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HomeMy WebLinkAbout04.02 HOA BylawsBYLAWS OF SPRING VALLEY RANCH COMMUNITY ASSOCIATION, INC. 1 TABLE OF CONTENTS Article 1 OBJECT AND DEFINITIONS 1 1.1 Purposes 1 1.2 Definitions 1 Article 2 MEMBERSHIP, VOTING OF OWNERS, QUORUM, PROXIES 1 2.1 Membership 1 2.2 Membership Classes 2 2.3 Proof of Ownership 2 2.4 Registration of Mailing Address 2 2.5 Registration of Electronic Mailing Address 2 2.6 Voting 2 2.7 Majority Vote 4 2.8 No Cumulative Voting 4 Article 3 MASTER ASSOCIATION MEETINGS; ACTION WITHOUT MEETING 4 3.1 Place of Meetings 4 3.2 Annual Meeting 4 3.3 Meeting to Review Annual Budget 4 3.4 Special Meetings 4 3.5 Notice of Master Association Meetings 5 3.6 Posting of Notices 5 3.7 Waiver of Notice 5 3.8 Adjourned Meetings 5 3.9 Quorum 5 3.10 Conduct of Meetings 5 3.11 Action Without Meeting 6 Article 4 EXECUTIVE BOARD 6 4.1 Master Association Management Responsibilities 6 4.2 Number and Qualification 6 4.3 Election and Term of Office 6 4.4 Period of Declarant Control of Master Association 7 -i- 4.5 Turnover Milestones 7 4.6 Turnover Mechanics 7 4.7 General Powers and Duties 8 4.8 Other Powers and Duties 9 4.9 Board Quorum and Decisions 10 4.10 Executive Session 10 4.11 Removal of Board Members 10 4.12 Vacancies 11 4.13 Organizational Meeting of Elected Board Members 11 4.14 Regular Meetings of the Board 11 4.15 Special Meetings of the Board 11 4.16 Waiver of Notice 11 4.17 Consent to Board Action 11 4.18 Telephone Communication as Attendance 11 4.19 Compensation 12 4.20 Fidelity Bonds and Accounting 12 4.21 Manager 12 4.22 Conflict of Interest Policy 12 4.23 Procedures and Guidelines for Adoption of Board Rules, Regulations and Policies 12 4.24 Dispute Resolution Policy 13 4.25 Investment of Reserve Funds Policy 13 4.26 Conduct of Meetings Policy 13 4.27 Records Inspection Policy 13 4.28 Enforcement Policy 13 4.29 Collections Policy 13 Article 5 OFFICERS 14 5.1 Designation and Election of Officers 14 5.2 President 14 5.3 Vice President 14 5.4 Secretary 14 5.5 Treasurer 14 Article 6 INDEMNIFICATION 15 10313\l\1087020.2 6.1 Definitions 15 6.2 Conditions of Indemnification 15 6.3 Termination of Proceedings 15 6.4 Limitations on Indemnification 15 6.5 Indemnification Payment 16 6.6 Insurance 16 6.7 Right to Impose Conditions to Indemnification 16 6.8 Non -Liability of the Board, Officers, Committee Members and Declarant 16 6.9 No Personal Liability 17 Article 7 AMENDMENTS 17 7.1 Articles of Incorporation 17 7.2 Bylaws 17 7.3 Preparation of Amendments 17 Article 8 RIGHT TO INSPECT RECORDS, STATEMENT OF ACCOUNT 17 8.1 Records and Audits 17 8.2 Records 17 8.3 Inspection 18 8.4 Statement of Assessments Due 18 Article 9 MASTER ASSOCIATION NOT-FOR-PROFIT 18 9.1 Master Association Not -for -Profit 18 Article 10 MISCELLANEOUS 19 10.1 Notice to Master Association 19 10.2 Compliance 19 10.3 Conflicts 19 10313\1\1087020.2 ARTICLE 1 OBJECT AND DEFINITIONS 1.1 Purposes. The purposes for which the Spring Valley Ranch Community Association, Inc. (the "Master Association") has been formed are: (a) Governance of Project. To govern, manage and operate the property and planned community established by the Master Declaration of Covenants, Conditions and Restrictions For Spring Valley Ranch P.U.D. (the "Master Declaration"), a "planned community" form of common interest community pursuant to the Colorado Common Interest Ownership Act, §§ 38-33.3-101 to 38-33.3-317, as the same may be amended from time to time (the "Act") located in the Garfield County, Colorado, (the "Project"). The Project may be expanded to include additional real estate described in the Master Declaration. (b) Promotion of Project. To promote the Project, protect the value of the Project and promote the common benefit of the Owners and Occupants of the Project; and (c) Operate Master Association. To be and constitute the "Master Association," referred to in the Master Declaration, in accordance with the Act and the Colorado Revised Nonprofit Corporation Act, §§ 7-127-101 to 7-137-301, C.R.S., as the same may be amended from time to time ("Non -Profit Act"), and to perform all obligations and duties of the Master Association and to exercise all rights and powers of the Master Association. 1.2 Definitions. Unless otherwise defined herein, terms used and not otherwise defined in these Bylaws shall have the meanings given to them in the Master Declaration. ARTICLE 2 MEMBERSHIP, VOTING OF OWNERS, QUORUM, PROXIES 2.1 Membership. (a) Creation of Membership. Ownership of a Lot or Cabin Interest is required in order to qualify for membership in the Master Association. Any Person on becoming an Owner of a Lot or Cabin Interest (each an "Owner" and collectively "Owners") shall automatically become a member of the Master Association ("Member" and all present and future Owners collectively, "Members") and shall be, together with the respective Occupants of the Lots and Cabin Interests be subject to the terms and provisions of these Bylaws. The acquisition or rental of any of the Lot or Cabin Interest, or the act of use or occupancy of any of the Lot or Cabin Interests, shall constitute acceptance and ratification of these Bylaws. (b) Termination of Membership. Membership in the Master Association shall terminate without any formal Master Association action whenever a Person ceases to be an Owner (even if such Person is an Occupant), but termination shall not relieve or release any such former Owner from any liability or obligation to the Master Association, or impair any rights or remedies which the Master Association may have against such former Owner arising out of or in any way connected with the period of ownership of a Lot or Cabin Interest and membership in the Master Association. No certificates of stock shall be issued by the Master Association, but the Board of Board Members of the Master Association elected in accordance with these Bylaws (the "Board"), if it so elects, in its sole discretion, may, but is under no obligation to, issue membership cards or certificates to the Owners. Such membership card or certificates shall be surrendered to the Secretary of the Master Association whenever ownership of the Lot or Cabin Interest designated thereon shall terminate. 2.2 Membership Classes. The Master Association shall a single class of membership, consisting solely of all Owners. 2.3 Proof of Ownership. Except for Owners who initially purchase a Lot or Cabin Interest from Master Declarant, any person on becoming an Owner shall furnish to the Master Association a copy of the recorded instrument vesting that person with an interest or ownership in the Lot or Cabin Interest, which copy shall remain in the files of the Master Association. 2.4 Registration of Mailing Address. Each Owner shall have one registered mailing address for physical delivery of mail to be used by the Master Association for mailing of monthly statements, notices, demands and all other communications, and such registered address shall be the only mailing address of the Owner to be used by the Master Association. The registered address of an Owner(s) shall be furnished by such Owner(s) to the Master Association within fifteen (15) days after transfer of title, or after a change of address, and such registration shall be in written form and signed by the Owner or by such persons as are authorized by law to represent the interest of the Owner. 2.5 Registration of Electronic Mailing Address. Any Owner may register with the Master Association the electronic mail address for the Owner. If the Master Association has available electronic means to provide notice of meeting or other information related to the Project by electronic mail, the Master Association shall provide such notices and information by electronic mail, to all Owners who have requested delivery of the information by electronic mail and have provided a valid electronic mail address for receipt thereof. Any notice or information provided by electronic mail shall be deemed delivered when sent to the electronic address provided by the Owner, without return of the electronic message as undeliverable or receipt by the Master Association of notice of delivery failure. 2.6 Voting. (a) Allocation of Votes. Each Owner of a Lot shall have four (4) votes in the Master Association for all purposes for which a vote of the Members is required; provided however, that if a Lot is divided into Cabin Interests pursuant to a Supplement Declaration, the votes allocated to that Lot shall be reallocated equally amongst the Cabin Interests created for the Lot (e.g., an undivided one-fourth Cabin Interest shall have one vote in the Master Association). (b) Multiple Owners. If title to a Lot or Cabin Interest is owned by more than one (1) Person, such persons shall collectively cast their allocated vote(s). If only one of the multiple owners of a Lot or Cabin Interest is present at a Master Association meeting, such owner is entitled to cast the vote(s) allocated to that Lot or Cabin Interest. If more than one of the multiple owners is present, the vote(s) allocated to that Lot or Cabin Interest may be cast only in accordance with the agreement of a majority in interest of the owners. There is a majority agreement if any of the multiple owners casts the vote(s) allocated to that Lot or Cabin Interest -2— without protest being made promptly to the person presiding over the meeting by any of the other owners of the Lot or Cabin Interest. In the event of a protest made by one or more multiple owners, and a majority of the multiple owners of the Lot or Cabin Interest cannot agree on how to cast their votes, any votes cast for that Lot or Cabin Interest shall nevertheless be counted in determining the presence of a quorum with respect to the issue being voted upon. (c) Proxies. The vote(s) allocated to a Lot or Cabin Interest may be cast pursuant to a proxy duly executed by a Lot or Cabin Interest Owner. A Lot or Cabin Interest Owner may not revoke a proxy given pursuant to this Section except by actual notice of revocation to the person presiding over a meeting of the Master Association. A proxy is void if it is not dated or purports to be revocable without notice. A proxy shall terminate eleven (11) months after its date, unless a different termination date is otherwise set forth on its face. A proxy may be executed and granted either for general purposes or for a particular meeting or issue. A proxy shall not be valid if obtained through fraud or misrepresentation. Unless otherwise provide in the Master Declaration, Bylaws, or the Rules and Regulations, appointment of proxies may be made substantially as provided in C.R.S. § 7-127-203. (d) Corporate Owners. If ownership of any Lot or Cabin Interest is held by a corporation, limited liability company, trust, or partnership (general or limited) or other legally recognized corporate or partnership entity, an officer, Board Member, agent, representative or employee of said entity, when designated in writing by the Owner to the Master Association, may cast the vote of the entity on behalf of the Owner. (e) Rejection of Votes. The Master Association is entitled to reject a vote, consent, written ballot, waiver, proxy, appointment, or proxy appointment revocation if the Secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the Owner. The Master Association and its officer or agent who accepts or rejects a vote, consent, written ballot, waiver, proxy appointment, or proxy appointment revocation in good faith and in accordance with the standards of this Section 2.6 are not liable in damages for the consequences of acceptance or rejections. Votes allocated to a Lot or Cabin Interest owned by the Master Association may not be cast. (0 Voting by Mail. Pursuant to the Non -Profit Act, any action that may be taken at any annual, regular or special meeting of Owners may be taken without a meeting if the Secretary delivers a written ballot to every Owner entitled to vote on the matter. "Delivery" to the Owner of the ballot and the Owner's return of the completed ballot shall be made by the same methods available for providing notice to an Owner set forth in Section 3.5. A written ballot shall set forth the proposed action and provide an opportunity to vote for or against the action. Approval by written ballot shall be valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot. All solicitations for votes by written ballot shall indicate the number of responses needed to meet any quorum requirement, state the percentage of approvals necessary to approve each matter, specify the time by which a ballot must be received by the Master Association in order to be counted, and be accompanied by written information sufficient to -3— permit each person casting such ballot reach an informed decision on the matter. A written ballot, once received by the Master Association, may not be revoked, unless the Owner casting the written ballot appears in person at a meeting convened to consider any one or more of the matters on the ballot. 2.7 Majority Vote. Provided a quorum of allocated votes entitled to vote is present in person or by proxy, the affirmative vote of a majority of the total allocated votes so present shall constitute approval of any matter voted upon unless a different number is required on a particular matter by the Act, this Master Declaration, any Supplemental Declaration, the Articles, the Act or the Non -Profit Act. 2.8 No Cumulative Voting. Cumulative voting shall not be permitted in the election of the Board or for any other purpose. ARTICLE 3 MASTER ASSOCIATION MEETINGS; ACTION WITHOUT MEETING 3.1 Place of Meetings. Meetings of the Owners shall be held at locations within the State of Colorado specified by the Board from time to time. 3.2 Annual Meeting. The annual meetings of the Master Association shall be held each year on such date as shall be selected by the Board. Notwithstanding the date of all future annual meetings, the first annual meeting shall be held within sixty (60) days after recording the Master Declaration, at which time the members of the Board (collectively "Board Members" or "Board Members") shall be elected or affirmed and a budget approved. Thereafter, Board Members shall be elected by secret ballot in accordance with the requirements of these Bylaws, the Master Declaration and the Act. The Owners may also transact such other business of the Master Association as may properly come before them at these meetings. 3.3 Meeting to Review Annual Budget. At the annual meeting of the Master Association or at a special meeting of the Master Association called for such purpose, the Owners shall be afforded the opportunity to reject the budget for the next Fiscal Year. A summary of the proposed budget that has been approved by the Board shall be mailed to the Owners within ninety (90) days after Board approval along with a notice of a meeting of the Master Association to be held not less than ten (10) nor more than fifty (50) days after mailing the summary to the Owners. Unless a majority of all Owners rejects the approved budget at the meeting, or by ballot, the budget shall be deemed ratified. There are no quorum requirements for any meeting on the annual budget. If a proposed budget is rejected, the budget last ratified by the Owners shall continue until such time as the Owners ratify a subsequent budget proposed by the Board. 3.4 Special Meetings. The President may call a special meeting of the Owners (i) upon his or her own initiative; (ii) upon resolution of the Board adopted at a Board meeting; or (iii) upon receipt of a written request from at least twenty percent (20%) of the Owners. The notice of any special meeting shall state the time and place of such meeting and the purpose thereof. No business except as stated in the notice shall be transacted at a special meeting. Special Meetings shall be held at such place and time as the President determines -4— 3.5 Notice of Master Association Meetings. It shall be the duty of the Secretary to notify the Owners of the place, date and time of each annual and special meeting of Owners by delivering notice to the Owner by first class mail, postage prepaid, by reputable delivery service, or by hand delivery, not less ten (10) days nor more than fifty (50) days before the meeting date. If an electronic means of notice is available and an Owner requests that the Master Association send notice by electronic mail, the Master Association shall provide notice of all regular and special meetings of Owners by electronic mail to those Owners who request such notice after furnishing the Master Association with their valid electronic mail addresses as soon as reasonably possible and in any event at least 24 hours before the scheduled meeting. The notice of any meeting must state the items on the agenda, including the general nature of any proposed amendment to the Governing Documents and a description of any matters that must be approved by the Owners, or for which the Owners' approval is sought. 3.6 Posting of Notices. In addition to notices by electronic mail, notice of any meeting of the Master Association shall be physically posted in a conspicuous place at the Project. Notice also shall be posted on the Master Association's website, if any, or the website of the Project manager, if any, or in a newsletter or similar publication which is routinely circulated to all Owners. 3.7 Waiver of Notice. Any Owner may, at any time, waive notice of any meeting of the Master Association in writing, and the waiver shall be deemed the same as receipt of notice. A waiver of notice, signed by the Owner before, at, or after any meeting shall be a valid substitute for notice. The certificate of the Secretary that notice was properly given as provided in these Bylaws shall be prima facie evidence thereof. 3.8 Adjourned Meetings. If any meeting of the Master Association cannot be convened because a quorum has not attended or if the business of the meeting cannot be concluded, the Owners who are present may adjourn the meeting for periods of no longer than one month until a quorum is obtained, or until a conclusion can be reached. When an adjourned meeting is reconvened, any business that might have been transacted at the meeting as originally called may be transacted without further notice. 3.9 Quorum. Except as otherwise provided in these Bylaws or in the Master Declaration, the presence at the beginning of any meeting of Owners entitled to cast twenty percent (20%) of the votes shall constitute a quorum. Notice of meeting adjournment for lack of a quorum of a voting class shall be provided to all Owners, together with the date the meeting will be reconvened to conclude the Master Association business. 3.10 Conduct of Meetings. All meetings of the Master Association, the Board or any committee established in furtherance of the governance of the Master Association shall be open to attendance by all Owners or their designated representatives, except the Board may hold an executive session pursuant to Section 4.10 below. At an appropriate time determined by the Board, but before the Board votes on an issue under discussion, Owners or their designated representatives shall be permitted to speak regarding that issue. The Board may place reasonable restrictions on those persons speaking during the meeting. If more than one person desires to address an issue and there are opposing views, the Board shall provide for a reasonable number of persons to speak on each side of the issue. -5— 3.11 Action Without Meeting. Any action permitted to be taken at any Master Association meeting may be taken without a meeting if the Members entitled to vote thereon unanimously agree and consent to such action in writing, pursuant to Section 7-127-107 of the Non -Profit Act. ARTICLE 4 EXECUTIVE BOARD 4.1 Master Association Management Responsibilities. The Master Association has the responsibility to manage and operate and administer the Project, acting through the Board. 4.2 Number and Qualification. There shall be elected three (3) Board Members who shall thereafter govern the affairs of this Master Association until their successors have been duly elected and qualified. In the case of Owners that are entities, the officers, members of the board, employees, partners or agents of such entities may be Board Members. 4.3 Election and Term of Office. The term of office of the Board Members shall be fixed as follows: (a) Staggered Term. One Board Member shall have term of office fixed for one (1) year and the other two (2) Board Members shall have a term of office fixed for two (2) years. Except as provided in these Bylaws, each Board Member shall hold office until their successors have been elected or duly appointed as provided for in these Bylaws. (b) Nominations. Nominations for Board Members may be submitted by any Owner to the Board no later than two (2) days in advance of any Owners' meeting where Board Members will be elected. The Board shall post the nomination. Nominations for Board Members also shall be taken from the floor at the meeting; provided the nominated Owner consents to serve on the Board (consent to be provided in person or may be provided by a duly executed proxy), and the nomination is seconded by an Owner. (c) Majority Vote. Each Board Member shall be elected by an affirmative vote of a majority of all votes in the Master Association entitled to vote in person or by proxy at the meeting to elect Board Members at which a quorum is present. (d) Secret Ballots. Secret written ballots shall be used in any voting for the election of one or more Board Members and for any matter which twenty percent (20%) of the Owners present at the meeting or represented by proxy requests secret ballots. In any election in which secret ballots are used, those ballots shall be counted by a neutral third party or by a committee of volunteers. Such volunteers shall be Owners who are selected or appointed at an open meeting, in a fair manner, by the chair of the Board or other person presiding during that portion of the meeting. The volunteers shall not be Board Members, and in the case of a contested election for Board position, shall not be candidates. For any matter not requiring secret ballots, any manner of voting authorized by these Bylaws may be used. 4.4 Period of Declarant Control of Master Association. Notwithstanding any other provisions hereof, Board Members and officers of the Master Association ("Officers") may be appointed by Declarant in its sole discretion, during the Period of Declarant Control. The -6— "Period of Declarant Control" shall commence upon the Recording of the Master Declaration and terminate no later than the earlier of (a) sixty (60) days after conveyance of seventy-five percent (75%) of the Lots that may be created to Owners other than Declarant; or (b) two (2) years after the last conveyance of a Lot by the Declarant in the ordinary course of business; or (c) two (2) years after any right to add new Lots was last exercised by Declarant. For purposes of determining the "Period of Declarant Control" a Lot which is divided into Cabin Interests shall be deemed conveyed by Declarant only upon the conveyance by Declarant of one hundred percent (100%) of the Cabin Interests in such Lot. 4.5 Turnover Milestones. During the Period of Declarant Control of the Master Association: (a) Twenty -Five Percent of Lots Conveyed. Not later than sixty (60) days after conveyance of twenty-five percent (25%) of the Lots that may be created to Owners other than Declarant, at least one (1) member and not less than twenty-five percent (25%) of the Board Members must be elected by Lot and Cabin Interest Owners other than Declarant. (b) Fifty Percent of Lots Conveyed. Not later than sixty (60) days after conveyance of fifty percent (50%) of the Lots that may be created to Owners other than Declarant, not less than thirty-three and one-third percent (33 1/3%) of the Board Members must be elected by Lot and Cabin Interest Owners other than Declarant. 4.6 Turnover Mechanics. At any time prior to the termination of the Period of Declarant Control, Declarant may voluntarily surrender and relinquish the right to appoint and remove officers and members of the Executive Board, but in such event Declarant may require, for the duration of the Period of Declarant Control, that specified actions of the Master Association or the Executive Board, as described in a Recorded instrument executed by Declarant, be approved by Declarant before they become effective. As to such actions, Declarant may give its approval or disapproval in its sole discretion and option, and its disapproval shall invalidate any such action by the Executive Board or the Master Association. Pursuant to Section 38 33.3 303(9) of the Act, within sixty (60) days after Owners other than Declarant elect a majority of the members of the Executive Board, Declarant shall deliver to the Master Association all property of the Owners and of the Master Association held or controlled by Declarant, including without limitation the following items: (a) The original or a certified copy of the recorded Master Declaration as amended, the Master Association's Articles of Incorporation, Bylaws, minute books, other books and records, and any Master Rules and Regulations which may have been promulgated; (b) An accounting for Master Association funds and financial statements from the date the Master Association received funds and ending on the date the Period of Declarant Control ends. The financial statements shall be audited by an independent certified public accountant and shall be accompanied by the accountant's letter, expressing either the opinion that the financial statements present fairly the financial position of the Master Association in conformity with generally accepted accounting principles or a disclaimer of the accountant's ability to attest to the fairness of the presentation of the financial information in conformity with generally accepted accounting principles and the reasons therefor. The expense of the audit shall not be paid for or charged to the Master Association. (c) The Master Association funds or control thereof; (d) All of the Declarant's tangible personal property that has been represented by the Declarant to be the property of the Master Association or all of the Declarant's tangible personal property that is necessary for, and has been used exclusively in, the operation and enjoyment of Association Property, and inventories of these properties; (e) A copy, for the nonexclusive use by the Master Association, of any plans and specifications used in the construction of the improvements in the Common Interest Community; (f) All insurance policies then in force, in which the Owners, the Master Association, or its Board Members and officers are named as insured persons; (g) Copies of any certificates of occupancy that may have been issued with respect to any improvements comprising the Common Interest Community; (h) Any other permits issued by governmental bodies applicable to the Common Interest Community and which are currently in force or which were issued within one year prior to the date on which Members other than the Declarant took control of the Master Association; (i) Written warranties of the contractor, subcontractors, suppliers, and manufacturers that are still effective; (j) A roster of Owners and Occupants and Mortgagees and their addresses and telephone numbers, if known, as shown on the Declarant's records; (k) Employment contracts in which the Master Association is a contracting party; and (1) Any service contract in which the Master Association is a contracting party or in which the Master Association or the Owners have any obligation to pay a fee to the persons performing the services. 4.7 General Powers and Duties. The Board shall have the powers and duties necessary for the administration of the affairs of the Master Association and for the operation and maintenance of the Project as set forth in the Master Declaration and as authorized by the Act. The Board may do all such acts and things as are not prohibited by law, the Articles, these Bylaws or the Master Declaration. 4.8 Other Powers and Duties. In addition to the powers set forth in the Articles, the Board shall be empowered and shall have the duties as follows: (a) To administer and enforce the covenants, conditions, restrictions, easements, uses, limitations, obligations and all other provisions set forth in the Master Declaration, these Bylaws, the Master Rules and Regulations (defined below) and other documents governing the Master Association; (b) To establish, adopt, amend and enforce compliance with bylaws and such reasonable Master Rules and Regulations and policies and procedures ("Policies") as may be necessary for the operation, use and occupancy of the Project, with the right to amend same from time to time (collectively the "Master Rules and Regulations"). The initial Master Rules and Regulations shall be adopted by a majority vote of the Board at the first organization meeting of the Master Association. The Board may amend or adopt additional Master Rules and Regulations by majority vote at any special meeting of the Board convened for the purpose of amending or adopting additional Rules and Regulations. A copy of the Master Rules and Regulations shall be delivered or mailed to each Owner promptly upon the adoption thereof. (c) Adopt and amend budgets for revenues, expenditures and Assessments; (d) Hire and terminate managing agents and other employees, agents and independent contractors; (e) Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more Owners on matters affecting the Project, provided, however, that the Board and/or the Master Association shall only be able to institute legal actions on behalf of an Owner or Owners only to the extent that such Owner(s) could have brought such legal action on their own; (f) (g) Common Areas; (h) Make contracts and incur liabilities; Regulate the use, maintenance, repair, replacement and modification of Cause additional improvements to be made as part of the Common Areas; (i) Acquire, hold, encumber and convey in the name of the Master Association any right, title or interest to real or personal property, except that Common Areas may be conveyed or subjected to a security interest only if: (a) Members entitled to cast at least sixty-seven percent (67%) of the votes and (b) all Owners to which any Limited Common Area is allocated agree in order to convey that Limited Common Area or subject it to a security interest; (.) Common Areas; Grant easements, leases, licenses and concessions through or over the (k) Impose and receive any payments, fees or charges for the use, rental or operation of the Common Areas; (1) Impose charges for late payment of Assessments, recover reasonable attorney fees and other legal costs for collection of Assessments and other actions to enforce the -9— powers of the Master Association, regardless of whether or not suit was initiated and, after notice and opportunity to be heard, levy reasonable fines for violations of the Master Declaration, these Bylaws, the Master Rules and Regulations or other documents governing the Master Association; (m) Impose reasonable charges for the preparation and recordation of amendments to the Master Declaration or statements of unpaid Assessments; (n) Provide for the indemnification of its officers and Board and maintain Board Members' and officers' liability insurance; Assessments; (o) Assign its right to future income, including the right to receive (p) Exercise any other powers conferred by the Master Declaration; (q) Exercise all other powers that may be exercised in this state by legal entities of the same type as the Master Association and any other powers necessary and proper for the governance and operation of the Master Association. 4.9 Board Quorum and Decisions. Subject to the Conflicts of Interest Policy (defined below), at all meetings of the Board, a majority of the Board Members shall constitute a quorum for the transaction of business, shall require the affirmative vote of a majority of the Board Members voting at the meeting at which a quorum is present. If, at any meeting of the Board, there is less than a quorum present, the majority of those present may adjourn the meeting until a quorum is obtained. At any such adjourned meeting, any business that might have been transacted at the meeting as originally called may be transacted without further notice. For the purposes of this Article 4, the term "present" shall included attendance in person, by proxy (to the extent permitted by the Non -Profit Act), via telephonic means or communication via real time internet transmission or email. 4.10 Executive Session. With the exception of matters that may be discussed in executive session, as set forth in Section 38-33.3-308(3-7) of the Act, all regular and special meetings of the Executive Board or any committee thereof shall be open to attendance by all Members or their representatives. Without limiting the generality of the foregoing, no Master Rule or Regulation may be validly adopted during an executive session. Agendas for meetings of the Executive Board shall be made reasonably available for examination by all Members of the Master Association or their representatives. 4.11 Removal of Board Members. The Lot and Cabin Interest Owners, by a vote of sixty-seven percent (67%) of all allocated votes present and entitled to vote at any meeting of the Lot and Cabin Interest Owners at which a quorum is present, may remove any member of the Executive Board with or without cause, other than a member appointed by Declarant. Board Members appointed by Declarant may only be removed by Declarant. 4.12 Vacancies. Vacancies in the Board caused by any reason other than the removal of a Board Member by a vote of the Owners shall be filled by vote of the majority of the remaining Board Members, even though they may constitute less than a quorum; and each - 10 — person so elected shall be a Board Member for the remainder of such term and until his successor is elected in accordance with Section 4.3. 4.13 Organizational Meeting of Elected Board Members. The first meeting of the Board elected at the annual Owners' meeting shall be held no later than sixty (60) days after the election at the place fixed by the Board at the meeting when the Board Members were elected. No further notice shall be necessary to the newly elected Board Members in order to legally convene such meeting, providing a majority of the whole Board shall be present. 4.14 Regular Meetings of the Board. Regular meetings of the Board may be held at such time and place as determined by a majority of the Board Members, but at least one such meeting shall be held during each calendar year. Notice of regular meetings for the Board shall be given to each Board Member, personally or by mail, telephone, telecopy, telegraph, or electronic mail at least five (5) days prior to the day named for such meeting. The Board may set a schedule of additional regular meetings by resolution and no further notice is necessary to constitute regular meetings. 4.15 Special Meetings of the Board. Special meetings of the Board may be called by the President, on his or her own initiative, on three (3) days' notice to each Board Member, given personally, or by mail, telephone, telecopy, or confirmed electronic mail which notice shall set forth 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 receipt of a written request to call such a special meeting from at least two (2) Board Members. All Members shall have the right to attend and speak at all regular and special Board meetings, subject to the Conduct of Meetings Policy (defined below). Agendas for all meetings of the Board shall be made available for inspection by the Members. 4.16 Waiver of Notice. Before or at any meeting of the Board, any Board Member may, in writing, waive notice of such meeting and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a Board Member at any meeting of the Board shall be a waiver of notice by him of the time and place thereof. If all the Board Members are present at any meeting of the Board, no notice shall be required and any business may be transacted at such meeting. 4.17 Consent to Board Action. The Board Members shall have the right to take any action in the absence of a meeting that they could take at a meeting by either: (i) obtaining the written approval of a majority of the Board Members; or (ii) obtaining the ratification of the action(s) at the next duly called meeting of the Board at which a quorum of Board Members is present. Any action so approved shall have the same effect as though taken at a meeting of the Board Members. The Secretary shall file these consents with the minutes of the meetings of the Board. 4.18 Telephone Communication as Attendance. One or more or all Board Members may attend a meeting of the Board by using an electronic or telephonic communication method whereby the Board Member may be heard by the other Board Members and may hear the deliberations of the other Board Members on any matter properly brought before the Board. The Board Member's vote shall be counted, and his or her presence noted, as if that Board Member were present in person on that particular matter. 4.19 Compensation. The Board Members shall serve as such without salary or compensation. Board Members may be reimbursed for expenses incurred on behalf of the Master Association upon approval of a majority of the other Board Members. 4.20 Fidelity Bonds and Accounting. The Board shall require that all Officers and employees of the Master Association handling or responsible for Master Association funds shall furnish adequate fidelity bonds or insurance. The premiums on such bonds or insurance shall be a Common Expense paid by the Master Association. If the Master Association delegates powers of the Board or Officers relating to collection, deposit, transfer, or disbursement of Master Association funds to other persons or to a Manager, the following requirements shall apply: (a) Fidelity Insurance. The Manager or other person handling the funds shall maintain fidelity insurance coverage or a bond in an amount not less than fifty thousand dollars or such higher amount as the Board may require; (b) Separate Accounts. The Manager or other person handling the funds shall maintain all funds and accounts of the Master Association separate from the funds and accounts of other Master Associations managed by the other persons or managing agent and maintain all reserve accounts of each Master Association so managed separate from operational accounts of the Master Association in accordance with the Reserves Policy; (c) Annual Accounting. An annual accounting for Master Association funds and a financial statement shall be prepared and presented to the Master Association by the managing agent, a public accountant, or a certified public accountant completed in accordance with the requirements of the Act. 4.21 Manager. The Board may employ for the Master Association a Manager (at a compensation established by the Board), to perform such duties and services the Board shall authorize. The Board may delegate any of the Board's powers and duties but, notwithstanding any delegation, the Board shall not be relieved of its responsibility under the Master Declaration, the Articles or these Bylaws. 4.22 Conflict of Interest Policy. The Board shall adopt a Policy to address, among other matters as the Board deems appropriate, any contract, decision, or other action taken by or on behalf of the Board that would financially benefit any Board Member, or any person who is a parent, grandparent, spouse, child, or sibling of a Board Member, or a parent or spouse of any of those persons (the "Conflict of Interest Policy"). Board Members shall be provided a copy of the Conflict of Interest Policy before taking office, and shall agree to abide by the Conflict of Interest Policy and its requirements concerning conflicts of interest. The Board shall retain the Conflict of Interest Policy with the records of the Master Association. 4.23 Procedures and Guidelines for Adoption of Board Rules, Regulations and Policies. The Board shall adopt a Policy regarding Board practice and procedures applicable to the Board consideration and adoption of rules, regulations or Policies governing the Master Association (the "Policy Regarding Adoption of Policies"). Board Members shall be provided a - 12— copy of the Policy Regarding Adoption of Policies and shall abide by the policy when considering any Rules, Regulations or Policies applicable to the Project. The Board shall retain the Policy Regarding Adoption of Policies with the records of the Master Association. 4.24 Dispute Resolution Policy. The Board shall adopt a Policy to address, among other matters as the Board deems appropriate, procedures to be followed when and if a dispute arises between any two or more of the Master Association and any Owner of a Lot or Cabin Interest, and Declarant ("Dispute Resolution Policy"). Board Members shall be provided a copy of the Dispute Resolution Policy before taking office, and shall agree to abide by the Dispute Resolution Policy and its requirement. The Board shall retain the Dispute Resolution Policy with the records of the Master Association. 4.25 Investment of Reserve Funds Policy. The Board shall adopt a Policy to address, among other matters as the Board deems appropriate, procedures to be followed when investing the funds held in an account for reserves ("Reserves Policy"). Board Members shall be provided a copy of the Reserves Policy before taking office, and shall agree to abide by the Reserves Policy and its requirements concerning conflicts of interest. The Board shall retain the Reserves Policy with the records of the Master Association. 4.26 Conduct of Meetings Policy. The Board shall adopt a Policy to address, among other matters as the Board deems appropriate, the conduct and procedures of Owner and Board meetings (the "Conduct of Meetings Policy"), which policy may refer to applicable provisions of the Act and the Non -Profit Act code or other recognized rules and principles. Board Members shall be provided a copy of the Conduct of Meetings Policy before taking office, and shall agree to abide by the Conduct of Meetings Policy and its requirements concerning conflicts of interest. The Board shall retain the Conduct of Meetings Policy with the records of the Master Association. 4.27 Records Inspection Policy. The Board shall adopt a Policy for records inspection to provide for the inspection, retention and copying of Master Association records by Owners. ("Records Inspection Policy"). Board Members shall be provided a copy of the Records Inspection Policy before taking office, and shall agree to abide by the Records Inspection Policy and its requirements concerning conflicts of interest. The Board shall retain the Records Inspection Policy with the records of the Master Association. 4.28 Enforcement Policy. The Board shall adopt a Policy for policies and procedures to be followed in the enforcement of the terms and provisions of the Governing Documents (the "Enforcement Policy"). Board Members shall be provided a copy of the Enforcement Policy before taking office, and shall agree to abide by the Enforcement Policy and its requirements concerning conflicts of interest. The Board shall retain the Enforcement Policy with the records of the Master Association. 4.29 Collections Policy. The Board shall adopt a Policy for the collection of Assessments, including Assessments that are delinquent ("Collections Policy"). Board Members shall be provided a copy of the Collections Policy before taking office, and shall agree to abide by the Collections Policy and its requirements concerning conflicts of interest. The Board shall retain the Collections Policy with the records of the Master Association. - 13 — ARTICLE 5 OFFICERS 5.1 Designation and Election of Officers. The Officers of the Master Association shall be at least, a President, a Secretary and a Treasurer, duly appointed by the Board at the annual meeting of the Board. Further, the Board may, in its discretion, elect one or more Vice Presidents, Assistant Secretaries or Assistant Treasurers from among the Owners. All Officers and Assistant Officers (if any) must be Owners. One (1) person may hold concurrently more than one office, except that the President may not serve as both President and Secretary. 5.2 President. The President shall be the chief executive Officer of the Master Association. The President shall preside at all meetings of the Master Association and of the Board. The President shall have all of the general powers and duties which are usually vested in the office of the president of a non-profit corporation, including, but not limited to, the power to appoint committees from among the Owners from time to time as may be deemed appropriate to assist in the conduct of the affairs of the Master Association or as may be established by the Board or by the Owners at any regular or special meetings. The President shall have the authority to execute and deliver documents and instruments on behalf of the Master Association. 5.3 Vice President. The Vice President shall have all of the powers and authority and perform all the functions and duties of the President, in the absence of the President or in the President's inability for any reason to exercise such powers and functions or perform such duties. 5.4 Secretary. The Secretary shall keep the minutes of all the meetings of the Board and the minutes of all meetings of the Master Association and shall have charge of such books and papers as the Board may direct. The Secretary also shall perform all the general duties incident to the office of Secretary. The Secretary shall compile and keep up to date at the principal office of the Master Association a complete list of Owners and their last known addresses as shown on the records of the Master Association. Such list shall also show opposite each Owner the number or other appropriate designation of the Lot or Cabin Interest owned by such Owner and the Allocated Interest for each Lot or Cabin Interest. The Owner's list shall be open to inspection by Owners and other persons lawfully entitled to inspect the same at reasonable times during regular business hours in accordance with Article 8. Assistant Secretaries, if any, shall have the same duties and powers, subject to supervision by the Secretary. 5.5 Treasurer. The Treasurer shall have responsibility for Master Association funds, shall have the responsibility for maintaining the financial records and books of account of the Master Association and shall be responsible for keeping full and accurate accounts of all receipts and disbursements in the name, and to the credit, of the Master Association in such depositories as may from time to time be designated by the Board. Assistant Treasurers, if any, shall have the same duties and powers, subject to supervision by the Treasurer. ARTICLE 6 INDEMNIFICATION 6.1 Definitions. For purposes of this Article 6, the following terms shall have the meanings set forth below: (a) Proceeding. Any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal. (b) Indemnified Party. Any person who is or was a party or is threatened to be made a party to any Proceeding by reason of the fact that he or she is or was a Board Member or Officer of the Master Association, or a member of a committee formed by the Master Association, who is or was serving at the request of the Master Association in such capacity, or as a Board Member, Officer, partner, fiduciary, trustee, employee or agent of another corporation, partnership, joint venture, trust, committee or other enterprise including, without limitation, any employee benefit plan of the Master Association for which any such person is or was serving in such capacity. 6.2 Conditions of Indemnification. Subject to this Section 6.2, the Master Association shall indemnify an Indemnified Party against liability, including without limitation expenses, judgments, fines, amounts paid in settlement actually and reasonably incurred in connection with such Proceeding if: (a) In the case of a Board Member appointed by the Declarant during the period of Declarant control, the Board Member exercised the care required of fiduciaries of the Owners; (b) In the case of Board Members elected by Owners other than Declarant, the Board Member conducted himself in good faith and reasonably believed that, (i) in the case of conduct acting in the Board Member's official capacity with the Master Association, that the conduct was in the Master Association's best interest, and in all other cases, that the Board Member's conduct was not opposed to the Master Association's best interests; (c) In the case of any criminal proceedings, the Board Member had no reasonable cause to believe his conduct was unlawful; or (d) Indemnification is appropriate under existing law, subject to Section 6.3, the Indemnified Party shall be indemnified to the fullest extent permitted by law. 6.3 Termination of Proceedings. The termination of any proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, is not of itself determinative that the individual did not meet the standards of conduct set forth in Section 6.2(a) and 6.2(b), provided the Board may, in its discretion, determine the circumstances of the termination make indemnification contrary to the best interest of the Master Association. 6.4 Limitations on Indemnification. The Master Association may not indemnify an Indemnified Party under this Section if: - 15— (i) Criminal Conduct or Malfeasance. In connection with a Proceeding by or in the right of the Master Association in which the Indemnified Party was adjudged liable to the Master Association or adjudged guilty of criminal conduct in connection with performance of the Indemnified Party's duties, or culpable of willful misfeasance, malfeasance or fraud in the performance of duties in connection with the particular case or controversy; or (ii) Improper Personal Benefit. In connection with any proceeding charging improper personal benefit to the Indemnified Party, whether or not involving action in his or her official capacity, in which he or she was adjudged liable on the basis that personal benefit was improperly received by him; or (iii) Conduct Not Arising Out of Duties. The conduct for which the Indemnified Party seeks indemnification arises in connection with the duties or obligations assumed or liabilities incurred by the Indemnified Party solely by virtue of his ownership or interest in any Lot or Cabin Interest. 6.5 Indemnification Payment. Such liability shall be satisfied within thirty (30) days after request therefor if there exist adequate operating funds, but if not, the funds shall be raised by a special assessment of the Owners as quickly as possible, without the need of Owners' approval. 6.6 Insurance. The Master Association shall purchase and maintain insurance, in such amounts as the Board may deem appropriate, on behalf of any Indemnified Party against any liability asserted against the Indemnified Party or incurred in the capacity of the Indemnified Party or arising out of the status as an Indemnified Party, whether or not the Master Association would have the power to indemnify the person against such liability under applicable provisions of laws. 6.7 Right to Impose Conditions to Indemnification. The Master Association shall have the right to impose, as conditions to any indemnification provided or permitted in this Article 6, such reasonable requirements and conditions as the Board deems appropriate in each specific case and circumstances including, without limitation, any one or more of the following: (a) that any counsel representing the person to be indemnified in connection with the defense or settlement of any Proceeding shall be counsel mutually agreeable to the Indemnified Party and to the Master Association; (b) that the Master Association shall have the right, at its option, to assume and control of the defense or settlement of any claim or proceeding made, initiated or threatened against the Indemnified Party; and (c) that the Master Association shall be subrogated, to the extent of any payments made by way of indemnification, to all of the Indemnified Party's right of recovery, and that the Indemnified Party execute all writings and do everything necessary to assure such rights of subrogation to the Master Association. 6.8 Non -Liability of the Board, Officers, Committee Members and Declarant. Neither the Board Members nor Officers nor committee members, nor the Declarant shall be personally liable to the Owners for any mistake or judgment or for any acts or omissions of any nature whatsoever taken as Board Members, Officers, committee members or as Declarant, except for any acts or omissions found by a court to constitute gross negligence or fraud. - 16 — 6.9 No Personal Liability. Contracts or other commitments made by a Board Member or an Officer shall be made as an agent for the Master Association, and the Board member or Officer shall have no personal responsibility on any such contract or commitment. ARTICLE 7 AMENDMENTS 7.1 Articles of Incorporation. The Articles of Incorporation may be amended in the manner provided in the Articles and by law. 7.2 Bylaws. These Bylaws may be amended by the affirmative vote of sixty-seven (67%) percent of the Board Members, provided, however, that no amendment shall conflict with or minimize the intended effect of the provisions of the Articles of Incorporation, or the Master Declaration, nor omit any of the particular requirements of the Act, or other applicable law. Any meeting to amend the Bylaws shall specify the nature and text of any proposed amendment or amendments, provided that these Bylaws shall at all times comply with the provisions of the Act and the Non -Profit Act. 7.3 Preparation of Amendments. The President and Secretary of the Master Association may prepare, execute and certify amendments to the Bylaws. ARTICLE 8 RIGHT TO INSPECT RECORDS, STATEMENT OF ACCOUNT 8.1 Records and Audits. The Master Association shall maintain financial records as required in the Master Declaration and the Act. The costs of any audit or review shall be a Common Expense unless otherwise provided in the Act or the Master Declaration. An audit or review shall be done as and when required by the Master Declaration, the Act or as may be determined by the Board. 8.2 records: Records. The Master Association or its Manager, if any, shall keep the following (a) an account for each Lot or Cabin Interest designating the name and address of each Owner, the name and address of each mortgagee who has given notice to the Master Association that it holds a mortgage on the Lot or Cabin Interest, the amount of each Assessment, the dates on which each Assessment comes due, any other fees payable by the Owner(s) of the Lot or Cabin Interest, the amounts paid on the account and the balance due; (b) an account for each Owner showing any other fees payable by the Owner; (c) the most recent regularly prepared balance sheet and income and expense statement, if any, of the Master Association; (d) the current operating budget; (e) a record of any unsatisfied judgments against the Master Association and the existence of any pending suits in which the Master Association is a defendant; - 17— (f) a record of insurance coverage provided for the benefit of Owners and the Master Association; (g) tax returns for state and federal income taxation; and (h) minutes of proceedings of meetings of the Owners, Board Members, committees of the Board, and waivers of notice. 8.3 Inspection. All Owners, Mortgagees and other persons lawfully entitled to inspect the Master Association's and the Board's business records may conduct such inspection, provided any inspection shall be conducted at reasonable times during business hours in accordance with the Records Inspection Policy. 8.4 Statement of Assessments Due. Upon payment of a reasonable fee set from time to time by the Board and upon fourteen (14) days' written request to the Master Association's registered agent by certified mail, first class postage prepaid, or by personal delivery, any Owner, designee or agent of Owner, Mortgagee, prospective Mortgagee or prospective purchaser of a Lot or Cabin Interest shall be furnished with a written statement setting forth the amount of the unpaid Assessments, if any, with respect to such Lot or Cabin Interest and other charges due and owing from the Owner. ARTICLE 9 MASTER ASSOCIATION NOT-FOR-PROFIT 9.1 Master Association Not -for -Profit. This Master Association is not organized for profit. No Board Member, Officer or person from whom the Master Association may receive any property or funds shall receive or shall be lawfully entitled to receive any pecuniary profit from the operation of the Master Association, and in no event shall any part of the funds or assets of the Master Association be paid as a salary or compensation or as a dividend, or be distributed to or inure to the benefit of any Board Member, Officer or member; provided, however, that: (a) Outside Business Interests. Nothing herein shall prohibit the Master Association from compensating a Board Member, or any entity with which a Board member is affiliated, for services or supplies furnished to the Master Association in a capacity other than as a Board Member pursuant to a contract or agreement with the Master Association, provided that such Board Member's interest was made known to the Board prior to entering into such contract and such contract was approved by the majority of the Board, excluding the interested Board Member; (b) Authorized Compensation. Only reasonable compensation be paid to any Owner, Board Member or Officer while acting as an agent or employee of the Master Association if permitted by these Bylaws or the Master Declaration or Master Rules and Regulations; and (c) Reimbursement. Any Owner, Board Member or Officer may, from time to time, be reimbursed for his or her actual and reasonable expenses incurred in connection with the administration of the affairs of the Master Association. ARTICLE 10 MISCELLANEOUS 10.1 Notice to Master Association. Every Owner shall timely notify the Master Association of the name and address of any Mortgagee, purchaser, transferee or lessee of its Lot or Cabin Interest. Notice of any purchase, transfer or lease of a Lot or Cabin Interest shall be provided to the Master Association no later than fifteen (15) days after execution of the document effecting the purchase, transfer or lease. The Master Association shall maintain such information at the office of the Master Association. 10.2 Compliance. These Bylaws are intended to comply with the requirements of the Act and the Non -Profit Act. If any provisions of these Bylaws conflict with the provisions of any of such Acts, as the Acts may be amended from time to time, it is hereby agreed that the provisions of the appropriate Act will apply. 10.3 Conflicts. These Bylaws shall govern the affairs of the Master Association, but to the extent there is a conflict between the terms or provisions of these Bylaws and the Master Declaration, the terms and provisions of the Master Declaration shall prevail. CERTIFICATION The undersigned, being the Board of Directors of the Master Association, hereby certify that the foregoing Bylaws were duly adopted by the Board, and that the same are in full force and effect as of the date indicated below. Name Date Name Date Name Date