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2004-09-17 Bylaws .. . BYLAWS OF TOWNE LAKES TOWNHOMES HOMEOWNERS ASSOCIATION A MINNESOTA NON-PROFIT CORPORATION ARTICLE I INCORPORATION Section 1. Name. The name of the corporation is Towne Lakes Townhomes Homeowners Association ("Association"). The Association is formed pursuant to Chapter 317A and Sections 515B.l-1O 1 et seq., Minnesota Statutes, known respectively as the Minnesota Non- Profit Corporation Act and Minnesota Common Interest Ownership Act (the latter being referred to herein as the "Act"), and laws amendatory thereof and supplemental thereto. The terms used in these Bylaws shall have the same meaning as they have in the Act, and if not defined in the Act, then such terms shall have the meanings assigned to them in the Master Declaration of Towne Lakes, as amended (the HMaster Declaration") or in the Declaration of Towne Lakes Townhomes, as amended, a planned community. Section 2. Date of Incorporation. The Articles of Incorporation of the Association were filed in the office of the Secretary of State of the State of Minnesota on the 4th day of August, 2004. Section 3. Master Association/Powers. The Association is a member of Towne Lakes Community Association (the HMaster Association") and the Real Estate is subject to the Master Declaration. All powers of the Association are delegated to the Master Association, except those (A) reserved to the Association under Article III, Section 4 of these Bylaws or under the Master Bylaws, or (B) relinquished by the Master Association under Section 8.1 of the Master Bylaws. Section 4. Membership and Voting. The membership of the Association shall consist of the Lot Owners of the Lots within Common Interest Community Number 79, a Planned Community, Towne Lakes Townhomes, Wright County, Minnesota (hereinafter referred to as the "Planned Community"), which was created by the filing of the Declaration of the Common Interest Community in the Office of the County Recorder, Wright County, Minnesota (the "Declaration"). Membership in the Association shall be appurtenant to, and shall not be separated from, Lot ownership in the Planned Community. A person shall cease to be a member of the Association at such time as that person ceases to be a Lot Owner of a Lot. Each Lot shall have one vote. Where there is more than one Lot Owner of a Lot, all of such Lot Owners shall be members of the Association and the vote allocated to that Lot in accordance with the Declaration, and these Bylaws shall be cast as the Lot Owners among themselves may determine and signify in writing to the Association, but in no event shall more than one vote be cast with respect to any Lot nor shaH the vote allocated to a Lot be split or otherwise cast separately by the Lot Owners. Where there is more than one Lot Owner of a Lot, the Lot Owners thereof shall Section 4. Notice of Meetings. At least twenty-one (21) days in advance of any annual or regularly scheduled meeting, and at least seven (7) days in advance of any other meeting, the Secretary of the Association shall send to each Lot Owner a written notice of the time, place and complete agenda of the meeting which is the subject of such notice. Such notice shall be hand delivered or sent by United States mail, or, at the Board's discretion, sent electronically, to all Lot Owners of record at the address of their respective Lots and to such other addresses as any Lot Owner may have designated in writing to the Secretary. Lot Owners of record shall be those Lot Owners who are registered with the Secretary as provided in Article I Section 5 on a date specified by the Board of Directors (the "Record Date"). Such Lot Owners of record shall be entitled to notice of any duly called meeting of the Members; provided that the Board of Directors may not specify a Record Date which is more than thirty-five (35) days prior to the date of an annual meeting or more than twenty (20) days prior to the date of a special meeting. A Lot Owner may at any time waive notice of any meeting by a signed writing or by attendance at the meeting. Section 5. Quorum and Adjournment. The presence of members in person or represented by proxy who have the authority to cast ten percent (10%) of the total of the votes of all members of the Association shall be requisite for and shall constitute a quorum at all meetings of the Association for the transaction of business except that of adjourning the meeting to reconvene at a subsequent time and except as otherwise provided by law. If, however, such per- centage shall not be present or represented at any such meeting, the members entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum shall be present, at which time any business may be transacted which might have been transacted at the meeting as initially called had a quorum then been present. The quorum, having once been established at a meeting, shall continue to exist for that meeting, notwithstanding the departure of any member previously in attendance in person or by proxy. Section 6. V otin~ Register. At the beginning of each meeting of the members, the Secretary shall deliver to the chairman for the meeting a written list of the Lot numbers, the respective name or names of the Lot Owners entitled to notice of such meeting, and the respective name of the person (in the case of multiple Lot Owners) authorized to vote. Section 7. Order of Business. The order of business at annual meetings of the members, and at such other membership meetings of the members as may be practical, shall be as follows: A. Presenting of Voting Register, proxy certification and establishment of a quorum. B. Reading or distribution of minutes of the preceding meeting of the Members, if any. C. Reports of officers, if any. D. Reports of committees, if any. 3 Community pursuant to Article XIII of the Declaration establishing the Planned Community, to Lot Owners other than Declarant; or a recording of a written surrender of control of the Association by the Declarant, whichever first occurs. If Declarant elects to voluntarily surrender control of the Association prior to either the five years or- 75% ownership requirements, above, then, following an Association meeting at which new Directors and officers are elected and take office, Declarant shall prepare and record a Notice of Surrender of Declarant Control to Association ("Notice"). The Notice: shall recited the Association meeting at which control was surrendered; shaH be signed by Declarant; shall be signed by the resigning president and secretary; shall include an acceptance signed by the newly elected president and secretary; shaH include acknowledgements for all parties signing; and shaH otherwise be prepared in a form acceptable for recording with the county recorder/registrar of titles. Upon the happening of the earliest of said events, all Directors elected by the Declarant shall resign from the Board of Directors. Notwithstanding the foregoing, however, not later than sixty (60) days after conveyance of fifty percent (50%) of the Lots, including any Lots which have then or may thereafter be added to the Planned Community pursuant to Article XIII of the Declaration establishing the Planned Community, to Lot Owners other than Declarant, one-third of all of the members of the Board of Directors shall be elected by Lot Owners other than the Declarant. Upon the resignation from the Board of Directors of aH Directors elected by the Declarant, five (5) directors shall be elected, two for a one (1) -year term, and three for a two (2) -year term. At each annual meeting thereafter, three or two (as the case may be) directors shall be elected, to a two-year term, as successors to the three or two (as the case may be) directors whose terms are then ending. The term of a member of the Board of Directors shall expire upon the election of a successor at an annual meeting of the Members. A director shaH hold office until he shall resign and his resignation shall have become effective, or until a qualified successor has been elected and shall have accepted the office, or until the director has been removed in accordance with the provisions of these Bylaws. The Board of Directors elected by the Declarant shall have the power to adopt the Bylaws of the Association, to elect officers, to establish a schedule of assessments and shall have generally the powers and duties of the Board of Directors as set forth herein and in the Declaration. Section 3. Election. The five (5) directors being elected upon the resignation from the Board of Directors of aH Directors elected by the Declarant shall be elected in one voting. Each Lot shall be entitled to cast up to five (5) votes. Such votes may not be used cumulatively and, if cast, must be cast for separate candidates. At the initial election of directors, the first, second and third candidates receiving the highest number of votes shall be elected to a two (2) -year term and the candidates receiving the fourth and fifth highest number of votes shall be elected to a one (1) -year term. Thereafter, the directors being elected at any annual meeting shall be elected in one voting. Each Lot shall be entitled to cast one vote per open position. Such votes may not be used cumulatively and such votes, if cast, must be cast for separate candidates. After the initial election of directors, all directors elected at any annual meeting shall be elected to two (2) -year terms. Section 4. Powers. Subject to the powers as herein delegated to the Master Association, the powers of the Association include, without limitation, all powers necessary for the administration of the affairs and obligations of the Association, including all powers and authority vested in or 5 (iv) regulate changes in the appearance of the Common Elements and conduct which may damage the Real Estate; (v) regulate the exterior appearance of the Real Estate, including, for example, signs and other displays, regardless of whether inside a Living Unit; (vi) exercise the powers reserved by this Section; and (vii) otherwise facilitate the operation of the Real Estate, provided, however, when there is any conflict between the Master Governing Documents, including the Master Rules and Regulations, and the Rules and Regulations adopted pursuant to this reservation of power, the more restrictive rule shall control. G. administer and enforce the covenants, conditions, restrictions and other obligations set forth in the Declaration, these Bylaws and the Rules and Regulations, provided however the Master Association shall have the power and authority to administer and enforce such covenants, conditions, restrictions and obligations if the Association fails to do so; H. approve changes to Living Unit exteriors as provided in Article VI of the Declaration provided however such approval shall not replace, restrict, modify, limit or eliminate the approval requirements and process provided in Section 8 of the Master Declaration; 1. institute, defend or intervene in litigation or administrative proceedings (A) in its own name, on behalf of itself or two or more Owners, on matters affecting the Common Elements or other matters affecting the Real Estate or the Association, or, (B) with the consent of the Owners of the affected Lots on matters affecting only those Lots; J. make contracts and incur liabilities on behalf of the Association; K. subject to Section 8 of the Master Declaration, cause improvements to be made as part of the Common Elements; L. acquire, hold, encumber and convey in its own name, any right, title or interest to real estate or personal property; M. subject to any restrictions contained in the Master Governing Documents, grant easements as follows: (i) public utility and communication systems easements through, over or under the Common Elements may be granted by the Board; and (ii) other public or private easements, leases and licenses through, over or under the Common Elements may be granted only by approval of the Board, and by the 7 members of the Association in the manner provided for by the Act, herein and in the Declaration. The Board shall include in the monthly assessments such amount as is necessary to accumulate an adequate reserve for the maintenance, repair and replacement of those Common Elements that must be replaced, repaired or maintained on a periodic basis, and may accumulate an additional reserve from time to time in anticipation of extraordinary Common Expenses. B. Cause to be kept detailed, accurate records in chronological order, of the receipts and expenditures affecting the Common Elements, specifying and itemizing the maintenance repair and replacement expenses of the Common Elements and any other expenses incurred. Such records and the vouchers authorizing the payments shall be.available for examination by the Lot Owners during normal business hours. C. Prepare or cause to be prepared an annual report, a copy of which shall be provided to each Lot Owner with the notice of each annual meeting and shaH be available to each Lot Owner at the annual meeting, showing the financial affairs of the Association, and containing at a minimum the following: 1. a statement of any capital expenditures in excess of two percent (2%) of the current budget or $5,000.00, whichever is greater, approved by the Association for the current fiscal year or succeeding two (2) fiscal years; ll. a statement of the balance of any reserve or replacement fund and any portion of the fund designated by the Board for any specified project; 111. a copy of the statement of revenues and expenses for the Association's last fiscal year and a balance sheet as of the end of said fiscal year; lV. a statement ofthe status of any pending litigation or judgments in which the Association is a party; v. a detailed description of the insurance coverage provided by the Association, including a statement as to which, if any, of the items referred to in Section 515B.3-113, subsection (b) of the Act are insured by the Association; and VI. a statement of the total past due assessments on aH individual Lots, current as of not more than sixty (60) days prior to the date of the meeting. D. Furnish or cause to be furnished a certificate in accordance with Section 515BA- 107 (b) of the Act. The Board of Directors shaH have the power to establish and collect a fee for such certificates, which fee shall be in an amount reasonably related to the costs incurred by the Association in furnishing such certificate. 9 any sale or transfer of his Lot or on the date of transfer of possession thereof in connection with any such sale or transfer, whichever occurs earlier. Section 10. Regular Meeting. The regular annual meeting of the Board of Directors shall be held without notice at the place, and immediately following the adjournment of the annual meeting of the members of the Association, to transact such business as may properly come before the Board. Section 11. Special Meetings of the Board of Directors. Special meetings of the Board of Directors shall be held upon written request of the President or of any Director, stating the purpose or purposes thereof. Notice of such meeting shall be given by mail or facsimile transmission to each Director, or, at the Board's discretion, sent electronically, addressed to him at his residence or usual place of business at least three (3) days before the day on which such meeting is to be held. Every such notice shaH state the time, place and purpose of the meeting. No business other than that stated in the notice shall be transacted at said meeting without the unanimous consent of the Directors. Section 12. Quorum and Manner of Acting. Except as otherwise provided by statute, the Declaration or these Bylaws, a majority of the Directors in office at the time of any meeting of the Board of Directors shall constitute a quorum for transaction of business at such meeting and the act of a majority of the Directors present at any such meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the Directors present may adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum be had. Section 13. Waiver of Notice. Notice of a special meeting may be waived by any member of the Board of Directors in writing and shall be waived by attendance at such meeting in person or by proxy. Section 14. Action Taken Without A Meeting. Any action which might be taken at a meeting of the Board of Directors may be taken without a meeting if authorized in a writing or writings signed by all of the Directors. Section 15. Fidelitv Bonds. The Board of Directors shall require that all officers, directors, employees and representatives of the Association, and all officers, employees and agents of any management agent employed by the Association, handling or responsible for the Association funds shall furnish adequate fidelity bonds or fidelity insurance coverage. Such fidelity bonds or fidelity insurance coverage shall be in such amount as the Board of Directors deems appropriate but not less than required by the Act and not less than an amount as may be required by the Federal Housing Administration, the Federal National Mortgage Association, the Department of Housing and Urban Development, the Federal Home Loan Mortgage Corporation, the Department of Veteran Affairs or other applicable federal agency or program as a precondition to their insuring, purchasing or financing a mortgage on a Lot. Such bonds shall name the Association as an obligee, or in the case of the management company's fidelity insurance, shall name the Association as an additional insured. Any fidelity insurance coverage 11 on behalf of the Association. In the absence of the President, the Vice President shall assume and perform the duties of the President. The Secretary shall keep the minute book of the Association wherein minutes of all meetings and all resolutions and proceedings of the members and of the Board of Directors shall be recorded, and shall keep a record of the name and mailing address of each Lot Owner, and the Lot or Lots in which he has an interest and shall give aH notices required by the Articles of Incorporation of the Association, these Bylaws, the Declaration or the Act. The Treasurer shall keep the financial records and books of account of the Association. The Treasurer shall have custody of aH intangible property of the Association, including funds, securities and evidences of indebtedness. The Treasurer shall deposit all moneys and other valuable effects in the name of or to the credit of the Association in such depositories as may be designated by the Board of Directors and shall disburse the funds of the Association as ordered by the Board of Directors and shall perform all other duties incident to the office of Treasurer. He shall furnish upon request of any Lot Owner a statement as to the current account of the Lot Owner upon the assessment roHs of the Association. Officers shall serve without compensation except for reimbursement for out-of-pocket expenses incurred in the performance of their duties. If desired by the Board, administrative tasks of the officers may be performed by a managing agent selected by the Board. ARTICLE V OPERATION OF THE PROPERTY Section 1. Budget; Levy. The Board of Directors shaH from time to time, and at least annually in advance of the beginning of the Association's fiscal year, prepare a budget of Common Expenses for the Association, including the Association's share of the Master Association's Assessments, as defined in the Master Declaration, and shall allocate, assess and levy such Common Expenses among the Lot Owners in accordance with the Act and the Declaration. Upon the vote of the Board of Directors adopting a resolution which sets forth the budget of Common Expenses and the allocation thereof to the Lot Owners, the amount so allocated to the Lot Owners of each Lot shall, without further resolution by the Board of Directors, be levied as the annual assessment against such Lot, payable in equal monthly installments due on the first day of each month during the period covered by the Budget. The Common Expenses shaH include those Common Expenses set forth in the Declaration and these Bylaws and may include such other amounts as the Board of Directors may deem proper for the operation and maintenance of the Real Estate and as permitted by the Act and all laws amen- datory thereof and supplementary thereto, provided, however, that the assessment for Common Expenses shall include an adequate reserve fund for maintenance, repair and replacement of those Common Elements that must be replaced on a periodic basis, and shall, when practicable, be payable in regular installments. Contributions to any reserve funds established by the Association may not be withdrawn by any Lot Owner. The Board of Directors shall advise all Lot Owners in writing prior to the beginning of the period covered by the budget as to the amount of the monthly assessment payable by each of them, and shall, upon request by the Lot Owner, furnish copies of each budget on which such Common Expenses and the assessment are based to such Lot Owner and to his First Mortgagee. The total of any budget shaH be in the amount of the estimated Common Expenses for the period covered thereby, including a reason- able allowance for contingencies and reserves, less the amounts of any unneeded Common 13 whereupon the same shall become immediately due and payable. Additionally, the Board of Directors shall have the right to withhold services from any defaulting Owner. The Board of Directors shall have the right and duty to attempt to recover all assessments for Common Expenses, together with interest thereon and the expenses of the proceeding, including reasonable attorneys' fees, in an action to recover the same brought against an Owner, by foreclosure of the lien on a Lot pursuant to the Act, any statute amendatory thereof or supplementary thereto, or by another remedy available under the Act or hereunder. Section 5. Records. The Board of Directors shall cause to be kept at the registered office of the Association or at such other place as the Board of Directors may determine, records of the actions of the Board of Directors, minutes of the meetings of the Board of Directors, minutes of the meetings of the Members of the Association, names of the Lot Owners and names of any First Mortgagees who have requested the notice of default described in the Declaration and the Lot on which such First Mortgagee holds a mortgage, and detailed and accurate records, in chronological order, of the receipts and expenditures affecting the Common Elements. Such records shall be available for examination by the Owners or Mortgagees at convenient hours of weekdays. Separate accounts shaH be maintained for each Lot setting forth the amount of the assessments against the Lot, the date when due, the amount paid thereon and the balance remaining unpaid. ARTICLE VI AMENDMENT TO BYLAWS Section 1. These Bylaws may be amended only in the same manner and to the same extent as the Declaration. ARTICLE VII INDEMNIFICATION OF OFFICERS AND DIRECTORS Section 1. The Association shall indemnify and hold harmless every Director and officer, his heirs, executors and administrators, against all loss, cost, judgment and expense, including attorneys' fees, which may be imposed upon or reasonably incurred by him in connection with or arising out of the defense or settlement of any claim, action, suit or proceeding to which he may be made a party by reason of his being or having been a director or officer of the Association whether or not he is an officer or director at the time of incurring such loss, cost, judgment or expense, except as to matters as to which he shall be finally adjudged in such action, suit or proceeding to have been guilty of willful or fraudulent conduct detrimental to the best interests of the Association. In the event of a settlement, indemnification shall be pro- vided only in connection with such matters covered by the settlement as to which the Board of Directors has agreed on behalf of the Association that the person to be indemnified has not been guilty of willful or fraudulent conduct detrimental to the best interests of the Association in the performance of his duty as such director or officer in relation to the matter involved. The foregoing rights shall not be exclusive of other rights to which such director or officer may be entitled. All liability, loss, damage, costs and expenses incurred or suffered by the Association by reason or arising out of or in connection with the foregoing indemnification provisions shall 15 '. " Rules, the Act, the Declaration, these Bylaws, and any Rules and Regulations adopted by the Association, the Act shall control unless it permits the documents to control. As among the Declaration, these Bylaws, the Rules and Regulations, the Master Governing Documents and the Master Rules, the Master Governing Documents shaH control, except when the Declaration or these Bylaws are more restrictive, the more restrictive document shall control. The Master Rules shall control as against the Rules and Regulations adopted by the Association, except when a rule or regulation by the Association is more restrictive, the more restrictive rule or regulation shall control. In the event of any conflict among the provisions of the Act, the Declaration, these Bylaws of the Association or any Rules and Regulations adopted by the Association, the documents shall control in the following order of priority: A. the Act; B. the Declaration; C. these Bylaws; and D. the Rules and Regulations. Section 9. Interpretation. As appropriate, each reference to a masculine pronoun shall include the feminine and neutral pronoun and each reference to a singular pronoun shall include the multiple pronoun and vice versa. Except as otherwise specified in these Bylaws, the terms used in these Bylaws which are defined in the Declaration or the Act shall have the same meaning as they have in the Declaration or the Act. The undersigned hereby certifies that the foregoing Bylaws were adopted as the Bylaws of Towne Lakes Townhomes Homeowners Association, a non-profit corporation under the laws of the State of Minnesota, by action of the Board of Directors at the first meeting thereof, effective this 17th day of September, 2004. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Plaza 200 Coon Rapids Boulevard Minneapolis, MN 55433 (763) 780-8500 241412_5 17