Loading...
HomeMy WebLinkAbout1.01 Bylaws of HOABYLAWS OF LACY PARK OWNERS ASSOCIATION TABLE OF CONTENTS BYLAWS OF LACY PARK OWNERS ASSOCIATION ARTICLE I - OFFICES 1 ARTICLE II - OBJECT 1 Section 1. Purpose 1 Section 2. Application 1 Section 3. Nonprofit Corporation 1 ARTICLE III - MEMBERSHIP, VOTING, QUORUM, PROXIES 1 Section 1. The Name 1 Section 2. Membership 1 Section 3. Voting 2 Section 4. Two Classes of Voting Membership 2 Section 5. Resolution of Voting Disputes 2 Section 6. Cumulative Voting 2 Section 7. Majority Vote 2 Section 8. Quorum 2 Section 9. Adjournment of Members' Meetings 3 Section 10. Vote Required at Members' Meetings 3 Section 11. Proxies 3 Section 12. Required Proxies 3 ARTICLE IV - MEMBERSHIP MEETINGS 3 Section 1. Association Responsibilities 3 Section 2. Annual Meetings 3 Section 3. Special Meetings 4 Section 4. Notice of Meetings 4 Section 5. Order of Business 4 ARTICLE V - EXECUTIVE BOARD 4 Section 1. Number and Qualifications 4 Section 2. Powers and Duties 4 Section 3. Management Agent 6 Section 4. Election and Term of Office 6 Section 5. Vacancies 6 Section 6. Removal of Members of the Executive Board 6 Section 7. Regular Meetings 6 Section 8. Special Meetings 7 Section 9. Waiver of Notice 7 C:\CLIENT JOHNSON\DOC\8-3-98.BYL i Section 10. Quorum 7 Section 11. Immunity 7 Section 12. Powers Restricted 7 ARTICLE VI - OPEN MEETINGS AND EXECUTIVE SESSIONS 7 Section 1. Open Meetings 7 Section 2. Closed Sessions 7 Section 3. Topics Limited 8 Section 4. Announcement Required 8 Section 5. Other Limitations 8 Section 6. Minutes 8 ARTICLE VII - OFFICERS 8 Section 1. Designation 8 Section 2. Election of Officers 8 Section 3. Removal of Officers 9 Section 4. President 9 Section 5. Vice -President 9 Section 6. Secretary 9 Section 7. Treasurer 9 ARTICLE VIII - INDEMNIFICATION OF BOARD MEMBERS AND OFFICERS ... 9 ARTICLE IX - BUDGETS 10 Section 1. Executive Board to Propose Budgets 10 Section 2. Membership Approval 10 ARTICLE X - ASSESSMENTS 10 Section 1. Assessments 10 Section 2. Annual Assessments 11 Section 3. Special Assessments 11 Section 4. Establishment of Annual Assessment Period 12 Section 5. Equality of Assessment and Exceptions 12 Section 6. Collection of Assessments 12 Section 7. Assessment Liens 12 Section 8. Non -User Exemption 13 Section 9. Payment of Assessments 13 Section 10. Assessment Certificates 13 Section 11. Notice of Assessment Liens 13 C: \CLIENThOHNSON\DOC \8-3-98. BYL ii ARTICLE XI - LIMITA Section 1. Section 2. Section 3. Section 4. DECLARANT'S RIGHTS TO CONTROL THE ASSOCIATION AND TIONS 13 This Article Controls 13 Period of Declarant Control 14 Voluntary Surrender 14 Association's Records 14 ARTICLE XII - Section 1. Section 2. ARTICLE XIII Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. ARTICLE XIV Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. RULES AND REGULATIONS 14 Promulgation of Rules and Regulations 14 Members and Occupants to Comply 14 - INSURANCE 14 Association to Maintain Insurance 14 Liability Coverage 14 Non -Availability 15 Fidelity Bonds and Insurance 15 Officers and Directors 15 Worker's Compensation and Employer's Liability Insurance 15 Other Insurance 16 Insurance Expense 16 - MISCELLANEOUS 16 Amendments 16 Proof of Ownership. 16 Registration of Mailing Address 16 Bylaws Shall Comply with Law 16 Nonprofit Purpose 16 Corporate Seal 17 C:\ CLIENT\JOHNSON\DOC18-3-98. BYL iii BYLAWS OE LACY PARK OWNERS ASSOCIATION ARTICLE I - OFFICES The principal office of the corporation (the "Association") shall be located at 2720 Railroad Avenue, Rifle, Colorado 81650. The Association may have such other offices either within the State of Colorado as the Executive Board may designate, or as the business of the corporation may require. ARTICLE II - OBJECT Section 1. Purpose. The purpose of this nonprofit corporation is to govern the commercial Community consisting of the real property more particularly described and shown on the Final Plat of Lacy Park Subdivision, recorded as Reception No. of the Garfield County, Colorado records (the "Plat") and to administer the Declaration of Covenants, Conditions, and Restrictions for Lacy Park Subdivision recorded as Reception No. of the Garfield County, Colorado records (the "Declaration"). Section 2. Application. All present and future owners, tenants and persons using land or improvements within the Community, are subject to the provisions set forth in these Bylaws. The mere acquisition or rental of any lot or improvements in the Community or the mere act of occupancy of the same or any portion thereof shall signify that these Bylaws are accepted, ratified and will be complied with. Section 3. Nonprofit Corporation. This corporation is organized in compliance with the Colorado Nonprofit Corporation Act. To the extent any provision contained in these Bylaws or in the Declaration conflicts with any mandate of the Act, the provisions of the Act shall be deemed to control. The Declaration shall control the Bylaws to the extent any conflict should exist between those documents. ARTICLE III - MEMBERSHIP, VOTING, QUORUM, PROXIES Section 1. The Name. The name of the Association is LACY PARK OWNERS ASSOCIATION. Section 2. Membership. Membership shall be limited to record owners of lots in the Community. Every owner shall be entitled and required to be a member of the Association. An owner shall be entitled to one (1) membership for each lot owned. Each such membership shall C: \C W ENT\JOHNSON\DOC\8-3-98. BYL be appurtenant to and inseparable from the lot upon which it is based, and shall be transferred automatically by the transfer (in whatsoever form) of that lot. Ownership of a lot shall be the sole qualification for membership. No person or entity other than an owner may be a member of the Association. Section 3. Voting. Each lot shall be entitled to one (1) vote. Owners of more than one (1) lot shall have the right to cast the aggregate number of votes that the lots which they own represent. If any lot is owned by multiple parties, all such parties shall be members; provided, however, that the vote to which such lot is entitled shall be exercised as the several owners among themselves shall determine, but in no event shall more than one (1) vote be cast with respect to any one (1) lot. Section 4. Two Classes of Voting Membership. The Association shall have two classes of voting membership. Class A members shall be all the owners of lots other than the Declarant. The Declarant and any successor to Declarant's interests under the provisions of this Section by virtue of express assignment of Declarant's voting rights, shall be the Class B member. The Class B member shall be entitled to appoint and elect all members of the Executive Board of the Association, and to otherwise control the Association until such time as Declarant has transferred eighty percent (80%) of the lots to owners other than a Class B member, whereupon the Class B membership shall cease and be automatically converted to a Class A membership. Section 5. Resolution of Voting Disputes. In the event of any dispute as to the entitlement of any member to vote or as to the results of any vote of members, the Executive Board of the Association shall act as arbitrators and the decision of the disinterested majority of the Board shall, when rendered in writing, be final and binding. Section 6. Cumulative Voting. Cumulative voting shall not be allowed in the election of the Executive Board or for any other purpose. Section 7. Majority Vote. As used in these Bylaws, the term "majority vote" means more than fifty percent (50%) of the total number of votes authorized. Section 8. Quorum. Except as may be otherwise provided in the Declaration or these Bylaws, and except as hereinafter provided with respect to the calling of another meeting, the presence, in person or by proxy of members entitled to cast at least sixty percent (60%) of the votes of all members entitled to vote shall constitute a quorum at any meeting of such members. Members present in person or by proxy at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of members so as to leave less than a quorum. If the required quorum is not present in person or by proxy at any such meeting of members, another meeting may be called, subject to the notice requirements herein specified, and the presence, in person or by proxy of members entitled to cast at least forty percent (40%) of the votes of all member shall constitute a quorum at such meeting, except as may be otherwise provided in the Declaration, these Bylaws, or the Colorado Nonprofit Corporation Act. C:\CLIENTUGHNSON\DOC\8-3-98. BYL 2 Section 9. Adjournment of Members' Meetings. Members present in person or by proxy at any meeting may adjourn the meeting from time to time, whether or not a quorum shall be present in person or by proxy, without notice other than announcement at the meeting, for a total period or periods of not to exceed thirty (30) days after the date set for the original meeting. At any adjourned meeting which is held without notice other than announcement at the meeting, the quorum requirement shall not be reduced or changed, but if the originally required quorum is present in person or by proxy, any business may be transacted which might have been transacted at the meeting as originally called. Section 10. Vote Required at Members' Meetings. At any meeting, if a quorum is present, a majority of the votes present, in person or by proxy and entitled to be cast on a matter, shall be necessary for the adoption of the matter, unless a greater proportion is required by law, the Declaration, the Articles of Incorporation, or these Bylaws. Section 11. Proxies. A member entitled to vote may vote in person or by proxy executed in writing by the member or his duly authorized attorney-in-fact and filed with the Secretary of the meeting prior to the time the proxy is exercised. Any proxy may be revoked by attendance of the member in person at a meeting or by revocations in writing filed with the Secretary of the meeting prior to the time the proxy is exercised. A proxy shall automatically cease upon the conveyance by a member of the lot and the transfer of the membership on the books of the Association. Section 12. Required Proxies. If title to a lot is held by more than one (1) person or by a firm, corporation, partnership, association or other legal entity, or any combination thereof, such owners shall execute a proxy appointing and authorizing one (1) person or alternate persons to attend all annual and special meetings of members and thereat to cast whatever vote the owner himself might cast if he were personally present. Such proxy shall be effective and remain in force unless voluntarily revoked, amended, or sooner terminated by operation of law; provided, however, that within thirty (30) days after such revocation, amendment or termination, the owner shall reappoint and authorize one (1) person or alternate persons to attend all annual and special meetings as is provided by this paragraph. ARTICLE IV - MEMBERSHIP MEETINGS Section 1. Association Responsibilities. The Association shall have the responsibility of administering the project and advancing the purposes of the Association as set forth in the Declaration. Section 2. Annual Meetings. Meetings of the Association shall be held at such place as the Executive Board may determine. The annual meeting of the members shall be held at seven o'clock (7:00) p.m. on the second Tuesday in the month of October in each year for purposes of electing, from among the members, an Executive Board, and to transact such other business of the Association as may properly come before the meeting. C: \ CLIENT \JOHNSON\DOC \8-3-98. BYL 3 Section 3. Special Meetings. The President shall call a special meeting of the owners when so directed by resolution of the Executive Board or upon presentation to the Secretary of a petition signed by owners representing at least forty percent (40%) of the voting rights. No business shall be transacted at a special meeting, except as stated in the notice. Section 4. Notice of Meetings. Written notice stating the place, day and hour of any meeting shall be delivered not less than ten (10) nor more than fifty (50) days before the date of the meeting, either personally or by mail, by or at the direction of the President or the Secretary of the Association or the officers or persons calling the meeting, to each member entitled to vote at such meeting. The notice of an annual meeting shall identify any matter which it is known may come before the meeting including, but not limited to, the general nature of any proposed amendment to the Declaration or Bylaws, any budget changes, and any proposal to remove an officer or member of the Executive Board. The notice of a special meeting shall state the purpose or purposes for which the meeting is called. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the member at his address as it appears on the records of the Association, with postage thereon prepaid. Waiver of notice, either in person or by proxy, and signed either before, at or after any meeting, shall be a valid substitute for service. The certificate of the President or Secretary that notice was duly given shall be prima facie evidence thereof. Section 5. Order of Business. The order of business at all meetings of the members shall be as follows: (a) Roll call (to determine the votes represented at the meeting); (b) Proof of notice of meeting or waiver of service; (c) Reading of minutes of preceding meeting; (d) Reports of officers (when applicable); (e) Reports of committees (when applicable); (0 Election of a Board of Managers (when proper and required under these Bylaws); and (g) New business. ARTICLE V - EXECUTIVE BOARD Section 1. Number and Qualifications. The affairs of this Association shall be governed by an Executive Board composed of not less than three, nor more than five, persons. The persons named in the Articles of Incorporation shall act in such capacity, and shall manage the affairs of the Association until the first annual meeting and until their successors are elected. The initial Executive Board shall be composed of three (3) members. Section 2. Powers and Duties. The Executive Board shall have the powers and duties necessary for the administration of the affairs of the Association and to carry out the obligations of the Association indicated in the Declaration. The Executive Board (the "Board") shall have the C: \CLIENT\JOHNSON\DOC\8-3-98. BYL 4 duty to manage the affairs of the Association and have all powers necessary to do so, including all powers, rights and authority of the Association not reserved to the members, as provided in the Declaration, the Articles of Incorporation, these Bylaws or the Colorado Nonprofit Corporation Act, including without limitation, the following duties and powers: (a) To administer and enforce the covenants, conditions, restrictions, obligations and other provisions set forth in the Declaration; (b) To establish, promulgate and enforce compliance with such reasonable rules and regulations as may be necessary for the use and occupancy of the Community, with the right to amend the same from time to time; (c) To propose budgets for the Community; (d) To insure and keep in force such insurance as is determined to be proper or in the interest of its members; (e) To fix, determine, levy and collect the assessments for common expenses to be paid by the owners; (f) To levy and collect special assessments for the purposes specified in the Declaration and for other purposes which, in the opinion of the Board, are necessary or appropriate; (g) To collect delinquent assessments by suit or otherwise and to enjoin or seek damages from an owner, as provided in the Declaration, these Bylaws and the Act; (h) To defend the Association from loss or damage by suit or otherwise; (i) To borrow funds to temporarily cover current operating expenses and for other purposes related to its functions and duties, and to execute all such instruments evidencing such indebtedness as may be appropriate; (j) To enter into contracts within the scope of their duties and powers; (k) To establish one or more bank accounts for the common treasury and for all separate funds which are required or may be deemed advisable; (1) To keep and maintain full and accurate books and records showing all of the receipts, expenses of disbursement and to permit examination thereof at any time by any of the owners and any mortgagee of a lot; C:\CLIENT\JOHNSON\DOC\8-3-98. BYL 5 (m) To prepare and deliver annually to each owner a statement showing, in at least summary form, all receipts, expenses or disbursements since the last such statement; (n) To meet at least annually and more often as needed; (o) To carry on the administration of this Association and to generally do all things necessary and reasonable in order to effectuate the functions of the Association as addressed in the Declaration; (p) (q) To exercise any other powers conferred by the Declaration; To exercise all other powers that may be exercised in this state by legal entities of the same type as the Association; and (r) To exercise any other powers necessary and proper for the governance and operation of the Association. Section 3. Management Agent. The Executive Board may employ for the Association a Management Agent, at a compensation established by the Board, to perform such duties and services as the Board shall authorize, including, but not limited to, the duties listed above. Any management agreement shall be subject to all restrictions set forth in the Declaration or the Act. Section 4. Election and Term of Office. At each annual meeting, a Board shall be elected for a term of one (1) year, and they shall serve until their successors have been elected and hold their first meeting. Section 5. Vacancies. Vacancies in the Board, by any reason other than the removal by a vote of the members, shall be filled by vote of the majority of the remaining members of the Board, even though they may constitute less than a quorum; and each person so elected shall be a member of the Board until a successor is elected at the next annual meeting of the Association. Section 6. Removal of Members of the Executive Board. At any regular meeting or at any special meeting called for that purpose, any one or more members of the Board may be removed with or without cause, by a majority vote of the total authorized votes of the membership, and a successor then and there may be elected to fill the vacancy thus created. Any member of the Board whose removal has been proposed by the owners, shall be given an opportunity to be heard at the meeting. Section 7. Regular Meetings. Regular meetings of the Board may be held at such time and place as shall be determined from time to time by a majority of the members of the Board, but at least one (1) meeting shall be held during each fiscal year. Notice of regular meetings of C:\CLIENTV OHNSON\DOC\8-3-98.BYL 6 the Board shall be given to each member of the Board, personally or by mail, telephone or fax, at least three (3) days prior to the day named for such meeting. Section 8. Special Meetings. Special meetings of the Board may be called by the President on three (3) days' notice to each member of the Board, given personally, or by mail, telephone or fax, which notice shall state the time, place and purpose of the meeting. Special meetings of the Board shall be called by the President or Secretary in like manner and on like notice on the written request of at least two (2) members of the Board. Section 9. Waiver of Notice. Before, at or after any meeting of the Board, any member of the Board may, in writing, waive notice of such meeting and such waiver shall be deemed equivalent to the giving of such notice. Attendance by the members of the Board at any meeting of the Board shall be a waiver of notice by him of the time and place thereof. If all the members of the Board are present at any meeting of the Board, no notice shall be required and any business may be transacted at such meeting. Section 10. Quorum. At all meetings of the Board, a majority thereof shall constitute a quorum for the transaction of business, and the acts of the majority of the members of the Board present at a meeting at which a quorum is present shall be the acts of the Board. If, at any meeting of the Board there is less than a quorum present, the majority of those present may adjourn the meeting from time to time. At any such adjourned meeting, any business which might have been transacted at the meeting, as originally called, may be transacted without further notice. Section 11. Immunity. To the full extent permitted by law, no member of the Board and no officer shall be liable for actions taken or omissions made in the performance of such Board member's duties, except for wanton and willful acts or omissions. Section 12. Powers Restricted. The Board may not act on behalf of the Association to amend the Declaration, to change the number of members that shall constitute the Executive Board, to elect members of the Executive Board or determine the qualifications, powers, duties, or terms of office of Executive Board members, but the Board may fill vacancies in its membership for the unexpired portion of any term. ARTICLE VI - OPEN MEETINGS AND EXECUTIVE SESSIONS Section 1. Open Meetings. All regular and special meetings of the Association's Executive Board, or any committee thereof, shall be open to attendance by all members of the Association or their representatives. Section 2. Closed Sessions. The members of the Executive Board or any committee thereof may hold an executive or closed door session and may restrict attendance to Executive Board members and such other persons requested by the Executive Board during a regular or specially announced meeting or a part thereof. C:\CLIENT\JOHNSON\DOC18-3-98. BYL 7 Section 3. are limited to: Topics Limited. Matters for discussion by an executive or closed session (a) Matters pertaining to employees of the Association or involving the employment, promotion, discipline or dismissal of an officer, agent, or employee of the Association; (b) Consultation with legal counsel concerning disputes that are the subject of pending or imminent court proceedings or matters that are privileged or confidential between attorney and client; (c) Investigation proceedings concerning possible or actual criminal misconduct; (d) Matters subject to specific constitutional, statutory, or judicially imposed requirements protecting particular proceedings or matters from public disclosure; and (e) Any matter the disclosure of which would constitute an unwarranted invasion of individual privacy. Section 4. Announcement Required. Prior to the time the members of the Executive Board or any committee thereof convene in executive session, the chair of the body shall announce the general matter of discussion as enumerated in Section 3, above. Section 5. Other Limitations. No rule or regulation shall be adopted during an executive session. A rule or regulation may be validly adopted only during a regular or special meeting or after the body goes back into regular session following an executive session. Section 6. Minutes. The minutes of all meetings at which an executive session was held shall indicate that an executive session was held, and the general subject matter of the executive session. ARTICLE VII - OFFICERS Section 1. Designation. The officers of the Association shall be a President, a Vice - President, a Secretary and a Treasurer, all of whom shall be elected by and from the Executive Board. Section 2. Election of Officers. The officers of the Association shall be elected annually by the Executive Board at the initial meeting of each new Board. The officers shall hold office at the pleasure of the Board. One person may hold concurrently any two (2) offices, except that the person holding the office of President shall not concurrently hold the office of Secretary. C:\CLIENTUGHNSON\DOC\8-3-98. BYL 8 Section 3. Removal of Officers. Upon an affirmative vote of a majority of the members of the Executive Board, any officer may be removed, with or without cause, and his successor elected at any regular meeting of the Board, or at any special meeting of the Board called for such purpose. Section 4. President. The President shall be the chief executive officer of the Association. He shall act as chairman and preside (or appoint another Board member to preside) at all meetings of the Association and the Board. He shall have all of the general powers and duties which are usually vested in the office of President of an Association, including, but not limited to, the power to appoint committees from among the owners as he may, in his discretion, decide is appropriate to assist in the conduct of the affairs of the Association. Section 5. Vice -President. The Vice -President shall have all the powers and authority and perform all of the functions and duties of the President, in the absence of the President or upon the President's inability, for any reason, to exercise such powers and functions or perform such duties. Section 6. Secretary. The Secretary shall keep the minutes of meetings of the Executive Board and minutes of the meetings of the Association. He shall have charge of such books and papers as the Board may direct. He shall, in general, perform all the duties incident to the office of the Secretary. The Secretary shall compile and keep current, at the principal office of the Association, a complete list of members and their registered mailing addresses. Such list shall also show, opposite each member's name, the appropriate designation of the lot owned by such member. Such list shall be open to inspection by members and other persons lawfully entitled to inspect the same at reasonable times during regular business hours. Section 7. Treasurer. The Treasurer shall have responsibility for Association funds and shall be responsible for keeping full and accurate accounts of all receipts and disbursements in books belonging to the Association. He shall be responsible for the deposit of all monies and other valuable effects in the name and to the credit of the Association in such depositories as may from time to time be designated by the Board. ARTICLE VIII - INDEMNIFICATION OF BOARD MEMBERS AND OFFICERS The Association shall indemnify every member of the Executive Board or officer, against all loss, costs and expenses, including counsel fees reasonably incurred by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a member of the Board or officer of the Association, except as to matters to which he shall be finally adjudged in such action, suit or proceeding to be liable for gross negligence or willful misconduct. In the event of a settlement, indemnification shall be provided only for those matters determined by the Board not to be the product of gross negligence or willful misconduct on the part of the Board member or officer to be indemnified. The Board member or members to be indemnified shall not take part in the decision to indemnify. All liability, loss, damage, costs and C:\CLIENT V OHNSON\DOC18-3-98. BYL 9 expense incurred or suffered by the Association by reason or arising out of or in connection with the foregoing indemnification provisions shall be treated and handled by the Association as common expenses. The Association shall maintain insurance for purposes of this paragraph, as more particularly provided below. Nothing contained in this paragraph shall be deemed to obligate the Association to indemnify any member or owner of a lot, who is or has been a Board member or officer of the Association, with respect to any duties or obligations assumed or liabilities incurred by him under and by virtue of the Declaration as an owner of a lot covered thereby. ARTICLE IX - BUDGETS Section 1. Executive Board to Propose Budgets. It shall be the duty of the Executive Board to formulate and propose a budget of expenses, not less than annually. Section 2. Membership Approval. Within thirty (30) days after adoption of any proposed budget for the Community, the Executive Board shall mail, by ordinary first-class mail, or otherwise deliver a summary of the budget to all the lot owners (members) and shall set a date for a meeting of the lot owners to consider ratification of the budget not less than fourteen (14) nor more than sixty (60) days after mailing or other delivery of the summary. Unless at that meeting, members representing a majority of all lots reject the budget, the budget is ratified, whether or not a quorum is present. In the event that the proposed budget is rejected, the periodic budget last ratified by the members shall be continued and deemed effective for the ensuing period until such time as the members ratify a subsequent budget proposed by the Board. ARTICLE X - ASSESSMENTS Section 1. Assessments. The Association shall have the right to levy and make assessments, in accordance with its Declaration and these Bylaws for the following purposes: (a) To promote the health, safety, and welfare of the owners, tenants and occupants of the Property; (b) To preserve or enhance property values; (c) To pay taxes and special assessments levied against any of the property of the Association, whether real or personal; (d) To pay all costs and charges associated with the maintenance and operation of the common water well, pump house, storage tank, water distribution system, trunk lines and related facilities, including operational and maintenance costs and capital improvements associated with the same; C: \C LI EMI V OHN SON\ D008-3 -98. B Y L 10 (e) To pay all costs and charges associated with periodically monitoring, inspecting and testing the individual reverse osmosis water treatment systems required for each lot; (f) To pay all costs and charges associated with the maintenance and operation of the common water retention pond required for fire flows and the fire hydrants, trunk lines, and related facilities, including operational and maintenance costs and capital improvements associated with the same; (g) To pay all water allotment fees, contract fees and other charges of the West Divide Water Conservancy District, in respect to the Water Allotment Contract for the well and as otherwise related to the water supply for the Property; (h) To pay all costs of supervising, inspecting and otherwise monitoring (a) water allocations and water usage; and (b) the maintenance and upkeep of the individual reverse osmosis water treatment systems required to be maintained for each lot by the owner of that lot; (i) To perform or provide other proper functions in the nature of community services for the benefit of the Property; (j) To pay wages for Association employees, Association management expenses, legal and accounting fees; (k) To pay any deficit remaining from any previous assessment period; (1) To create a reasonable contingency reserve, surplus and/or sinking fund; (m) To pay any other expenses or liabilities which may be incurred by the Association for the benefit of the owners under or by reason of these Bylaws, its Articles of Incorporation or its Declarations or as otherwise permitted by law. Section 2. Annual Assessments. Commencing with the year following the year in which the Declaration is recorded, an Annual Assessment shall be made against each lot shown on the Plat. Annual assessments shall be based upon the annual budget approved by the Executive Board for the purpose of paying common expenses, including, reserves for any costs or expenditures reasonably determined by the Executive Board to be properly the subject of an Annual Assessment. Section 3. Special Assessments. In addition to the Annual Assessment, the Association may levy Special Assessments from time to time as and when the need arises. C:\CLIENT\JOHNSON\DOC18-3-98. BYL 11 Section 4. Establishment of Annual Assessment Period. After the initial Annual Assessment has been made by the Association, Annual Assessments shall thereafter be based on a budget adopted no less frequently than annually. The period for which the Annual Assessment is to be levied (the "Assessment Period") shall be the calendar year, until and unless a more suitable twelve (12) month fiscal period should be determined and adopted as the Assessment Period by the Executive Board. The Executive Board shall fix the amount of the annual Assessment against each lot at least sixty (60) days in advance of the end of the prior assessment period. Section 5. Equality of Assessment and Exceptions. Each lot shall bear an equal proportionate share of any assessment for common expenses other than expenses associated with the maintenance of the separate access roads which serve less than all the Property. Lot 1 is served by a separate access road and shall bear all costs and expenses associated therewith, without any involvement on the part of the Association. Lots 2 and 3 are served by a separate access road, and Lots 4 and 5 are served by yet another separate access road, all as shown on the Plat. All costs and expenses associated with each such access road shall be borne exclusively and shared equally by the lots served thereby. The maintenance of such access roads may be handled by the owners served thereby without any involvement of the Association; however, should such owners fail to properly maintain any such access road or fail to agree as to the nature or extent of the maintenance required or as to the sharing of costs, the Association may perform such maintenance as it deems proper and assess the costs to the lots serviced thereby, equally. Section 6. Collection of Assessments. Assessments shall be due and payable after the date the same are levied within such reasonable time period as the Association may specify. If not paid within that time, the same shall be considered delinquent. All delinquent assessments shall bear interest at the rate established by the Association from time to time, but in no event less than twelve percent (12%) per annum. The Association may further assess a late charge for each month the delinquency continues. The Association shall have the right to bring an action at law against the owner personally obligated to pay any delinquent assessment. In addition, the Association may record in the office of the Clerk and Recorder of Garfield County, Colorado, a Statement of Lien setting forth the name of the owner, the legal description of the lot, the name of the Association, and the amount of the delinquent assessment, which Statement shall be signed and acknowledged by an executive officer of the Association, and served upon the owner of the lot by ordinary mail, mailed to the address of the lot, or to such other address the Association may have in its records for the owner of the lot. Upon the expiration of not less than ten (10) days after the mailing of such notice, the Association may proceed to foreclose the Statement of Lien in the same manner as provided for the foreclosure of mortgages on real property. The Association shall be entitled to recover as a part of any action (whether a foreclosure action or a personal action) the full amount of all delinquent assessments, together with interest, late charges, costs and expenses of suit, including without limitation, its reasonable attorneys' fees incurred. Section 7. Assessment Liens. All sums assessed to any lot by the Association shall be secured by a lien on such lot in favor of the Association. Such lien shall be subordinate to any C:\CLIENTIOHNSON\DOC\8-3-98. BYL 12 valid tax and special assessment lien on the lot in favor of any governmental assessing authority, but shall be superior to all other liens and encumbrances on such lot. No owner may exempt himself or his lot from liability for any assessment or assessment lien by waiving any benefits or by abandonment of his lot. A transfer (by whatever method) of any lot shall not affect the assessment lien. The sale or transfer of a lot shall not relieve any former owner of personal liability therefore, and the party acquiring such lot, i.e., the new owner, shall be deemed to have personally assumed such liability. Section 8. Non -User Exemption. Notwithstanding anything herein contained to the contrary, no lot shall be subject to assessment until such time as the lot is improved with: (a) a building or other structure; or (b) facilities which permit the use of water from the common well and water distribution system. Until either such event should occur, unimproved lots shall be exempt from assessment and all common expenses shall be shared equally among the improved lots only. Section 9. Payment of Assessments. Each owner shall pay to the Association, in accordance with its Bylaws, such assessments as may be periodically made by the Association, without counterclaim, deduction or set off. Section 10. Assessment Certificates. Upon request, the Association shall provide any owner, prospective purchaser, mortgagee or prospective mortgagee, of any lot in the Community a certificate in writing signed by an officer of the Association setting forth the amount of any assessments, interest or late charges due in connection with any specified lot. A reasonable charge may be made by the Association for the issuance of such certificates. Section 11. Notice of Assessment Liens. The Association shall furnish to a lot owner or his designee, or to a holder of any security interest, mortgage or deed of trust or its designees, upon written request delivered personally or by certified mail, first-class postage prepaid, return receipt requested, to the Association's registered agent, a written statement setting forth the amount of unpaid assessments currently levied against such owner's lot. This statement shall be furnished within fourteen (14) days after receipt of the request and is binding on the Association, the Executive Board and every owner. Any such statement provided by the Association shall be deemed delivered upon (a) mailing, ordinary mail, postage prepaid; or (b) sending by fax; or (c) personal delivery. If no statement is furnished to the inquiring party within said fourteen (14) day period, then the Association shall have no right to assert a lien upon the lot for unpaid assessments which were due as of the date of the request. ARTICLE XI - DECLARANT'S RIGHTS TO CONTROL THE ASSOCIATION AND LIMITATIONS Section 1. This Article Controls. Notwithstanding anything contained in the Declaration or the Bylaws to the contrary, the provisions of this Article shall control all inconsistent and conflicting provisions. C:\CLIENTVOHNSON\DOC\8-3-98. BYL 13 Section 2. Period of Declarant Control. The Executive Board, and all members thereof, shall be appointees and subject to removal, at any time and from time to time by the Declarant, in its sole and absolute discretion, until sixty (60) days after conveyance of eighty percent (80%) of the lots to owners other than a Class B member. Section 3. Voluntary Surrender. The Declarant may voluntarily surrender the right to appoint and remove officers and members of the Executive Board before termination of the period of Declarant control set forth above. In that event, the Declarant may require for the duration of the period of Declarant control, that specified actions of the Association or Executive Board, as described in a recorded instrument executed by the Declarant, be approved by the Declarant before becoming effective. Section 4. Association's Records. Within sixty (60) days after termination of Declarant's control and the election of a new Executive Board by the members, the Declarant shall deliver to the Association all records and property of the Association held or controlled by the Declarant as prescribed by the Act. ARTICLE XII - RULES AND REGULATIONS Section 1. Promulgation of Rules and Regulations. The Association, through its Executive Board, shall have the power and authority to adopt and promulgate such rules and regulations as it may from time to time deem necessary or desirable to regulate the use of the lots and activities within the Community, in a manner consistent with the purposes of the Declaration. Section 2. Members and Occupants to Comply. Each owner and every person occupying or in possession of any lot, improvement or portion thereof, shall comply strictly with the provisions of the Declaration and any Rules and Regulations promulgated by the Association. Each owner shall always endeavor to observe and promote the cooperative purposes for which the Association was established. Each owner shall see that any tenant or other person occupying his lot, building or portion thereof upon his lot, is supplied with a copy of the Rules and Regulations and a copy of the Declaration and require that such tenant comply therewith. Every lease or rental agreement in respect to any lot within the Community shall require the tenant to comply with the Rules and Regulations of the Association and the Declaration. ARTICLE XIII - INSURANCE Section 1. Association to Maintain Insurance. Commencing not later than the time of the first conveyance of a lot to a person other than the Declarant, the Association shall maintain, to the extent reasonably available, the kinds and types of insurance specified in this Article. Section 2. Liability Coverage. Commercial general liability insurance against claims and liabilities arising in connection with the operation and management of the business and affairs of the Association, as deemed sufficient in the judgment of the Executive Board, but in no event, C:\CLIENTV OHNSON\DOC\8-3-98.BYL 14 less than one million dollars per occurrence and two million dollars aggregate, insuring the Executive Board, the Association, the management agent, if any, and their respective employees, agents, and all persons acting as agents. Declarant shall be included as an additional insured in Declarant's capacity as an owner. The owners shall be included as additional insureds only for claims and liabilities arising in connection with the operation and management of the business and affairs of the Association. The insurance shall cover claims of one (1) or more insured parties against other insured parties. The policy carried pursuant to this Section shall provide that: (a) Each owner is an insured person under the policy with respect to liability arising out of such owner's membership in the Association; (b) The insurer waives its rights to subrogation under the policy against any owner or member of his household; (c) No act or omission by the owner, unless acting within the scope of such owner's authority on behalf of the Association, will void the policy or be a condition to recovery under the policy; (d) If, at the time of a loss under the policy, there is other insurance in the name of an owner covering the same risk covered by the policy, the Association's policy provides primary insurance. Section 3. Non -Availability. If the insurance described in Section 2 of this Article is not reasonably available, or if any policy of such insurance is canceled or not renewed, without a replacement policy therefore having been obtained, the Association promptly shall cause notice of that fact to be hand delivered, or sent prepaid, U.S. mail, to all owners. Section 4. Fidelity Bonds and Insurance. The Association may require all Executive Board members, officers, employees and managers of the Association handling or responsible for Association funds, to furnish (at the expense of the Association) adequate fidelity bonds or insurance to protect against dishonest acts, with such coverage limits as the Association deems appropriate. Section 5. Officers and Directors. The Association shall keep and maintain Officers and Directors errors and omissions and personal liability coverage, with limits not less than $1,000,000 per occurrence and $2,000,000 aggregate, to protect the officers and directors from personal liability in relation to or arising out of their duties on behalf of the Association. Section 6. Worker's Compensation and Employer's Liability Insurance. The Association shall obtain worker's compensation and employer's liability insurance and all other similar insurance with respect to its employees in such amounts and form as may now or hereafter be required by law. C:ICLIENT UGHNSON\DOC \8-3-98.BYL 15 Section 7. Other Insurance. The Association may also obtain insurance coverage against any such other risks of a similar or dissimilar nature, as deemed appropriate. Section 8. Insurance Expense. The cost of all insurance which the Association is required or permitted to maintain, shall be assessed to the lot owners as a common expense. ARTICLE XIV - MISCELLANEOUS Section 1. Amendments. These Bylaws may be amended by the Association members at a duly constituted meeting for such purposes, and no amendment shall take effect unless approved by owners representing a majority (or such greater number as may be required by the Declaration in respect to any specific matter) of the total votes present or represented by proxy, at such meeting. The notice of such meeting shall contain a summary of the proposed changes or a copy of such proposed changes. Section 2. Proof of Ownership. Any person, on becoming an owner of a lot, shall furnish to the Executive Board a photocopy of the recorded instrument vesting that person with an interest or ownership, which instrument shall remain in the files of the Association. A member shall not be deemed to be in good standing nor shall he be entitled to vote at any annual or at a special meeting of members unless this requirement is first met. Section 3. Registration of Mailing Address. The owners of each lot shall have one registered mailing address to be used by the Association for mailing of monthly statements, notices, demands, and all other communications, and such registered address shall be the only mailing address of a person or persons, firm, corporation, partnership, association or other legal entity, or any combination thereof, to be used by the Association. Such registered address of a lot owner or owners shall be furnished by owners to the Secretary within five (5) days after transfer of title. Such registration shall be in written form and signed by all of the owners of the lot or by such persons as are authorized by law to represent the interests of the owners thereof. If no such address is registered or if all of the owners cannot agree, then the address of the lot shall be the registered address until another registered address is furnished as permitted under this Article. Registered addresses may be changed from time to time by similar designation. Section 4. Bylaws Shall Comply with Law. These Bylaws are intended to comply with the requirements of the Colorado Non -Profit Corporation Act. If any of these Bylaws should, at any time, conflict with the provisions of the Act in any manner not permitted, the provisions of the Act will apply. Section 5. Nonprofit Purpose. This Association is not organized for profit. No member, member of the Executive Board, or officer of the Association shall receive or shall be lawfully entitled to receive any pecuniary profit from the operation thereof, and in no event shall any part of the funds or assets of the Association be paid as salary or compensation to, or inure to the benefit of any member of the Executive Board; provided, however; (1) reasonable C \CLIENT V OH NSON\DOC18-3-98. BYL 16 compensation may be paid to any director, officer or member while acting as an agent or employee of the Association, for services rendered in effecting one or more of the purposes of the Association; and (2) any director, officer or member may, from time to time, be reimbursed for his actual and reasonable expenses incurred in connection with the administration of the affairs of the Association; and (3) any member of the Executive Board may be compensated for attendance at regular or special meetings of the Executive Board. Section 6. Corporate Seal. The Association hereby adopts as the Corporate Seal of this non-profit corporation, the seal making the imprint shown on the side of this page. DATED this day of , 1998. THE UNDERSIGNED Secretary of Lacy Park Owners Association a Colorado corporation, not for profit, does hereby certify that the above and foregoing Bylaws were duly adopted by the Executive Board as the Bylaws of the corporation on the day of , 1998, and that the same do now constitute the Bylaws of the corporation. C:\CLIENTUGHNSON\DOC\8-3-98. BYL 17 Secretary