ARTICLE 4
OWNER'S ASSOCIATION

4.1 Creation & Operation: There has been incorporated a non-profit corporation, known as the WINTHROP NORTH VILLAGE PROPERTY OWNERS ASSOCIATION, which, acting through its members, board, officers, managers or any duly authorized agent shall constitute the governing body for the PD. The Association shall be governed by a Board of Directors, the number, qualifications and manner of election of which are set forth in the Articles of Incorporation and By-Laws therein noted.

4.2 Membership & Voting Rights: The Association shall have two classes of membership established according to the following provisions:

4.2.1 Class A Membership. Class A membership shall be that held by each Owner of a lot other than the Declarant, and each Class A Member shall be entitled to one vote for each lot owned. If a lot is owned by more than one person, each such person shall be a member of the Association, but there shall be not more than one vote for each lot.

4.2.2 Class B Membership. Class B Membership shall be that held by Declarant (or its successors in interest) who shall be entitled to three votes for each lot owned by Declarant; provided that Class B Membership shall be converted to Class A Membership and shall forever cease to exist on the occurrence of whichever of the following is first in time:

4.2.2.1 When the last lot is sold by the Declarant; or

4.2.2.2 On the 10th anniversary of the recordation of this Declaration.

4.4 Rights & Obligations of the Association: It shall be the responsibility of the Association in general to provide for the health, safety and welfare of the Association Members in the management of the Open Space and Common Property. For this purpose, the Association may:

4.4.1 Provide adequate means, financial or otherwise, for the maintenance, repair, replacement, upkeep, control and use of the property of the Association, whether real or personal, including the Common Property which shall be deeded to the Association, together with all appurtenances thereto appertaining, including but not limited to specific property or properties enumerated herein.

4.4.2 Fix, levy collect and enforce payment by any lawful means, of all charges or assessments pursuant to the terms of the Declaration; pay all expenses in connection therewith and all other expenses incident to the conduct of the business of the Association, including all licenses, taxes or governmental charges levied or imposed against the property of the Association.

4.4.3 Acquire by gift, purchase or otherwise, and to own, hold, improve, build upon, operate, maintain, convey, sell, lease, transfer and dedicate for public use or otherwise dispose of real or personal property in connection with the affairs of the Association, subject to the provisions of this document, the restrictions found on the face of the Plat and the Town of Winthrop Zoning Code.

4.4.4 Participate in mergers and consolidations with other non-profit corporations organized for similar purposes or annex additional property and common areas.

4.4.5 Adopt rules and regulations as may be required from time to time governing, among other things and without limitation the following:

a. The use of the Open Space and other Common Property,
b. The use of private roads, trails and paths, and pedestrian bridge,
c. Collection and disposal of garbage and trash,
d. Control of animals,
e. Parking restrictions,
f. Posting of maximum speeds for traffic and other traffic rules,
g. Schedule of fines for infraction of these rules

A copy of the rules and regulations shall be distributed to each member of the Association yearly or upon any change therein. All rules and regulations shall be consistent with the letter and intent of the provisions of these Covenants.

4.4.6 The Association, alone or in cooperation with the Town of Winthrop, may provide for the enforcement of these Covenants. It is contemplated that from time to time either the Town or the Association may use the service of the other in furtherance of its obligations, and they may contract with each other to better provide for such cooperation.

4.4.7 Implied Rights and Obligations. The Association may exercise any other right or privilege given to it expressly by the Project Documents, and every other right or privilege reasonably to be implied from the existence of any right or privilege given to the Association under this Declaration or reasonably necessary to effectuate any such right or privilege. The Association shall perform all of the duties and obligations imposed on it expressly by the Project Documents, together with every other duty or obligation reasonably to be implied from the express provisions of the Project Documents or reasonably necessary to satisfy any such duty or obligation.

4.4.8 The Association shall make available for inspection, upon request, during normal business hours or under other reasonable circumstances, to Owners and Mortgagees, current copies of the Project Documents, and the books, records, and financial statements of the Association prepared pursuant to the By-Laws. The Association may charge a reasonable fee for copying such materials.

4.5 Membership Voting Requirements: Except where otherwise expressly provided in this Declaration or in the By-Laws, any action taken by the Association which must have the approval of the Association membership before being undertaken shall require the vote or written assent of a majority of the votes present or voting, with not less than a quorum present or voting. The number of votes constituting a quorum shall be as set from time to time in the By-Laws of the Association.

4.6 Membership Meetings: Regular and special meetings of members of the Association shall be held with the frequency, at the time and place, and in accordance with the provisions of the By-Laws of the Association.

ARTICLE 5
MAINTENANCE AND ASSESSMENTS

5.1 Creation of the Lien and Personal Obligation for Assessments. The Declarant, for each Lot owned within the Property, hereby covenants, and each Owner of any Lot, by acceptance of a deed therefore, whether or not it shall be so expressed in any such deed, is deemed to covenant and agree to pay to the Association: (1) general annual Assessments or charges as provided in this Declaration for the purpose of funding the Maintenance Fund; (2) special Assessments for capital improvements and other purposes as stated in this Declaration, such annual and special Assessments to be established and collected from time to time as provided herein and in the By-Laws of the Association; and (3) default assessments which may be assessed against an Owner’s Lot pursuant to the Project Documents for failure to perform an obligation under the Project Documents or because the Association has incurred an expense on behalf of the Owner under the Project Documents. The annual, special, and default Assessments, together with interest, costs, and reasonable attorneys’ fees, shall be a continuing lien upon the Lot against which each such Assessment is made, the lien to become effective upon levy of the assessment Each such Assessment, together with interest, costs, and reasonable attorneys’ fees, shall also be the personal obligation of the Owner of such Lot at the time when the Assessment fell due. No Owner of a Lot may exempt him/herself from liability for the contribution toward the common expenses by waiver of the use or enjoyment of any part of the Plat or by the abandonment of their Lot.

5.2 Purpose of Assessments. The Assessments levied by the Association shall be used exclusively to promote the recreation, health, safety, and welfare of the Owners of the PD and for the improvement and maintenance of the Common Property, including, but not limited to, the payment of taxes and insurance on the Common Property, and repair, replacement, and additions to any improvements on the Common Property, reserve accounts, and the expenses of administering the Association, of enforcing this Declaration and other requirements of the Project Documents, and of providing for insurance for the Association.

5.3 Calculation of Annual Assessments. Not less than thirty (30) days before the end of the Association’s fiscal year, the Board of Directors shall prepare a budget estimating its net cash flow requirements for the next year and an estimate of the Assessments to be charged each Owner, and the Board shall distribute the proposed budget to the Owners. Each budget shall include funds for establishing and maintaining reserves for periodic repairs, replacement, and maintenance of any improvements of the Common Areas which must be replaced on a periodic basis, and for taxes, capital improvements, deficiencies from the prior year’s Maintenance Fund, and other purposes, and shall include any expected income and surpluses from the prior year’s Maintenance Fund. At the time the proposed budget is distributed to the Owners, the Board shall provide notice of the date for a meeting of the Owners to consider ratification of the budget, which date shall be not less than fourteen (14) nor more than sixty (60) days after distribution of the budget. Unless at that meeting, the Owners holding a majority of the votes in the Association reject the budget, the budget is ratified, whether or not a quorum is present. In the event the proposed budget is rejected or the required notice is not given, the periodic budget last ratified by the Owners shall be continued until such time as the Owners ratify a subsequent budget proposed by the Board. If the Board proposes a supplemental budget during a fiscal year that results in an increase in Assessments, such budget shall not take effect unless ratified by the Owners in accordance with this Section 5.3.

5.4 Special Assessments. In addition to the annual Assessments authorized by Section 5.1 above, the Board of Directors may levy in any fiscal year one or more special Assessments, applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, repair or replacement of a capital improvement upon the Common Property, including the necessary fixtures and personal property related thereto, or to make up any shortfall in the current year’s budget. Ratification of the amount and due dates for such special Assessments must be obtained pursuant to the procedure set forth in Section 5.3 above.

5.5 Uniform Rate of Assessment. Both annual and Special Assessments must be fixed at a uniform rate for each Lot of the Property/PD; provided, that Lots upon which a residence has not yet been constructed shall be assessed at 50 percent of the rate otherwise applicable until the earlier to occur of (i) substantial completion of the Improvements on such Lot or (ii) twelve (12) months following conveyance of such Lot by Declarant to any Owner.

5.6 Commencement of Annual Assessments: Due Dates. The annual Assessments shall commence as to all Lots on the first day of the month following the conveyance of the first Lot to an Owner by Declarant or such later date as may be established by Declarant so long as Declarant pays all actual operating expenses (but not allocations to reserves) during the period of delayed commencement. The first annual Assessment shall be prorated according to the number of months remaining in the calendar year. Due dates of the Assessments shall be established by the Board of Directors of the Association and be set forth in the annual notice, along with the amount of the general annual assessment.

5.7 Default Assessments. All monetary fines assessed against an Owner pursuant to the Project Documents, or any expense of the Association which is the obligation of an Owner or which is incurred by the Association on behalf of the Owner to bring a Lot into compliance with the Project Documents, including attorney fees and costs, shall be a default Assessment and shall become a lien against such Owner’s Lot which may be foreclosed or otherwise collected as provided in this Declaration. Notice of the amount and due date of such default Assessment shall be sent to the Owner subject to such Assessment at least thirty (30) days prior to the due date.

5.8 Enforcement of Assessment Obligations. Any Assessment installment, whether pertaining to annual, special, or default Assessments, which is not paid within thirty (30) days of its due date shall be delinquent. In the event that an Assessment installment becomes delinquent, the Association, in its sole discretion, may take any or all of the following actions:

5.8.1 assess a late charge of $10 per month per delinquency;

5.8.2 assess an interest charge from the date of delinquency at the rate per annum of two points above the prime rate charged by the Association’s bank, or such other rate as shall have been established by the Board of Directors;

5.8.3 suspend the voting rights of the Owner during any period of delinquency;

5.8.4 bring an action at law against any Owner personally obligated to pay the delinquent installments;

5.8.5 file a statement of lien with respect of the Lot, and foreclose as set forth in more detail below:

The Association may file a statement of lien by recording in the official records of Okanogan County, Washington, a written statement with respect to the Lot, setting forth the name of the Owner, the legal description of the Lot, the name of the Association, and the amount of delinquent Assessments then owing, which statement shall be duly signed and acknowledged by the President, Vice President, Treasurer or Manager of the Association, and which shall be served upon the Owner of the Lot by certified, return receipt mail to the address of the Lot or at such other address as the Association may have in its records for the Owner. At any time after thirty (30) days following the mailing of such notice, the Association may proceed to foreclose the lien in the same manner as provided for the exercise of power of sale in deeds of trust or by judicial foreclosure as a mortgage, under the statutes of the State of Washington. Such lien shall be in favor of the Association and shall be for the benefit of all other Owners. In either a personal or foreclosure action, the Association shall be entitled to recover as a part of the action, the interest, costs, and reasonable attorneys’ fees with respect to the action. The Association acting on behalf of the Owners, shall have the power to bid for the Lot at the foreclosure sale, and to acquire and hold, lease, mortgage, sell and convey the same. The remedies provided herein shall not be exclusive, and the Association may enforce any other remedies to collect delinquent Assessments as may be provided by law.

5.9 Successor’s Liability for Assessment. In addition to the personal obligation of each Owner to pay all Assessments thereon and the Association’s perpetual lien for such Assessments, all successors to the fee simple title of a Lot except as provided in Section 5.10 below, shall be jointly and severally liable with the prior Owner or Owners thereof for any and all unpaid Assessments, interest, late charges, costs, expenses, and attorneys’ fees against such Lot without prejudice to any such successor’s right to recover from any prior Owner any amounts paid by such successor. This liability of a successor shall not be personal and shall terminate upon termination of such successor’s fee simple interest in the Lot. In addition, such successor shall be entitled to rely on the statement of status of Assessments by or on behalf of the Association under Section 5.13 below.

5.10 Subordination of the Lien. The lien of the Assessments provided for in this Declaration shall be subordinate to the lien of any First Mortgage. No sale or transfer shall relieve a Lot from liability for any Assessments or from the lien thereof. However, sale or transfer of any Lot pursuant to a decree of foreclosure or by a public trustee’s foreclosure, or any other proceeding or deed in lieu of foreclosure for the purpose of enforcing a First Mortgage shall extinguish the lien of such Assessments as to installments which became due prior to such sale or transfer, and the amount of such extinguished lien may be reallocated and assessed to all Lots as a common expense at the direction of the Board of Directors. No sale or transfer shall relieve the purchaser or transferee of a Lot from liability for, nor the Lot from the lien of, any Assessments made after the sale or transfer.

5.11 Notice of Action. Any First Mortgagee who makes a prior written request to the Secretary of the Association and furnishes its name and address and the legal description of the Lot in which it has an interest to the Secretary shall be entitled to timely written notice of any delinquency in payment of an annual, special, or default Assessment levied against the Lot encumbered by its First Mortgage which has continued for a period of sixty (60) days or more. In addition, any such First Mortgagee shall be entitled to cure such delinquency and obtain a release from the lien imposed or perfected by reason of such delinquency. Failure of the Association to timely provide this written notice to a First Mortgagee shall not extinguish the lien and obligation as to the Lot Owner and the Lot, subject to the provisions of Section 5.10 above.

5.12 Statement of Status of Assessments. Upon ten (10) days’ written notice to the Treasurer of the Association or the Manager and payment of a reasonable fee set by the Association from time to time, any Owner, prospective purchaser, or Mortgagee of a Lot shall be furnished a statement of the account for such Lot setting forth:

5.12.1 the amount of any unpaid Assessments (whether annual, special, or default Assessments), interest, late charges, costs, expenses, and attorneys’ fees then existing against a particular Lot;

5.12.2 the amount of the current periodic installments of the annual Assessment and the date through which they are paid; and 5.12.3 any other information deemed proper by the Association.
The information contained in such statement, when signed by the Treasurer or Manager, shall be conclusive upon the Association as to the person or persons to whom such statement is issued and who rely on it in good faith.

5.13 Failure to Assess. The omission or failure of the Board to fix the Assessment amounts or rates or to deliver or mail to each Owner an Assessment notice shall not be deemed a waiver, modification, or a release of any Owner from the obligation to pay Assessments. In such event, each Owner shall continue to pay annual Assessments on the same basis as for the last year for which an Assessment was made until a new Assessment is made, at which time any shortfalls in collections may be assessed retroactively by the Association.