representative and to exclude the Declarant's Representative from any Open 3633-120328\CCRS\1210336.3 12/9/14 G-155 Meeting or portion thereof if, in the good faith judgment of the Board, access to such information or attendance at the Open Meeting would adversely affect the attorney-client privilege between the Association and its counsel or if, in the good faith judgment of the Board, access to such information or attendance at an Open Meeting would not be in the best interest of the Association or the Owners. The Declarant's Representative shall not be entitled to attend executive sessions of the Board. The Declarant's Representative will attend any Open Meeting it is permitted to attend in an observer capacity only, and it shall not have any right to vote on matters coming before the Board or Owners. Declarant's Representative shall be entitled to receive copies of the minutes of all Open Meetings. The Declarant's rights to receive written notice of meetings and to have a Declarant's Representative present at such meeting shall continue until the later of the date that is ten (10) years after the first Close of Escrow in the Community, or the expiration date of all applicable statutes of limitations or repose for the filing of a complaint or suit or other legal remedies against Declarant under the Right to Repair Law (including any tolling periods). 15.10 DECLARANT APPROVAL OF ACTIONS 15.10.1 General Rights. Until Declarant no longer owns a portion of the Community or the Annexable Area, Declarant's prior written approval is required for any amendment to the Governing Documents which would impair or diminish Declarant's right to complete the Community or the Annexable Area or sell or lease Condominiums therein. 15.10.2 Limit on Actions. Until the end of all applicable statutes of limitations or repose for the filing of a complaint or suit or other legal remedies against Declarant under the Right to Repair Law (including any tolling periods), the following actions, before being undertaken by the Association, must first be approved in writing by Declarant: (a) Any amendment or action requiring the approval of First Mortgagees; (b) The annexation to the Community of real property other than the Annexable Area pursuant to Section 16.1; (c) The levy of a Capital Improvement Assessment for the construction of new facilities not constructed on the Association Property by Declarant; (d) Any significant reduction of Association maintenance or other services; or (e) Any modification or termination of any provision of the Governing Documents benefiting Declarant. 15.11 MARKETING NAME. The Community shall be marketed under the general name "Sol Y Mar. " Declarant may change the marketing name of the Community or designate a different marketing name for any Phase at any time in Declarant's sole discretion. Declarant shall notify the BRE of any change in or addition to the marketing name or names of the Community or any Phase. -112- 3633-120328\CCRS\1210336.3 12/9/14 G-156 ARTICLE 16 ANNEXATION OF ADDITIONAL PROPERTY Additional real property may be annexed to the Community and become subject to this Declaration by any of the following methods: 16.1 ADDITIONS BY DECLARANT. Declarant may, until the Seventh Anniversary Date, add any or all of the Annexable Area to the Community and bring such Annexable Area under the general plan of this Declaration without the approval of the Association, the Board, or Owners, as long as Declarant owns the portion of the Annexable Area to be added to the Community. However, Declarant may not add Annexable Area to the Community and bring it under the general plan of this Declaration at any time unless: 16.1.1 the quality of construction of the Improvements in the Added Area will be consistent with the quality of construction of the Improvements in Phase 1 of the Community; 16.1.2 all Improvements in the Annexable Area to be added to the Community are substantially complete before they are added to the Community; 16.1.3 Declarant obtains the prior written approval of HUD, VA and Fannie Mae if they hold, insure or guarantee any Mortgage in any Condominium at the time Added Area is to be annexed; and 16.1.4 if Fannie Mae holds any mortgage in the Community at the time any Annexable Area is added to the Community, it is furnished with title evidence, in a form satisfactory to it, which discloses any lien, easement or other encumbrance affecting the portion of the Annexable Area to be added to the Community or which will affect such portion after such addition. No amendment may be made to this Section 16.1 without the prior written approval of Declarant. 16.2 OTHER ADDITIONS. Additional real property may be annexed to the Community and brought under the general plan of this Declaration upon the approval by vote or written consent of Members entitled to exercise no less than two-thirds (2/3) of the Association's voting power. 16.3 ADDED AREA RIGHTS AND OBLIGATIONS When a Notice of Addition containing the provisions required by Section 16.4 is Recorded, all provisions in this Declaration will apply to the real property described in such Notice of Addition (the"Added Area') in the same manner as if the real property were originally covered by this Declaration. Thereafter, the rights, powers and responsibilities of the Owners, lessees and occupants of Condominiums in the Added Area, as well as in the property originally subject to this Declaration, will be the same as if the Added Area were originally covered by this Declaration. After the first day of the month following the first Close of Escrow in the Added Area, the Owners of Condominiums in the Added Area shall share in the payment of Assessments to the Association to meet Common Expenses of the Community. Voting rights attributable to the Condominiums in the Added Area may not be exercised until Annual Assessments have commenced on such Condominiums. 3633-120328\CCRS\1210336.3 12/9/14 G-157 16.4 NOTICE OF ADDITION. The additions authorized under Sections 16.1 and 16.2 must be made by Recording a Notice of Addition against the real property to be added to the coverage of this Declaration. The Notice of Addition must (a) reference by instrument number this Declaration and the date of its Recordation, (b) describe with specificity the Added Area, (c) state that this Declaration shall apply to the Added Area and (d) describe the land use designations in the Added Area. The Notice of Addition for any addition under Section 16.1 must be signed by Declarant. The Notice of Addition for any addition under Section 16.1 must be signed by at least two (2) officers of the Association to certify that the Owner approval required under Section 16.1 was obtained. On Recordation of the Notice of Addition, the Added Area will be annexed to and constitute a part of the Community and it will become subject to this Declaration. Subject to Section 16.3, the Owners of Condominiums in the Added Area will automatically acquire Membership in the Association. No Notice of Addition or Supplemental Declaration may revoke the covenants, conditions, restrictions, reservation of easements, or equitable servitudes in this Declaration as the same pertain to the real property originally covered by this Declaration. 16.5 DE -ANNEXATION AND AMENDMENT. In addition to the rights to amend or terminate a Notice of Addition granted elsewhere in this Declaration or in a Notice of Addition, Declarant may also amend a Notice of Addition for purposes other than those described in Section 13.2.7 or delete all or a portion of a Phase from coverage of this Declaration and the Association's jurisdiction so long as Declarant is the owner of all of such Phase and provided that (a) an amending instrument or a Notice of Deletion of Territory, as applicable, is Recorded in the same manner as the applicable Notice of Addition was Recorded, (b) Declarant has not exercised any Association vote concerning any portion of such Phase, (c) Assessments have not yet commenced concerning any portion of such Phase, (d) Close of Escrow has not occurred for the sale of any Condominium in such Phase, and (e) the Association has not made any expenditures or incurred any obligations concerning any portion of such Phase. No amendment may be made to this Section 16.5 without the prior written approval of Declarant. /- [SIGNATURES ON NEXT PAGE] -114_ 3633-120328\CCRS\1210336.3 12/9/14 G-158 [SIGNATURE PAGE TO DECLARATION OF COVENANT$ CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENT This Declaration is dated for identification purposes 12014. TAYLOR MORRISON OF CALIFORNIA, LLC, a California limited liability company C Print Name: Title: Declarant A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On 9 , before me, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) -115_ 3633-120328\CCRS\1210336.3 12/9/14 G-159 EXHIBIT A LEGAL DESCRIPTION OF ANNEXABLE AREA All that certain real property located in the City of Rancho Palos Verdes, Los Angeles County, California, more particularly described as follows: All of Tract No. 71878, as shown on a Subdivision Map, Filed on , 2014, in Book , Pages to inclusive, of Maps, in the Office of the Los Angeles County Recorder, excepting Phase 1 therefrom 3633-120328\CCRS\ 1210336.3 12/9/14 G-160 EXHIBIT B ARTICLES OF INCORPORATION OF THE ASSOCIATION 3633-120328\CCRS\ 1210336.3 12/9/14 G-161 EXHIBIT C BYLAWS OF THE ASSOCIATION I' 3633-120328\CCRSU 210336.3 12/9/14 G-162 EXHIBIT D SPECIFIC MAINTENANCE OBLIGATIONS Component Owner Association Structural Integrity of Condominium Building Roof Maintain per schedule. Foundation Maintain per schedule. Internal Structural Components of Condominium Building Maintain per schedule, including any fire assembly and noise mitigation measures between Unit (does not include any noise mitigating floor covering materials installed in the Unit). Outer Surface of Condominium Building Walls Stucco Maintain per schedule. Siding Maintain per schedule. Surface Finishes Maintain per schedule. Garage Door Maintain indoor surface, maintain door opener and hardware. Maintain door and outdoor hardware per schedule. Unit Entry Door Door Hardware Maintain per schedule. Weatherstripping Maintain per schedule. Frame Maintain per schedule. Replacement of Door Replace per schedule. Outdoor Paint or Other Finish Maintain per schedule. Indoor Paint or Other Finish Maintain. Exclusive Use Areas Patio/Porch/Balcony Sweep floor regularly; keep free of standing water. Maintain slider/French door. Keep free of debris and trash. Maintain surface membrane per schedule. Reapply balcony coating as required. Air Conditioning Compressor Pad Maintain. 3633-120328\CCRS\ 1210336.3 12/9/14 G-163 Component Owner Association Unit systems — Water pressure Maintain systems and appliances in the regulator, water heater, plumbing Owner's Unit; but see also "Plumbing" outlets and fixtures, furnaces, below. ducts, built-in appliances (microwave, range, ovens), electrical wiring and circuit breakers. Forced -air heater in Unit Maintain heater and all ductwork inside the Unit. Telephone wiring exclusively Maintain. serving a Unit. Utility Service Maintain gas lines not serviced by Gas Maintain all utilities serving Company or Association and water and Association Property or more electrical utilities not serviced by provider than one Unit or Association. Interior of Unit Maintain all elements not designated for maintenance by Association. Indoor floor coverings Maintain; Committee to pre -approve in writing replacement floorings and noise mitigating underlayments. Indoor wall surfaces and ceiling Maintain surface, including paint and Maintain shear walls, fire other wall coverings, and patch and repair assembly and any noise damage to drywall. No removal or mitigation measures installed replacement of drywall or ceiling without between walls in the prior written approval of Committee. Condominium Building. Plumbing Immediately report water leaks, sewer Maintain pipes and other backups and overflowing tubs and sinks fixtures serving more than one to the Association. Maintain in -Unit Unit. plumbing fixtures, including sinks, toilets, bath, shower, faucets, sink hardware, and drain lines for washing machine and dishwasher and gas line and vent line (if any) for dryer. Owners and tenants must regularly inspect water supply lines/hoses connected to washing machine, toilets, faucets and dishwasher for leaks and replace when necessary at Owner's expense. Do not leave running faucets or toilets unattended. Owners are also responsible for removing blockages from all drains and sewer lines serving the Unit through laterals to the main line. Owners are responsible for damage to the Unit, to other Units and to Association Property to extent caused by Owner or tenant failure to prevent or stop leaks or overflows in the Unit and for damage caused by 3633-120328\CCRS\ 1210336.3 12/9/14 G-164 Component Owner Association negligent plumbing repairs. Residents who plan to leave the Unit unoccupied for more than 24 hours must shut off water supplies to fixtures and appliances to prevent leaks during their absence. Plumbers hired by Owners must be approved by Association. The Board has the right and power to promulgate Rules and Regulations to supplement or revise the foregoing requirements without having to amend this Declaration. Elevators Maintain elevator, elevator shafts and all components located within the Unit serving the elevator. Cabinets Maintain. Interior doors and hardware Maintain. Appliances Maintain. Fire Sprinklers Keep heads free of dust and debris. Do Maintain per schedule the not obstruct heads nor expose them to pipes, valve, pressure gauges. open flame or high heat sources. Do not Test all systems per schedule. disable heads. Immediately report to Association any damage, leak or malfunction. Electrical Maintain outlets and switch wiring and Maintain wiring and distribution exclusively serving the Unit distribution equipment serving wherever located. Owner shall hire more than one Unit. qualified electrical contractor for all electrical maintenance work. Smoke detector Maintain (including periodic testing and battery replacement). Report malfunction to servicer specified in Maintenance Guidelines. Windows (except sliding glass Maintain and regularly clean indoor and Maintain frame per schedule. doors) outdoor surfaces of glass if accessible. Maintain weatherstripping, caulking, locks, screens, and replace broken glass. Replacement of glass. Sliding Glass Doors Hardware Maintain lock, weather stripping, rollers, screen door (including screen, frame and lock) keep track clear of obstructions. Glass Replace broken glass as necessary. Regularly clean indoor and outdoor surfaces. 3633-120328\CCRS\ 1210336.3 12/9/14 G-165 Component Owner Association Mailbox Replace lost key or broken lock as necessary. Outdoor Lighting Fixtures Controlled by switch in Unit or Relamp as necessary. Maintain fixtures per schedule separately metered to Unit. and wiring. Controlled by switch in Association Maintain fixtures and wiring Property per schedule; relamp as necessary. Private Street Improvements, Maintain Community Walls per Maintain streets and Landscaping, Community Walls requirements of Declaration and landscaping per schedule. Exhibit E. Maintain Community Walls per requirements of Declaration and Exhibit E. Utility Submeter Maintain submeter. Owner responsible If Owner fails to maintain for cost of replacement or repair or submeter, Association shall damage caused by Owner or Owner's have the power to perform Family, tenants or guest. required maintenance and charge the cost thereof to the Owner as a Special Assessment in addition to any other remedies available under law. NOTES: Maintain, capitalized or not, means "maintain, repair and replace." Notwithstanding anything in the Declaration or this exhibit to the contrary, all maintenance by Owners must at least conform to the recommendations in the Maintenance Guidelines. This exhibit is not intended to be an exhaustive list of Association maintenance obligations; it is intended to supplement relevant provisions of the Declaration, the applicable Notice of Addition or Supplemental Declaration, the Maintenance Guidelines, and the Association's latest adopted budget. The phrase "per schedule," when used in connection with Association maintenance obligations, shall mean and refer to maintenance levels and frequencies in the latest adopted Budget; provided, however, that the Association shall not permit any required maintenance to fall below the levels specified in the Maintenance Guidelines (if any are specified for the Improvement). 7 3633-120328\CCRS\ 1210336.3 12/9/14 G-166 EXHIBIT E APPROXIMATE LOCATION OF COMMUNITY WALLS IN PHASE I 3633-120328\CCRS\ 1210336.3 12/9/14 G-167 SUBDIVISION IMPROVEMENT AGREEMENT G-168 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: With a copy to: City of Rancho Palos Verdes Planning, Building and Code Enforcement 30940 Hawthorne Boulevard Rancho Palos Verdes, CA 90275 Attention: City Clerk APN: 7589-013-009 NO FEE REQUIRED PURSUANT TO: Government Code Sections 6103 and 27383 [Space above this line for Recorder's Use Only] SUBDIVISION IMPROVEMENT AGREEMENT 60! FINAL TRACT MAP NO. 71878 ("Final Map" herein) BASED ON TENTATIVE PARCEL MAP NO. 71878 NAME OR TRACT NUMBER OF SUBDIVISION: LEGAL DESCRIPTION OF PROPERTY: NAME AND ADDRESS OF SUBDIVIDER: CITY COUNCIL RESOLUTION OF APPROVAL NO.: IMPROVEMENT PLANS: IMPROVEMENTS: TRACT 71878 — Crestridge Subdivision ("Subdivision" herein) See Exhibit A — Legal Description of Property (the "Property" herein) ("Resolution of Approval" herein) (hereinafter "Improvement Plans," which include all Subdivision specifications.) See Exhibit A -- Schedule of Improvements and Section 1.A below 1 G-169 R6876-0001 11 784564v2. doc ESTIMATED TOTAL COSTS OF IMPROVEMENTS: FORM OF IMPROVEMENT SECURITY: NAME AND ADDRESS OF SURETY: SURETY BOND NUMBERS: EFFECTIVE DATE OF AGREEMENT: PERFORMANCE $ PAYMENT $ WARRANTY $ TOTAL: $ (hereinafter "Estimated Total Costs") [X] Surety bonds [ ] Deposit of money [ ] Other: Performance Bond No.: Payment Bond No.: Warranty Bond No.: 2015 COMPLETION PERIOD: All Improvements of Subdivision shall be completed within two years from the Effective Date of the Agreement (hereinafter, "Completion Period"). G-170 R6876-0001 \1 784564v2.doc TABLE OF CONTENTS Page 1. SUBDIVIDER'S OBLIGATION TO CONSTRUCT IMPROVEMENTS .............................1 2. SOILS TESTING AND REPORT....................................................................................3 3. SPECIFICATIONS FOR IMPROVEMENTS...................................................................4 4. INSPECTION OF WORK AND FINAL ACCEPTANCE...................................................4 5. GUARANTEE AND WARRANTY OF THE IMPROVEMENTS ....................................... 5 6. TIME EXTENSIONS.......................................................................................................5 7. IMPROVEMENT SECURITY..........................................................................................6 8. REDUCTION OR RELEASE OF IMPROVEMENT SECURITY......................................7 9. INDEMNIFICATION OF CITY BY SUBDIVIDER ............................ 10. INSURANCE..............................................................................................................10 11. OWNERSHIP OF THE IMPROVEMENTS................................................................. 16 12. DEFAULT AND BREACH BY THE SUBDIVIDER AND REMEDIES OF THE CITY......................................................................................................................17 13. RELATIONSHIP OF THE PARTIES...........................................................................18 14. ASSIGNMENT............................................................................................................19 15. NOTICES .................................................. ------................................19 16. ENTIRE AGREEMENT...............................................................................................19 17. SEVERABILITY..........................................................................................................20 18. INCORPORATION OF SUBDIVISION REFERENCE DATA AND RECITALS ........... 20 19. GOVERNING LAW; VENUE......................................................................................20 20. COUNTERPARTS......................................................................................................20 21. LIENS................................................................................................... .........20 22. EFFECTIVE DATE OF THE AGREEMENT................................................................20 Exhibit A Legal Description of Property Exhibit B Schedule of Improvements for Crestridge Subdivision Exhibit C Form of Improvement Securities Exhibit D Consent and Subordination Agreement G-171 R6876-000111784564 v2. d oc THIS SUBDIVISION IMPROVEMENT AGREEMENT ("Agreement") is made and entered into by and between the City of Rancho Palos Verdes, a California municipal corporation (the "City"), and the Subdivider whose name and address is set forth above in the Subdivision Reference Data. RECITALS A. Subdivider has presented to the City for approval and recordation a Final Map, identified above in the Subdivision Reference Data, of a proposed subdivision pursuant to the Subdivision Map Act of the State of California and the City's ordinances and regulations relating to the filing, approval and recordation of subdivision maps (collectively referred to herein as the "Subdivision Laws"). B. A tentative tract map of the Subdivision was previously approved by the City, subject to the Subdivision Laws and to the City's standard requirements and conditions of approval contained in the City Council's Resolution of Approval, a copy of which is on file in the Office of the City Clerk and which is incorporated herein by this reference. C. The Subdivision Laws establish, as a condition precedent to the approval of a Final Map, that the Subdivider comply with the City Council's Resolution of Approval and either (i) complete, in compliance with City standards, all of the Improvements and land development work required by the Subdivision Laws and the City Council's Resolution of Approval; or (ii) enter into a secured agreement with the City to complete the Improvements and land development work within a period of time specified by the City. D. In consideration of approval of the Final Map for the Subdivision by the City Council, the Subdivider desires to enter into this Agreement whereby the Subdivider promises to install and complete, at its sole expense, all public and private improvement work required by the City for the proposed Subdivision. The Subdivider has secured this Agreement by improvement security required by the Subdivision Laws and approved by the City, as set forth herein. E. Improvement Plans, as designated above in the Subdivision Reference Data, for the construction, installation and completion of the improvements identified in Exhibit B hereto, have been prepared by the Subdivider, approved by the Director of Public Works or his/her designee (the "Director"), and are on file in the office of the Director. Said Improvement Plans are incorporated herein by this reference. NOW, THEREFORE, in consideration of the approval and recordation by the City Council of the Final Map of the Subdivision, the Subdivider and the City agree as follows: 1. SUBDIVIDER'S OBLIGATION TO CONSTRUCT IMPROVEMENTS A. Subdivider shall, at its sole cost and expense, and in compliance with the provisions of the Subdivision Laws, the Improvement Plans, all Conditions of the Resolution of Approval, and all applicable City standards and fees, and in a good and workmanlike fashion, furnish, construct, install and guarantee and warranty (as set forth in Section 5 of this Agreement) the Improvements generally described in Exhibit B and more -1- R6876-0001 11 784 564v2.doc G-172 specifically described in the tentative map and in the City Council's Resolution of Approval relating thereto (collectively, the "Improvements"). B. To the extent necessary to construct the Improvements, as determined by the Director, the Subdivider shall acquire and dedicate, or pay the cost of acquisition by the City of, all rights-of-way, easements and other interests in real property for the construction or installation of the Improvements, free and clear of all liens and encumbrances. The Subdivider's obligations with regard to the acquisition by the City of off-site rights-of-way, easements and other interests in real property, if any, shall be subject to a separate agreement between the Subdivider and the City. C. Subject to any time extensions granted in accordance with Section 6 of this Agreement, the Subdivider shall complete all Improvements within the Completion Period specified in the Subdivision Reference Data; provided, however, that if the Director reasonably determines in good faith that accelerated construction of the Improvements is essential in order to protect the public health, welfare and safety, the Director shall give Subdivider not less than fifteen (15) business days' prior written notice to commence or accelerate installation and construction of such Improvements, or any portion thereof. The notice shall describe the work to be done by the Subdivider, the time within which the work will commence, the period within which the work will be completed, and the reasons that such early commencement is essential in order to protect the public health, welfare and safety. All or any portions of said Improvements may be required to be commenced and/or completed at a specified time, providing the foregoing criteria are met. If the Subdivider objects to acceleration of the schedule as specified by the Director, the Subdivider may appeal the decision of the Director to the City Council. Any such appeal shall be filed with the City Clerk within ten (10) days after the effective date of the written notice from the Director. D. If the Improvements to be constructed by Subdivider include monumentation, such monumentation shall be installed not later than thirty (30) days after the City's acceptance of all other Improvements pursuant to Section 4 of this Agreement. As used herein, "monumentation" shall mean the setting of survey monuments and tie points in accordance with the Subdivision Laws, and the delivery to the Director of tie notes for said points. E. Subdivider shall, at its sole expense, replace or repair all public improvements, public property, public utility facilities, and surveying or subdivision monuments which are destroyed or damaged as a result of any work under this Agreement or any work related to the Subdivision. Any such replacement or repair shall be subject to the approval of the Director. F. In addition to, and separate from, the indemnity obligations contained in Section 9 of this Agreement, and without limiting the City's remedies under general construction defect law, Subdivider shall be responsible for the care, repair and maintenance of the Improvements, and shall bear all risks of loss or damage to the Improvements, until the later of the following time periods: (i) the category of Improvements as set forth on Exhibit B is accepted by the City; or (ii) the expiration of the required one- year guarantee and warranty period as specified herein; or (iii) the expiration of any applicable period of time specified in any other agreement or obligation imposed on the -z- G-173 R6876-000111784564 v2. d oc Subdivider regarding the Subdivider's obligation to maintain the Improvements. Neither the City, nor its officers, officials, employees, agents or volunteers, shall have any liability for any accident, loss or damage to the Improvements prior to their completion and acceptance by the City. G. In addition to, and separate from: (1) the indemnity obligations contained in Section 9 of this Agreement, (2) the care, repair and maintenance provisions under Subsection F of this Section 1 of this Agreement; and (3) the warranty and guarantee provisions of Section 5 of this Agreement, the Subdivider shall repair and correct, or be liable to the City for any cost to repair and correct, any defect in the construction of the Improvements that is identified by City within ten (10) years after City's acceptance of the Improvement, provided the City provides notice to Subdivider of the existence of the defect within that time period, and the defect is caused directly or indirectly by the design, construction, functionality, installation, assembly or workmanship of the Subdivider. Nothing contained in this Subsection is intended to limit or otherwise waive any right or cause of action under applicable construction defect law that City may assert against the Subdivider. H. The Subdivider shall, at its sole expense, obtain all necessary permits and licenses for the construction and installation of the Improvements, give all necessary notices, and pay all taxes required by law. Additionally, the Subdivider shall pay all fees and costs required by the City's ordinance or resolution, as set forth in the applicable fee ordinance or resolution as adopted by the City Council from time to time, and required for the development of the Subdivision, including but not limited to, building permit fees, final map filing fee, final map plan check fees, final map monumentation fees, grading permit fees, plan check and review fees, encroachment permit fees, and inspection fees. 1. Not less than fifteen (15) days prior to commencement of work on the Improvements, the Subdivider shall give written notice to the Director of the date fixed for such commencement of work so that the Director shall have adequate time to schedule all necessary inspections. J. Subdivider shall provide the City with final Record Drawings of all plans developed for the Subdivision, showing all changes and as built conditions as specified in the Resolution of Approval prior to the acceptance of Improvements and release of bonds or other security. 2. SOILS TESTING AND REPORT A. In the event the Director determines that soil testing is required for the Improvements, the Subdivider shall employ and pay for a Soils Engineer acceptable to the Director of the City and the Soils Engineer shall perform materials testing, construction control testing, interpretation of test results, and design for the Improvements in accordance with the requirements set forth in Improvement Plans, and to the extent applicable, the APWA Standard Plans for Public Works Construction (Southern California Chapter) (popularly known as, and hereinafter, the "Greenbook"), as approved by City. B. The Soils Engineer shall provide the City the reports containing the results of the testing, the interpretation of the results and the Improvement design done in connection with the Improvement Plans and this Agreement. With the last report filed, the G-174 86876-000111784564v2.doc Soils Engineer shall include a certificate that the testing, interpretation, and design have been done properly in accordance with the applicable provisions of the Greenbook, as approved by the City, and good engineering practices. All reports and the certificates shall be mailed or delivered to the City. C. The street portion of the Improvements shall be constructed in accordance with the pavement design, and any modification thereto, that is approved by the Director. 3, SPECIFICATIONS FOR IMPROVEMENTS Subdivider shall construct, at Subdivider's own expense, all of the Improvements in compliance with the drawings, plans and specifications set forth below, which drawings, plans and specifications are incorporated herein by this reference and made a part of this Agreement as though set forth at length herein: Improvement Plans, as designated above in the Subdivision Reference Data, on file in the office of the Director. Consistent with the offers of dedication shown on the Final Map, Subdivider irrevocably offers the public Improvements within City right of way and property, to City for public use_ 4. INSPECTION OF WORK AND FINAL ACCEPTANCE A. Subdivider shall at all times maintain proper facilities and safe access for inspection of the Improvements by the Director and other City personnel and inspection consultants. B. Upon completion of the work on all of the Improvements specified in Exhibit B, the Subdivider may request, in the form of a written letter, a final inspection by the Director. Within forty-five (45) days of receipt of the written letter request, the Director shall inspect the Improvements and provide written notice to Subdivider of the list of items which have been found to be incomplete and the list of items which have been found to be complete. If the Director determines that all of the Improvements have been completed in accordance with this Agreement and in compliance with the Improvement Plans and all applicable City standards, then the Director shall certify that determination in a report to the City Council. If the Improvements that are completed are to be dedicated to or owned by the City, the Director's certification shall be submitted to the City Council for final acceptance by the City, unless such power to accept has been delegated by the City Council to the Director or some other official of the City, in which case the final acceptance shall be subject to the approval of that specified official. If the Improvements that are completed are to be dedicated to or owned by a public entity other than the City, the Subdivider's written request shall be submitted to the applicable public entity or other owner, for final acceptance. Subdivider shall bear all costs of inspection and certification for completeness in accordance with the City's formally adopted fees and rates. C. Acceptance of all of public Improvements by the City Council (or other specified official) shall be made upon recommendation and certification of the Director following inspection of said public Improvements pursuant to Subsection B above. The City Council (or other specified official) shall act upon the Director's recommendation that such public Improvements have been completed within thirty (30) days following certification by -4- G-175 R6876-004111784564 v2, doc the Director. Acceptance by the City Council (or other specified official) of the Improvements, or by the governing body of the entity that is to accept dedication or ownership of all or part of the Improvements, shall not constitute a waiver by the City or such other public entity of any defects in the Improvements. 5. GUARANTEE AND WARRANTY OF THE IMPROVEMENTS A. Within the period commencing on the date all of the Improvements are accepted by the City, if any Improvements or part of any Improvements furnished, installed or constructed by the Subdivider, any of the materials comprising the Improvements, or any of the work performed under this Agreement, fails to comply with any requirements of this Agreement, or the Subdivision Laws, or the Improvement Plans, the Subdivider shall, without delay and without cost to the City, repair, replace or reconstruct any defective or otherwise unsatisfactory part or parts of the Improvements. This guarantee and warranty on behalf of the Subdivider shall be separate from and in addition to the Improvement Security defined and described in Section 7A(3) of this Agreement. B. Should the Subdivider fail or refuse to act promptly or in accordance with Subsection A above, or should the exigencies of the situation require repair, replacement, or reconstruction to be undertaken before the Subdivider can be notified and can perform the necessary work, then the City may, in its discretion, make the necessary repairs or replacements or perform the necessary reconstruction. The City shall provide a bill to the Subdivider of the total costs of such repair, replacement, or reconstruction, and the Subdivider shall immediately reimburse the City for those total costs. if the Subdivider does not immediately pay the total costs incurred, the City may opt to tender on the Subdivider's Improvement Securities as defined in Subsection 7A, and/or take any other lawful actions to recover any nonpayment or deficiency. 6. TIME EXTENSIONS A. Upon a showing by the Subdivider of good cause, the duration of the Completion Period for any or all of the Improvements may be extended by the Director. As used herein, "good cause" may include, without limitation: delay resulting from acts of God or force majeure, strikes, boycotts or similar job actions by employees or labor organizations which prevent the conduct of the work; acts or failure to act by the California Coastal Commission, including any order thereof; findings made by a governmental entity that the site of a particular Improvement is of archeological significance; actions or failure to act by the native American monitors(s); and the order of any court or the City. B. A time extension may be granted without notice to any surety or sureties of the Subdivider and shall not affect the validity of this Agreement nor release the surety or sureties on any bond given as an Improvement Security pursuant to this Agreement. C. As a condition of any time extension provided for herein, the Director may require the Subdivider to furnish new or modified Improvement Security guaranteeing performance of this Agreement, as extended, in an increased amount as necessary to compensate for any projected increase in the Estimated Total Costs, as determined by the Director. G-176 R6876-000111784 5642. doc 7. IMPROVEMENT SECURITY A. Prior to the City's execution of this Agreement, the Subdivider shall provide as security to the City the following (collectively, "Improvement Securities" and individually, an "Improvement Security"): 1. For Performance: Performance Security in an amount equal to one hundred percent (100%) of the Estimated Total Costs, as set forth in the Subdivision Reference Data. With this Performance Security, the Subdivider assures faithful performance under this Agreement, as demonstrated by the City's acceptance, in accordance with the Resolution of Approval and Improvement Plans. 2. For Payment: Payment Security in an amount equal to one hundred percent (100%) of the Estimated Total Costs, as set forth in the Subdivision Reference Data. With this Payment Security, the Subdivider guarantees payment to all contractors, subcontractors, laborers, material suppliers, and other persons employed in the performance of the agreement and referred to in Part 6 (commencing with Section 5000) of Division 4 of the California Civil Code. 3. For Warranty: Warranty Security in an amount equal to one hundred percent (100%) of the Estimated Total Costs, as set forth in the Subdivision Reference Data, must be provided before final completion and the acceptance of any category of Improvements by the City. With this Warranty Security, the Subdivider guarantees the Improvements for one (1) year after the completion and acceptance of the last of such Improvements, against any defective workmanship or materials or any unsatisfactory performance, pursuant to Section 5 hereof. B. Each Improvement Security shall be a bond issued by a California admitted surety insurer or insurers having a Best rating of A or AA in substantially the form set forth in Exhibit C, attached to this Agreement and incorporated by this reference, and shall be subject to the approval and acceptance by the City Attorney and the City Council. If, in the opinion of the City, any surety or sureties thereon (i) become insolvent or liquidated, or any bond cannot be tendered upon for the full penal sum for any reason; (ii) the surety's bond rating is downgraded; (iii) the surety declares bankruptcy; or (iv) the surety is no longer deemed to be an admitted surety in California by the California Department of Insurance, the Subdivider shall renew or replace any such surety bond with a valid surety bond from a solvent surety or sureties in the amount of the full penal sum within thirty (30) days after receiving from City written demand therefor. C. Each Improvement Security shall be kept on file with the City Clerk. if a surety bond is replaced by another approved bond, the Subdivider shall submit the replacement bond to the City Clerk, and upon acceptance by the City Attorney, the replacement Improvement Security shall be deemed to have been made a part of and incorporated into this Agreement. Upon approval by the City Attorney of a replacement bond, the former Improvement Security shall be released. D. The Subdivider shall automatically increase the amount of each Improvement Security by an amount equal to ten percent (10 %) of the deposited security every year, subject to the provision that the Director may at any time determine that a M R6876 -000111784564v 2. d oc G-177 greater increase in the amount of the Improvement Security is necessary due to a greater increase in the cost of construction of the Improvements or any of them. In such event, the Subdivider shall provide the additional Improvement Security within thirty (30) days after receiving demand and justification therefor. E. Modifications of the Improvement Plans and the Improvements, not exceeding ten percent (10%) of the original Estimated Total Costs, shall not relieve or release any Improvement Security furnished by Subdivider pursuant to this Agreement. If any such modifications exceed ten percent (10%) of the Estimated Total Costs, Subdivider shall furnish additional Improvement Securities for performance, payment, and guarantee as required by Subsection A above, for one hundred percent (100%) of the revised Estimated Total Cost of the Improvements. Alternatively, the Subdivider may provide official notice from the surety company that it acknowledges receipt of the modified Improvement Plans and that the existing bonds have been amended to reflect the new penal sum, which shall be in the amount of the revised Estimated Total Costs, and that the existing bonds shall therefore apply to warrant the Project as revised. F. All Improvements shall be completed within the Completion Period listed in the Subdivision Reference Data. Subject to any time extensions granted in accordance with Section 6 herein, if the Subdivider has not completed the Improvements within this specified time, the Subdivider shall be in default. G. Alternatively, in the event of a default by the Subdivider pursuant to Section 12, and after written notice to Subdivider and reasonable opportunity to cure, the City, at its sole option, shall have the right, without limiting any other rights and remedies available to the City at law or in equity, to draw upon or utilize any or all Improvement Securities furnished herewith to construct and install the Improvements itself. 8. REDUCTION OR RELEASE OF IMPROVEMENT SECURITY A. Performance Security shall be released in full upon the occurrence of both of the following: 1. All "Public Improvements" (improvements that are to be owned or dedicated to the City or other public entity as distinguished from those owned by individual property owners or a private community association) shall be first completed, certified completed by the Director and then accepted as complete by the City Council. 2. All private improvements (improvements that are to be owned by individual property owners or a private community association and not dedicated or owned by the City or other public entity) shall be first completed and then certified as complete by the Director. B. Partial releases or reductions in the Subdivider's Performance Security may be authorized prior to the City's acceptance of all Improvements required hereunder, as follows: 1. At the time that the Subdivider believes that the obligation to perform the work for which security was required is complete, the Subdivider may notify the G-178 R6876-060111784564v2.doc City in writing of the completed work, including a list of work completed. Upon receipt of the written notice, the Director shall review and comment or approve the completion of the required work within 45 days. if the Director does not agree that all work has been completed in accordance with the plans and specifications for the improvements, the Director shall supply a list of all remaining work to be completed within this 45 -day period. 2. Within 45 days of receipt of the list of remaining work from the Director, the Subdivider may then provide cost estimates for all remaining work for review and approval by the Director. Upon receipt of the cost estimates, the Director shall then have 45 days to review, comment, and approve, modify, or disapprove those cost estimates. The City shall not be required to engage in this process of partial release more than once between the start of work and completion and acceptance of all work; however, nothing in this section prohibits the City from allowing for a partial release as the Director otherwise deems appropriate. 3. If the Director approves the cost estimate, the Director shall release all Performance Security except for security in an amount up to two hundred percent (200%) of the cost estimate of the remaining work. The process allowing for a partial release of Performance Security shall occur when the cost estimate of the remaining work does not exceed 20 percent of the total original Performance Security unless the Director allows for a release at an earlier time. Substitute bonds or other security may be used as a replacement for the Performance Security, subject to the approval of the Director. If substitute bonds or other security is used as a replacement for the Performance Security released, the release shall not be effective unless and until the Director receives and approves that form of replacement security. A reduction in the Performance Security, authorized under this section, is not, and shall not be deemed to be, an acceptance by the City of the completed improvements, and the risk of loss or damage to the improvements and the obligation to maintain the improvements shall remain the sole responsibility of the Subdivider until all required Public improvements have been accepted by the City and all other required improvements have been fully completed in accordance with the plans and specifications for the Improvements. 4. The Subdivider shall complete the works of improvement until all items are accepted by the City. 5. Upon the completion of the work on all of the Improvements specified in Exhibit B, the Subdivider, or his or her assigns, shall request in writing a final inspection in accordance with Subsection 4B, and within forty-five (45) days of the Director's certification that the project is complete, the release of any remaining performance security shall be placed upon the agenda of the City Council for approval of the release of any remaining performance security. C. Payment Security shall, after passage of the time within which claims of lien are required to be recorded pursuant to Part 6 (commencing with Section 8000) of Division 4 of the California Civil Code and after acceptance of the work, be reduced to an amount equal to the total claimed by all claimants for whom claims of lien have been recorded and notice thereof given in writing to the City Council, and if no claims have been recorded, the security shall be released in full. I. R6876-0001\1 784564v2.doc G-179 D. The partial release provisions of this Section 8 shall not apply to any required guarantee and warranty period required by Section 66499.9 of the California Government Code for the guarantee or warranty nor to the amount of the Warranty Security deemed necessary by the City for the guarantee and warranty period nor to costs and reasonable expenses and fees, including reasonable attorneys' fees. Security furnished to guarantee and warrant the Improvements against any defective work or labor done or defective materials furnished, shall be released within sixty (60) days after the completion of the one-year period following completion and acceptance of all Improvements. E. If Subdivider's obligations relating to any Improvements are subject to the approval of another governmental agency, the City shall not release the improvement Performance Security therefor until the obligations are performed to the satisfaction of such other governmental agency. Such agency shall have two (2) months after the Subdivider's performance of the obligation to register its satisfaction or dissatisfaction. If at the end of that period it has not registered its satisfaction or dissatisfaction, it shall be conclusively deemed that the Subdivider's performance of the obligation was done to its satisfaction, and such Improvement Security shall be promptly released. F. In the event the time periods for action by the City or other governmental agency specified in this Section conflict with a shorter or longer time period for such actions as provided in California Government Code Section 66499.7 or 66499.8, the time periods in Government Code Section 66499.7 and 66499.8 shall control. 9. INDEMNIFICATION OF CITY BY SUBDIVIDER A. Neither the City, nor its officers, officials, employees, agents and volunteers (collectively, "City Personnel"), shall be liable or responsible for any accident, injury, loss or damage to either property or person attributable to or arising out of the construction, functionality, installation, assembly or improper maintenance, including, without limitation, the use of defective or inferior methods, materials, workmanship, or design (collectively, "Subdivider's Faults"), of the Improvements by Subdivider, its officers, employees, contractors, subcontractors and agents. Subdivider shall indemnify, hold harmless and defend the City and City Personnel from and against any and all losses, claims, costs, expenses, liabilities, damages, actions, causes of action and judgments, including attorneys' fees, arising directly or indirectly out of or attributable to Subdivider's Faults, including Subdivider's acts or failure to act. B. Subdivider's obligations under this Section 9 are not conditioned or dependent upon whether the City, or City Personnel, prepared, supplied or reviewed any Improvement Plans in connection with the Subdivision or the Improvements, or has insurance or other indemnification covering any of these matters. C. Subdivider's obligation to indemnify, hold harmless and defend the City and City Personnel shall extend to injuries to persons and damages to or alleged taking of property resulting from the Subdivider's Faults, including without limitation, design or construction of the Subdivision, and the Improvements required herein, and shall likewise extend to claims asserted by adjacent property owners based upon the diversion of waters caused by the Subdivider's design or construction of Improvements. Except for a City Directive as defined below, the City's acceptance of the Improvements shall not constitute G-180 R6876-0001117845642. doc an assumption by the City of any responsibility or liability for any damage or alleged taking of property referenced herein. The City shall not be responsible or liable for the design or construction of the Subdivision or the Improvements constructed or installed pursuant to the approved Improvement Plans or the Final Map, regardless of any act or omission by the City in approving the improvement Pians or the Final Map, unless the particular Improvement design was required by the City over the written objection of the Subdivider, which objection stated that the improvement design was potentially dangerous or defective and set forth an alternative design (a "City Directive"). After the City's acceptance of the Improvements, the Subdivider shall remain obligated to correct or eliminate all dangerous conditions created by defects in design or construction or Subdivider's Faults (other than those required by a City Directive). The Subdivider's indemnity obligations hereunder shall remain in effect for ten (10) years following acceptance of the respective Improvement(s) by the City Council. Subdivider acknowledges and agrees that Subdivider shall be responsible and liable for the Subdivider's Faults with respect to the Improvements and other work done pursuant to this Agreement, unless the same is due to a City Directive. The City shall not be liable for any acts or omissions in approving, reviewing, checking, correcting or modifying any Improvement Plans, or in inspecting, reviewing or approving any work or construction of Improvements, unless the same is due to a City Directive. The Subdivider's Improvement Security shall not be required to secure the Subdivider's obligations under this Subsection C beyond the one-year guarantee and warranty period set forth in Subsection 7(A)(3) of this Agreement. D. Subdivider shall pay and satisfy any judgment, award or decree that may be rendered against City and City Personnel to the extent of the indemnity provided above, in any such suit, action, or other legal proceeding, provided the City gives the Subdivider prompt written notice of such claim. E. Subdivider's obligation to indemnify shall not be restricted to Insurance proceeds, if any, received by the City and City Personnel. F. Subdivider, on behalf of itself and all parties claiming under or through it, hereby waives all rights of subrogation and contribution against the City and City Personnel to the extent of the indemnity above provided. 10. INSURANCE A. The following coverages shall be obtained and maintained by Subdivider on behalf of City and in accordance with the requirements set forth herein. If Subdivider performs construction activities through a general contractor, some or all of these insurance requirements for the period of construction may be satisfied by the general contractor's insurance coverages. In such case, Subdivider shall maintain during this same construction period, and after the construction period, the coverages shown below as "Insurance After Construction." In addition, Subdivider may elect to obtain, for all or any portion of the Project, an "Owner -Controlled Wrap Up" insurance policy in satisfaction of the insurance requirements for general contractors and subcontractors provided it satisfies all of the insurance requirements below for general contractors and subcontractors. Throughout these specifications, the word "Subdivider" refers to the Party responsible to provide the coverages as specified and, depending on context, may refer either to Subdivider or to a G-181 R6876-0001 \1 784 564 v2.doc separate General Contractor. Subdivider may satisfy insurance requirements contained herein by Subdivider's master insurance policies covering other operations and locations. B. Insurance During Construction Subdivider shall obtain and maintain the following insurance during construction of the Improvements. Insurance requirements may be met through insurance provided by Subdivider's General Contractor: Commercial General Liabilitv Insurance Commercial General Liability Insurance (primary) shall be provided on Insurance Services Offices ("ISO") ISO -CGL Form No. CG 00 01 or equivalent coverage, including provisions for defense of additional insureds. Policy limits shall be no less than one million dollars ($1,000,000) per occurrence for all coverages and two million dollars ($2,000,000) general aggregate. City and City Personnel shall be added as additional insureds using ISO Form CG 20 10 11 85, or other revision of the CG 20 10 form if available from the insurer and reasonably acceptable to the City, not limiting coverage for the additional insured to "ongoing operations" or in any way excluding coverage for completed operations. Coverage shall apply on a primary non-contributing basis in relation to any other insurance or self- insurance, primary or excess, available to City or any City Personnel. Coverage shall not be limited to the vicarious liability or supervisory role of any additional insured. Coverage shall contain no contractors' limitation or other endorsement limiting the scope of coverage for liability arising from pollution, explosion, collapse, or underground property damage. 2. Umbrella Liability Insurance Umbrella Liability Insurance (or, at Subdivider's election, Excess Liability Insurance) (over primary) shall apply to bodily injury/property damage, personal injuryladvertising injury, at a minimum. Coverage shall be at least as broad as any underlying coverage. There shall be no cross liability exclusion and no contractor's limitation endorsement. Policy limits shall be not less than five million dollars ($5,000,000) per occurrence and in the aggregate, including any limits required in the underlying policies. The policy shall have a starting date no later than and an ending date no earlier than those of the underlying coverages. The Named Insured (Subdivider or General Contractor as appropriate) may determine the layering of primary and excess liability insurance provided that if such layering differs from that described here, the actual coverage program meets the minimum total required limits and complies with all other requirements listed here. 3. Business Auto Coverage Business Auto Coverage shall be written on ISO Business Auto Coverage Form CA 00 01 or the equivalent, including symbol (1) (any Auto). if Subdivider (or Contractor) does not own any vehicles, this requirement may be satisfied by a non -owned vehicle endorsement to the general and umbrella liability policies. Limits shall be no less than one million dollars per accident. This policy shall be scheduled as underlying insurance to the umbrella policy required above for a total limit of no less than five million dollars ($5,000,000) each accident. -11- 86876-0001\1784564v2. doc G-182 4. Workers' Compensation/Employer's Liability Workers' Compensation/Employer's Liability shall provide workers' compensation statutory benefits as required by law. Employer's liability limits shall be no less than one million dollars ($1,000,000) per accident or disease. Employer's liability coverage shall be scheduled under the umbrella or excess liability policy described above. This policy shall be endorsed to waive any right of subrogation with respect to City, its officers, employees or agents. 5. Builder's Risk Insurance Builder's Risk Insurance covering all real and personal property for "all risks" of loss or "comprehensive perils" coverage including but not limited to the perils of earth movement, including earthquake (if required by Subdivider's lender or if available at commercially reasonable rates) and flood for all Improvements. C. Insurance After Construction Upon completion of construction of the Improvements, and for the required guarantee and warranty period (unless such longer period of time is specified herein), Subdivider at Subdivider's expense shall obtain and maintain or cause to be maintained the following insurance: Commercial Property Insurance Commercial Property Insurance covering the Improvements. Coverage shall be at least as broad as the IS© broad causes of loss form CP 10 20, and reasonably approved of in writing by the City. Coverage shall be sufficient to insure 100% of the replacement value and there shall be no coinsurance provisions. The policy shall include an inflation guard endorsement, 100% rents coverage, contents coverage, coverage for personal property of others, ordinance or law and increased cost of construction coverage. Subdivider also agrees to provide builder's all-risk insurance using an inland marine form during the period of any major alteration or improvement, using the broadest form available. This requirement may be satisfied through a combination Builders' Risk and Property Insurance master policy at Subdivider's option. The insurance coverage for the peril of earthquake required for this project is subject to availability on the open market at commercially reasonable premium cost, as determined by mutual agreement between Subdivider and City. If such earthquake insurance coverage should, after diligent effort be Subdivider, be unobtainable at such mutually determined commercially reasonable premium cost, then Subdivider shall obtain the maximum insurance reasonably obtainable at commercially reasonable premium cost (if any) and give notice to City of the extent of Subdivider's inability to obtain, in full, the required insurance, and in such event, Subdivider's obligation to procure and maintain such insurance as unobtainable shall be excused. Subdivider and City agree that a premium cost of earthquake insurance coverage of up to 150% of the premium cost paid by Subdivider for such coverage on the Effective Date (to be adjusted over time based on the Consumer Price Index,) shall constitute a commercially reasonable premium cost. Non-availability at commercially reasonable premium cost must be documented by a letter from Subdivider's _12.. G-183 R6876-000111784564 vZdoc insurance broker or agent indicating a good faith effort to place the required insurance and showing, at a minimum, the names of the insurance carriers and the declinations or quotations received from each. 2. Commercial General Liability Insurance Commercial General Liability Insurance (primary) shall be provided on ISO -CGL form No. CG 00 01 or equivalent coverage, including provisions for defense of additional insureds. Policy limits shall be no less than one million dollars ($1,000,000) per occurrence for all coverages and two million dollars general aggregate. City and City Personnel shall be added as additional insureds using ISO Form CG 20 10 11 85, or other revision of the CG 20 10 form if available from the insurer and reasonably acceptable to the City, not limiting coverage for the additional insured to "ongoing operations" or in any way excluding coverage for completed operations. Coverage shall apply on a primary non-contributing basis in relation to any other insurance or self-insurance, primary or excess, available to City or any City Personnel. 3. Umbrella Liability Insurance Umbrella Liability Insurance (or, at Subdivider's election, Excess Liability Insurance) (over primary) shall apply to bodily injury/property damage, personal injuryladvertising injury, at a minimum. Coverage shall be at least as broad as any underlying coverage. Coverage shall be provided on a "pay on behalf' basis. There shall be no cross liability exclusion. Policy limits shall be not less than five million dollars ($5,000,000) per occurrence and in the aggregate, including any limits required in the underlying policies. The policy shall have a starting date no later than and an ending date no earlier than those of the underlying coverages. Subdivider may determine the layering of primary and excess liability insurance provided that if such layering differs from that described here, the actual coverage program meets the minimum total required limits. 4. Workers Compensation Insurance Workers' Compensation/Employer's Liability shall provide workers' compensation statutory benefits as required by law. Employer's liability limits shall be no less than one million dollars ($1,000,000) per accident or disease. Employer's liability coverage shall be scheduled under any umbrella or excess liability policy described above. Unless otherwise agreed, this policy shall be endorsed to waive any right of subrogation as respects City, its employees or agents. 5. Business Auto Coverage Business Auto Coverage for vehicles owned, operated or maintained in any way connected with the project, shall be written on ISO Business Auto Coverage form CA 00 01 or the equivalent, including symbol (1) (any Auto). If Subdivider (or Contractor) does not own any vehicles, this requirement may be satisfied by a non -owned vehicle endorsement to the general and umbrella liability policies. Limits shall be no less than one million dollars ($1,000,000) per accident. This policy shall be scheduled as underlying insurance to the umbrella or excess liability policy required above for a total limit of no less than five million dollars ($5,000,000) each accident. -13- G-184 R6876-000111784664v2.doe D. Provisions Pertaining to Insurance Provided by Subdivider 1. All insurance coverage and limits provided pursuant to this Agreement shall apply to the full extent of the policies involved, available or applicable. Nothing contained in this Agreement or any other agreement relating to City or its operations limits the application of such insurance coverage. 2. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only and is not intended by any Party to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. 3. All general or auto liability insurance coverage provided pursuant to this Agreement, or any other agreements pertaining to the performance of this Agreement, shall not prohibit Subdivider, and Subdivider's employees, or agents, from waiving the right of subrogation prior to a loss. Subdivider waives its right of subrogation against City. 4. None of the policies required herein shall be in compliance with these requirements if they include any limiting endorsement that has not been first submitted to City and approved in writing by the City. 5. Unless otherwise approved by City, Subdivider's insurance and insurance provided by any contractor or subcontractor relating to the construction of the Improvements shall be written by insurers authorized to do business in the State of California and with a minimum "Best's" Insurance Guide rating of at least "A -:VII." Self- insurance will not comply with these insurance specifications unless expressly approved in writing by the City. 6. In the event any policy of insurance required under this Agreement does not comply with these requirements and Subdivider does not cure the non- compliance within thirty (30) days after written notice from City (or Subdivider does not provide reasonable evidence of such cure within such period), or if the insurance is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Subdivider. 7. Subdivider agrees to provide evidence of the insurance required herein, satisfactory to City, consisting of certificate(s) of insurance evidencing all of the coverages required and an additional insured endorsement to Subdivider's general liability policies using ISO Form CG 20 10 11 85 or other revision of the CG 20 10 form if available from the insurer and reasonably acceptable to the City. Certificate(s) are to reflect that the insurer will provide 30 days notice of any cancellation of coverage and policies are to have a "cancellation endorsement" to the same effect. Subdivider agrees to provide complete certified copies of all required insurance policies, including without limitation, any endorsements modifying coverage in any way, upon request from City. 8. Subdivider shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced -14- R6876-0001 \1 784564v2.doc G-185 with other policies providing at least the same coverage. Such evidence shall be in the form of a certificate of insurance. 9. Any actual or alleged failure on the part of City or any other additional insured under these requirements to obtain proof of insurance required under this Agreement in no way waives any right or remedy of City or any additional insured, in this or any other regard. 10. Subdivider agrees to require all subcontractors or other parties (but not including a general contractor) hired for this project to construct the Improvements to purchase and maintain insurance for general liability (minimum limit $1,000,000 per occurrence), automobile liability ($1,000,000 per accident) and workers' compensation (statutory benefits). The requirement for general liability may be satisfied by Subdivider through the procurement of an OCIP policies covering some or all of the subcontractors. Prior to the issuance of the Certificate of Completion for each Phase, Subdivider shall, upon request by City, provide the City with copies of all insurance policies, certificates and endorsements related to such Phase. 11. Subdivider agrees to monitor and review all coverage required by this Section and assumes all responsibility for ensuring that such coverage is provided as required here. Subdivider agrees to obtain certificates evidencing such coverage. Subdivider agrees that upon request, all agreements with subcontractors or others with whom Subdivider contracts with on behalf of City, and all certificates of insurance obtained in compliance with this Section will be submitted to City for review upon request by City. Failure of City to request copies of such documents will not impose any liability on City, or its employees. 12. Subdivider agrees to require that no contract used by any general contractor or subcontractor in connection with construction of the Improvements, or contracts Subdivider enters into on behalf of City, will reserve the right to charge back to City the cost of insurance required by this Agreement. 13. Where appropriate (such as in the case of automobile insurance coverages), coverage will not be limited to the specific location designated as the Property. 14. Subdivider agrees to provide notice to City of any claim or loss against Subdivider that includes City as a defendant promptly after Subdivider receives written notice or obtains knowledge thereof. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. City agrees to provide similar notice to Subdivider of any such claims it is notified of respecting the Property. 15. Subdivider agrees not to attempt to avoid its defense and indemnity obligations to City, and City Personnel by using as a defense Subdivider's statutory immunity under workers' compensation and similar statutes. 16. Subdivider agrees to ensure that coverage provided to meet these requirements is applicable separately to each insured and that there will be no cross G-186 R6876-000111784564 v2.doc liability exclusions that preclude coverage for suits between Subdivider and City or between City and any other insured or Named Insured under the policy, or between City and any Party associated with City or its employees. 17. If Subdivider or any contractor or subcontractor is a Limited Liability Company, general liability coverage must apply so that the Limited Liability Company and its Managers, Members, Affiliates, and their employees are insureds. 18. Subdivider shall require General Contractor to maintain commercial general liability, and if necessary, commercial umbrella liability insurance with a limit of not less than five million dollars ($5,000,000) for each occurrence, until the warranty period specified in this Agreement expires. 19. Subdivider agrees to obtain and provide to City evidence of professional liability coverage for Architects, Engineers or other design professionals working on the Improvements. The limit of liability required is subject to City approval, but in no event to be less than $1 million per claim and in the aggregate, and Subdivider shall use reasonable efforts to require and cause such professionals to maintain such coverage with respect to each occurrence for at least three years following substantial completion of the work and, in the event Subdivider is unable to do so, Subdivider shall promptly inform the City of the scope of such efforts and the reasons that it was unable to do so. If Subdivider requests that the City approve a lower limit for any particular design professional Subdivider seeks to employ on the Improvements, City will evaluate each such request based on City's perception of liability exposure associated with the work that would be performed by that design professional. 20. To the extent a particular coverage or policy form or specification is not reasonably available from Subdivider's insurer or would result in an additional premium that is extraordinary or unreasonably disproportionate to the premium for the policy as a whole, then Subdivider shall provide substantially similar coverage reasonably acceptable to City for which the cost is not extraordinary or unreasonably disproportionate. A. Ownership of all or any category of the Improvements constructed and installed by the Subdivider pursuant to this Agreement and shown on the Map to be dedicated to the public shall vest, as applicable, in the City (or other specified governmental agency) upon acceptance of said Improvements by the City Council (or other specified governmental agency). The acceptance of the Improvements shall either be shown by a certificate on the Final Map or by subsequent resolution accepting the Improvements adopted by the City Council pursuant to Government Code Section 66477.2 and recorded with the County Recorder. B. The Subdivider shall at all times prior to the acceptance of the Improvements by the City, give good and adequate warning to the public of each and every dangerous and defective condition caused by the construction of the Improvements and shall take all steps necessary to protect the public from such dangerous or defective conditions. The Subdivider agrees and understands that until acceptance of the -�6- G-187 R6876-0001\1 7 84 564v2.doc Improvements by the City, each Improvement that is offered for dedication shall be under the charge of the Subdivider, and the Subdivider may close all or a portion of any street or area whenever necessary to protect the public during the construction of the Improvements. 12. DEFAULT AND BREACH BY THE SUBDIVIDER AND REMEDIES OF THE CITY A. Upon the occurrence of any of the following events, the Subdivider shall be deemed to be in default under this Agreement: 1. Subject to any time extensions granted in accordance with Section 6 of this Agreement, failure to complete construction and installation of the Improvements or any of them by the Completion Date; 2. Failure to promptly correct or cure any defect in the Improvements or any of them (other than a City Directive) during the guarantee and warranty period required by Subsection 5(A) of this Agreement, or failure to commence correction or cure of any such defect or failure to diligently prosecute same to completion, in each instance following written notice that such defect exists; 3. Subject to any time extensions granted in accordance with Section 6 of this Agreement, failure to perform substantial work on the Improvements or on any of them, after commencement of work on same, for a period of thirty (30) days after written notice thereof from the City; 4. Insolvency, appointment of a receiver, or the filing of any petition in bankruptcy, whether voluntary or involuntary, and such is not cured or discharged within a period of thirty (30) days; 5. Commencement of a foreclosure action against the Subdivision or any portion thereof, or any conveyance by the Subdivider in lieu or in avoidance of foreclosure, within thirty (30) days after written notice thereof from the City; or 6. Failure to perform any other obligations in accordance with the terms and provisions of this Agreement within the time period specified in the Agreement for the performance of that obligation, or if no time is specified, within thirty (30) days after written notice thereof from the City. B. The City reserves to itself all remedies available to it at law or in equity for any breach of the Subdivider's obligations under this Agreement. After written notice to the Subdivider of alleged default and failure by the Subdivider, and failure by Subdivider to promptly commence the cure of any alleged default and diligently prosecute such cure to completion, the City shall have the right, without limitation of other rights or remedies, to tender against, draw upon or utilize any or all Improvement Securities furnished hereunder to complete the Improvements, or request said surety take over and complete the Improvements, or otherwise mitigate the City's damages in the event of the Subdivider's default. G-188 86876-000119 784564v2. d oc C. The Subdivider acknowledges that the Estimated Total Costs and Improvement Security amounts set forth herein may not reflect the actual cost of construction or installation of the Improvements, and, consequently, the City's damages for Subdivider's default shall be measured by the actual cost of completing the required Improvements. If the damages incurred by the City in taking over and completing the Improvements exceeds the principal amount of the improvement security, then the Subdivider shall reimburse the City in the amount of such excess damages. D. Following the written notice of alleged default and failure by the Subdivider to promptly commence the cure of any alleged default and to diligently prosecute such cure to completion, the City may, without liability for so doing, take possession of, and utilize in completing the Improvements, such materials, appliances, plant and other property belonging to the Subdivider as may be on the site of the work and necessary for the performance of the work. The Subdivider hereby consents to such entry by the City and its representatives, including employees, agents, and contractors, upon any real property in the Subdivision owned by the Subdivider or by any assignee of this Agreement, in the event the City elects to maintain or complete the work on the Improvements following the Subdivider's default. E. The Subdivider acknowledges and agrees that, upon approval of the Final Map for the Subdivision, the City will confer substantial rights upon the Subdivider, including the right to sell, lease or finance lots within the Subdivision, and that such approval constitutes the final act necessary to permit the division of land within the Subdivision. As a result, the City will be damaged to the extent of the cost of construction or installation of the Improvements upon Subdivider's failure to perform its obligations under this Agreement, which failure is not promptly remedied by sureties or by the Subdivider. F. The City's failure to take an enforcement action with respect to a default, or to declare a default or breach, shall not be construed as a waiver of that default or breach or any subsequent default or breach of the Subdivider. G. If any legal action or other proceeding, including action for declaratory relief, is brought for the enforcement of this Agreement or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, experts' fees, and other costs, in addition to any other relief to which the party may be entitled. If City sues to compel Subdivider's performance of this Agreement, or to recover damages or costs incurred in completing or maintaining the work on the Improvements, Subdivider agrees to pay all attorneys' fees and other costs and expenses of litigation incurred by the City in connection therewith, even if Subdivider subsequently resumes and completes the work. 13. RELATIONSHIP OF THE PARTIES Neither the Subdivider, nor any of the Subdivider's contractors, subcontractors, employees or agents, are or shall be deemed to be, agents of the City in connection with the performance of the Subdivider's obligations under this Agreement. The Subdivider shall not, at any time or in any manner, represent or allow representation by its contractors, subcontractors, employees or agents that any of them are contractors, subcontractors, employees or agents of the City. G-189 R6876-0001\17845642_doc 14. ASSIGNMENT A. Subdivider shall not assign this Agreement, or any portion thereof without the prior written consent of the City. Any attempted or purported assignment in violation of this Subsection A shall be null and void and shall have no force or effect. B. The sale or other disposition of the Subdivision shall not relieve the Subdivider of its obligations hereunder. If the Subdivider intends to sell the entire Subdivision to any other person or entity, the Subdivider may request a novation of this Agreement and a substitution of Improvement Securities. Upon the City's approval of the novation and substitution of Improvement Securities, the Subdivider may request a release or reduction of the Improvement Securities furnished pursuant to this Agreement. 15. NOTICES All notices required or provided for in this Agreement shall be in writing and delivered in person or be given by certified United States Mail, return receipt requested, or by nationally recognized overnight courier, addressed as follows: If to the City: City of Rancho Palos Verdes 30940 Hawthorne Boulevard Rancho Palos Verdes, CA 90275 Attn: City Manager With a copy to: Richards, Watson & Gershon 355 South Grand Avenue, 40th Floor Los Angeles, California 90071-3101 Attn: Carol Lynch, Esq. If to the Subdivider: To the address set forth above in the Subdivision Reference Data, or to such other address as may subsequently be designated in written notice to the City. Notice shall be effective on the date that it is delivered in person, or, if sent by certified mail, shall be deemed effective on the date of delivery or attempted delivery shown on the return receipt, and notices given by overnight courier shall be deemed effective one (1) business day following delivery to the overnight courier. Any party may change its address for the service of notice by giving written notice of such change to the other party, as specified herein. 16. ENTIRE AGREEMENT This Agreement, along with the conditions of approval and mitigation measures that were imposed previously by the City, constitutes a single, integrated written contract, expresses the entire agreement of the parties with respect to its subject matter, supersedes all negotiations, prior discussions and preliminary agreements. All modifications, amendments, or waivers of any terms of this Agreement shall be in writing and signed by the duly authorized representatives of the parties. In the case of the City, the duly authorized representative, unless otherwise specified herein, shall be the Director. -19- G-190 R6876-0001 N1784564v2.d oc WA&IAW: 17.r:31aM The provisions of this Agreement are severable. If any portion of this Agreement is held invalid by a court of competent jurisdiction, the remainder of the Agreement shall remain in full force and effect. 18. INCORPORATION OF SUBDIVISION REFERENCE DATA AND RECITALS The Subdivision Reference Data, the Recitals, and Exhibits A and B, are attached hereto and incorporated into this Agreement. 19. GOVERNING LAW; VENUE This Agreement shall be governed by the domestic laws of the State of California, without regard to its laws regarding choice of applicable law. Venue for any action relating to this Agreement shall be in the Los Angeles County Superior Court. 20. COUNTERPARTS This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement. 21. LIENS Subdivider represents and warrants that Subdivider owns the Property, and that there are no encumbrances on the Property that would prohibit or interfere with this Agreement or the rights granted to City hereunder, and that there are no monetary liens (except for property taxes and assessments not yet delinquent) affecting the Property except for (a) that certain deed of trust dated , recorded , in the office of the County Recorder of the County of Los Angeles, California, as document number executed by as trustor, in favor of , as beneficiary; and (b) that certain deed of trust dated recorded , in the office of the County Recorder of the County of Los Angeles, California as document number , executed by as trustor, in favor of , as beneficiary. Subdivider has obtained from each such beneficiary a consent and subordination in the form attached hereto as Exhibit D, duly executed by such lien holder and acknowledged, and has delivered it to the City for recordation. Final Map No.71878 shall not be recorded until such fully executed lien holder consent and subordination has been delivered to the City and has been recorded. 22. EFFECTIVE DATE OF THE AGREEMENT This Agreement shall be and become effective as of the date that it is executed by a duly authorized officer or employee of the City, it being the intention of the parties that the Subdivider shall first execute this Agreement and thereafter submit it to the City. The City shall insert the effective date in the Subdivision Reference Data in all counterparts of this Agreement and shall transmit a fully executed counterpart to the Subdivider. -20- G-1 91 R6876.000111784564v2.doo IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the dates set forth below their respective signatures. [Note: All signatures must be acknowledged by a notary public and the acknowledgement must be attached.] "CITY" ATTEST: "SUBDIVIDER" Date: C�7��iT�:7sTiL�;L� ' . ��M'TjM �0j= Carla Morreale, City Clerk (SEAL) APPROVED AS TO FORM: In Carol Lynch, City Attorney Mayor -21- G-192 88875-0001�1784564v2.doc [This page for acknowledgments.] _22_ G-193 R6876-000111784564v2.doc EXHIBIT A LEGAL DESCRIPTION OF PROPERTY THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF RANCHO PALOS VERDES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: APN: A-1 R6876-0001\1 784564v2.doc G-194 EXHIBIT B SCHEDULE OF IMPROVEMENTS FOR CRESTRIDGE SUBDIVISION FINAL TRACT MAP NO. 71878 *"Conditions of Approval" refer to the numbered Conditions of Approval in Exhibit 8 to the Resolution of Approval. TOTAL PERFORMANCE SECURITY: $ TOTAL PAYMENT SECURITY: $ TOTAL WARRANTY SECURITY: $ B-1 R6676-0001\1784564v2.doc G-195 AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF CATEGORIES OF ESTIMATED PERFORMANCE PAYMENT WARRANTY IMPROVEMENTS TOTAL COST SECURITY SECURITY SECURITY [1] Public Works & City $ 334,280.00 $ 334,280.00 $ 334,280.00 $ 334,280.00 Engineer conditions, including ADA requirements; Streets (Conditions of Approval* 16, 17, 37) [2] Sewers $ 198,226.00 $ 198,226.00 $ 198,226.00 $ 198,226.00 (Conditions of Approval* 18) [4] Drainage $ $ $ 348,755.00 $ 348,755.00 348,755.00 348,755.00 (Conditions of Approval* 30) [5] Survey Monumentation $ TBD $ TBD $ TBD $ TBD (Conditions of Approval* 42) [61 Grading and Geology $ 1,110,217.0 $ 1,110,217.00 $ 1,110,217.0 $ 1,110,217.00 (Conditions of Approval 47, 0 0 85) TOTAL $ $ $ $ *"Conditions of Approval" refer to the numbered Conditions of Approval in Exhibit 8 to the Resolution of Approval. TOTAL PERFORMANCE SECURITY: $ TOTAL PAYMENT SECURITY: $ TOTAL WARRANTY SECURITY: $ B-1 R6676-0001\1784564v2.doc G-195 EXHIBIT C Form of Improvement Securities Performance Bond 2. Payment Bond 3. Warranty Bond C-1 G-196 86876-000111784564v2.doc I:.1 :1R.a FAITHFUL PERFORMANCE BOND KNOW ALL PERSONS BY THESE PRESENTS that: Whereas, the City Council of the City of Rancho Palos Verdes, State of California, and (hereinafter designated as "Principal") have entered into an agreement whereby Principal agrees to install and complete certain designated public improvements, which said agreement, dated , 20 , and identified as project , is hereby referred to and made a part hereof; and Whereas, Principal is required under the terms of said agreement to furnish a bond for the faithful performance of said agreement. Now, therefore, we, the Principal and , as surety (hereinafter designated as "Surety"), are held and firmly bound unto the City of Rancho Palos Verdes in the penal sum of dollars ($ ) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by these presents. The condition of this obligation is such that if the above bounded Principal, his, her, or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the said agreement and any alteration thereof made as therein provided, on his, her, its or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless the City of Rancho Palos Verdes, its officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect. As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorneys' fees, incurred by the City of Rancho Palos Verdes in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. Further, Surety hereby waives the provisions of California Civil Code sections 2845 and 2849. The City of Rancho Palos Verdes is the principal beneficiary of this bond and has all rights of a party hereto. The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the agreement or to the work or to the specifications. -,- G-197 86876-000111784564v2.doc IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety, on the date set forth below, the name of Principal and Surety being hereto affixed and these presents duly signed by Principal and by Surety's undersigned representative(s) pursuant to authority of its governing body. Dated: "Principal" (seal) Note: This bond must be executed in duplicate and dated, all signatures must be notarized, and evidence of the authority of any person signing as attorney-in-fact must be attached. "Surety" By: Its: By: Its: (Seal) APPROVED AS TO FORM: RICHARDS, WATSON & GERSHON A Professional Corporation By: City Attorney -2- G-198 86876-000111784564v2. d oc Bond No. PAYMENT BOND KNOW ALL PERSONS BY THESE PRESENTS that: Whereas, the City Council of the City of Rancho Palos Verdes, State of California, and (hereinafter designated as "Principal") have entered into an agreement whereby the Principal agrees to install and complete certain designated public improvements, which agreement, dated , 20 , and identified as project , is hereby referred to and made a part hereof; and Whereas, under the terms of the agreement, the Principal is required before entering upon the performance of the work, to file a good and sufficient payment bond with the City of Rancho Palos Verdes to secure the claims to which reference is made in Part 6 (commencing with Section 8000) of Division 4 of the Civil Code. Now, therefore, the Principal and , as corporate surety (hereinafter designated as "Surety"), are held firmly bound unto the City of Rancho Palos Verdes and all contractors, subcontractors, laborers, material suppliers, and other persons employed in the performance of the agreement and referred to in Part 6 (commencing with Section 8000) of Division 4 of the Civil Code in the sum of dollars ($ ), for materials furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to this work or labor, that the Surety will pay the same in an amount not exceeding the amount hereinabove set forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorneys' fees, incurred by the City of Rancho Palos Verdes in successfully enforcing this obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered. It is hereby expressly stipulated and agreed that this bond shall inure to the benefit of any and all persons, companies, and corporations entitled to file claims under Part 6 (commencing with Section 8000) of Division 4 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond. Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect. Further, Surety hereby waives the provisions of California Civil Code sections 2846 and 2840. The City of Rancho Palos Verdes is the principal beneficiary of this bond and has all rights of a party hereto. The Surety hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension, alteration, or addition. ..T_ G-199 86876-000111784564v2.doc IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety, on the date set forth below, the name of Principal and Surety being hereto affixed and these presents duly signed by Principal and by Surety's undersigned representative(s) pursuant to authority of its governing body. Dated: "Principal" (Seal) Note: This bond must be executed in duplicate and dated, all signatures must be notarized, and evidence of the authority of any person signing as attorney-in-fact must be attached. -2- R6876-0001 \1784564v2.doc "Surety" By: Its: By: Its: (Seal) APPROVED AS TO FORM: RICHARDS, WATSON & GERSHON A Professional Corporation City Attorney G-200 WARRANTY BOND KNOW ALL PERSONS BY THESE PRESENTS that: Whereas, the City Council of the City of Rancho Palos Verdes, State of California, and (hereinafter designated as "Principal") have entered into an agreement, dated , 20 , and identified as project , is hereby referred to and made a part hereof; and Whereas, Principal is required under the terms of said agreement to furnish a bond for the good and sufficient warranty of all of the improvements installed pursuant to said agreement. Now, therefore, we, the Principal and , as surety (hereinafter designated as "Surety"), are held and firmly bound unto the City of Rancho Palos Verdes in the penal sum of dollars ($ ) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by these presents. The condition of this obligation is such that, if the hereby bounded Principal, his, her or its heirs, executors, administrators, successors or assigns, shall remedy, without cost to the City of Rancho Palos Verdes, any defects which may develop during a period of one (1) year from the date of the completion and acceptance of the last of the improvements installed under the agreement, caused by defective or inferior design, materials, workmanship or maintenance as determined by the City, and shall indemnify, defend and hold harmless the City of Rancho Palos Verdes, its officers, officials, employees, agents and volunteers for any and all claims, demands, causes of action, judgments, damages, injuries, liabilities, losses, costs or expenses, including attorneys' fees and costs of defense, which arise out of, pertain to, or relate to such defects or inferior design, materials, workmanship or maintenance or to the Principal's actions or inactions in remedying such defects or inferior design, materials, workmanship or maintenance, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect. If suit is brought upon this bond, Surety further agrees to pay, in addition to the Penal Sum, all costs and reasonable expenses and fees, including reasonable attorneys' fees, incurred by the City of Rancho Palos Verdes in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. Further, Surety hereby waives the provisions of California Civil Code sections 2845 and 2849. The City of Rancho Palos Verdes is the principal beneficiary of this bond and has all rights of a party hereto. The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect its obligations on this bond, -1- R6876-0001 11 78 4 5 64v2. do c G-201 and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the agreement or to the work or to the specifications. IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety, on the date set forth below, the name of Principal and Surety being hereto affixed and these presents duly signed by Principal and by Surety's undersigned representative(s) pursuant to authority of its governing body. Dated: "Principal" (Seal) Note: This bond must be executed in duplicate and dated, all signatures must be notarized, and evidence of the authority of any person signing as attorney-in-fact must be attached. -2- R6876-0001 \1784564v2.doc "Surety" By: Its: By: Its: (Seal) APPROVED AS TO FORM: RICHARDS, WATSON & GERSHON A Professional Corporation M City Attorney G-202 EXHIBIT D Consent and Subordination Agreement D-1 86876-0001\1784564v2.doc G-203 CONSENT AND SUBORDINATION The undersigned, , being the owner and holder of (a) that certain deed of trust dated , recorded in the office of the County Recorder of the County of Los Angeles, California, as document number (as now or hereafter increased, amended, modified, supplemented, consolidated, replaced, substituted, extended and/or renewed, the "First Deed of Trust"); and (b) that certain deed of trust dated , recorded , in the office of the County Recorder of the County of Los Angeles, California as document number (as now or hereafter increased, amended, modified, supplemented, consolidated, replaced, substituted, extended and/or renewed, the "Second Deed of Trust"), encumbering the Property, hereby executes this Consent and Subordination to acknowledge its consent to the terms of the attached Subdivision Improvement Agreement ("Agreement") and to agree that the First Deed of Trust and the Second Deed of Trust will be subject and subordinate to the terms of the Agreement. Print Name: Title: R6876 -000111784564v2. doc 0 Print Name: Title: D-2 G-204 State of California County of Los Angeles On , before me, (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature D-3 R6876-0001 11 784564v2.doc (Seal) G-205 RESOLUTION 2013-31, APPROVING THE CRESTRIDGE SENIOR CONDOMINIUM PROJECT G-206 RESOLUTION NO. 2013-31 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES CONDITIONALLY APPROVING CASE NOS. SUB2012- 00001 AND ZON2012-00067 FOR A TENTATIVE TRACT MAP, CONDITIONAL USE PERMIT AND GRADING PERMIT TO ALLOW THE CRESTRIDGE SENIOR CONDOMINIUM HOUSING PROJECT (CASE NOS. ZON2012-00067 & SUB2012-00001) LOCATED AT 5601 CRESTRIDGE ROAD (APN 7589-013-009). WHEREAS, on February 22, 2012, applications for an Environmental Assessment, Conditional Use Permit, Grading Permit (ZON2012-00067) and Tentative Tract Map (SUB2012-00001) were submitted to the Community Development Department for 147,000 cubic yards of grading to accommodate a 60 -unit senior (age restricted to 55 years and above) condominium housing project on a vacant 9.76 -acre parcel located at 5601 Crestridge Road (APN 7589-013-009); and, WHEREAS, after the submittal of additional information, Staff deemed the project applications complete on April 20, 2012, pursuant to the State Permit Streamlining Act (PSA), Government Code Section 65920 et seq.; and, WHEREAS, pursuant to the provisions of the California Environmental Quality Act, Public Resources Code Sections 21000 et. seq. ("CEQA"), the State's CEQA Guidelines, California Code of Regulations, Title 14, Section 15000 et. seq., the City's Local CEQA Guidelines, and Government Code Section 65962.5(f) (Hazardous Waste and Substances Statement), the City of Rancho Palos Verdes prepared an Environmental Impact Report (State Clearinghouse Number 2012051079) (the "EIR"); and, WHEREAS, the City prepared an Initial Environmental Study (the "Initial Study") for the Project pursuant to Section 15063 of the CEQA Guidelines, and on May 29, 2012, the Initial Study (IS) and Notice of Preparation (NOP) was released to the public and public agencies for a comment period of 31 days (through June 29, 2012). Further, a Public Notice was mailed on May 29, 2012 to the 57 property owners that are within a 500 -foot radius from the subject property. Subsequently, the Notice was published in the Peninsula News on May 31, 2012. Furthermore, the notice was posted on the City's website, and emailed to the 587 email addresses that are registered on the listserve for this project. Lastly, a copy of the Initial Study was made available at the public counter at City Hall, Hesse Park, the local libraries, and made available on the City's website for the public to download and review; and, WHEREAS, on June 26, 2012, the Planning Commission conducted a public scoping meeting to provide a forum for agencies and members of the community to provide verbal comments on the IS/NOP, at which time the Planning Commission extended the comment period through July 12, 2012; and, WHEREAS, after the NOP comment period ended, the Draft EIR was prepared taking various comments into account. After completing the Draft EIR, the document was made available to the public on August 21, 2012 for a 48 -day public comment period that concluded on October 8, 2012; and, G-207 WHEREAS, on September 26, 2012 the Planning Commission held a public comment session to provide the public with an opportunity to submit verbal comments, in addition to the typical written comments, on the Draft EIR; and, WHEREAS, on October 25, 2012, the Final EIR was completed and Notice was provided via mail and publication in the PV Peninsula News that a public hearing was scheduled with the Planning Commission on November 13, 2012 to review the Final EIR and the entitlement applications for the proposed project. Subsequently, a notice was emailed to the 611 people registered on the City's listserve for this project; and, WHEREAS, after notice was issued pursuant to the requirements of the Rancho Palos Verdes Development Code and CEQA, the Planning Commission held a duly noticed public hearing on November 13, 2012, at which time all interested parties were given an opportunity to be heard and further present evidence regarding the entitlements associated with the Project, the Final EIR and the responses to the comments received regarding the Draft EIR; and, WHEREAS, on November 13, 2012 Planning Commission meeting, the Planning Commission directed Staff to include conditions to address lighting, landscaping, trail use, and tower height, and return to the Planning Commission on December 11, 2012 with Resolutions for consideration; and, WHEREAS, on the December 11, 2012, the Planning Commission adopted PC Resolution No. 2012-22, recommending that the City Council certify the Environmental Impact Report, and, adopted PC Resolution No. 2012-23, recommending that the City Council conditionally approve Case Nos. SUB2012-00001 and ZON2012-00067 for a proposed 60 -unit condominium subdivision known as the Crestridge Senior Condominium Housing Project, and, WHEREAS, after notice was issued pursuant to the requirements of the Rancho Palos Verdes Development Code and CEQA, the City Council continued the public hearing to the April 2, 2013 City Council meeting at the applicant's request; and, WHEREAS, on April 2, 2013, at the applicant's request, the public hearing was continued to May 21, 2013; and, WHEREAS, on May 21, 2013, the City Council held a duly noticed public hearing, at which time all interested parties were given an opportunity to be heard and present evidence regarding the entitlements associated with the Project, the Final EIR, the responses to the comments received regarding the Draft EIR, and the Planning Commission recommendation: NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS: Section 1: The proposed project includes 60 age -restricted (aged 55+), for -sale condominium units accessed by one driveway at the southwestern portion of the site. The 60 units will be located within 18 different buildings distributed throughout the site, where Resolution No. 2013-31 Page 2 of 12 G-208 some buildings will be two-story structures and others will be split-level, two-story structures. The proposed project also includes a 2,400 square foot community building for the residents of the development; a community garden area for the residents at the northwest portion of the site; an outdoor community recreation area at the northeast portion of the site; and a series of public and private pedestrian trails. Three of the condominium units are proposed to be made available to qualified very -low-income senior households in accordance with the City's inclusionary affordable housing requirements contained in Chapter 17.11 (Affordable Housing). To facilitate the development, a total of 147,000 cubic yards of grading is proposed, which includes 145,000 cubic yards of cut (143,000 cubic yards of export) and 2,000 cubic yards of fill. The topography of the site will be lowered by as much as approximately 38 -feet on the western side of the property to create a flatter and lower site. This grading will result in the structures on the west side of the property being well below the maximum 16 -foot height limit, as measured from existing grade. TENTATIVE TRACT MAP Section 2: Consistent with the Planning Commission's recommendation, the City Council makes the following findings of fact with respect to the application for Vesting Tentative Tract Map No. 71878 to subdivide the 9.76 -acre site for a 60 -unit, age -restricted (aged 55+), condominium project: A. The proposed map and the design and improvement of the proposed subdivision are consistent with the Rancho Palos Verdes General Plan. The goal of the Urban Environment Element of the General Plan "to preserve and enhance the community's quality living environment; to enhance the visual character and physical quality of existing neighborhoods; and to encourage the development of housing in a manner which adequately serves the needs of all present and future residents of the community." Additionally, it is a policy of the General Plan to "Review the location and site design of future institutional uses very carefully to ensure their compatibility with adjacent sites". Furthermore, it is a Housing Activity Policy of the City's General Plan to "[require] all new housing developed to include suitable and adequate landscaping, open space, and other design amenities to meet the community standards of environmental quality." The proposed project meets this goal and these policies as it provides an aesthetically pleasing senior housing project that is compatible with existing land uses and serves the needs of residents within the community, and is consistent with the City's vision for the site and surrounding area as evidenced by the approved development pattern of senior housing to the west and east of the site; Belmont Village and Mirandela, respectively. Lastly, based upon the proposed 60 -unit project, the applicant shall be obligated to provide three (3) dwelling units (or their equivalents) that are affordable to households with very low incomes. Resolution No. 2013-31 Page 3 of 12 G-209 B. The site is physically suitable for the type and density of development proposed in that the subject property measures 9.76 -acres in area and is sufficient in size to accommodate the proposed Senior Housing Condominium Project. The buildings are sufficiently spaced, the project provides for open space, outdoor recreational areas for the future tenants, complies with applicable setbacks, and has a density of approximately 6 units to the acre. C. The design of the subdivision and the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat, nor are they likely to cause serious public health problems. The subject property has never been developed and has remained a vacant parcel. Further, there have been past approvals and proposals that call out the subject property for the use that is now being proposed. There are no sensitive plant or animal species; no known historical, archaeological or paleontological resources; and no known hazardous materials or conditions on the subject property. In the event that any of these are encountered prior to or during construction of the project, the recommended mitigation measures and conditions of approval will reduce any potential impacts upon the environment, fish and wildlife, sensitive habitats or public health to less -than -significant levels. D. The design of the subdivision or the type of improvements will not conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. There are no known public access easements across the subject property that should be preserved as a part of this project. However, since the City's Conceptual Trails Plan (CTP) calls for a trail to connect Crestridge Road to Indian Peak Road below, the project will provide and record a public pedestrian trail easement through the development, consistent with the City's CTP to connect Crestridge Road with the trails in the City's Preserve property to the north adjacent to Indian Peak Road. CONDITIONAL USE PERMIT Section 3: Consistent with the Planning Commission's recommendation, the City Council makes the following findings of fact with respect to the application for a conditional use permit to; 1) establish a senior condominium residential development project on the subject property; and, 2) to allow certain building heights to exceed the Institutional District's development standards of 16'-0" tall and one-story: A. The site is adequate in size and shape to accommodate the proposed use and for all of the yards, setbacks, walls, fences, landscaping and other features required by Title 17 (Zoning) or by conditions imposed under Section 17.60.050 to integrate said use with those on adjacent land and within the neighborhood, such as: 1. The proposed structures will comply with and exceed all of the required setbacks of the Institutional zoning district. 2. Parking throughout the site will be provided to residents of the facility within dedicated 2 -car garages for each unit, and visitor parking will be available Resolution No. 2013-31 Page 4 of 12 G-210 throughout the site. 3. The proposed project will contain landscaping throughout the facility and will be conditioned to minimize view impairment by requiring the landscaping to be maintained to specified height limits, and the appearance of the buildings will not be apparent due to the landscaping. 4. The subject site will be lowered by up to 38' from existing grade to create the proposed building pads, internal roadway and parking area, and will create a manageable slope for the site to accommodate the development, which would continue to slope from west to east, but it would be less of a dramatic slope. Further, lowering the site will bring the western portion of the project closer in elevation to the adjacent Belmont Assisted Living facility, which was also lowered substantially from its pre -construction grade; and, lowering the site also reduces the height of the existing slopes along the roadway, which will be planted as part of the project, and will minimize the use of retaining walls along the street. Furthermore, lowering the site substantially and reducing the height of some of the structures reduces the potential view impacts over the site from the upslope residences to the south along Mistridge Drive. 5. The building designs are of a residential character, with a mix of two-story structures and split-level two story structures, and will be consistent with other residential type structures along Crestridge Road, such as the Belmont Assisted Living Facility, Mirandela Senior Apartments, and the Canterbury Congregate Care Facility, as well as the residential character of the existing single-family residential neighborhoods to the east and south of the site. B. The site for the proposed use relates to streets and highways sufficient to carry the type and quantity of traffic generated by the subject use. The project takes direct access from Crestridge Road, a collector roadway connecting Crenshaw Boulevard and Highridge Road. The project plans and traffic study have been reviewed by the City's traffic engineer. The traffic study considered five intersections and focused on assessing potential traffic impacts during the morning and evening commute peak hours and found that the five (5) key study intersections currently operate and are forecast to continue to operate at an acceptable LOS with project implementation. The cumulative projects analysis also found that the five (5) key study intersections are forecast to continue to operate at an acceptable LOS with the addition of project generated traffic. Construction traffic was also assessed since construction includes 143,000 cubic yards of export, and concluded that the increased traffic generated by the project will not exceed the impact threshold. Lastly, sight distance related to the project's access way onto Crestridge Road is adequate due to a mitigation measure limiting landscaping height and prohibiting curbside parking along Crestridge Road within the identified sight visibility lines. C. In approving the subject use for age -restricted (aged 55+), Senior condominiums at the specific location, there will be no significant adverse effect on adjacent property or the permitted use thereof. The use will not be in conflict with other Resolution No. 2013-31 Page 5 of 12 G-211 uses in the area and will add to the mixture of housing types offered by providing additional senior housing. Since the project includes structures that exceed 16 -feet above existing grade, Staff conducted view analyses from various residences along Seaside Heights, Mistridge, and Oceanridge Drives. The residences are located to the south of the project site, and contain up to 180 -degree views over the subject property. The residences along Oceanridge and Seaside Heights Drives are at a substantially higher elevation than the subject property, and the proposed development will not project into their views. As a result, the proposed project would not result in a significant impact upon views (i.e., adverse effect) to the residences along Seaside Heights and Oceanridge Drives. The residences along Mistridge Drive are lower in elevation than the residences along Oceanridge Drive. Consequently, although they are higher in elevation than the subject property, due to the topography of the area, these residences do not have a view of the Santa Monica Bay; rather, their views are predominantly of the Los Angeles basin over the subject property and in a northeasterly direction overthe abutting Mirandela Senior Housing Project. Staff visited several residences along Mistridge Drive, which have been incorporated into the Aesthetics section of the EIR with view simulations. There are 9 structures that are above the 16 -foot height limit dispersed throughout the site as follows: a) four, 2 -story split level structures that front along Crestridge Road; b) one, 2 -story split-level structure along the easternmost side of the development; c) one, 2 -story split-level structure in the middle of the development; d) one, 2 -story structure in the middle of the development; and, e) two, 2 -story structures at the rear of the development. Ultimately, of the 9 structures that are above the 16 -foot height limit, the two- story structures (a total of 3 that are identified as "d" and "e", above) result in some type of view impairment, as the portions above the 16 -foot height limit (i.e., 16 -feet above existing grade) impair a small portion of the city view at the bottom of the view frames from the existing residences on Mistridge Drive. The proposed structures that are along Crestridge Road and the eastern property line (identified as "a" and "b", above) are at lower elevations than the other structures on the site; as a result, these structures are in the foreground and will not project into the view frames from the residences along Mistridge Drive. The remaining 3 structures along the rear of the development and in the middle of the development (identified as "d" and "e", above) are also above the 16 -foot limit (i.e., 16 -feet above existing grade). Since these buildings are located near the center of the site, they are in the middle of the view corridors of the properties along Mistridge Drive. The heights of these proposed structures, coupled with the location within the view frames, makes them more apparent Resolution No. 2013-31 Page 6 of 12 G-212 and results in some type of view impairment from the residences along Mistridge Drive. As a result, these buildings have been modified in the following manner: • Reduce the plate heights of the structures containing units 19 thru 22, and 45 and 46 — This reduces the height of the buildings by up to 2 -feet. • Reduce the roof pitch from 3:12, to 1.75:12 for the structures containing units 19 thru 22, and 45 and 46— This reduces the height of the buildings by up to 1 -foot • Change the roofs on the eastern portions of the three buildings from gable roofs to hip -pitched roofs — This reduces the amount of horizontal projections and opens up more view. The modifications will result in a reduction in the structure heights by 3 -feet, resulting in structures that are approximately 23 -feet above finish grade, and reduces the roof massing with incorporation of a hip on these buildings. Consequently, these modifications minimize the view impairment such that the buildings will minimally project into the city lights views while maintaining the larger panoramic view from the residences along Mistridge Drive. D. The proposed use is not contrary to the General Plan. Specifically, the goal of the Urban Environment Element of the General Plan is "to preserve and enhance the community's quality living environment, to enhance the visual character and physical quality of existing neighborhoods, and to encourage the development of housing in a manner which adequately serves the needs of all present and future residents of the community. " Additionally, it is a policy of the General Plan to "Review the location and site design of future institutional uses very carefully to ensure their compatibility with adjacent sites". Furthermore, itis a Housing Activity Policy of the City's General Plan to "[require] all new housing developed to include suitable and adequate landscaping, open space, and other design amenities to meet the community standards of environmental quality. " The proposed project meets this goal and these policies as it provides an aesthetically pleasing senior housing project that is compatible with existing land uses and serves the needs of residents within the community, and is consistent with the City's vision for the site and surrounding area as evidenced by the approved development pattern of senior housing to the west and east of the site; Belmont Village and Mirandela, respectively. Lastly, based upon the proposed 60 -unit project, the applicant shall be obligated to provide three (3) dwelling units (or their equivalents) that are affordable to households with very low incomes. E. The subject property is not located within an overlay control district. F. Conditions, which the Planning Commission finds to be necessary to protect the health, safety and general welfare, have been imposed upon this project. Specifically, as included in the Mitigation Monitoring Program and as shown in the exhibits attached to City Council Resolution Nos. 2013-30 and 2013-31, and briefly described below, the project includes conditions that address: Resolution No. 2013-31 Page 7 of 12 G-213 • Limitations on the heights of walls and fences; • Conditions regarding the placement and type of exterior light fixtures; • Requirements for marking fire lanes and prohibiting parking therein; • Requirements for compliance with the City's attached unit development standards regarding the transmission of sound and vibration through common walls and floors; • Requirements for dedication of an easement for trail purposes, consistent with the Conceptual Trails Plan. • Requirements for water -conserving landscaping and irrigation; • Further limitations or restrictions on the height of foliage and trees; and, • Restrictions on the number and types of signage for the project. • Limitations on the heights, roof types and roof pitches for the buildings identified above. Section 4: Consistent with the Planning Commission's recommendation, the City Council makes the following findings of fact with respect to the application for a Grading Permit for 147,000 cubic yards of grading related to the development of the proposed condominium project: A. The grading does not exceed that which is necessary for the permitted primary use of the lot, as defined in Section 17.96.2210 of the Development Code. The proposed project encompasses 147,000 cubic yards of total earth movement (cut and fill combined) throughout the 9.76 -acre parcel. The grading will substantially lower the existing topography in an effort to maintain views over the subject property. The site will be lowered by approximately 38 -feet on the west side of the site, which will result in structures that are lower than the existing topography. Grading of the entire site will occur, and will serve to accommodate the various structures on-site, the internal roadway that will loop through the development, the community building and the outdoor recreation area. Since the intent of the grading is primarily to lower the site's topography, there will be 143,000 cubic yards of export. The export will lower the site to provide a better designed project and will allow the majority of the buildings to be set lower on the site than could be allowed "by right" without the proposed grading (or with less grading). B. The grading and/or related construction does not significantly adversely affect the visual relationships with, nor the views from, neighboring properties. The proposed grading results in most structures being lower than would be permitted "by right" without the proposed grading. Furthermore, while there is some fill throughout the site, no fill under buildings is necessary and the proposed project will not significantly affect the visual relationships with, nor the views from neighboring properties. C. The nature of the grading minimizes disturbance to the natural contours, and finished contours are reasonably natural. The existing site topography slopes from west to east, and the topography is higher than the adjacent developments Resolution No. 2013-31 Page 8 of 12 G-214 (i.e., Belmont and Mirandela). Artificial fill has been identified at the site, which was placed during grading operations for the construction of Crestridge Road along the southerly property line. The site also slopes up from Crestridge Road to the middle of the site, then slopes down towards the City's Reserve property to the north. Thus, some of the slopes on the site appear to have been manmade and are not natural. Nonetheless, the majority of the grading is to lower the site, and in doing so the resulting structures will be in line with the developments on either side, which slopes down from west to east. Due to the existing topography of the site, which is convex in shape, the grading will also prepare the site for development. The existing contours will be removed, but the finished contours will ensure a gentler sloping site that continues to slope from west to east. D. While portions of the topographic features appear to be man-made as a result of the construction of surrounding roadways, and not of a natural topographic feature, the proposed project still considers the topographic features and appearance of the existing site by creating new slopes that are similar to the existing slopes. There will continue to be a transitional slope up to Belmont and down to Mirandela, which aid in creating a stepped development that is in line with the adjacent developments. As a result, the proposed development would not be topographically out of scale with the surrounding area. E. The required finding that, for new single-family residences, the grading and/or related construction is compatible with the immediate neighborhood character, as defined in Section 17.02.040(A)(6) of the Development Code, is not applicable because the proposed project is not a new single-family residence. F. In new residential tracts, the grading includes provisions for the preservation and introduction of plant materials so as to protect slopes from soil erosion and slippage, and minimize visual effects of grading and construction on hillside areas. The proposed project is a new residential tract, although it is not a single family subdivision. This intent of this finding is to minimize the visual impacts and disturbance of existing vegetation that commonly occurs with cut -and -fill grading of terraced single-family neighborhoods. The grading will lowerthe site and will result in a development that steps down from west to east such that there is an aesthetic symmetry linking the developments on either side. As a result, the slopes and pervious areas will contain landscaping to prevent erosion and create an aesthetically pleasing site. Further, the landscaping will be conditioned so as to prevent foliage from growing above the heights of the buildings and creating view impairment to the residents to the south of the site. Thus, as proposed and conditioned, adequate landscaping will be provided throughout the site to make the project less apparent. G. The grading utilizes street designs and improvements which serve to minimize grading alternatives and harmonize with the natural contours and character of the hillside. The proposed project involves a private roadway that loops within the development to provide access to the various buildings, and includes one Resolution No. 2013-31 Page 9 of 12 G-215 ingress/egress point along Crestridge Road. The street will slope with the resulting topography and will be of a width that can accommodate two-way traffic, will prohibit street parking, and will accommodate emergency personnel. Lastly, beside the ingress/egress driveway along Crestridge Road, the interior roadway will not be visible from the public rights-of-way. H. The grading would not cause excessive and unnecessary disturbance of natural landscape or wildlife habitat through removal of vegetation. A Biological Resources Assessment was performed for the EIR. According to the assessment, the subject property is regularly cleared and maintained through disking and grubbing. As such, there is no protected habitat (CSS) present on site. Further, non-native vegetation is present on the site, which provides for poor habitat for wildlife species. The site is, however, adjacent to the City's Reserve property. As such, there are mitigation measures proposed to minimize disturbance and impacts to the City's Reserve, which includes native landscaping, especially for those areas that abut the City's Reserve. I. The proposed project is inconsistent with 3 of the grading criteria contained within Municipal Code Section 17.76.040(E)(9) pertaining to grading on slopes over 35% steepness, maximum finished slopes, and maximum depth of cut or fill. However, a deviation from the criteria regarding grading on slopes greater than 35% is hereby approved because the grading will not threaten the public health, safety and welfare, since development of the subject site will require City Geologist approval and building permits that will ensure that the proposed project will not threaten public health, safety and welfare. Furthermore, a deviation to the criteria regarding maximum finished slopes and maximum depth of cut and fill is hereby approved because unusual topography, soil conditions, previous grading and other circumstances make such grading reasonable and necessary. However, it is important to consider that the subject site is a vacant parcel with undulating topography and some un -compacted fill material that was placed on the site previously must be removed and exported in order to render the site buildable. Lastly, grading down of the site provides better views and a better visual representation of the project and consistency with the surrounding areas are circumstances that warrant approval of the increased depth of cut and fill. In regards to a deviation from the grading criteria regarding maximum finished slopes, upslope retaining wall heights, and restricted grading areas, the City Council finds that: a) The criteria of subsection (E)(1) through (E)(8) of Municipal Code Section 17.76.040 are satisfied, as noted in A through E above. b) The project is consistent with the purpose of the Grading Permit, which is 1) to permit reasonable development of land, 2) ensure the maximum Resolution No. 2013-31 Page 10 of 12 G-216 preservation of natural scenic character of the area consistent with reasonable economic use of the property, 3) ensure that the development of land occurs in a manner harmonious with adjacent lands, and 4) ensure that the project is consistent with the General Plan. Specifically, the proposed project will lower the site while maintaining a similar topographic configuration of a flatter area with slopes, thereby helping to preserve views over the site and not cause visual impacts, which will develop the site in a manner harmonious with adjacent lands. In doing so the project permits the reasonable development of land while maintaining the natural scenic character. c) Departure from the standards in subsection (E)(9) of Municipal Code Section 17.76.040 will not constitute a grant of special privileges inconsistent with the limitations upon other properties in the vicinity. Lowering the site will ensure less than significant view and visual impacts. Development proposals on large vacant parcels with similar grading have been approved in the past; approval of this project is consistent with prior actions on other Institutional uses along Crestridge Road, namely the Belmont Assisted Living Facility and the Mirandela Senior Affordable Housing projects wherein those sites were also lowered substantially for the same purposes. Lastly, departure from the standards of subsection (E)(9) of Municipal Code Section 17.76.040 will not be detrimental to the public safety nor to other properties, because a geological report for this project has been submitted to and approved by the City geologist. Section 5: Based upon the Final EIR and the record before the Planning Commission and City Council, and consistent with the Planning Commission's recommendation, the City Council finds that the Project will create a significant unavoidable impact to aesthetics (Visual Character and Quality of the Site). This significant impact is further described in the Exhibit "A", titled "Facts, Findings and Statement of Overriding Considerations regarding the Environmental Effects for the Crestridge Senior Housing Project" of Resolution No. 2013-30, which is incorporated herein by this reference . Section 6: The mitigation measures set forth in the Mitigation Monitoring Program, Exhibit "B" to Resolution No. 2013-30, are incorporated into the scope of the proposed project by this reference. Section 7: The time within which the judicial review of the decision reflected in this Resolution, if available, must be sought is governed by Section 1094.6 of the California Code of Civil Procedure or other applicable shortened periods of limitation. Section 8: For the foregoing reasons and based on the information and findings included in the Staff Reports and all of the documents that were presented to the Planning Commission and the City Council, the Minutes and other records of the proceedings related to this application, the City Council of the City of Rancho Palos Verdes hereby conditionally approves Tentative Tract Map No. 71878, Conditional Use Permit, and Grading Permit (Planning Case Nos. SUB2012-00001 and ZON2012-00067), in conjunction with certification of an Environmental Impact Report, to allow the subdivision of Resolution No. 2013-31 Page 11 of 12 G-217 a 9.76 -acre site into sixty (60), age -restricted (aged 55+), senior condominium units, located at 5601 Crestridge Road (APN 7589-013-009), subject to the recommended conditions of approval in the attached Exhibits "A" and "B", which are incorporated herein by this reference. PASSED, APPROVED and ADOPTED this 21" day of May 2013. yor ATTEST: City Clerk State of California ) County of Los Angeles ) ss City of Rancho Palos Verdes ) I, Carla Morreale, City Clerk of the City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2013-31 was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on May 21, 2013. (fit � City Clerk Resolution No. 2013-31 Page 12 of 12 G-218 EXHIBIT `A' TO RESOLUTION 2013-31 CONDITIONS OF APPROVAL FOR CONDITIONAL USE PERMIT, GRADING PERMIT, AND TENTATIVE TRACT MAP NO. 71878 (PLANNING CASE NOS. ZON2012-00067 & SUB2012-00001) General 1. This approval is for the following: A. A 60 -unit, for -sale, age -restricted (55 years and older) condominium housing complex, distributed amongst 18 individual buildings B. Three (3) units affordable to "Extremely Low" and/or "Very Low" income households in accordance with the City's Inclusionary Housing requirements. C. A private and public trail system in open space areas on the north, and a public trail through the development connecting Crestridge Road with the public trail system in open space areas on the north. D. A 13,000 -square foot outdoor community recreation area located at the northeastern corner of the site. The amenities for this area include a patio, a community conversation and gathering stage, a sundeck and outdoor living room, barbeque facilities, bocce ball courts, and picnic tables. E. A 2,400 square -foot Community Service Center building and sundeck providing secondary, centralized community amenities for the project's residents. The Community Service Center building will provide a recreation and lounge area for community gatherings, kitchen, computer center/business room, office, fitness room, bathrooms, indoor and outdoor fireplaces, outdoor living area, spa, barbeque and seating area. The Community Service Center could also be used for community gatherings and as a social venue for regular resident activities like movie nights, book clubs and cooking classes. F. A gated vehicular access off of Crestridge Road. The vehicular entry gate would have a key pad and call box. G. A pedestrian entry tower and access point adjacent to the gated vehicular access. H. An internal private street that is a minimum of 26 feet wide. A total of 31 guest parking spaces distributed throughout the site to supplement the two -car garages available for each condominium unit. G-219 J. A community garden area at the northwest portion of the site (behind the existing Belmont Assisted Living facility) for the residents and/or owners of the Crestridge Senior Housing Condominium project. 2. Within ninety (90) days of this approval, the applicant and/or property owner shall submit to the City a statement, in writing, that they have read, understand and agree to all conditions of approval contained in this approval. Failure to provide said written statement within ninety (90) days following the date of this approval shall render this approval null and void. 3. The developer shall supply the City with one mylar, one copy, and an electronic copy of the map after the final map has been filed with the Los Angeles County Recorders Office. 4. This approval expires twenty-four (24) months from the date of approval of the tentative tract map by the City Council, unless extended per the Subdivision Map Act and Municipal Code. Any request for extension shall be submitted to the Planning Department in writing prior to the expiration of the map. 5. Construction of the approved project shall substantially comply with the plans originally stamped APPROVED; with the Institutional Zoning District; the mitigation measures, conditions and development standards contained in PC Resolution No. 2012-22 and PC Resolution No. 2012-23; City Council Resolution No. 2013-31; and, the Rancho Palos Verdes Development Code. 6. The Community Development Director is authorized to approve minor modifications to the approved plans or any of the conditions if such modifications achieve substantially the same results as would strict compliance with said plans and conditions. Otherwise, all other modifications shall be subject to review and approval by the Planning Commission. 7. All mitigation measures contained in the approved Mitigation Monitoring and Reporting Program (MMRP) contained in PC Resolution No. 2012-22 and City Council Resolution No. 2013-30 for the Environmental Impact Report (EIR) shall be adhered to. The mitigation measures are repeated herein under the appropriate subject heading, sometimes with clarifying language that may differ from the MMRP. Where the conditions differ from the mitigation measures, the stricter of the two shall govern. All costs associated with implementation of the Mitigation Monitoring Program shall be the responsibility of the Developer, and/or any successors in interest. 8. The Conditions of Approval contained herein shall be subject to review and modification, as deemed necessary and appropriate by the Planning Commission at a noticed public hearing held one year after issuance of a final Certificate of Occupancy for the last building constructed. At the review hearing, the Planning Resolution No. 2013-31 Exhibit A Page 2 of 25 G-220 Commission may add, delete or modify any conditions of approval as deemed necessary and appropriate. Notice of said review hearing shall be published and provided to owners of property within a 500' radius from the entire project's boundary, to persons requesting notice, to all affected homeowners associations, and to the property owner in accordance with Rancho Palos Verdes Development Code Section 17.80.090. As part of the one year review, the Planning Commission may consider and review compliance with all the conditions of approval, assess any lighting and noise impacts, and address any other concerns raised by Staff, the Commission and/or interested parties. If necessary, the Planning Commission may impose more restrictive standards and conditions to mitigate any impacts resulting from the review. 9. In order to minimize view impairing foliage when viewed from the residences along Mistridge Drive, Oceanridge Drive and Seaside Heights Drive, all private landscaping throughout the development shall be maintained so that it will not exceed the height of the line illustrated and depicted on the photographs taken from the residences along Mistridge Drive and Seaside Heights Drive, which are on file with the Planning Department (Exhibit B to City Council Resolution No. 2013-31). If it is brought to the City's attention that foliage in the development exceeds the aforementioned line and impairs a view as viewed from any residence along Mistridge Drive, Seaside Heights Drive or Oceanridge Drive, then said foliage shall be trimmed down to a level that no longer impairs the view. 10. Permitted hours and days for construction activity (other than the aforementioned grading activity) are 7:00 AM to 7:00 PM, Monday through Saturday, with no construction activity permitted on Sundays or on the legal holidays specified in Section 17.96.920 of the Rancho Palos Verdes Municipal Code without a special construction permit. Tentative Tract Map No. 71878 11. The proposed project approval permits 60, age restricted (aged 55+) condominium units on the existing 9.76 -acre subject parcel as shown on Tentative Tract Map No. 71878, as approved by the City Council on May 21, 2013. 12. Prior to submitting the Final Map for recordation, the subdivider shall obtain clearances from affected departments and divisions, including a clearance from the City's Engineer for the following items: mathematical accuracy, survey analysis, correctness of certificates and signatures, etc. 13. The Final Map shall be in conformance with the lot size and configuration shown on the Tentative Tract Map. 14. Prior to approval of the Final Map, copies of the Covenants, Conditions and Resolution No. 2013-31 Exhibit A Page 3 of 25 G-221 Restrictions (CC&R's) shall be submitted for review and approval by the Director and the City Attorney. Said CC&R's shall reflect the applicable conditions of approval contained in this Resolution. All necessary legal agreements, including homeowners' association, deed restrictions, covenant, dedication of development rights, public easements and proposed methods of maintenance and perpetuation of drainage facilities and any other hydrological improvements shall be submitted for review and approval prior to the approval of the Final Map. County Recorder 15. If signatures of record title interests appear on the final map, the developer shall submit a preliminary guarantee. A final guarantee will be required at the time of filing of the final map with the County Recorder. If said signatures do not appear on the final map, a preliminary title report/guarantee is needed that covers the area showing all fee owners and interest holders. The account for this preliminary title report guarantee shall remain open until the final map is filed with the County Recorder. Public Works and City Engineer Conditions 16. Subject to review and approval by the Director of Public Works, prior to final certificate of use and occupancy, the following items shall be addressed: • Sidewalk must be constructed on Crestridge Road that provides for a total sidewalk width of 6' from Face of Curb to Back of Sidewalk (to match existing conditions on Crestridge Road). • Relocate electrical facilities along Crestridge Road to provide for 4' clear sidewalk access to match other updated facilities and to adhere to ADA. • Provide for ADA compliant access across the top of the proposed site entry driveway on Crestridge Road. • Indicate the ADA path of travel from Crestridge Rd. throughout the interior of the site. • Any other requirements made by the Public Works Department in reviewing the construction plans. 17. Per the Department of Public Works and subject to approval by the Director of Public Works, the Applicant shall ensure the following to the satisfaction of the Public Works Director: • No above ground utilities permitted in the Public Right of Way. • All utilities must be outside of the driveway approach (minimum 2 feet away from driving edge). • Only cement concrete or asphalt concrete surface are allowed in the ROW. Resolution No. 2013-31 Exhibit A Page 4 of 25 G-222 • The engineer shall provide a longitudinal profile of the driveway approach and driveway centerline depicting vertical curves and slopes. • Driveway approach slope and details needs to comply with APWA STD PLAN 110-0 (latest edition) and other applicable drawings. • Prior to the issuance of a grading permit, a complete hydrology and hydraulic study (include off-site areas affecting the development) shall be prepared by a qualified civil engineer and approved by the City Engineer. The report shall include detail drainage conveyance system including applicable swales, channels, street flows, catch basins, and storm drains which will allow building pads to be safe from inundation by rainfall runoff which may be expected from all storms up to and including the theoretical 100 -year flood. • It is the property owner's responsibility to maintain any landscaping in the abutting public right-of-way and keep it in a safe condition. • Any cuts made into the existing asphalt roadway of Crestridge Road will require full width resurfacing of the road for a length to be determined by the Director of Public Works or his designee. • All damaged curb and gutter, sidewalk, and asphalt in front of the proposed property must be removed and replaced in kind. • All ADA improvements shall be completed by the developer in the ROW. • Catch basins shall have "NO Dumping -Drain to Ocean" painted on them in the ROW and on the property. • Filtering and Water Quality devices shall be installed in all storm drain inlets, including existing catch basins where a connection to the development's system is required. • Plans shall provide Best Management Practices (BMP's) and Water Quality Management Plan (WQMP). • Plans shall provide Sewer connection information, and shall be approved by LA County Public Works Department prior to approval by the City of Rancho Palos Verdes. • Plans shall provide clear sight triangle at driveway per Caltrans standards. Sewers 18. A bond, cash deposit, or other City approved security, shall be posted prior to recordation of the Final Map or start of work, whichever occurs first, to cover costs for construction of and connection to a sanitary sewer system, in an amount to be determined by the Director of Public Works. 19. Prior to approval of the final map, the subdivider shall submit to the Public Works Director a written statement from the County Sanitation District approving the design of the tract with regard to the existing trunk line sewer. Said approval Resolution No. 2013-31 Exhibit A Page 5 of 25 G-223 shall state all conditions of approval, if any, and state that the County is willing to maintain all connections to said trunk lines. 20. Approval of this subdivision of land is contingent upon the installation, dedication and use of local main line sewer and separate laterals to serve each unit of the land division. 21. Sewer easements may be required, subject to review by the City Engineer, to determine the final locations and requirements. 22. Prior to construction, the subdivider shall obtain approval of the sewer improvement plans from the County Engineer Sewer Design and Maintenance Division. Water 23. Prior to recordation of the Final Map or prior to commencement of work, whichever comes first, the subdivider must submit a labor and materials bond in addition to either: a. An agreement and a faithful performance bond in the amount estimated by the City Engineer and guaranteeing the installation of the water system; or b. An agreement and other evidence satisfactory to the City Engineer indicating that the subdivider has entered into a contract with the serving water utility to construct the water system, as required, and has deposited with such water utility security guaranteeing payment for the installation of the water system. 24. There shall be filed with the City Engineer a statement from the water purveyor indicating that the proposed water mains and any other required facilities will be operated by the water purveyor and that, under normal operating conditions, the system will meet the needs of the developed tract. 25. At the time the final land division map is submitted for checking, plans and specifications for the water systems facilities shall be submitted to the City Engineer for checking and approval, and shall comply with the City Engineer's standards. Approval for filing of the land division is contingent upon approval of plans and specifications mentioned above. 26. The project shall be served by adequately sized water system facilities that shall include fire hydrants of the size and type and location as determined by the Los Angeles County Fire Department. The water mains shall be of sufficient size to accommodate the total domestic and fire flows required for the land division. The City Engineer shall determine domestic flow requirements. Fire flow Resolution No. 2013-31 Exhibit A Page 6 of 25 G-224 requirements shall be determined by the Fire Department and evidence of approval by the Fire Chief is required. 27. Framing of structures shall not begin until after the Los Angeles County Fire Department has determined that there is adequate firefighting water and access available to said structures. 28. Prior to issuance of the first building permit, the applicant shall ensure that construction plans and specifications for the project include the following interior water -conservation measures: • Reduce water pressure to 50 pounds per square inch or less by means of a pressure -reducing valve; • Install water -conserving clothes washers; • Install water -conserving dishwashers and/or spray emitters that are retrofitted to reduce flow; and, • Install one -and -one-half gallon, ultra-low flush toilets. 29. Prior to issuance of the first building permit, the applicant shall submit landscape and irrigation plans for the common open space areas for the review and approval of the Community Development Director. If the Community Development Director utilizes a landscape consultant to review the plans, the applicant shall be responsible for all costs associated with said view. Said plans shall incorporate, at a minimum, the following water -conservation measures: • Extensive use of native plant materials. • Low water -demand plants. • Minimum use of lawn or, when used, installation of warm season grasses. • Grouped plants of similar water demand to reduce over -irrigation of low water demand plants. • Extensive use of mulch in all landscaped areas to improve the soil's water - holding capacity. • Drip irrigation, soil moisture sensors, and automatic irrigation systems. • Use of reclaimed wastewater, stored rainwater or grey water for irrigation. In addition, the landscaping plan shall include the following: • A pesticide management plan to control the introduction of pesticides into site runoff. The pesticide management plan shall be approved by the Director of Public Works. • Landscaping at or near the proposed driveway that does not obstruct a driver's clear line of site to the satisfaction of the City's Public Works Department. • Foliage/trees are of a type of species than can be maintained so as not to exceed the height of the line illustrated and depicted on the photos in Exhibit B, to Resolution No. 2012-23, which are the highest visible roof ridgelines of the development. Resolution No. 2013-31 Exhibit A Page 7 of 25 G-225 Drainage 30. All drainage swales and any other on -grade drainage facilities, including gunite, shall be of an earth tone color approved by the Community Development Director prior to building permit final of the last building. 31. Site surface drainage measures included in the project's geology and soils report shall be implemented by the project developer during project construction. 32. Subject to review and approval by the City's Public Works Department and Building and Safety Division, prior to issuance of any grading permit, the project proponent shall submit a stormwater management plan which shows the on-site and off-site stormwater conveyance system that will be constructed by the project proponent for the purpose of safely conveying stormwater off of the project site. These drainage structures shall be designed in accordance with the most current standards and criteria of the Director of Public Works and Los Angeles County Department of Public Works to ensure that default drainage capacity is maintained. The plan shall also show whether existing stormwater facilities off the site are adequate to convey storm flows. 33. In accordance with the Clean Water Act, the developer shall coordinate with the Regional Water Quality Control Board (RWQCB) regarding the required National Pollutant Discharge Elimination System (NPDES) permit for the project. The developer shall obtain this permit and provide the City with proof of the permit before construction activities begin on the project site. 34. Appropriate Best Management Practices (BMPs), including sandbags, shall be used to help control runoff from the project site during project construction activities. 35. In accordance with the Clean Water Act, the project proponent shall coordinate with the Regional Water Quality Control Board (RWQCB) on the preparation of a Stormwater Pollution Prevention Plan (SWPPP) for the proposed project. 36. Prior to issuance of any grading permit, the City's NPDES consultant shall review and approve the project to ensure that the project will comply with all applicable requirements for the control and treatment of erosion and run-off from the project site. Streets 37. Prior to recordation of the final tract map, the applicant shall post a bond or other Resolution No. 2013-31 Exhibit A Page 8 of 25 G-226 security acceptable to the Director of Public Works for any approved improvements within the public right-of-way of Crestridge Road. 38. The contractor shall be responsible for repairs to any neighboring streets in the City of Rancho Palos Verdes (those streets to be determined by the Director of Public Works) which may be damaged during development of the project. Prior to issuance of a grading permit, the developer shall post a bond, cash deposit or City approved security, in an amount determined by the Director of Public Works to be sufficient to cover the costs to repair any damage to streets or appurtenant structures as a result of this development. Said streets shall be videotaped by the applicant and submitted to the Public Works Department on CD prior to issuance of a grading permit. 39. Prior to issuance of any Certificate of Occupancy for the project, and subject to review and approval by the Director of Public Works, the Applicant shall be responsible for installing 1) a "STOP" sign and stop bar at the project driveway that intersects with Crestridge Road. This feature shall be shown on all project plans submitted for building permit review. (Mitigation Measure T-4) Subject to review and approval by the Director of Public Works and the Sherrif 's Department, the text of said sign shall be worded in such a way and the location of said sign shall be placed in such a way that the sign will be enforceable by the Sherriffs Department. 40. Landscaping, walls or other site improvements at or near the proposed project driveway shall not obstruct a driver's clear line of sight, to the satisfaction of the Director of Public Works. (Mitigation Measure T-4) 41. On -street parking shall identified sight visibility (Mitigation Measure T-4) Survey Monumentation be prohibited along the property frontage within the lines as determined by the Public Works Director. 42. Prior to recordation of the Final Map, a bond, cash deposit, or combination thereof shall be posted to cover costs to establish survey monumentation in an amount to be determined by the City Engineer. 43. Within twenty-four (24) months from the date of filing the Final Map, the developer shall set survey monuments and tie points and furnish the tie notes to the City Engineer. 44. All lot corners shall be referenced with permanent survey markers in accordance with the City's Municipal Code. Resolution No. 2013-31 Exhibit A Page 9 of 25 G-227 45. All corners shall be referenced with permanent survey markers in accordance with the Subdivision Map Act. Street Names and Unit Numbering 46. Any street names and/or unit numbering by the developer must be approved by the City Engineer. Grading 47. Prior to recordation of the final map or the commencement of work, whichever occurs first, a bond, cash deposit, or combination thereof, shall be posted to cover the costs of grading in an amount to be determined by the City Engineer. 48. Permitted hours and days for grading of the site, including site preparation, import and export, shall be limited to the hours between 8:15 AM and 4:15 PM, Monday through Friday, with no such activities permitted on Saturdays, Sundays or on the legal holidays specified in Section 17.96.920 of the Rancho Palos Verdes Municipal Code without a special construction permit. 49. Prior to issuance of a grading permit by Building and Safety, the applicant shall submit to the City a Certificate of Insurance demonstrating that the applicant has obtained a general liability insurance policy in an amount not less than 5 million dollars per occurrence and in the aggregate to cover awards for any death, injury, loss or damage, arising out of the grading or construction of this project by the applicant. Said insurance policy must name the City and its officers, agents and employees as additional insureds and be issued by an insurer with a minimum rating of A -VII by Best's Insurance Guide. Said insurance shall not be canceled or reduced during the grading or construction work and shall be maintained in effect for a minimum period of one (1) year following the final inspection and approval of said work by the City, and without providing at least thirty (30) days prior written notice to the City. 50. Approval of the project shall allow a total of 147,000 cubic yards of earth movement, consisting of 145,000 cubic yards of cut and 2,000 cubic yards of fill, of which 143,000 cubic yards will be exported from the site. Any revisions that result in a substantial increase to the aforementioned grading quantities shall be reviewed and approved by the City Council as a revision to the grading application. 51. The construction of three retaining walls shall be permitted as part of the proposed project. These include one, 6 -foot high upslope retaining wall behind each of the three structures on the west side of the development, as illustrated on the approved plans. Subject to review and approval by the Community Resolution No. 2013-31 Exhibit A Page 10 of 25 G-228 Development Director, and prior to issuance of any provide a landscape plan be aesthetically screener aesthetically pleasing. and/or other plan showing by use of landscaping permits, the Applicant shall how the retaining walls will and wall materials that are 52. A construction plan shall be submitted to the Community Development Director prior to issuance of a grading permit. Said plan shall include but not be limited to: limits of grading, estimated length of time for rough grading and improvements, location of construction trailer, location and type of temporary utilities. The use of rock crushers shall be prohibited. 53. Prior to filing the Final Map, a grading plan shall be reviewed and approved by the City Engineer and City Geologist. This grading plan shall include a detailed engineering, geology and/or soils engineering report and shall specifically be approved by the project's California State Licensed geologist and/or soils engineer and show all recommendations submitted by them. It shall also be consistent with the tentative map and conditions, as approved by the City. 54. Grading shall conform to Chapter 29, "Excavations, Foundations, and Retaining Walls", and Chapter 70, "Excavation and Grading of the Uniform Building Code". 55. Prior to issuance of a grading permit, haul routes used to transport soil exported from the project site shall be approved by the Director of Public Works to minimize exposure of sensitive receptors to potential adverse noise levels from hauling operations. In reviewing the haul route, the Public Works Director shall take into account and consideration the school traffic along the haul routes, and shall have the ability to modify the approved haul route, modify the hours of the grading operation, and impose any traffic -control conditions in the interest of public safety, if deemed necessary. 56. The following shall be implemented during construction to minimize emissions of NOx associated with diesel -fuelled construction equipment. a) All diesel construction equipment shall meet Interim Tier 4 EPA emission standards. b) Construction contractors shall minimize equipment idling time throughout construction. Engines shall be turned off if idling would be for more than five minutes. c) Equipment engines shall be maintained in good condition and in proper tune as per manufacturers' specifications. d) The number of pieces of equipment operating simultaneously shall be minimized. e) Construction contractors shall use alternatively fueled construction equipment (such as compressed natural gas, liquefied natural gas, or electric), when feasible. f) The engine size of construction equipment shall be the minimum practical Resolution No. 2013-31 Exhibit A Page 11 of 25 G-229 size. h) Heavy-duty diesel -powered construction equipment manufactured after 1996 (with federally mandated clean diesel engines) shall be utilized wherever feasible. i) During the smog season (May through October), the construction period should be lengthened as permitted by the City's Municipal Code so as to minimize the number of vehicles and equipment operating at the same time. (Mitigation Measure AQ -1(a)) 57. The following shall be implemented during construction to minimize fugitive dust emissions: a) All exposed, disturbed, and graded areas onsite shall be watered three times (3x) daily until completion of project construction to minimize the entrainment of exposed soil. b) Pre-grading/excavation activities shall include watering the area to be graded or excavated before commencement of grading or excavating activities. Application of water (preferably reclaimed, if available) should penetrate sufficiently to minimize fugitive dust during grading activities. C) Fugitive dust produced during grading, excavation, and construction activities shall be controlled by the following activities: • Trucks transporting material on and off the site must be tarped from the point of origin or must maintain at least one feet of freeboard. • All graded and excavated material, exposed soil areas, and active portions of the construction site, including unpaved on-site roadways, shall be treated to prevent fugitive dust. Treatment shall include, but not necessarily be limited to, periodic watering, application of environmentally -safe soil stabilization materials, and/or roll -compaction as appropriate. Watering shall be done as often as necessary and reclaimed water shall be used whenever possible. d) Ground cover must be replaced in disturbed areas as quickly as possible. e) During periods of high winds (i.e., wind speed sufficient to cause fugitive dust to affect adjacent properties), all clearing, grading, earth moving, and excavation operations shall be curtailed to the degree necessary to prevent fugitive dust from being an annoyance or hazard, either off-site or on-site. f) The contractor must provide adequate loading/unloading areas that limit track -out onto adjacent roadways through the utilization of wheel washing, rumble plates, or another method achieving the same intent. g) Adjacent streets and roads shall be swept at least once per day, preferably at the end of the day, if visible soil material is carried over to adjacent streets and roads. h) Personnel involved in grading operations, including contractors and subcontractors, shall wear respiratory protection in accordance with California Division of Occupational Safety and Health regulations. Resolution No. 2013-31 Exhibit A Page 12 of 25 G-230 i) All residential units located within 500 feet of the construction site must be sent a notice regarding the construction schedule of the proposed project. A sign legible at a distance of 50 feet must also be posted in a prominent and visible location at the construction site, and must be maintained throughout the construction process. All notices and the signs must indicate the dates and duration of construction activities, as well as provide a telephone number where residents can inquire about the construction process and register complaints. j) Visible dust beyond the property line emanating from the project must be prevented to the maximum extent feasible. k) Signs shall be posted on-site limiting construction traffic to 15 miles per hour or less. 1) Dust control requirements shall be shown on all grading plans. m) These control techniques must be indicated in project specifications. Compliance with the measure shall be subject to periodic site inspections by the City. (Mitigation Measure AQ -1(b)) Common Area Improvements and CC&Rs 58. The community garden area at the northwest portion of the site shall not be planted with any type of trees, including but not limited to citrus trees, avocado trees, etc. The individual gardens in this area shall not be enclosed with any fencing taller than 42 -inches in height. 59. In order to minimize view impairing foliage when viewed from the residences along Mistridge Drive, Oceanridge Drive and Seaside Heights Drive, all common landscaping throughout the development shall be maintained so that it will not exceed the height of the line illustrated and depicted on the photographs taken from the residences along Mistridge Drive and Seaside Heights Drive, which are on file with the Planning Department (Exhibit B to City Council Resolution No. 2013-31). If it is brought to the City's attention that foliage in the development exceeds the aforementioned line and impairs a view as viewed from any residence along Mistridge Drive, Seaside Heights Drive or Oceanridge Drive, then said foliage shall be trimmed down to a level that no longer impairs the view. 60. The Community Service Center shall not be rented to or used by non-residents or non -owners of the community. Additionally, the Center shall be closed daily by no later than 10pm. 61. The entry tower shall be limited to a maximum height of 16 -feet, as measured from adjacent finish grade to the highest point of the structure. 62. An improved public pedestrian access trail shall be provided through the community and maintained by the developer and subsequent HOA. Specifically, Resolution No. 2013-31 Exhibit A Page 13 of 25 G-231 the trail system shall be provided for the general public that connects Crestridge Road to the Vista del Norte Trail and the Indian Peak Loop Trail located on the City's Reserve property to the north. 63. The pedestrian access point at the entry tower shall not contain a gate or other similar enclosure that would prevent the general public from entering, or discouraged from entering, the site to access the trailheads at the rear of the property or the trails located on the City's Reserve property to the north. Further, public access shall not be impeded by any gate, fence, or improvement along the entire length of the public trail easement. 64. The public trail shall be limited to pedestrian use only; and shall facilitate and ensure public access through the community to the trails in the Vista del Norte Reserve to the north. 65. The trail portions at the north of the development that connect to the City trails shall be constructed using decomposed granite or other material approved by the Community Development Director and maintained by the developer and subsequent HOA. 66. Directional signage shall be posted along the entire length of the public trail to guide the general public through the development and to the two trials identified above. The location and signage design shall be approved by the Community Development Director prior to installation 67. Any temporary or permanent project signage shall require the approval of a sign permit by the Community Development Director, and shall be consistent with the provisions of Section 17.76.050(E)(2). 68. No parking shall be allowed on the internal private street. 69. The internal private street shall be maintained by the developer and subsequent HOA. 70. A minimum of 31 guest parking spaces shall be provided and maintained throughout the development. Lighting: 71. All exterior lighting shall be in compliance with the standards of Section 17.56.040 of the Rancho Palos Verdes Development Code. 72. Prior to Building Permit issuance, the applicant shall submit a final site lighting plan, prepared by a lighting consultant, for the review and approval of the Resolution No. 2013-31 Exhibit A Page 14 of 25 G-232 Community Development Director. The lighting plan shall include the location, height, number of lights, foot candles by area and, estimates of maximum illumination on site with no spill/glare at the property line. The lighting color temperature shall be limited to a range between 2,700 to 3,700 Kelvin for lights. The lighting plan shall also demonstrate that all lighting fixtures on the buildings and throughout the entire project site are designed and installed so as to contain light on the subject property and not spill over or be directed toward adjacent properties or public rights-of-way. The light source on each fixture shall be shielded such that the light source is not visible from the public rights-of-way or adjacent properties. 73. Exterior lighting fixtures in the landscape area shall be low, downcast, bollard - type fixtures, not to exceed forty-two 42" inches in height and shall employ downcast and shielded lumieres. 74. No one light fixture shall exceed 1,200 watts, and the light source shall not be directed toward or result in direct illumination of an adjacent parcel of property or properties other than upon which such light source is physically located. All exterior lighting shall be arranged and shielded so as to prevent direct illumination of abutting properties and to prevent distraction of drivers of vehicles on public rights-of-way. 75. No outdoor lighting shall be permitted where the light source or fixture, if located on a building is more than 7 -feet above existing grade, adjacent to the building, with the exception of ceiling lights in the ceilings above exterior covered balconies. 76. Prior to issuance of a Certificate of Occupancy for each building, the applicant shall request that the Director or his designee conduct an inspection of the site to ensure that there is no spill-over of light onto adjacent properties or cause a negative impact to adjacent properties or public rights-of-way and that the light sources on each fixture are appropriately shielded such that the light source is not visible from the public rights-of-way or adjacent properties. Upon determination by the Director that any installed lighting creates an impact, the property owner shall modify said lighting to the satisfaction of the Director. 77. All exterior lighting fixtures on the grounds, pathways and common areas, including any street lights, shall not exceed 5 feet in height, as measured from adjacent grade. 78. No internally -illuminated signage may be used on the project site. 79. All proposed lighting shall be shielded so that it is down -cast and does not create any direct illumination impacts to off-site properties. Resolution No. 2013-31 Exhibit A Page 15 of 25 G-233 Street Names and Numbering 80. Any street names and/or house numbering by the developer must be approved by the City Engineer. Park, Open Space and Other Dedications 81. Prior to final tract map recordation, the applicant shall pay to the City a fee equal to the value of parkland in lieu of the dedication of such land to the City, pursuant to the provision of Section 16.20.100 of the Rancho Palos Verdes Municipal Code. 82. A pedestrian trail easement shall be dedicated to the City and recorded on the Final Tract Map to connect Crestridge Road with the two existing trails located on the City's Reserve property to the north. The trail portions at the north of the development that are not associated with the trail network for project residents shall be constructed using decomposed granite or other material approved by the Community Development Director. 83. The community services building, internal roadway and public trail shall all be constructed and completed to the satisfaction of the Community Development Director, prior to the building permit final for the first condominium building. Affordable Housing 84. The applicant shall construct three (3) units affordable to households with very low incomes. The three (3) affordable units shall be similar in exterior appearance, interior appointments, configuration and basic amenities (such as storage space and outdoor living areas) to the market rate units in the proposed project, as demonstrated to the satisfaction of the Community Development Director prior to building permit final of the affordable units. Covenants and agreements required by Chapter 17.11 of the City's Municipal Code must be recorded against the three (3) affordable units, which shall be specifically designated, concurrently with the recordation of the final map or the issuance of the certificate of occupancy for any building, whichever occurs first. Geology 85. Prior to the issuance of a building permit by the City's Building Official, the applicant shall obtain final approval of the grading and construction plans from the City's geotechnical consultant. This review shall include analysis of any potential impacts resulting from the former landslide condition on the subject Resolution No. 2013-31 Exhibit A Page 16 of 25 G-234 property. The applicant shall be responsible for the preparation and submittal of all soil engineering and/or geology reports required by the City's geotechnical consultant in order to grant such final approval. 86. All geologic hazards associated with this proposed development shall be eliminated or the City Geologist shall designate a restricted use area in which the erection of buildings or other structures shall be prohibited. 87. Prior to issuance of grading or building permits, the developer shall submit a Geology and/or Soils Engineer's report on the expansive properties of soils on all building sites in the proposed subdivision. Such soils are defined by Building Code Section 2904 (b). 88. An as -built geological report shall be submitted for structures founded on bedrock. An as -built soils and compaction report shall be submitted for structures founded on fill as well as for all engineered fill areas. 89. Compliance with the recommendations included in the previous geotechnical studies undertaken at the site shall be required. These recommendations include maintenance of a uniform, near optimum moisture content in the slope soils, and avoidance of over -drying or excess irrigation, which will reduce the potential for softening and strength loss. In addition, slope maintenance shall include the immediate planting of the slope with approved, deep rooted, lightweight, drought resistant vegetation, as well as proper care of erosion and drainage control devices, and a continuous rodent control program. Brow ditches and terraces shall be cleaned each fall, before the rainy season, and shall be frequently inspected and cleaned, as necessary, after each rainstorm. Access to the slopes, including foot traffic outside of designated pedestrian footpaths, should be minimized to avoid local disturbance to surficial soils. The City of Rancho Palos Verdes Public Works Department shall review and approve all final plans for slope maintenance prior to issuance of a grading permit. (Mitigation Measure GEO-2(a)) 90. The proposed retaining wall at the top of the existing cut slope at the eastern boundary of the site shall be designed as a buried retaining wall to support the project and underlying adverse geologic structure. The system requires a design and depth of embedment that would safeguard onsite improvements in the event the offsite slope failed. (Mitigation Measure GEO-2(b)) 91. An as -graded geotechnical report shall be prepared by the project geotechnical consultant following completion of grading. The report shall include the results of in -grading density tests, and a map clearly depicting buttress fill keyway locations and depths, removal area locations and depths, sub -drainage system locations and depths and geological conditions exposed during grading. (Mitigation Measure GEO-2(c)) Resolution No. 2013-31 Exhibit A Page 17 of 25 G-235 92. If required by the final geotechnical report, as reviewed and approved by the City Geologist, the applicant shall install permanent inclinometer stations at the site to allow the northern slope to be monitored for possible movement following implementation of the project. The number and location of the inclinometer stations shall be determined by the City Geologist. The applicant shall submit a record of inclinometer readings along with any recommendations from a geotechnical engineer to the City every six months during the lifetime of the project or until the City Geologist agrees that semi-annual readings are no longer necessary. In addition, readings and geotechnical recommendations shall be submitted to the City following a heavy rainfall month (>2 times average monthly rainfall) or following a magnitude 5.0 or greater seismic event within 20 miles of the project site. If the geotechnical engineer determines that sufficient movement has taken place that warrants further corrective or preventative action, the project applicant shall be responsible for all expenses associated with the costs of implementing any remediation recommended by the geotechnical engineer to ensure that the slope remains stable. Further monitoring by inclinometers may be required, if recommended by the geotechnical engineer or required by the City. (Mitigation Measure GEO-2(d)) 93. Prior to issuance of any Grading Permit or Building Permit, the project applicant shall comply with all recommendations contained within the Geology and Geotechnical Investigation prepared by Group Delta Consultants (2003) including: • Following grading, the expansion potential of the exposed subgrade shall be tested. The design of foundations and slabs shall consider the high expansion potential. Following completion of grading and until slabs and footings are poured, the exposed soil and bedrock materials shall be periodically wetted to prevent them from drying out. Pre -saturation is also recommended. (Mitigation Measure GEO-3(a)) 94. Suitable measures to reduce impacts from expansive soils could include one or more of the following techniques, as determined by a qualified geotechnical engineer and approved by the City Geologist: • Excavation of existing soils and importation of non -expansive soils. All imported fill shall be tested and certified by a registered Geotechnical Engineer and certified for use as a suitable fill material; and • On-site foundations shall be designed to accommodate certain amounts of differential expansion in accordance with Chapter 18, Division III of the UBC. (Mitigation Measure GEO-3(b)) Utilities 95. Prior to building permit issuance, the applicant shall provide evidence of confirmation from the applicable service providers that provide water, wastewater Resolution No. 2013-31 Exhibit A Page 18 of 25 G-236 treatment and solid waste disposal, that current water supplies are adequate to serve the proposed project. 96. Prior to building permit issuance, the applicant shall ensure that construction plans and specifications for the project includes the following interior water - conservation measures for the following plumbing devices and appliances: Reduce water pressure to 50 pounds per square inch or less by means of a pressure -reducing valve; Install water -conserving clothes washers; Install water - conserving dishwashers and/or spray emitters that are retrofitted to reduce flow; and, install one -and -one-half gallon, ultra-low flush toilets. 97. All utilities to and on the property shall be provided underground, including cable television, telephone, electrical, gas and water. All necessary permits shall be obtained for their installation. Cable television shall connect to the nearest trunk line at the developer's expense. 98. Site disturbance, including brush clearance, shall be prohibited during the general avian nesting season (February 1 — August 30), if feasible. If breeding season avoidance is not feasible, a qualified biologist shall conduct a preconstruction nesting bird survey to determine the presence/absence, location, and status of any active nests on or adjacent to the project site. The surveys shall be conducted by a qualified biologist approved by the Community Development Department. The extent of the survey buffer area surrounding the site shall be established by the qualified biologist to ensure that direct and indirect effects to nesting birds are avoided. To avoid the destruction of active nests and to protect the reproductive success of birds protected by MBTA and the Fish and Game Code of California, nesting bird surveys shall be performed twice per week during the three weeks prior to the scheduled vegetation clearance. In the event that active nests are discovered, a suitable buffer (e.g. 30-50 feet for passerines) should be established around such active nests. No ground disturbing activities shall occur within this buffer until the City -approved biologist has confirmed that breeding/nesting is completed and the young have fledged the nest. (Mitigation Measure BIO -3) 99. The following measures shall be employed as part of construction monitoring for the site: • Contractors shall be educated regarding the off-site Reserve and the need to keep equipment and personnel within the project site prior to the initiation of construction. • Temporary construction fencing shall be placed at the planned limits of disturbance adjacent to the Reserve. (Mitigation Measure BIO -4(a)) 100. No species listed in the Cal -IPC Invasive Plant Inventory (2006) or identified as Resolution No. 2013-31 Exhibit A Page 19 of 25 G-237 potentially invasive ornamental species in the Rancho Palos Verdes NCCP Subarea Plan (2004) will be utilized in the landscaping plan for the site. Species listed in the Subarea Plan include everblooming acacia (Acacia longifolia), Sydney golden wattle (Acacia cyclops), Peruvian pepper tree (Schinus molle), Brazilian pepper tree (Schinus terebenthifolia), black locust (Robinia pseudo- acacia), myoporum (Myoporum laetum), gum tree (Eucalyptus spp.), and pines (Pinus spp.). In addition, to the extent feasible the proposed project shall incorporate native habitat elements into the landscaping plan for the 1.67 -acre passive park with trails, scenic overlooks, and community gardens in the northern portion of the Crestridge Senior Housing development project. Native habitat elements include using locally sourced native shrubs such as toyon, California sagebrush, coastal bluff buckwheat, native grasses, and native perennial forbs as part of the planting palette. (Mitigation Measure BIO -4(b)) 101. Grading and building plans submitted for the proposed project for City review and approval shall identify areas for construction staging, fueling and stockpiling. These areas shall be located as far as practical from the Vista del Norte Preserve, and not closer than 70 feet from the Preserve boundary. (Mitigation Measure 131O4(c)) 102. Cut/fill slopes not subject to fuel modification and adjacent to the City's Reserve property shall be re -vegetated with appropriate native species approved by the PVPLC. 103. Avoid sidecasting of materials during road and utility construction and maintenance. 104. Construction adjacent to drainage shall occur during periods of minimum flow (i.e., summer through the first significant rain of fall) to avoid excessive sedimentation and erosion and to avoid impacts to drainage -dependent species. Cultural Resources 105. If cultural resources are encountered during grading or construction, the construction manager shall ensure that all ground disturbance activities are stopped, and shall notify the City Building and Safety Department immediately to arrange for a qualified archaeologist to assess the nature, extent, and potential significance of any cultural resources. If such resources are determined to be significant, appropriate actions to mitigate impacts to the resources must be identified in consultation with a qualified archaeologist. Depending upon the nature of the find, such mitigation may include avoidance, documentation, or other appropriate actions to be determined by a qualified archaeologist. The archeologist shall complete a report of excavations and findings, and shall the report to the South Central Coastal Information Center. After the find is Resolution No. 2013-31 Exhibit A Page 20 of 25 G-238 appropriately mitigated, work in the area may resume. (Mitigation Measure CR - 1) 106. Prior to the commencement of grading, the applicant shall retain a qualified paleontologist approved by the City to monitor grading and excavation. Monitoring onsite shall occur whenever grading activities are occurring. Additional monitors in addition to one full-time monitor may be required to provide adequate coverage if earth -moving activities are occurring simultaneously. Any cultural resources discovered by construction personnel or subcontractors shall be reported immediately to the paleontologist. In the event undetected buried resources are encountered during grading and excavation, work shall be halted or diverted from the area and the paleontologist shall evaluate the resource and propose appropriate mitigation measures. Measures may include testing, data recovery, reburial, archival review and/or transfer to the appropriate museum or educational institution. All testing, data recovery, reburial, archival review or transfer to research institutions related to monitoring discoveries shall be determined by the qualified paleontologist and shall be reported to the City. (Mitigation Measure CR -2) Noise 107. The applicant shall provide, to the satisfaction of the Community Development Director, a Noise Mitigation and Monitoring Program that requires all of the following: • Construction contracts that specify that all construction equipment, fixed or mobile, shall be equipped with properly operating and maintained mufflers and other state required noise attenuation devices. • That property owners and occupants located within 0.25 miles of the project site shall be sent a notice by the developer, at least 15 days prior to commencement of construction of each phase, regarding the construction schedule of the project. All notices shall be reviewed and approved by the Community Development Director prior to the mailing or posting and shall indicate the dates and duration of construction activities, as well as provide a contact name and telephone number where residents can inquire about the construction process and register complaints. • That prior to issuance of any Grading or Building Permit, the Applicant shall demonstrate to the satisfaction of the City's Building Official how construction noise reduction methods such as shutting off idling equipment and vehicles, installing temporary acoustic barriers around stationary construction noise sources, maximizing the distance between construction equipment staging and parking areas and occupied residential areas, and electric air compressors and similar power tools, rather than diesel equipment, shall be used where feasible. Resolution No. 2013-31 Exhibit A Page 21 of 25 G-239 • That during construction, stationary construction equipment shall be placed such that emitted noise is directed away from sensitive noise receivers. (Mitigation Measure N -1(a)) 108. During demolition, construction and/or grading operations, trucks and other construction vehicles shall not park, queue and/or idle at the project site or in the adjoining public rights-of-way prior to the grading and construction hours specified in condition nos. 10 and 48, above. (Mitigation Measure N -1(b)) 109. The construction contractor shall provide staging areas onsite to minimize off-site transportation of heavy construction equipment. These areas shall be located to maximize the distance between activity and sensitive receptors (neighboring residences and institutional uses). This would reduce noise levels associated with most types of idling construction equipment. (Mitigation Measure N-1 (c)) 110. All diesel equipment shall be operated with closed engine doors and shall be equipped with factory recommended mufflers. (Mitigation Measure N-1 (d)) 111. Electrical power shall be used to run air compressors and similar power tools and to power any temporary structures, such as construction trailers or caretaker facilities. (Mitigation Measure N-1 (e)) 112. Excavation and conditioning activities shall be restricted to between the hours of 8:15 AM and 4:15 PM, Monday through Friday and located to maximize the distance between activity and sensitive receptors (neighboring residences and institutional uses). (Mitigation Measure N -1(f)) 113. For all noise -generating construction activity on the project site, additional noise attenuation techniques shall be employed to reduce noise levels to the maximum extent feasible. Such techniques may include, but are not limited to, the use of sound blankets on noise generating equipment and the construction of temporary sound barriers between construction sites and nearby sensitive receptors. (Mitigation Measure N -1(g)) Development Standards 114. Unless specific development standards for the development of the property are contained in these conditions of approval, the development of the lots shall comply with the requirements of Title 17 of the City's Municipal Code. 115. Prior to submittal of plans to the Building and Safety Division for plan check, the buildings identified in the associated Staff Report to the Planning Commission dated November 13, 2012, shall be modified as follows: Resolution No. 2013-31 Exhibit A Page 22 of 25 G-240 Building containing units 23 and 24: A hip roof shall be added to the East end of the building so that most of the building is below 16 feet in height in order to reduce roof mass at the East end of the building. Building containing units 19, 20, 21, 22: Hip roofs shall be added to both West and East building ends; the roof pitch shall be changed from 3:12, to 1-3/4:12; and the plate heights of the units shall be reduced by 1 foot, from 10 feet to 9 feet in order to reduce the overall building height by 3 feet and reduce the roof mass at both ends of the building. Maximum overall building height shall be limited to 24 -feet. Building containing units 45 and 46: A hip roof shall be added to the East end of the building; the roof pitch shall be changed from 3:12, to 1-3/4:12; and the plate heights of the units shall be reduced by 1 foot, from 10 feet to 9 feet in order to reduce the overall building height by 3 feet and reduce the roof mass at the East end of building. Maximum overall building height shall be limited to 24 - feet. 116. All buildings shall maintain minimum setbacks of at least twenty-five feet (25'-0") front and street side setbacks, and twenty (20'-0") side and rear setbacks. 117. Driveway slopes shall conform to the maximum 20 -percent standard set forth in the Development Code. 118. The private driveway and parking areas shall meet Fire Department standards, including any painting or stenciling of curbs denoting its existence as a Fire Lane and turn-arounds. 119. Prior to building permit issuance, the building elevations shall be revised to provide architectural trim and detailing on any blank 2 -story facades of the facing wings of the building. 120. With the exception of the buildings identified in Condition no. 115 above, the maximum building heights shall be limited to the ridgeline elevations identified in the plan reviewed by the Planning Commission on December 11, 2013, and approved by the City Council on March 5, 2013. BUILDING HEIGHT CERTIFICATION REQUIRED for every building, prior to roof sheathing inspection. 121. The pad elevations for each structure shall be limited to the pad elevations identified on the grading plan reviewed by the Planning Commission on December 11, 2012, and approved by the City Council on March 5, 2013. PAD ELEVATION CERTIFICATION REQUIRED for each building pad, prior to construction of each building on that pad. Further, a FINISH FLOOR Resolution No. 2013-31 Exhibit A Page 23 of 25 G-241 ELEVATION CERTIFICATION for each building shall also be provided prior to placement of concrete. 122. The approved project shall consist of sixty (60) 2 -bedroom condominium units, age restricted to 55 years and older. 123. The approved project shall provide and maintain a 2 car enclosed garage for each unit. Further, a minimum of 31 off-street guest parking spaces shall be provided and maintained. 124. Chimneys, vents and other similar features shall be no higher than the minimum requirements of the Uniform Building Code. 125. The following attached unit development standards from Chapter 17.06 of the Rancho Palos Verdes Development Code shall apply to all units in the building: a. No plumbing fixture or other such permanent device which generates noise or vibration shall be attached to a common wall adjacent to a living room, family room, dining room, den or bedroom of an adjoining unit. All plumbing fixtures or similar devices shall be located on exterior walls, on interior walls within the unit or on common walls, if adjacent to a similar fixture or device. b. All water supply lines within common walls and/or floors/ceilings shall be isolated from wood or metal framing with pipe isolators specifically manufactured for that purpose and approved by the city's building official. In multistory residential structures, all vertical drainage pipes shall be surrounded by three -quarter -inch thick dense insulation board or full thick fiberglass or wool blanket insulation for their entire length, excluding the sections that pass through wood or metal framing. The building official may approve other methods of isolating sound transmission through plumbing lines where their effectiveness can be demonstrated. C. All common wall assemblies which separate attached single-family units shall be of a cavity -type construction. d. All common wall assemblies which separate all other attached dwelling units (multiple -family condominiums, stock cooperatives, community apartment houses) or a dwelling unit and a public or quasi -public space shall be of a staggered -stud construction. e. All common wall assemblies which separate dwelling units from each other or from public or quasi -public spaces (interior corridors, laundry rooms, recreation rooms and garages) shall be constructed with a minimum rating of fifty-five STC (sound transmission class). f. All common floor/ceiling assemblies which separate dwelling units from each other or from public or quasi -public spaces (interior corridors, laundry rooms, recreation rooms and garages) shall be constructed with a minimum rating of fifty STC (sound transmission class) and a minimum Resolution No. 2013-31 Exhibit A Page 24 of 25 G-242 rating of fifty-five IIC (impact insulation class). Floor coverings may be included in the assembly to obtain the required ratings, but must be retained as a permanent part of the assembly and may only be replaced by another insulation. g. STC and IIC ratings shall be based on the result of laboratory measurements and will not be subjected to field testing. The STC rating shall be based on the American Society for Testing and Materials system specified in ASTM number 90-66t or equivalent. The IIC rating shall be based on the system in use at the National Bureau of Standards or equivalent. Ratings obtained from other testing procedures will require adjustment to the above rating systems. In documenting wall and floor/ceiling compliance with the required sound ratings, the applicant shall either furnish the city's building official with data based upon tests performed by a recognized and approved testing laboratory, or furnish the building official with verified manufacturer's data on the ratings of the various wall and floor/ceiling assemblies utilized. 126. Fences and walls located within the 25 -foot front -yard setback area shall not exceed forty-two inches (42") in height, with the exception of the intersection visibility triangle at the driveway and Crestridge Road, where the height of any fences or walls shall be subject to review and approval by the Public Works Department. No perimeter fencing is approved with these entitlements; however, any future request to install perimeter fencing shall be subject to review and approval by the Community Development Director prior to installation of any perimeter fencing. 127. With the exception of solar panels, roof -mounted mechanical equipment is not permitted. Mechanical equipment may encroach upon the rear- and side -yard setback areas, provided that such equipment does not generate noise levels in excess of 65 dBA at the property line. 128. The condominium development is a senior housing development for seniors aged 55 and older. The development shall comply with all applicable Federal and State Laws governing senior housing for seniors aged 55 and older. Resolution No. 2013-31 Exhibit A Page 25 of 25 G-243 0 Iq t, I -P G-244 �mv M .� C7 O N N W 0) O m Z d c O M O N t 72 L X W G-245 c 0 0 co :t -�2 x LLJ cu cr- W— G-246 c O m y.. t X W G-247