1999-12-21 Articles of Incorporation
"
ARTICLES OF INCORPORJ\TION
OF
KOLVILLE ESTATES HOMEO\VNERS ASSOCIATION
The undersigned, for the purpose of fomling a corporation pursuant to the provisions of the
Minnesota Nonprofit Corporation Act, Minnesota Statutes, Chapter 317 A, and statutes amendatory
thereof, hereby adopts the following Articles of Incorporation:
ARTICLE I
NAl\1E
The name of this corporation shall be "Kolville Estates Homeowners Association" (referred
to herein as the "Association").
ARTICLE II
PURPOSES AND POWERS
The purposes for which the Association is formed, and its powers, are as follows:
1. To act as the Association which is referred to in the Declaration of Kolville Estates (the
"Declaration"), a common interest community as defined in Minnesota Statutes
Chapter 515B, located in Wright County, Minnesota. The definitions of terms set forth in
the Declaration shall apply to the same terms when used in these Articles ofIncorporation.
2. To provide for the maintenance, preservation, architectural control, operation and
management of the Property described in the Declaration, for the health, safety and welfare
of the owners thereof, and for the preservation of the value and architectural character of the
Units and Common Elements described in the Declaration.
3. To exercise the powers and duties now or hereafter granted or imposed by law, the
Declaration or the Association's Bylaws, and to do all other lawful acts or things reasonably
necessary for carrying out the Association's purposes; provided, that no actions shall be
authorized or undertaken which violate any state or federal laws applicable to nonprofit
corporations.
EXHIBIT F
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ARTICLE III
NO PECUNIARY GAIN
The Association shall not afford pecuniary gain, incidentally or otherwise, to its Members
by reason oftheirmembership. However, subject to approval by the Board of Directors, as provided
in the Association's Bylaws, a Memher may be reimbursed for out-of-pocket expenses incurred in
carrying out duties on behalf of the Association, or a Member may be reasonably compensated for
goods or services furnished to the Association in an independent, arms-length business transaction.
ARTICLE IV
DURATION
The duration of the Association shall be perpetual.
ARTICLE V
REGISTERED OFFICE
The location of the registered office ofthis Association shall be 251 Eighth Street, Elk River,
Minnesota 55330.
ARTICLE VI
INCORPORATOR
The name and address of the incorporator of this Association is as follows:
David B. Eide
601 Second Avenue South, Suite 4200
Minneapolis, Minnesota 55402-4302
ARTICLE VII
DIRECTORS
The business of this Association shall be managed by a Board of Directors consisting of at
least three persons, or such greater number as provided in the Bylaws. The members of the Board
of Directors shall be elected and carry out their duties as provided in the Bylaws.
ARTICLE VIII
LIMITED LIABILITY
The Members of this Association shall not be subject to any personal liability for corporate
obligations. In addition, no person who serves without compensation as a director, officer, member
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or agent of the Association shall be held civilly liable for an act or omission by that person ifthe act
or omission was in good faith, was within the scope of the person's responsibilities as director,
officer, Member or agent of the Association, and did not constitute willful or reckless misconduct,
except as follows:
1. an action or proceeding brought by the attorney general for a breach of a fiduciary duty as
a director;
2. a cause of action to the extent it is based on federal law;
3. a cause of action based on the person's express contractual obligation; or
4. an act or proceeding based on a breach of public pension plan fiduciary responsibility.
Nothing in this Article limits an individual's liability for physical injury to another person or for
wrongful death which is personally and directly caused by that individual.
ARTICLE IX
NO CAPITAL STOCK
This Association shall have no capital stock.
ARTICLE X
MEMBERSHIPNOTING
The Members ofthis Association shall be those persons described as Members in the Bylaws.
Membership in the Association shall be transferable, but only as an appurtenance to and together
with the Member's interest in the Unit (as defined in the Declaration) to which the membership is
allocated. One membership is allocated to each Unit. The Members have the voting rights allocated
to their respective Units as described in the Declaration. Cumulative voting by Members is not
permitted.
ARTICLE XI
BYLA WS
The first Board of Directors shall, upon the first meeting thereof, adopt Bylaws for the
regulation of the business ofthe Association. Thereafter, the Bylaws may be amended or revoked
only by the Members of the Association, as provided in the Bylaws.
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ARTICLE XII
MEETINGS
The Association shall hold meetings of its Members, at such time and in such manner as shall
be specified in the Bylaws.
ARTICLE XIII
AMENDMENTS
Amendment ofthese Articles ofIncorporation shall require the prior approval of Members who
hold in excess of fifty percent of the voting power of all Members at a meeting duly held for such
purposes, or voting by mail; except that the registered office may be changed by the filing of a
Certificate of Change of Registered Office in accordance with law. In addition, any amendment
requiring approval of the Members shall be subject to the consent of Eligible Mortgagees, and/or the
FHA or VA, if required by the Declaration.
ARTICLE XIV
DISSOLUTION
The Association may be dissolved as provided in Minnesota Statutes, Chapter 317 A; provided,
that the common interest community shall have been terminated in accordance with the requirements
of Minnesota Statutes Section 515B.2-119.
IN WITNESS WHEREOF, I have subscribed my name on this
day of
David B. Eide
STATE OF MINNESOTA )
) 55.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
by David B. Eide, incorporator.
Notary Public
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COMMON INTEREST COMMUNITY NO.
Planned Community
KOLVILLE ESTATES HOMEO\VNERS ASSOCIATION
BYLA WS
SECTION 1
GENERAL
The following are the Bylaws of Kolville Estates Homeowners Association, a Minnesota
nonprofit corporation (the "Association"). The Association is organized pursuant to Minnesota
Statutes Chapter 317 A, and Section 515B.3-1 0 1 of the Minnesota Common Interest Ownership Act
(the "Act"), for the purpose of operating and managing Kolville Estates, a planned community
created pursuant to the Act. The terms used in these Bylaws shall have the same meaning as they
have in the Declaration of Kolville Estates (the "Declaration") and the Act.
SECTION 2
MEMBERSHIP
2.1 Owners Defined. All Persons described as Owners in Section 4 of the Declaration
shall be members of the Association. No Person shall be a member solely by virtue of holding a
security interest in a Unit. A Person shall cease to be a member at such time as that Person is no
longer an Owner.
2.2 Registration of Owners and Occupants. Upon request of the Association, an Owner
shall register with the Secretary of the Association, in writing, (i) the name and address of the
Owners and any Occupants ofthe Unit, (ii) the nature of such Owner's interest or estate in each Unit
owned; (iii) the address at which the Owner desires to receive notice of any meeting of the Owners,
if other than the Unit address; and (iv) the name and address of the secured party holding the first
mortgage on the Unit, if any. Each Owner shall have a continuing obligation to advise the
Association in writing of any changes in the foregoing information.
2.3 Transfers. The interests, rights and obligations of an Owner in the Association may
be assigned, pledged, encumbered or transferred, but only along with and as a part ofthe title to the
Owner's Unit or as otherwise specifically authorized by the Governing Documents or by law.
SECTION 3
VOTING
3.l Entitlement. Votes shall be allocated to each Unit as provided in the Declaration.
However, no vote shall be exercised as to a Unit while the Unit is owned by the Association.
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3.2 Authority to Cast Vote. At any meeting of the Owners, an Owner included on the
voting register presented by the Secretary in accordance with Section 4.6, or the holder of such
Owner's proxy, shall be entitled to cast the vote which is allocated to the Unit owned by the Owner.
If there is more than one Owner of a Unit, only one of the Owners may cast the vote. Ifthe Owners
ofa Unit fail to agree as to who shall cast the vote, or fail to register pursuant to Section 2.2, the vote
shall not be cast.
3.3 V oting by Proxv. An Owner may cast the vote which is allocated to the Owner's Unit
and be counted as present at any meeting of the Owners by executing a written proxy naming another
Person entitled to act on that Owner's behalf, and delivering the same to the Secretary before the
commencement of any such meeting. All proxies granted by an Owner shall be effective until the
earliest of the following events: (i) revocation by the granting Owner by written notice or by
personally attending and voting at the meeting for which the proxy is effective, (ii) the date specified
in the proxy, if any, or (iii) the time at which the granting Owner is no longer an Owner.
3.4 Voting by Mail Ballot. The entire vote on any issue, except the election orremoval
of directors, may be determined by mailed ballots, subject to the following requirements.
a. The notice of the vote shall: (i) clearly state the proposed action, (ii) indicate the
number of responses needed to meet the quorum requirements, (iii) state the
percentage of approvals necessary to approve each matter other than election of
directors and (iv) specify the time by which a ballot must be received by the
Association in order to be counted.
b. The ballot shall: (i) set forth each proposed action and (ii) provide an opportunity to
vote for or against each proposed action.
c. The Board shall set the time for the return of ballots, which shall not be less than
fifteen nor more than thirty days after the date of mailing of the ballots to the
Owners. The Board shall provide notice of the results of the vote to the Owners
within t.en days after the expiration of the voting period.
_ d. Approval by written ballot under this Section is valid only if(i) the number of votes
cast by ballot equals or exceeds the quorum required to be present at a meeting
authorizing the action, and (ii) the number of approval votes 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.
3.5 Vote Required. A majority of the votes cast at any properly constituted meeting of
the Owners, or cast by mail in accordance with Section 3.4, shall decide all matters properly brought
before the Owners, except where a different vote or voting procedure is required by the Governing
Documents or the Act. The term "majority" as used herein shall mean in excess of fifty percent of
the votes cast at a meeting, in person or by proxy, or voting by mail, in accordance with the
allocation of voting power set forth in the Declaration. Cumulative voting shall not be permitted.
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SECTION 4
MEETINGS OF O\VNERS
4.1 Place. All meetings of the Owners shall be held at the office of the Association or
at such other place in the state of Minnesota reasonably accessible to the Owners as may be
designated by the Board in any notice of a meeting of the Owners.
4.2 Annual Meetings. An annual meeting of the Owners shall be held in each fiscal year
on a date, and at a reasonable time and place, designated by the Board. At each annual meeting of
the Owners, (i) the Persons who are to constitute the Board shall be elected pursuant to Section 6,
(ii) a report shall be made to the Owners on the activities and financial condition of the Association,
and (iii) any other matter which is included in the notice of the annual meeting, and is a proper
subject for discussion or decision by the Owners, shall be considered and acted upon at the meeting.
4.3 Special Meetings. Special meetings of the Owners may be called by the President
as a matter of discretion. Special meetings of the Owners shall be called by the President or
Secretary within thirty days following receipt of the written request of a majority of the members
of the Board or of Owners entitled to cast at least twenty-five percent of all the votes in the
Association. The meeting shall be held within sixty days following receipt of the request. The
request shall state the purpose ofthe meeting, and the business transacted at the special meeting shall
be confined to the purposes stated in the notice. The purpose for which the meeting is requested and
held must be lawful and consistent with the Association's purposes and authority under the
Governing Documents.
4.4 Notice of Meetings. Not less than twenty-one nor more than thirty days in advance
of any annual meeting of the Owners, and at least seven, but no more than thirty, days in advance
of any special meeting of the Owners, the Secretary shall send, to all persons who are Owners as of
the date of sending the notice, notice of the time, place and agenda ofthe meeting, by United States
mail, or by hand delivery, at the Owner's Unit address or to such other address as the Owner may
have designated in writing to the Secretary. The notice shall also be sent to the Eligible Mortgagee,
upon request, at the address provided by the Eligible Mortgagee. Any Eligible Mortgagee shall,
upon. request, be entitled to designate a representative to be present at any meeting. Notice of
meetings to vote upon amendments to the Association's Articles ofIncorporation shall also be given
separately to each officer and director of the Association.
4.5 Quorum! Adjournment. The presence of Owners in person or by proxy, who have the
authority to cast in excess of forty percent of all the votes in the Association shall be necessary to
constitute a quorum at all meetings ofthe Owners for the transaction of any business, except that of
adjourning the meeting to reconvene at a subsequent time. Any meeting may be adjourned from
time to time, but until no longer than fifteen days later, without notice other than announcement at
the meeting as initially called. If a quorum is present at the reconvened meeting, 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 estab lished at a meeting or a reconvened meeting, shall
continue to exist for that meeting notwithstanding the departure of any Owner originally in
attendance in person or by proxy. The Association may not be counted in determining a quorum as
to any Unit owned by the Association.
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4.6 Voting Register. The Secretary shall have available at the meeting a list of the Unit
numbers, the names of the Owners, the vote attributable to each Unit and the name of the Person (in
the case of multiple Owners) authorized to cast the vote.
4.7 Agenda. The agenda for meetings of the Owners shall be established by the Board,
consistent with the Governing Documents, and shall be sent to all Owners along with the notice of
the meeting.
SECTION 5
ANNUAL REPORT
The Board shall prepare an annual report, a copy of which shall be provided to each Owner
at or prior to the annual meeting. The report shall contain, at a minimum:
5.1 Caoital Expenditures. A statement of any capital expenditures in excess of two
percent of the Association's current budget or five thousand dollars, whichever is greater, approved
by the Association for the current year or succeeding two fiscal years.
5.2 Reserve Funds. A statement of the balance in any reserve or replacement fund.
5.3 Financial Statements. 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.
5.4 Litigation and Judgments. A statement of the status of any pending litigation or
judgments to which the Association is a party.
5.5 Insurance. 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(b) of the Act are covered.
5.6 Status of Assessments. A statement of the total past due assessments on all Units,
current as of not more than sixty days prior to the date of the meeting.
SECTION 6
BOARD OF DIRECTORS
6.1 Number and Qualification. The affairs of the Association shall be governed by a
Board of Directors. The first Board of Directors shall consist ofthe persons designated by Declarant
as directors in the Articles ofIncorporation of the Association or appointed by Declarant to replace
them, subject to the rights of Owners to elect directors as set forth in Section 6.2. Upon the
expiration of the terms of the members of the first Board of Directors, the Board of Directors shall
be composed of five directors, a majority of whom shall be Owners, or a duly authorized
representative of the Owner if the Owner is an entity which has the capacity to hold title to real
estate.
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6.2 Term of Office. The terms of office of the members of the Board shall be as follows:
a. Subject to Section 6.2.b., the terms of all directors appointed by Declarant as
authorized by the Declaration shall terminate upon the earliest of (i) voluntary
surrender of control by Declarant, (ii) an Association meeting which shall be held
within sixty days after conveyance to Owners other than Declarant of seventy-five
percent ofthe total number of Units authorized to be included in the common interest
community or (iii) the date five years following the date of the first conveyance of
a Unit to an Owner other than Declarant.
b. Notwithstanding the provisions of Subsection a., the Owners other than Declarant
shall have the right to nominate and elect not less than thirty-three and one-third
percent of the directors at a meeting of the Owners held within sixty days following
the conveyance by Declarant of fifty percent ofthe total number of Units authorized
to be included in the common interest community. The term of office of any director
elected pursuant to this Subsection shall terminate at the same time as the directors
appointed by Declarant.
c. The first terms of office of the directors elected by the Owners immediately
following the termination of the terms provided for in Section 6.2.a. shall be one year
for two ofthe directors and two years for three of the directors. Each term of office
thereafter shall be two years and shall expire upon the election of a successor at the
appropriate annual meeting of the Owners; provided, that a director shall continue
in office until a successor is elected. A number of nominees equal to the number of
vacancies, and receiving the greatest numbers of votes, shall be elected,
notwithstanding that one or more of them does not receive a majority of the votes
cast. At the first election, the nominee or nominees receiving the greatest numbers
of votes shall fill the longer terms. A director appointed or elected to fill an
uncompleted term shall serve until the natural termination of that term, unless
removed in accordance with these Bylaws. There is no cumulative voting for
directors.
. 6.3 Nominations. Except for directors appointed by Declarant, and upon expiration of
the terms ofthe members ofthe first Board, nominations for election to the Board at each subsequent
annual meeting shall be made by a nominating committee appointed by the Board and shall be based
upon nominations submitted by the Owners (in addition to nominations submitted by the Board).
The nominating committee shall consist of Owners who are representative of the general
membership ofthe Association, and shall establish fair and reasonable procedures for the submission
of nominations.
6.4 Powers. The Board shall have all powers necessary for the administration of the
affairs of the Association, and may exercise for the Association all powers and authority vested in
or delegated to the Association (and not expressly prohibited or reserved to the Owners) by law or
by the Governing Documents. The powers ofthe Board shall include, without limitation, the power
to:
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a. adopt, amend and revoke Rules and Regulations not inconsistent with the Governing
Documents, as follows: (i) regulating the use of the Common Elements; (ii)
regulating the use of the Units, and the conduct of Owners and Occupants, which
may jeopardize the health, safety, or welfare of other Owners and Occupants, which
involves noise or other disturbing activity, or which may damage the Common
Elements or other Units; (iii) regulating or prohibiting animals; (iv) regulating
changes in the appearance of the Common Elements and conduct which may damage
the Property, (v) regulating the exterior appearance of the Property, including, for
example, decks, patios, and signs and other displays, regardless of whether inside a
Unit; (vi) implementing the Governing Documents, and exercising the powers
granted by this Section; and (vii) otherwise facilitating the operation of the Property;
b. adopt and amend budgets for revenues, expenditures and reserves, levy and collect
assessments for Common Expenses (subject to Section 6 of the Declaration), and
foreclose assessment liens incidental to its collection efforts;
c. hire and discharge managing agents and other employees, agents, and independent
contractors;
d. institute, defend, or intervene in litigation or administrative proceedings (i) in its own
name on behalf of itself or two or more Owners on matters affecting the Common
Elements or other matters affecting the Property or the Association, or, (ii) with the
consent of the Owners of the affected Units, on matters affecting only those Units;
e. make contracts and incur liabilities;
f. regulate the use, maintenance, repair, replacement and modification ofthe Common
Elements and the Units;
g. cause improvements to be made as a part of the Common Elements;
h. acquire, hold, encumber, and convey in its own name any right, title, or interest to
real estate or personal property, subject to the requirements of the Act for the
conveyance or encumbrance of the Common Elements;
1. grant easements as follows: (i) public utility and cable communications 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
Owners (other than Declarant) voting at an Association meeting, unless such
easement is expressly authorized by the Declaration;
J. impose and receive any payments, fees, or charges for services provided to Owners;
k. impose charges for late payment of assessments and, after notice and an opportunity
to be heard, levy reasonable fines for violations of the Governing Documents and the
Rules and Regulations;
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I. borrow money, and encumber or pledge the assets of the Association as security
therefor; provided, that any borrowings in any twelve month period which exceed,
in aggregate, ten percent of the Association's current annual budget, shall require
approval by the Owners voting at an Association meeting;
m. impose reasonable charges for the review, preparation and recording of amendments
to the Declaration or Bylaws, resale disclosure certificates required by
Section 515B.4-107 of the Act, statements of unpaid assessments, or furnishing
copies of Association records;
n. provide for the indemnification of its officers, directors and committee members, and
maintain directors' and officers' liability insurance;
o. provide for reasonable procedures governing the conduct of meetings and the election
of directors;
p. appoint, regulate and dissolve committees;
q. exercise any other powers conferred by law or the Governing Documents, or which
are necessary and proper for the governance of the Association.
6.5 Meetings and Notices. An annual meeting of the Board shall be held promptly following
each annual meeting of the Owners. At each annual meeting of the Board the officers of the
Association shall be elected.
a. Regular meetings of the Board shall be held at least on a quarterly basis, at such
times as may be fixed from time to time by a majority of the voting directors. A
schedule, or any amended schedule, of the regular meetings shall be provided to the
directors, and posted or published for the information of Owners, as provided in
Section 6.5.e.
b. Special meetings of the Board of Directors shall be held when called (i) by the
President of the Association, or (ii) by the Secretary within ten days following the
written request of a majority of the voting directors. Notice of any special meeting
shall be given to each director not less than three days in advance thereof, subject to
Section 6.5.c. Notice to a director shall be deemed to be given when deposited in the
United States mail postage prepaid to the Unit address of such director, or when
personally delivered, orally or in writing, by a representative of the Board.
c. Any director may at any time waive notice of any meeting of the Board orally, in
writing, or by attendance at the meeting. If all the directors are present at a meeting
ofthe Board, no notice shall be required, and any business may be transacted at such
meeting.
d. A conference among directors by a means of communication through which all
directors may simultaneously hear each other during the conference is a board
meeting, if (i) the same notice is given of the conference as would be required for a
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meeting, and (ii) the number of directors participating in the conference is a quorum.
Participation in a meeting by this means is personal presence at the meeting.
e. Except as otherwise provided in this Section, meetings of the Board must be open to
the Owners. To the extent practicable, the Board shall give reasonable notice to the
Owners 0 f the date, time, and p lace of a Board meeting. If the date, time and place
of meetings are provided for in the Declaration, the Association's Articles of
Incorporation, the Bylaws, announced at a previous meeting of the Board, posted in
a location accessible to the Owners and designated by the Board from time to time,
or if an emergency requires immediate consideration of a matter by the Board, notice
is not required. "Notice" has the meaning given in Section 11.1. Notwithstanding
the foregoing, meetings may be closed at the discretion of the Board to discuss the
following:
(1) personnel matters;
(2) pending or potential litigation, arbitration or other potentially adversarial
proceedings between Owners, between the Board or Association and Owners,
or other matters in which any Owner may have an adversarial interest, if the
Board determines that closing the meeting is necessary to discuss strategy or
to otherwise protect the position of the Board or Association or the privacy
of an Owner or Occupant of a Unit; or
(3) criminal activity arising within the common interest community if the Board
determines that closing the meeting is necessary to protect the privacy ofthe
victim or that opening the meeting would jeopardize investigation of the
activity.
The minutes of and the documentation discussed or submitted at such closed meeting
shall not be made available for review or copying pursuant to Section 8.5. Nothing
in this Section imposes a duty on the Board to provide special facilities for meetings.
The failure to give notice as required by this Section shall not invalidate the Board
meeting or any action taken at the meeting.
6.6 Quorum and Voting. A majority of the directors constitutes a quorum for the
transaction of business at any meeting thereof. A quorum, once established, continues to exist,
regardless of the subsequent departure of any directors. Each director has one vote. The vote of a
majority ofthe directors present at any meeting at which a quorum is present is sufficient to adopt
any action. Proxies shall not be permitted.
.6.7 Action Taken Without a Meeting. The Board shall have the right to take any action
in the absence of a meeting which it could take at a meeting when authorized in a writing signed by
all the directors; provided, that a copy of the proposed written action is given to all directors for
review prior to its signing.
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6.8 Vacancies. A vacancy in the directors, other than those under Sections 6.2 and 6.9,
shall be filled by a person elected within thirty days following the occurrence of the vacancy by a
majority vote of the remaining directors, regardless of their number. Each person so elected shall
serve out the term vacated.
6.9 Removal. A director may be removed from the Board, with or without cause, by a
majority vote at any annual or special meeting of the Owners; provided, (i) that the notice of the
meeting at which removal is to be considered states such purpose, (ii) that the director to be removed
has a right to be heard at the meeting and (iii) that a new director is elected at the meeting by the
owners to fill the vacant position caused by the removal. A director may also be removed by the
Board if such director (i) has more than two unexcused absences from Board meetings and/or
Owners meetings during any twelve month period or (ii) is more than sixty days past due with
respect to the payment of assessments or installments thereof on the director's Unit. Such vacancies
shall be filled by the vote of the Owners as previously provided in this Section.
6.10 Compensation. Except as authorized by a vote of the Owners at a meeting thereof,
the directors of the Association shall receive no compensation for their services in such capacity.
Directors may be reimbursed for out-of-pocket expenses incurred in the perfoTInance oftheir duties.
A director or an entity in which the director has an interest may, upon approval by the Board, be
reasonably compensated under a contract for goods and services furnished to the Association in a
capacity other than as a director; provided (i) that the contract is approved by a majority vote of the
Board, excluding the interested director, and (ii) that the director's interest is disclosed to the Board
prior to approval.
6.11 Fidelity Bond. Fidelity bonds or insurance coverage for unlawful taking of
Association funds shall be obtained and maintained as provided in the Declaration on all voting
directors and officers authorized to handle the Association's funds and other monetary assets.
SECTION 7
OFFICERS
7.1 Principal Officers. The principal officers of the Association shall bea President, a
Vice President, a Secretary and a Treasurer, all of whom shall be elected by the directors. The Board
may from time to time elect such other officers and designate their duties as in their judgment may
be necessary to manage the affairs of the Association. A person may hold more than one office
simultaneously, except those of President and Vice President. Only the President and Vice President
must be members of the Board.
7.2 Election. The officers of the Association shall be elected annually by the Board at
its annual meeting and shall hold office at the pleasure of the Board.
7.3 Removal. Upon an affirmative vote of a majority of the members of the Board, any
officer may be removed, with or without cause, and a successor elected, at any regular meeting of
the Board, or at any special meeting of the Board called for that purpose.
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7.4 President. The President shall be the chief executive officer of the Association, and
shall preside at all meetings of the Board and the Association. The President shall have all of the
powers and duties which are customari ly vested in the office of president of a corporation, including
without limitation the duty to supervise all other officers and to execute all contracts and similar
obligations on behalf of the Association. The President shall have such other duties as may from
time to time be prescribed by the Board.
7.5 Vice President. The Vice President shall take the place of the President and perform
the duties of the office whenever the President shall be absent or unable to act. The Vice President
shall also perform such other duties as shall from time to time be prescribed by the Board.
7.6 Secretary. The Secretary is responsible for recording the minutes of all meetings of
the Board and the Association. The Secretary shall be responsible for keeping the books and records
of the Association, and shall give all notices required by the Governing Documents or the Act unless
directed otherwise by the Board. The Board may delegate the Secretary's administrative functions
to a managing agent; provided, that such delegation shall not relieve the Secretary of the ultimate
responsibility for the Secretary's duties.
7.7 Treasurer. The Treasurer is responsible for all financial assets of the Association, and
shall be covered by a bond or insurance in such sum and with such companies as the Board may
require. The Treasurer shall (i) be responsible for keeping the Association's financial books,
assessment rolls and accounts; (ii) cause an annual financial report to be prepared, subject to review
by the Association's accountants; (iii) cause the books of the Association to be kept in accordance
with generally accepted accounting practices and shall submit them to the Board for its examination
upon request; (iv) cause all moneys and other monetary assets of the Association to be deposited in
the name of or to the credit of the Association in depositories designated by the Board; (v) cause the
proper obligations of the Association to be paid when due; and (vi) perform all other duties incident
to the office of Treasurer. The Board may delegate the Treasurer's administrative functions to a
managing agent; provided, that such delegation shall not relieve the Treasurer of the ultimate
responsibility for the Treasurer's duties.
7.8 Compensation. Except as authorized by a vote of the Owners at a meeting thereof,
officers ofthe Association shall receive no compensation for their services in such capacity. Officers
may be reimbursed for out-of-pocket expenses incurred in the performance of their duties. An
officer or an entity in which the officer has an interest may be reasonably compensated under a
contract for goods and services furnished to the Association in a capacity other than as an officer;
provided (i) that the contract is approved by a majority vote of the Board, excluding the interested
party, and (ii) that the officer's interest is disclosed to the Board prior to approval.
SECTION 8
OPERATION OF THE PROPERTY
8.1 Assessment Procedures. The Board(s) appointed by the Declarant shall annually
prepare a budget of Common Expenses for the Association, but may elect to defer the levying of a
Common Expense Assessment, in which case Declarant shall pay all expenses of the common
interest community until the first Assessment is levied. Following the expiration of the terms ofthe
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members of the Board(s) appointed by the Declarant, the Board shall annually prepare a budget of
Common Expenses for the Association and assess such Common Expenses against the Units
according to their respective Common Expense obligations as set forth in the Declaration.
a. Subject to the limitations contained in Section 6 of the Declaration, the Board shall
fix the amount of the annual Assessment against each Unit, levy the Assessment and
advise the Owners in. writing of the Assessment at least thirty days prior to the
beginning ofthe Association's fiscal year when the first Assessment installment shall
be due. The failure of the Board to timely levy an annual Assessment shall not
relieve the Owners oftheir obligation to continue paying Assessment installments in
the amount currently levied, as well as any increases subsequently levied.
b. Subject to the limitations contained in Section 6 of the Declaration, the Board may
amend the budget and Assessments, or levy a special Assessment, at any time. The
levy shall be deemed to occur upon the date specified in the resolution which fixes
the Assessment.
c. The Board may levy limited Assessments against only certain Units under Section
6.4 of the Declaration. Such Assessments may be included in the annual
Assessments levied against the affected Units or may be levied separately during the
year. Such Assessments are not annual or special Assessments within the meaning
ofthe Declaration or ofthese Bylaws, and are not subject to the limitations contained
in Section 6 of the Declaration.
d. The annual budget shall include a general operating reserve, and an adequate reserve
fund for maintenance, repair and replacement ofthe Common Elements and any parts
of the Units that must be maintained, repaired or replaced by the Association on a
periodic basis.
e. The Association shall furnish copies of each budget on which the assessment is based
to an Owner or to any Eligible Mortgagee, upon request of such persons.
8.2 Payment of Assessments. Annual Assessments shall be due and payable in monthly
or quarterly installments, as established by the Board, in advance on the first day of each month of
the year or other period for which the Assessments are made, and special Assessments shall be due
when designated by the Board. All Owners shall be absolutely and unconditionally obligated to pay
the Assessments. No Owner or Occupant shall have any right of withholding, offset or deduction
against the Association with respect to any Assessments, or late charges or costs of collection,
regardless of any claims alleged against the Association or its officers or directors. Any rights or
claims alleged by an Owner may be pursued only by separate action.
8.3 Default in Payment of Assessments. If any Owner does not make payment on or
before the date when any Assessment or installment thereofis due, subject to such grace periods as
may be established, the Board may assess, and such Owner shall be obligated to pay, a late charge
as provided in the Declaration for each such unpaid Assessment or installment thereof, together with
all expenses, including reasonable attorneys' fees, incurred by the Board in collecting any such
unpaid Assessment.
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a. If there is a default of more than thirty days in payment of any Assessment, the Board
may accelerate any remaining installments of the Assessment upon prior written
notice thereof to the Owner, as provided in the Declaration, and the entire unpaid
balance of the assessment and late charges shall become due and payable upon the
date stated in the notice unless all past due amounts, including late charges, costs of
collection and fines, are paid prior to said date.
b. The Board shall have 'the right and duty to attempt to recover all Assessments for
Common Expenses, together with any charges, attorneys' fees or expenses relating
to the collection thereof. In addition, the Board shall have the right and duty to
attempt to recover any and all collection or contingency fees or costs charged to the
Association by a collection agency or other Person acting on behalf of the
Association in collecting any delinquent amounts owed to the Association by an
Owner or Occupant.
c. Upon written request of an Owner or an Eligible Mortgagee of such Unit, notice of
a default of more than thirty days in payment of any Assessment or installment of an
Assessment for Common Expenses or any other default in the performance of
obligations by the Owner shall be given in writing to such Owner or Eligible
Mortgagee.
d. The rights and remedies referred to herein shall not limit the remedies available to
the Association under the Declaration or by law.
8.4 Foreclosure of Liens for Unpaid Assessments. The Association has the right to
foreclose a lien against a Unit for Assessments imposed by the Association, as more fully described
in the Declaration and the Act.
8.5 Records. The Board shall cause to be kept at the registered office ofthe Association,
and at such other place as the Board may determine, records of the actions ofthe Board, minutes of
the meetings of the Boa,rd, minutes ofthe meetings ofthe Owners, names ofthe Owners and Eligible
Mortgagees, and detailed and accurate records of the receipts and expenditures of the Association.
With.the exception of records that may be privileged information, an Association records, including
receipts and expenditures and any vouchers authorizing payments, shall be available for examination
by the Owners and the Eligible Mortgagees upon reasonable notice and during normal business
hours. Separate accounts shall be maintained for each Unit setting forth the amount of the
Assessments against the Unit, the date when due, the amount paid thereon and the balance remaining
unpaid.
8.6 Financial Review. The Board shall cause the financial records ofthe Association to
be "reviewed" by an independent certified public accountant on an arumal basis, pursuant to the
requirements of Section 515B.3-121 of the Act. The reviewed financial records shan be delivered
to all Members within one hundred eighty days after the end of the Association's fiscal year. The
review requirement may be waived, on an annual basis, by the vote of Owners holding at least thirty
percent of the total votes in the Association. The waiver must be approved prior to sixty days after
the end of the Association's fiscal year. The Board may require the review or an audit
notwithstanding a waiver vote by the Owners.
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8.7 Enforcement of Obligations. All Owners and Occupants and their guests are
obligated and bound to observe the provisions of the Governing Documents, the Rules and
Regulations and the Act. The Association may impose any or all of the charges, sanctions and
remedies authorized by the Governing Documents, the Rules and Regulations or by law to enforce
and implement its rights and to otherwise enable it to manage and operate the Association.
SECTION 9
AMENDMENTS
These Bylaws may be amended, and the amendment shall be effective, upon the satisfaction
of the following conditions:
9.1 Approval. The amendment must be approved by Owners who have authority to cast
in excess of fifty percent of the total votes in the Association, in writing or at a duly held meeting
of the Owners; subject to any approval rights of (i) Eligible Mortgagees, (ii) the FHA, (iii) the VA
or (iv) Declarant as provided in the Declaration; and
9.2 Notice. A copy ofthe proposed amendment and, if a meeting is to be held, notice of
such meeting, shall be mailed by U.S. mail, or hand delivered, to all Owners authorized to cast votes;
and
9.3 Effective Date: Recording. The amendment shall be effective on the date of approval
by the required vote of the Owners and need not be recorded.
SECTION 10
INDEMNIFICATION
The Association shall, to the extent the alleged liability is not covered by insurance,
indemnify every indivi,dual acting in any official capacity on behalf ofthe Association, pursuant to
the provisions of Minnesota Statutes Section 317 A.521.
SECTION 11
MISCELLANEOUS
11.1 Notices. Unless specifically provided otherwise in the Act, the Declaration or these
Bylaws, all notices required to be given by or to the Association, the Board, the Association officers
or the Owners or Occupants shall be in writing and shall be effective upon hand delivery, or upon
mailing if properly addressed with postage prepaid and deposited in the United States mail; except
that registrations pursuant to Section 2.2 shall be effective upon receipt by the Association.
11.2 Severability. The invalidity or unenforceability of any part ofthese Bylaws shall not
impair or affect in any manner the validity, enforceability or effect of the balance of these Bylaws.
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11.3 Captions. The captions herein are inserted only as a matter of convenience and for
reference andin no way limit or proscribe the scope of these Bylaws or the intent of any provision
hereof.
11.4 Conflicts in Documents. In the event of any conflict among the provisions ofthe Act,
the Declaration, these Bylaws or the Rules and Regulations, the Act shall control unless it permits
the documents to control. As anlongthe Declaration, these Bylaws and Rules and Regulations, the
Declaration shall control, and as between these Bylaws and the Rules and Regulations, these Bylaws
shall control.
11.5 Waiver. No restriction, condition, obligation or provision contained in these Bylaws
shall be deemed to have been abrogated or waived by reason of any failure to enforce the same,
irrespective of the number of violations or breaches thereof which may occur.
11.6 No Corporate Seal. The Association shall have no corporate seal.
11.7 Fiscal Year. The fiscal year of the Association shall be as determined by the Board.
The undersigned certifies that these Bylaws were adopted by the first Board of Directors of
Kolville Estates Homeowners Association, a Minnesota nonprofit corporation, effective as of the
date hereof.
Dated:
Secretary
Kolville Estates Homeowners Association
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COMMON INTEREST COMMUNITY NO.
Planned Community
KOLVILLE ESTATES
DECLARATION
This Declaration is made in the county of , state of Minnesota, on this
day of , 1999, by Heart of the Lakes Construction, Inc., a Minnesota corporation (the
"Declarant"), pursuant to the provisions of Minnesota Statutes Chapter 515B, known as the
Minnesota Common Interest Ownership Act (the" Act"), for the purpose of creating Kolville Estates
as a planned community under the Act.
WHEREAS, Declarant is the owner of certain real property located in Wright County,
Minnesota, legally described in Exhibit A attached hereto, and Declarant desires to submit said real
property and all improvements thereon (collectively the "Property") to the Act as a planned
community, and
WHEREAS, Declarant has the right to add to the Property all or a part of the real property
legally described in Ex.hibit C attached hereto (the "Additional Real Estate"), and
WHEREAS, Declarant desires to establish on the Property, and any Additional Real Estate
added thereto, a plan for a pern1anent residential community to be owned, occupied and operated for
the use, health, safety and welfare of its resident Owners and Occupants, and for the purpose of
preserving the value, the structural quality, and the original architectural character of the Property,
and
\VHEREAS, the Propcriy is not subject to an ordinance referred to in Section 515B.l-l 06
of the Act, governing conversions to common interest ownership, and is not subject to a master
association as defined in the Act.
THEREFO RE, Declarant subj ects the Property to this Declaration under the name "Kolville
Estates, II initially consisting of the Units refeITed to in Section 2, declaring that this Declaration shall
constitute covenants to run with the Property, and that the Property, and all Additional Real Estate
added thereto, shall be owned, used, occupied and conveyed subject to the covenants, restrictions,
easements, charges and liens set forth herein, all of which shall be binding upon all Persons owning
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or acquiring any right, title or interest therein, and their heirs, personal representatives, successors
and assigns.
SECTION 1
DEFINITIONS
The following words when used in the Governing Documents shall have the following
meanings (unless the context indicates otherwise):
1.1 "Act" means the Minnesota Common Interest Ownership Act, Minnesota Statutes
Chapter 515B, as amended.
1.2 "Additional Real Estate" means the real property legally described in Exhibit C
attached hereto, including all improvements located thereon now or in the future, and
all easements and rights appurtenant thereto, which property Declarant has the right
to add to the common interest community.
1.3 "Assessments" means and refer to all assessments levied by the Association
pursuant to Section 6 ofthe this Declaration, including annual assessments, special
assessments and limited assessments.
1.4 "Association" means the Kolville Estates Homeowners Association, a nonprofit
corporation which has been created pursuant to Minnesota Statutes Chapter 317 A
and Section 515B.3-1 0 1 ofthe Act, whose members consist of all Owners.
1.5 "Board" means the Board of Directors of the Association as provided for in the
Bylaws.
1.6 "Bylaws" means the Bylaws governing the operation of the Association, as amended
from time to time.
1.7 "Common Elements" means all parts of the Property except the Units, including all
improvements thereon, owned by the Association for the common benefit of the
Owners and Occupants. The Common Elements are legally described in Exhibit B
attached hereto.
1.8 "Common Expenses" means all expenditures made or liabilities incurred by or on
behalf of the Association and incident to its operation, including Assessments and
items otherwise identified as Common Expenses in the Declaration or Bylaws.
1.9 "Declarant Control Period" means the time period during which Declarant has the
exclusive right to appoint the members of the Board, as described in Section 17.
1.10 "Dwelling" means a building consisting of one or more floors, designed and intended
for occupancy as a single family residence, and located within the boundaries of a
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Unit. The Dwelling includes any garage attached thereto or otherwise included
within the boundaries of the Unit in which the Dwelling is located.
1.11 "Eligible Mortgagee" means any Person owning a mortgage on any Unit, which
mortgage is first in priority upon foreclosure to all other mortgages that encumber
such Unit, and which has requested the Association, in writing, to notify it regarding
any proposed action which requires approval by a specified percentage of Eligible
Mortgagees.
1.12 "Governing Documents" means this Declaration, and the Articles ofIncorporation
and Bylaws of the Association, as amended from time to time, all of which shall
govern the use and operation of the Property.
1.13 "Limited Common Elements" means a portion of the Common Elements allocated
by the Declaration or by operation of Section 515B.2-1 02(d) or (f) of the Act for the
exclusive use of one or more but fewer than all of the Units.
1.14 "Member" means all Persons who are members of the Association by virtue of being
Owners as defined in this Declaration. The words "Owner" and "Member" may be
used interchangeably in the Governing Documents.
1.15 "Occupant" means any Person or Persons, other than an Owner, in possession of or
residing in a Unit.
1.16 "Owner" means a Person who owns a Unit, but excluding contract for deed vendors,
mortgagees, holders of reversionary interests in life estates and other secured parties
within the meaning of Section 515B.1-103(29) of the Act. The term "Owner"
includes, without limitation, contract for deed vendees and holders of a life estate.
1.17 "Partv Wall" means the interior shared wall between two Dwellings.
1.18 "Person" means a natural individual, corporation, limited liability company,
partnership, trustee, or other legal entity capable of holding title to real property.
1.19 "Plat" means the recorded plat depicting the Property pursuant to the requirements
of Section 515B.2-l10(d) ofthe Act, and satisfying the requirements of Minnesota
Statutes Chapter 505, 508 or 508A, as applicable, including any amended or
supplemental Plat recorded from time to time in accordance with the Act.
1.20 "Propertv" means all ofthe real property subjected to this Declaration, now or in the
future, including the Dwellings and all other structures and improvements located
thereon. The Property is legally described in Exhibit A attached hereto.
1.21 "Rules and Regulations" means the Rules and Regulations of the Association as
approved from time to time pursuant to Section 5.6.
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1.22 "Unit" means any platted lot subject to this Declaration upon which a Dwelling is
located or intended to be located, as described in Section 2.1 and shown on the Plat,
including all improvements thereon, but excluding the Common Elements.
Any ternlS used in the Governing Documents, and defined in the Act and not in this Section, shall
have the meaning set forth in the Act.
SECTION 2
DESCRIPTION OF UNITS, BOUNDARIES AND RELATED EASEMENTS
2.1 Units. There are Units, subject to the right of the Declarant to add
additional Units pursuant to Section 18. All Units are restricted exclusively to residential use. Each
Unit constitutes a separate parcel of real estate. No additional Units may be created by the
subdivision or conversion of Units pursuant to Section 515B.2-112 ofthe Act. The Unit identifiers
and locations of the Units are as shown on the Plat, which is incorporated herein by reference, and
a schedule of Units is set forth on Exhibit A attached hereto. The Unit identifier for a Unit shall be
its lot and block numbers and the subdivision name.
2.2 Unit Boundaries. The front, rear and side boundaries of each Unit shall be the
boundary lines of the platted lot upon which the Dwelling is located or intended to be located as
shown on the Plat. The Units shall have no upper or lower boundaries. Subject to this Section 2 and
Section 3.2, all spaces, walls, and other improvements within the boundaries of a Unit are a part of
the Unit.
2.3 Access Easements. Each Unit shall be the beneficiary of a perpetual appurtenant
easement for access to a public street or highway on or across those portions of the Common
Elements surfaced for use as streets or walkways, as shown on the Plat or constructed by Declarant,
subject to any restrictions set forth in the Governing Documents or the Rules and Regulations.
2.4 Use and Enioyment Easements. Each Unit shall be the beneficiary of perpetual
appurtenant easements for use and enjoyment on and across the Common Elements, and for use and
enjoyment of any Limited Common Elements allocated to the Unit, subject to any restrictions
authorized by the Governing Documents.
2.5 Utility and Maintenance Easements. Each Unit shall be subject to and shall be the
beneficiary of perpetual appurtenant easements for all services and utilities servicing the Units and
the Common Elements, and for maintenance, repair and replacement as described in Section 13.
2.6 Encroachment Easements. Each Unit shall be subject to and shall be the beneficiary
of perpetual appurtenant easements for encroachments as described in Section 13.
2.7 Declarant's Easements. Declarant shall have and be the beneficiary of easements for
the exercise of special declarant rights described in Section 17.
2.8 Roadway Access Easements. The Common Elements shall be subject to an
appurtenant easement for roadway access in favor of the owners and occupants of any part of the
Additional Real Estate which is not added to the Property, as described in Section 13.
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2.9 Other Easements. The Property shall be subject to such other easements as may be
recorded against it or otherwise shown on the Plat.
2.10 Easements are Appurtenant. All easements and similar rights burdening or
benefitting a Unit or any other part of the Property shall run with the land, and shall be permanent,
subject only to termination in accordance with the Act or the terms of the easement. Any recorded
easement benefitting or burdening the Property shall be construed in a manner consistent with, and
not in conflict with, the easements created by this Declaration.
2.11 Impairment Prohibited. No Person shall restrict or impair any easement benefitting
or burdening the Property, or any equipment or improvements relating to the easement, subject to
the Declaration and the right of the Association to establish and enforce reasonable Rules and
Regulations governing the use of the Property.
2.12 Benefit of Easements. All easements benefitting a Unit shall benefitthe Owners and
Occupants of the Unit, and their families and guests. However, an Owner who has delegated the
right to occupy the Unit to an Occupant or Occupants, whether by a lease or otherwise, does not have
the use and other easements rights in the Property during such delegated occupancy, except as a
guest of an Owner or Occupant or in connection with the inspection of the Unit or recovery of
possession of the Unit from the Occupant pursuant to law.
SECTION 3
COMMON ELEMENTS, LIMITED COMMON ELEMENTS
AND OTHER PROPERTY
3.1 Common Elements. The Common Elements and their characteristics are as follows:
3.1.1 All of the Property not included within the Units constitutes Common
Elements. The Common Elements include, but are not limited to, all areas and items listed
in this Section 3, and those parts of the Property described in Exhibit B attached hereto or
designated as Common Elements on the Plat or in the Act. The Common Elements are
owned by the Association for the benefit of the Owners and Occupants.
3.1.2 The Common Elements shall be subject to (i) certain easements as described
in this Declaration and any other easements recorded against the Common Elements; (ii) the
rights of Owners and Occupants in Limited Common Elements appurtenant to their
respecti\'c Units; and (iii) the right of thc Association to establish reasonable Rules and
Regulations goveming the use of the Propeliy.
3.1.3 Except as otherwise expressly provided in the Governing Documents, all
maintenance, repair, replacement, management and operation ofthe Common Elements shall
be the responsibility of the Association.
3.1.4 Common Expenses for the maintcnance, repair, replacement, management and
operation of the Common Elements shall be assessed and collected from the Owners in
accordance with Section 6.
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3.2 Limited Common Elements. The Limited Common Elements arc those parts of the
Common Elements reserved for the exclusive use of the Owners and Occupants of the Units to
which they are allocated. The rights to the use and enjoyment ofthe Limited Common Elements are
automatically conveyed with the conveyance of such Units. The Limited Common Elements are
described and allocated to the Units, as follows:
3.2.1 Those items or areas designated as Limited Common Elements on the Plat or
by the Act.
3.2.2 Chutes, flues, ducts, pipes, wires, conduit or other utility installations, bearing
walls, bearing columns, or any other components or fixtures lying partially within and
partially outside the boundaries of a Unit, and serving only that Unit, are allocated to the Unit
they serve. Any portion of such installations serving or affecting the function of more than
one Unit or any portion of the Common Elements is a part of the Common Elements, but is
not a Limited Common Element.
3.2.3 Improvements, if any, such as decks, patios, porches, balconies, shutters,
awnings, window boxes, doorsteps, stoops, walks, driveways, and exterior doors and
windows, constructed as part of the original construction to serve a single Unit, and
replacements and modifications thereof authorized pursuant to Section 8, iflocated wholly
or partially outside the Unit's boundaries, are Limited Common Elements allocated
exclusively to that Unit.
3.2.4 Heating, ventilating or air conditioning equipment serving only a certain Unit
or Units, and located wholly or partially outside the Unit or Unit's boundaries, are Limited
Common Elements allocated to the Unit or Units served by such equipment.
3.3 Annexation of Other Property. In addition to the Additional Real Estate annexed by
Declarant, other real property may be annexed to the common interest community as Units or
Common Elements, or any combination thereof, and subjected to this Declaration, with the approval
of (i) Owners (other than Declarant) of Units to which are allocated at least sixty-seven percent of
the votes in the Association and (ii) Declarant so long as Declarant owns any unsold Unit for sale.
SECTION 4
ASSOCIATION MEMBERSHIP: RIGHTS AND OBLIGATIONS
Membership in the Association, and the allocation to each Unit of a portion of the votes in
the Association and a portion of the Common Expenses of the Association, shall be governed by the
following provisions:
4.1 Membership. Each Owner shall be a member ofthe Association solely by reason of
owning a Unit, and the membership shall be transferred with the conveyance of the Owner's interest
in the Unit. An Owner's membership shall terminate when the Owner's ownership tern1inates. When
more than one Person is an Owner of a Unit, all such Persons shall be members of the Association,
but multiple ownership of a Unit shall not increase the voting rights allocated to such Unit nor
authorize the division of the voting rights.
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4.2 V oting and Common Expenses. Voting rights and Common Expense obligations are
allocated equally among the Units, subject to Sections 6.4 and 6.7.
4.3 Appurtenant Rights and Obligations. The ownership of a Unit shall include the
voting rights and Common Expense obligations described in Section 4.2. Said rights and obligations
and the title to the Units, shall not be separated or conveyed separately, and any conveyance,
encumbrance, judicial sale or other transfer of any allocated interest in a Unit, separate from the title
to the Unit shall be void. The allocation ofthe rights and obligations described in this Section may
not be changed, except in accordance with the Governing Documents and the Act.
4.4 Authority to Vote. The Owner, or some natural Person designated to act as proxy on
behalf of the Owner, and who need not be an Owner, may cast the vote ~located to such Unit at
meetings of the Association. However, if there are multiple Owners of a lJnit, only the Owner or
other Person designated pursuant to the provisions of the Bylaws may cast such vote. The voting
rights of Owners are more fully described in Section 3 of the Bylaws.
SECTION 5
ADMINISTRATION
The administration and operation of the Association and the Property, including but not
limited to the acts required of the Association, shall be governed by the following provisions:
5.1 General. The operation and administration of the Association and the Property shall
be governed by the Governing Documents, the Rules and Regulations, and the Act. The Association
shall, subject to the rights of the Owners set forth in the Governing Documents and the Act, be
responsible for the operation, management and control of the Property. The Association shall have
all powers described in the Governing Documents, the Act and the statute under which the
Association is incorporated. All power and authority of the Association shall be vested in the
Board, unless action or approval by the individual Owners is specifically required by the Governing
Documents or the Act. . All references to the Association shall mean the Association acting through
the Board, unless specifically stated to the contrary.
5.2 Operational Purposes. The Association shall operate and manage the Property for
the purposes of (i) administering and enforcing the covenants, restrictions, easements, charges and
liens set forth in the Governing Documents and the Rules and Regulations, (ii) maintaining, repairing
and replacing those portions of the Property for which it is responsible and (iii) preserving the value,
and the architectural unifonnity and character, of the Property.
5.3 Binding Effect of Actions. All agreements and determinations made by the
Association in accordance with the powers and voting rights established by the Governing
Documents or the Act shall be binding upon all Owners and Occupants, and their lessees, guests,
heirs, personal representatives, successors and assigns, and all secured parties as defined in the Act.
5.4 Bylaws. The Association shall have Bylaws. The Bylaws shall govern the operation
and administration of the Association, and shall be binding on all Owners and Occupants.
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5.5 Management. The Board may delegate to a manager or managing agent the
management duties imposed upon the Association's officers and directors by the Governing
Documents and the Act. However, such delegation shall not relieve the officers and directors of the
ultimate responsibility for the performance oftheir duties as prescribed by the Governing Documents
and by law.
5.6 Rules and Regulations. The Board shall have exclusive authority to approve and
implement such reasonable Rules and Regulations as it deems necessary from time to time for the
purpose of operating and administering the affairs of the Association and regulating the use of the
Property; provided, that the Rules and Regulations shall not be inconsistent with the Governing
Documents or the Act. The inclusion in other parts of the Governing Documents of authority to
approve Rules and Regulations shall be deemed to be in furtherance, and not in limitation, of the
authority granted by this Section. New or amended Rules and Regulations shall be effective only
after reasonable notice thereof has been given to the Owners.
5.7 Association Assets: Surplus Funds. All funds and real or personal property acquired
by the Association shall be held and used for the benefit of the Owners for the purposes stated in the
Governing Documents. Surplus funds remaining after payment of or provision for Common
Expenses and reserves shall be credited against future assessments or added to reserves, as
determined by the Board.
SECTION 6
ASSESSMENTS
6.1 General. Assessments shall be determined and assessed against the Units by the
Board, in its discretion, subject to the requirements and procedures set forth in this Section 6, the
Bylaws and the Act. Assessments shall include annual Assessments under Section 6.2, and may
include special Assessments under Section 6.3 and limited Assessments under Section 6.4. Annual
and special Assessments shall be allocated among the Units equally, in accordance with the
allocation formula set forth in Section 4.2. Limited Assessments under Section 6.4 shall be allocated
to Units as set forth in that Section.
6.2 Annual Assessments. Annual Assessments shall be established and levied annually
by the Board, subject to the following qualifications:
6.2.1 Each annual Assessment shall cover all of the anticipated Common Expenses
of the Association for that year which are to be shared equally by all Units in accordance
with the allocation formula set forth in Section 4.2. Annual Assessments shall be payable
in equal monthly or quarterly installments, as established by the Board. Annual Assessments
shall provide, among other things, for an adequate reserve fund for the maintenance, repair
and replacement of the Common Elements and those parts of the Units for which the
Association is responsible.
6.2.2 Except for that part of any increase attributable to premiums on insurance
carried by the Association, the increase in the annual Assessment for any fiscal year shall not
exceed the greater of (i) five percent of the previous year's annual Assessment or (ii) the
percentage increase in the National Bureau of Labor Statistics Consumer Price Index for the
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Minnesota Twin City Metropolitan Area (or comparable index ifnot available) for the most
recent available year, multiplied times the previous year's annual Assessment; unless the
increase is approved (i) by the vote of sixty-seven percent of those Owners (other than
Declarant) voting, in person or by proxy, at a meeting called for that purpose, or voting by
mail, and (ii) by Declarant. Notice of the meeting shall be sent to all Owners not less than
twenty-one days nor more than thirty days in advance of the meeting. The foregoing
approval requirements shall apply only until the expiration ofthe Declarant Control Period.
6.2.3 Until the first annual Assessment is levied, Declarant shall pay all Common
Expenses of the common interest community.
6.3 Special Assessments. In addition to annual Assessments, and subject to the
limitations set forth hereafter, the Board may levy in any Assessment year a special Assessment
against all Units equally in accordance with the allocation formula set forth in Section 4.2. Special
assessments shall be used for the purpose of defraying in whole or in part the cost of any unforeseen
and unbudgeted, or underbudgeted, Common Expenses. Notwithstanding the foregoing, any special
Assessment shall be subject to approval (i) by the vote of sixty-seven percent ofthe Owners (other
than Declarant) voting, in person or by proxy, at a meeting called for that purpose, or voting by mail,
and (ii) by Declarant. Notice of the meeting shall be sent to all Owners not less than twenty-one
days nor more than thirty days in advance of the meeting. The foregoing approval requirements shall
apply only until the expiration of the Declarant Control Period.
6.4 Limited Assessments. In addition to annual Assessments and special Assessments,
the Board has the discretionary authority to levy and allocate limited Assessments among only
certain Units in accordance with the following requirements and procedures:
6.4.1 Any Assessment associated with the maintenance, repair, or replacement of
a Limited Common Element shall be assessed exclusively against the Unit, or equally among
the Units, to which that Limited Common Element is assigned.
6.4.2 Any Assessment or portion thereofbenefiting fewer than all ofthe Units may
be assessed exclusively against the Unit or Units benefited. Assessments relating to the
maintenance, repair or replacement of Limited Common Elements shall be assessed based
upon the "benefit" thereof as described in the preceding sentence.
6.4.3 The costs of insurance may be assessed in proportion to the square footage
or actual cost per Unit, and the costs of conm10n utilities may be assessed equally or in
proportion to usage.
6.4.4 Reasonable attorneys' fees and other costs incurred by the Association in
connection with (i) the collection of Assessments and (ii) the enforcement of the Governing
Documents, the Act, or the Rules and Regulations, against an Owner or Occupant or their
guests, may be assessed against the defaulting Owner's Unit.
6.4.5 Late charges, fines and interest may be assessed as provided in Section 14.
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6.4.6 Assessments levied under Section 515B.3-l16(a) of the Act to pay ajudgment
against the Association may be levied only against the Units existing at the time the
judgment was entered, in proportion to their Common Expense liabilities.
6.4.7 Ifany damage to the Common Elements or another Unit is caused by the act
or omission of any Owner or Occupant, or their guests, the Association may assess the costs
of repairing the damage exclusively against the Owner's Unit to the extent not covered by
Insurance.
6.4.8 If any Assessment or installment of an Assessment becomes more than thirty
days past due, then the Association may, upon at least ten days' written notice to the Owner,
declare the entire amount of the Assessment immediately due and payable in full.
6.4.9 If Common Expense liabilities are reallocated for any purpose authorized by
the Act, Assessments and any installment thereof not yet due shall be recalculated in
accordance with the reallocated Common Expense liabilities.
Assessments levied under Sections 6.4.1 through 6.4.7 may, at the Board's discretion, be assessed
as a part of, or in addition to, the Assessments levied under Section 6.
6.5 Working Capital Fund. A working capital fund shall be established in connection with
the initial sales of the Units to meet unforeseen expenditures or to purchase additional equipment
or services during the Association's beginning years of operation. The Board shall include in each
subsequent annual budget a reasonable amount of working capital, based upon the anticipated needs
of the Association for the year in question.
6.5.1 There shall be contributed, on a one-time basis for each Unit sold, an amount
equal to two months installments of the estimated annual Assessment for the Unit. The
contribution shall be paid at the earlier of the closing of the sale of the Unit or the
termination of the Declarant Control Period and shall be deposited into a segregated
Association account no later than the termination of the Declarant Control Period.
6.5.2 Declarant shall not use the working capital contributions to defray any of its
expenses, reserve contributions or construction costs, or to make up any budget deficit during
the Declarant Control Period. However, upon the closing of the initial sale of a Unit,
Declarant may reimburse itself from funds collected from the purchaser at the closing for any
contributions made by Declarant to the working capital fund with respect to that Unit.
6.5.3 The contributions to the working capital fund are in addition to the regular
installments of annual Assessments.
6.6 Liability of Owners for Assessments. Subject to Section 6;7, the obligation of an
Owner to pay Assessments shall commence at the later of (i) the time at which the Owner acquires
title to the Unit, or (ii) the due date of the first Assessment levied by the Board, subject to the
alternative Assessment program described in Section 6.7. The Owner at the time an Assessment is
payable with respect to the Unit shall be personally liable for the share of the Common Expenses
assessed against such Unit. Such liability shall be joint and several v,.-here there are multiple Owners
of the Unit. The liability is a.bsolute and unconditional. No Owner is exempt from liability for
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payment of Assessments by right of set-off, by waiver of use or enjoyment of any part of the
Property, by absence from or abandonment of the Unit, by the waiver of any other rights, or by
reason of any claim against the Association or its officers, directors or agents, or for their failure to
fulfill any duties under the Governing Documents or the Act. The Association may invoke the
charges, sanctions and remedies set forth in Section 14, in addition to any remedies provided
elsewhere in the Governing Documents, the Rules and Regulations, or by law, for the purpose of
enforcing its rights hereunder.
6.7 Declarant's Alternative Assessment Program. The following alternative Assessment
program is established pursuant to Section 515B.3-115(a)(2) of the Act. Notwithstanding anything
to the contrary in this Section 6, if a Common Expense Assessment has been levied, any unsold Unit
owned by Declarant shall be assessed at the rate of twenty-five percent of the Assessments levied
on other Units of the same type until a certificate of occupancy (or other comparable certification)
has been issued with respect to such Unit by the municipality in which the Unit is located. This
reduced Assessment shall apply to each Unit owned by Declarant at the time that the Unit is created,
and shall terminate with respect to the Unit upon the issuance of the certificate of occupancy (or
other comparable certification) for the Unit. Although this alternative Assessment program will not
affect the allocated share of replacement reserves attributable to Units owned by Declarant, there are
no assurances that there will be no effect on the level of services for items set forth in the
Association's budget.
6.8 Assessment Lien. The Association has a lien on a Unit for any Assessment levied
against that Unit from the time the Assessment becomes due. If an Assessment is payable in
installments, the full amount of the Assessment is a lien from the time the first installment thereof
becomes due. Fees, charges, late charges, fines and interest charges imposed by the Association
pursuant to Section 515B.3-102(a)(10), (11) and (12) of the Act are liens, and are enforceable as
Assessments, under this Section 6. Recording of the Declaration constitutes record notice and
perfection of any lien under this Section 6, and no further recordation of any notice of or claim for
the lien is required. The release of the lien shall not release the Owner from personal liability unless
agreed to in writing by the Association.
6.9 Foreclosure of Lien: Remedies. A lien for Assessments may be foreclosed against
a Unit under the laws of the state of Minnesota (i) by action, or (ii) by advertisement in a like manner
as a mortgage containing a power of sale. The Association, or its authorized representative, shall
have the power to bid in at the foreclosure sale and to acquire, hold, lease, mortgage and convey any
Unit so acquired. The Owner and any other Person claiming an interest in the Unit, by the
acceptance or assertion of any interest in the Unit, grants to the Association a power of sale and full
authority to accomplish the foreclosure. The Association shall, in addition to its other remedies,
have the right to pursue any other remedy at law or in equity against the Owner who fails to pay any
Assessment or charge against the Unit.
6.10 Lien Priority; Foreclosure. A lien for Assessments is prior to all other liens and
encumbrances on a Unit except (i) liens and encumbrances recorded before the Declaration, (ii) any
first mortgage on the Unit, and (iii) liens for real estate taxes and other governn1ental Assessments
or charges against the Unit. Notwithstanding the foregoing, if (1) a first mortgage on a Unit is
foreclosed, (2) the first mortgage was recorded on or after the date of recording of this Declaration,
and (3) no Owner redeems during the Owner's period of redemption provided by Minnesota Statutes
Chapters 580, 581, or 582, then the holder of the sheriffs certificate of sale from the foreclosure of
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the first mortgage shall take title to the Unit subject to a lien in favor of the Association for unpaid
Assessments or installments thereoflevied pursuant to Sections 5l5B.3-115(a), (h)(l) to (3), (i), and
(1) ofthe Act which became due, without acceleration, during the six months immediately preceding
the first day following the end of the Owner's period of redemption.
6.11 Voluntary Conveyances: Statement of Assessments. In a voluntary conveyance of
a Unit the buyer shall not be personally liable for any unpaid Assessments and other charges made
by the Association against the seller or the seller's Unit prior to the time of conveyance to the buyer,
unless expressly assumed by the buyer. However, the lien of such Assessments shall remain against
the Unit until released. Any seller or buyer shall be entitled to a statement, in recordable form, from
the Association setting forth the amount of the unpaid Assessments against the Unit, including all
Assessments payable in the Association's current fiscal year, which statement shall be binding on
the Association, seller and buyer.
SECTION 7
RESTRICTIONS ON USE OF PROPERTY
All Owners and Occupants, and all secured parties, by their acceptance or assertion of an
interest in the Property, or by their occupancy of a Unit, covenant and agree that, in addition to any
other restrictions which may be imposed by the Act or the Governing Documents, the occupancy,
use, operation, alienation and conveyance of the Property shall be subject to the following
restrictions:
7.1 General. The Property shall be owned, conveyed, encumbered, leased, used and
occupied subject to the Governing Documents and the Act, as amended from time to time. All
covenants, restrictions and obligations set forth in the Governing Documents are in furtherance of
a plan for the Property, and shall run with the Property and be a burden and benefit to all Owners
and Occupants and to any other Person acquiring or owning an interest in the Property, their heirs,
personal representatives, successors and assigns.
7.2 Subdivision Prohibited. Except as permitted by the Act, no Unit nor any part ofthe
Common Elements may be subdivided or partitioned without the prior written approval of all
Owners and all secured parties holding first mortgages on the Units.
7.3 Residential Use. The Units shall be used by Owners and Occupants and their guests
exclusively as private, single family residential dwellings, and not for transient, hotel, commercial,
business or other non-residential purposes, except as provided in Section 7.4. Any lease of a Unjt
(except for occupancy by guests with the consent of the Owner) for a period ofless than seven days,
or any occupancy which includes services customarily furnished to hotel guests, shall be presumed
to be for transient purposes.
7.4 Business Use Restricted. No business, trade, occupation or profession of any kind,
whether canied on for profit or otherwise, shall be conducted, maintained or permitted in any Unit
or the Common Elements, except:
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7.4.1 An Owner or Occupant residing in a Unit may maintain a home occupation
in such Unit and handle matters relating to such home occupation by telecommunications or
correspondence therefrom; provided, that such uses are incidental to the residential use; do
not involve physical alteration of the Unit visible from the exterior; are in compliance with
all governmental laws, ordinances and regulations; and do not involve any observable
business activity such as signs, advertising displays, regular deliveries, or pedestrian or
vehicular traffic to and from the Unit by customers or employees.
7.4.2 The Association may maintain offices on the Property for management and
related purposes.
7.4.3 Declarant may maintain offices, sales facilities and other business facilities
on the Property in connection with the exercise of its special declarant rights.
7.5 Leasing. Leasing of Units shall be allowed, subject to reasonable regulation by the
Association, and subject to the following conditions: (i) no Unit shall be leased for transient or hotel
purposes, (ii) no Unit may be subleased, (iii) all leases shall be in writing, (iv) the lease must cover
the entire Unit (not a room or rooms), and (v) all leases shall provide that they are subject to the
Governing Documents, the Rules and Regulations, and the Act, and that any failure of the lessee to
comply with the terms of such documents shall be a default under the lease. The Association may
impose such reasonable Rules and Regulations as may be necessary to implement procedures for the
leasing of Units, consistent with this Section.
7.6 Delegation of Use. An Owner may delegate, in accordance with the Governing
Documents, the Owner's right of use and enjoyment of the Unit to Persons living in the Unit
pursuant to a legal right of possession; provided, that such Persons shall be subject to the Governing
Documents and the Rules and Regulations. Iflessees, or other Persons other than the Owner or the
Owner's family, have been given the legal right to possess the Owner's Unit, then those Persons shall
have the right to use any common recreational facilities, parking, storage and other amenities on the
Property in lieu of the Owner and the Owner's family.
7.7 Parking. Garages and parking areas on the Property shall be used only for parking
of vehicles owned or leased by Owners and Occupants and their guests, and such other incidental
uses as may be authorized in writing by the Association. Garages shall not be converted to other
uses or used for storage or other purposes which would prevent the parking of two automobiles in
a garage. The use of garages, driveways and other parking areas on the Property, and the types of
vehicles and personal property pemlitted thereon, shall be subject to regulation by the Association,
including the right of the Association to tow illegally parked vehicles or to remove unauthorized
personal property.
7.8 Animals. No animal may be bred, or kept or maintained for business or cOrnn1ercial
purposes, anywhere on the Property. However, subject to the previous restriction, the Board shall
have the exclusive authority to prohibit, or to allow and regulate, by Rules and Regulations, the
keeping of animals on the Property. This authority may be exercised so as to permit or prohibit
different types of animals, but those animals which are pernlitted (if any) shall be limited to COrnn1on
domestic house pets such as dogs, cats, fish, birds and the like. The word "animal" shall be
construed in its broadest sense and shall include all living creatures except humans.
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7.9 Quiet Enjoyment; Interference Prohibited. All Owners and Occupants and their
guests shall have a right of quiet enjoyment in their respective Units. The Property shall be occupied
and used in such a manner as will not cause a nuisance, nor unduly restrict, interfere with or impede
the use and quiet enjoyment of the Property by other Owners and Occupants and their guests.
7.1 0 Compliance with Law. No use shall be made of the Property which would violate
any then existing municipal codes or ordinances, or state or federal laws, nor shall any act or use be
permitted which could cause waste to the Property, cause a material increase in insurance rates on
the Property, or otherwise cause any unusual liability, health or safety risk, or expense, for the
Association or any Owner or Occupant.
7.11 Alterations. Except for those made by Declarant in consideration of its initial sale
of a Unit, no alterations (as defined in Section 8) shall be made, or caused or allowed to be made,
in any part of the Common Elements, or in any part of the Unit which affects the Common Elements
or another Unit or which is visible from the exterior of the Unit, without the prior written
authorization of the Board, or a committee appointed by it, as provided in Section 8.
7.12. Ponds, Wetlands and Trees. Any ponds, wetlands, vegetation or trees located on the
Property shall be maintained in substantially the same condition as originally established or
constructed by the Declarant, subject only to (i) changes authorized by the Association consistent
with all statutes, requirements, rules and regulations imposed by governmental authorities having
jurisdiction and (ii) the prior approval of any such governmental authorities, ifrequired. No cutting,
mowing, trimming, draining, dredging or other alteration of such areas and items shall be permitted,
except as authorized by this Section 7.12, it being the intention that such areas and items remain and
be maintained in a substantially natural condition, and subject to natural changes.
7.13 Time Shares Prohibited. The time share form of ownership, or any comparable form
of lease, occupancy rights, ownership, or right-to-use plans, which has the effect of dividing the
ownership or occupancy of a Unit into separate time periods, is prohibited.
7.14 Access to Units. In case of emergency, all Units and Limited Common Elements are
subject to entry, without notice and at any time, by an officer or member of the Board, by the
Association's management agents or by any public safety personnel. Entry is also authorized for
maintenance purposes under Sections 9 and 13, and for enforcement purposes under Section 14.
SECTION 8
ARCHITECTURAL STANDARDS
8.1 Restrictions on Alterations. One of the purposes of this Declaration is to ensure that
those parts of the Units which are visible from the exterior be kept architecturally attractive and
uniform in appearance. Therefore, except as set forth in Section 8.5, the following restrictions and
requirements shall apply to alterations on the Property:
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8.1.1 Except as expressly provided in this Section 8, no structure, building,
addition, deck, patio, fence, wall, enclosure, window, exterior door, antenna or other type of
sending or receiving apparatus, sign, display, decoration, color change, shrubbery, material
topographical or landscaping change, nor any other exterior improvements to or alteration
of any Dwelling or any other part of a Unit which affects the Common Elements or another
Unit, or which is visible from the exterior of the Unit (collectively referred to as
"alterations"), shall be commenced, erected or maintained, unless and until the plans and
specifications showing the nature, kind, shape, height, color, materials and locations of the
alterations shall have been approved in writing by the Board or an architectural committee
appointed by it. Notwithstanding the foregoing, Declarant's written consent shall also be
required for alterations until Declarant no longer owns a Unit for sale.
8.1.2 The Board may appoint, supervise and disestablish an architectural
committee, and specifically delegate to it part or all of the functions which the Board
exercises under this Section 8, in which case the references to the Board shall refer to the
architectural committee where appropriate. The architectural committee shall be subject to
the supervision of the Board.
8.1.3 The Hoard shall establish the criteria for approval of alterations, which shall
include and require, at a minimum:
8.1.3.1 substantial uniformity of color, location, type and design in relation
to existing Dwellings and topography,
8.1.3.2 comparable or better quality of materials as used III existing
improvements on the Property,
8.1.3.3 ease of maintenance and repair,
8.1.3.4 adequate protection of the Property, the Association, Owners and
Occupants from liability and liens arising out of the proposed alterations,
8.1.3.5 substantial preservation of other Owners' sight lines, if material, and
8.1.3.6 compliance with governmental laws, codes and regulations.
The Board, or the appointed architectural committee if so authorized by the Board,
shall be the sole judge of whether such criteria are satisfied.
8.1.4 Approval of alterations which encroach upon another Unit or the Common
Elements shall create an appurtenant easement for such encroachment in favor of the Unit
wi th respect to which the alterations are approved, notwithstanding any contrary requirement
in the Governing Documents or the Act. A file of the resolutions approving all alterations
shall be maintained permanently as a part of the Associationrs records.
8.2 Review Procedures. The following procedures shall govern requests for alterations
under this Section:
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8.2.1 Detailed plans, specifications and related information regarding any proposed
alteration, in form and content acceptable to the Board, shall be submitted to the Board and
to Declarant (if applicable) at least sixty days prior to the projected commencement of
construction. No alterations shall be commenced prior to approval.
8.2.2 The Board and Declarant (if applicable) shall give the Owner written notice
of approval or disapproval. If the Board and Declarant (if applicable) fail to approve or
disapprove within sixty days after receipt ofsafd plans and specifications and all other
information requested by the Board and Declarant (if applicable), then approval shall be
deemed to be granted; provided that the alterations are done in accordance with the plans,
specifications and related information which were submitted.
8.2.3 Ifno request for approval is submitted, approval shall be deemed to be denied.
8.3 Remedies for Violations. The Association may undertake any measures, legal or
administrative, to enforce compliance with this Section and shall be entitled to recover from the
Owner causing or permitting the violation all attorneys' fees and costs of enforcement incurred by
the Association, whether or not a legal action is started. Such attorneys' fees and costs shall be a lien
against the Owner's Unit and a personal obligation of the Owner. In addition, the Association shall
have the right to enter the Owner's Unit and to restore any part of the Dwelling or Unit to its prior
condition if any alterations were made in violation of this Section, and the cost of such restoration
shall be a personal obligation ofthe Owner and a lien against the Owner's Unit.
8.4 Hold Harmless. The Owner who causes an alteration to be made, regardless ofwhether
the alteration is approved by the Board, shall be solely responsible for the construction standards and
specifications relating to the alteration, and the construction work. The Owner, and not the
Association, is responsible for determining whether any alternation is in violation of any restrictions
imposed by any governmental authori ty havingj urisdiction over the Property. The Owner shall hold
the Association harmless and indemnify the Association, and its officers and directors, from and
against any expenses, claims, damages, losses or other liabilities, including without limitation
attorneys' fees and costs of litigation, arising out of (i) any alteration which violates any
governmental laws, codes, ordinances or regulations, (ii) the adequacy of the specifications for
construction of the alterations and (iii) the construction of the alterations.
8.5 Exemptions. The requirements set forth in this Section 8 (except Section 8.4) shall not
apply to the following:
8.5.1 Original construction by Declarant in connection with its sale of Units.
8.5.2 The following antennas may be installed on a Unit, as pennitted by applicable
federal law: (i) one antenna one meter or less in diameter for the purpose of receiving direct
broadcast/satellite service or video programming services, or (ii) any antenna for receiving
television broadcast signals; provided, that the Board or an architectural committee appointed
by it may require that the antenna be installed so as to minimize its visibility from the front
of the Unit and otherwise camouflage its appearance, unless such requirements would
unreasonably delay installation, or unreasonably increase the cost of installation,
maintenance or use of the antenna, or preclude reception of an acceptable quality signal.
Such installation shall be subject to all govemmentallaws, codes and ordinances. The Board
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shall have authority to impose further, reasonable requirements consistent with law. The
Owner is responsible for all maintenance and repair of any antenna installed on a Unit.
SECTION 9
MAINTENANCE
9.1 Maintenance by Association. The Association shall provide for all maintenance,
repair or replacement (collectively referred to as "maintenance") of the Common Elements, including
all improvements thereon. In addition, for the purpose of preserving the architectural character,
quality, and high standards for appearance of the Property, the Association shall provide for exterior
maintenance upon the Dwellings and/or Units as follows:
9.1.1 paint, repair and replace roofs, gutters, downspouts, garage doors and exterior
entry doors (except hardware), door and window frames, exterior siding and other building
surfaces, driveways, sidewalks, and
9.1.2 provide for lawn, shrub and tree maintenance on the yard areas of the Units
(if any), as originally installed, and watering of lawns.
The Association's obligation for exterior maintenance shall, without limitation, exclude foundations
and foundation walls, Dwelling walls, floors and ceilings, structural components, interior parts of
the Dwellings, door hardware, mechanical, electrical, heating, air conditioning and plumbing
systems, glass, all portions, structural or otherwise, of decks and patios, and any other items not
specifically required to be maintained by the Association, unless otherwise approved under
Section 9.2. The Association shall have easements as described in Section 13 to perform its
obligations under this Section 9.
9.2 Optional Maintenance by Association. In addition to the maintenance described in
Section 9.1, the Association may, with the approval of a majority of the total votes in the Association
cast in person or by proxy at a meeting called for such purposes, undertake to provide additional
exterior maintenance to the Units or Dwellings, or maintenance of water and sewer systems within
the Units.
9.3 Maintenance by Owner. Except for the exterior maintenance required to be provided
by the Association under Section 9.1 or 9.2, all maintenance of the Dwellings and Units shall be the
sole responsibility and expense of the Owners thereof. The Limitcd Common Elements allocated
to a Unit shall be maintained by the Owner of that Unit. The Association may require that any
exterior maintenance to be performed by the Owner be accomplished pursuant to specific uniforn1
criteria established by the Association. The Association may also undertake any exterior
maintenance which the responsible Owner fails to or improperly performs, and charge and assess
the Unit for the cost thereof. Such cost shall be a personal obligation ofthe Owner and a lien against
the Owner's Unit. The Owners and Occupants shall have a duty to promptly notify the Association
of defects in or damage to those parts ofthe Property which thc Association is obligated to maintain.
9.4 Damage Caused bv Owner. Notwithstanding any provision to the contrary in this
Section, if, in the judgment of the Association, the need for maintenance of any part of the Property
is caused by the act or omission of an Owner or Occupant, or his or her guests, or by a condition in
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a Unit which the Owner or Occupant has allowed to exist, the Association may cause such damage
or condition to be repaired or corrected (and enter the yard area of upon any Unit to do so), and the
cost thereof may be charged and assessed against the Unit ofthe Owner responsible for the damage.
Such cost shall be a personal obligation of the Owner and a lien against the Owner's Unit. In the
case of party walls between Dwellings, the Owners of the affected Dwellings shall be liable as
provided in Section 10.
SECTION 10
P ARTY WALLS
10.1 General Rules of Law to Apply. Each wall built as part of the original construction
of Dwellings and located on the boundary line between Units shall constitute a party wall, and, to
the extent not inconsistent with the provisions of this Section, the general rules of law regarding
party walls and liability for property damage due to negligent or willful acts or omissions shall apply
thereto.
10.2 Repair and Maintenance. The Owners ofthe Units which share the party wall shall
be responsible for the maintenance, repair and replacement of party wall in equal proportions;
provided, (i) that any maintenance, repair or replacement necessary due to the acts or omissions of
a certain Owner or Occupant sharing such party wall shall be paid for by such Owner, and (ii) that
the Association may contract for and supervise the repair of damage caused by an Owner or
Occupant and assess the Owners for their respective shares of the cost to the extent not covered by
insurance. Such cost shall be a personal obligation of the Owner and a lien against the Owner's
Unit(s).
10.3 Destruction by Fire or Other Casualty. Ifa party wall is destroyed or damaged by fire
or other casualty, any Owner who has use of the party wall may, with the consent ofthe Association,
restore it, and the other Owner shall promptly reimburse the Owner who restored the wall for his or
her share of the cost of restoration thereof; provided, however, that the cost of restoration resulting
from destruction or other casualty resulting from the acts or omissions of certain Owners shall be
the financial responsibility of such Owners, and the Association may assess the responsible Owners
for their share of the costs, without prejudice to the right of an Owner to recover a larger contribution
from the other Owner. Insurance claims shall be made promptly following any casualty.
10.4 Weatherproofing. Notwithstanding any other provision of this Section, any Owner
who, by his or her negligent or willful act, causes a party wall to be exposed to the elements shall
bear the whole cost of the repairs necessary for protection against such elements.
10.5 Right to Contribution Runs With Land. The right of any Owner to contribution from
any other Owner under this Section shall be appurtenant to the Unit and shall pass to such Owner's
assigns and successors in title.
10.6 Arbitration. In the event of any dispute arising concerning a party wall, and if the
same is not resolved within thirty days of the event causing the dispute, the matter shall be submitted
to binding arbitration under the rules of the American Arbitration Association (or such other rules
as the parties may agree), upon the written demand ofthe Association or any Owner whose Dwelling
shares the party wall. A single arbitrator shall be used unless multiple arbitrators are agreed to by
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the parties. Upon request, the Association may, at its option, be made a party to the arbitration but
cannot be compelled to be a party. Each party agrees that the decision ofthe arbitrators shall be final
and conclusive of the questions involved. The fees of the arbitrators shall be shared equally by the
parties, but each party shall pay its own attorneys' fees or other costs incurred in the arbitration.
SECTION 11
INSURANCE
11.1 Required Coverage. The Association shall obtain and maintain, at a minimum, a
master policy or policies of insurance in accordance with the insurance requirements set forth in the
Act and the additional requirements set forth herein, issued by a reputable insurance company or
companies authorized to do business in the state of Minnesota, as follows;
11.1.1 Property insurance in broad form covering all risks of physical loss in an
amount equal to one hundred percent ofthe insurable "replacement cost" of the Property, less
deductibles, exclusive ofland, footings, excavation and other items normally excluded from
coverage (but including any building service equipment and machinery), in accordance with
such other requirements as may be authorized by the Act. The policy or policies shall cover
personal property owned by the Association. The policy or policies shall also contain
"Inflation Guard" and "Agreed Amount" endorsements, ifreasonably available. Such policy
or policies shall include such additional endorsements, coverages and limits with respect to
the foregoing and other hazards as may be required from time to time by the regulations of
the Federal Housing Administration ("FHA"), the U.S. Department of Veterans' Affairs
("VAil) or the Federal National Mortgage Association ("FNMA") as a precondition to their
insuring, purchasing or financing a mortgage on a Unit. The Association shall have authority
to; enter into binding written agreements with a mortgagee, insurer or servicer, including
without limitation the FHA, VA or FNMA, obligating the Association to keep certain
specified coverages or endorsements in effect.
11.1.2 Comprehensive public liability insurance covering the use, operation and
maintenance of the Common Elements, with minimum limits of one million dollars per
occurrence, against claims for death, bodily injury and property damage, and such other risks
as are customarily covered by such policies for projects similar in construction, location and
use to the Property. The policy shall contain a "severability of interest II endorsement which
shall preclude the insurer from denying the claim of an Owner or Occupant because of
negligent acts of the Association or other Owners or Occupants. The policy shall include
such additional endorsements, coverages and limits with respect to such hazards as may be
required by the regulations of the FHA, VA or FNMA as a precondition to their insuring,
purchasing or financing a mortgage on a Unit.
11.1.3 Fidelity insurance coverage against dishonest acts on the part of directors,
officers, managers, trustees, employees or other Persons responsible for handling funds
belonging to or administered by the Association, if deemed to be advisable by the Board or
required by the regulations of the FHA, V A or FNMA as a precondition to the purchase or
financing ofa mortgage on a Unit. The insurance may, if required by the regulations of the
FHA, V A or FNMA as a precondition to their insuring, purchasing or financing of a
mortgage on a Unit, be written in an amount equal to the greater of (i) the estimated
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maximum of Association funds, including reserves, in the custody of the Association or
management agent at any given time while the bond is in force, or (ii) a sum equal to three
months aggregate Assessments on all Units plus reserves. An appropriate endorsement to
the policy to cover any Persons who serve without compensation shall be added if the policy
would not otherwise cover volunteers.
11.1.4 Workers' Compensation insurance as required by law.
11.1.5 Directors' and officers' liability insurance with such reasonable limits and
coverages as the Board shall determine from time to time.
11.1.6 Such other insurance as the Board may determine from time to time to be in
the best interests of the Association and the Owners.
11.2 Premiums; Improvements; Deductibles. All insurance premiums shall be assessed
and paid as Common Expenses, and allocated among the Units as determined by the Board and
consistent with the Governing Documents. The insurance need not cover improvements and
betterments to the Units installed by Owners, but if improvements and betterments are covered, any
increased cost may be assessed against a Unit affected. The Association may, in the case of a claim
for damage to a Unit or Units, (i) pay the deductible amount as a Common Expense, (ii) assess the
deductible amount against the Units affected in any reasonable manner, or (iii) require the Owners
of a Unit affected to pay the deductible amount directly.
11.3 Loss Payee; Insurance Trustee. All insurance coverage maintained by the Association
shall be written in the name of, and the proceeds thereof shall be payable to, the Association (or a
qualified insurance trustee selected by it) as trustee for the benefit ofthe Owners and secured parties,
including Eligible Mortgagees, which suffer loss. The Association, or any insurance trustee selected
by it, shall have exclusive authority to negotiate, settle and collect upon any claims or losses under
any insurance policy maintained by the Association.
11.4 Required Policy Provisions. All policies of property insurance carried by the
Association shall provide that:
11.4.1 Each Owner and secured party is an insured Person under the policy with
respect to liability arising out of the Owner's interest in the Common Elements or
membership in the Association.
11.4.2 The insurer waives its right to subrogation under the policy against any Owner
or member of the Owner's household and against the Association and members of the Board.
11.4.3 No act or omission by any Owner or secured party, unless acting within the
scope of authority on behalf of the Association, shall void the policy or be a condition to
recovery under the policy.
11.4.4 If at the time of a loss under the policy there is other insurance in the name
of an Owner covering the same property covered by the policy, the Association's policy is
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pnmary lllsurance.
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11.5 Cancellation: Notice of Loss. All policies of property insurance and comprehensive
liability insurance maintained by the Association shall provide that the policies shall not be cancelled
or substantially modified, for any reason, without at least thirty days' prior written notice to the
Association, to the FHA, VA or FNMA (if applicable), all of the insureds and all Eligible
Mortgagees.
11.6 Restoration in Lieu of Cash Settlement. All policies of property insurance maintained
by the Association shall provide that, despite any provisions giving the insurer the right to elect to
restore damage in lieu of a cash settlement, such option shall not be exercisable (i) without the prior
written approval ofthe Association (or any insurance trustee) or (ii) when in conflict with provisions
of any insurance trust agreement to which the Association is a party, or any requirement of law.
11.7 No Contribution. All policies of insurance maintained by the Association shall be
the primary insurance where there is other insurance in the name of the Owner covering the same
property or incident, and may not be brought into contribution with any insurance purchased by
Owners or their Eligible Mortgagees.
11.8 Effect of Acts Not Within Association's Control. All policies of insurance maintained
by the Association shall provide that the coverage shall not be voided by or conditioned upon (i) any
act or omission of an Owner or Eligible Mortgagee, unless acting within the scope of authority on
behalf of the Association or (ii) any failure of the Association to comply with any warranty or
condition regarding any portion of the Property over which the Association has no control.
11.9 Owner's Personal Insurance. Each Owner may obtain additional personal insurance
coverage at his or her own expense covering fire and other casualty to the Unit, personal property
or personal liability. All insurance policies maintained by Owners shall provide that they are without
contribution as against the insurance purchased by the Association.
SECTION 12
RECONSTRUCTION, CONDEMNATION AND EMINENT DOMAIN
12.1 Reconstruction. The obligations and procedures for the repair, reconstruction or
disposition of the Property following damage or destruction thereof shall be governed by the Act.
Any repair or reconstruction shall be substantially in accordance with the plans and specifications
of the Property as initially constructed and subsequently improved. Notice of substantial damage
or destruction shall be given as provided in Section 16.10.
12.2 Condemnation and Eminent Domain. In the event of a taking of any part of the
Property by condemnation or eminent domain, the provisions of the Act shall govern; provided,
(i) that notice shall be given as provided in Section 16.10, (ii) that the Association shall be the
attorney-in-fact to represent the Owners in any related proceedings, negotiations, settlements or
agreements and (iii) that any awards or proceeds shall be payable to the Association for the benefit
of the Owners and the mortgagees of their Units. Eligible Mortgagees shall be entitled to priority
for condemnation awards in accordance with the priorities established by the Act and the Governing
Documents, as their interests may appear.
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12.3 Termination and Liquidation. The termination of the common interest community,
and the distribution of any proceeds therefrom, shall be governed by the Act. Any distribution of
funds shall be based upon the value of the Units as determined by their relative value for property
insurance purposes, and shall be made to Owners and their mortgage holders, as their interests may
appear, as provided in the Act.
12.4 Notice. The Association shall give written notice of any condemnation proceedings
or substantial destruction of the Property to the Eligible Mortgagees entitled to notice under
Section 16.10.
12.5 Association's Authority. In all cases involving reconstruction, condemnation,
eminent domain, termination or liquidation of the common interest community, the Association shall
have authority to act on behalf of the Owners in all proceedings, negotiations and settlement of
claims. All proceeds shall be payable to the Association to hold and distribute for the benefit ofthe
Owners and their mortgage holders, as their interests may appear, in accordance with the Act.
SECTION 13
EASEMENTS
13.1 Easement for Encroachments. Each Unit and the Common Elements, and the rights
ofthe Owners and Occupants therein, shall be subject to an exclusive easement for encroachments
in favor of the adjoining Units for fireplaces, walls, roof overhangs, air conditioning systems, decks,
balconies, porches, patios, utility installations and other appurtenances (i) which are part of the
original construction of the adjoining Unit or the Property or (ii) which are added in compliance with
Section 8. If there is an encroachment by a Dwelling, or other building or improvement located on
a Unit, upon another Unit or the Common Elements as a result of the construction, reconstruction,
repair, shifting, settlement or movement of any part of the Property, an appurtenant easement for the
encroachment, for the use, enjoyment and habitation of any encroaching Dwelling, building or
improvement, and for the maintenance thereof, shall exist; provided, that with respect to alterations
made pursuant to Section 8, no easement shall exist unless the same has been approved and the
proposed improvements constructed, as required by this Declaration. Such easements shall continue
for as long as the encroachment exists and shall not affect the marketability of title.
13.2 Easement for Maintenance, Repair, Replacement and Reconstruction. Each Unit, and
the rights of the Owners and Occupants thereof, shall be subject to the rights of the Association to
an exclusive, appurtenant easement on and over the Units for the purposes of maintenance, repair,
replacement and reconstruction of the Dwellings and other improvements located within the Units,
and utilities serving the Units, to the extent necessary to fulfill the Association's obligations under
the Governing Documents.
13.3 Utility Easements. The Property shall be subject to non-exclusive, appurtenant
easements in favor of all public utility companies and other utility providers for the installation, use,
maintenance, repair and replacement of all utilities, such as natural gas, electricity, cable TV and
other electronic communications, water, sewer, septic systems, wells, and similar services, and
metering and control devices, which exist or are constructed as part of the development of the
Property or the Additional Real Estate, or which are referred to in the Plat or otherwise described
in this Declaration or any other duly recorded instruments. Each Unit, and the rights of the Owners
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and Occupants thereof, shall also be subject to a non-exclusive, appurtenant easement in favorofthe
other Units for all such utilities and services. Utilities and related services or systems shall be
installed, used, maintained and repaired so as not to interfere with the use and quiet enjoyment of
the Units by the Owners and Occupants, nor affect the structural or architectural integrity of the
Units or Dwellings.
13.4 Emergency Access to Units. In case of emergency, all Units and Limited Common
Elements are subject to an easement in favor of the Association for access, without notice and at any
time, by an officer or member of the Board, by the Association's management agents or by any
public safety personnel. The Board may require that an Owner or Occupant leave keys to the Unit
with another Owner of his or her choice and to advise the manager or Board ofthe location(s) of the
keys, so as to allow access for emergencies when the Owner or Occupant is absent for extended
periods.
13.5 Proiect Sign Easements. Declarant shall have the right to erect and maintain
monument signs identifying the common interest community and related decorative improvements
on the Common Elements. Those parts of the Property on which monument signs or related
decorative improvements are located shall be subject to appurtenant, exclusive easements in favor
of the Association for the continuing use, maintenance, repair and replacement of said signs and
improvements. In exercising its rights under said easements, the Association shall take reasonable
care to avoid damaging the improvements to the Property and shall repair any damage caused by
such actions.
13.6 Roadway Access Easements. The Common Elements shall be subject to an
appurtenant easement for roadway access in favor of the owners and occupants of any part of the
Additional Real Estate which is not added to the Property, and which Declarant has no further right
to add to the Property, over those parts of the Common Elements which are paved and dedicated to
use as connecting streets.
13.7 Reservation of Easements. Declarant hereby reserves the right, in the event that a
portion of the Additional Real Estate is not added to the common interest community (whether due
to lapse of time or otherwise) to exercise the following rights and create the following perpetual,
non-exclusive easements appurtenant to the Additional Real Estate over, upon, and under portions
of the Common Elements, all in accordance with the following authority and conditions:
13.7.1 To connect any improvements constructed on the Additional Real Estate
which is not added to the Property (hereinafter referred to as the "Excluded Parcel") to any
natural gas, storm sewer, sanitary sewer, electrical, telephone or other utility line, cable TV
or other electronic communication lines, pipe, wire or other facilities which are or may be
located within or serve the Property; and the right to install, maintain and utilize, such lines,
pipes, wires or other facilities.
13.7.2 To do such other acts as are necessary in order to connect into and/or to utilize
such utility facilities to serve any improvement constructed or to be constructed on the
Excluded Parcel; provided, however, that the owner or owners of the Excluded Parcel
benefitted by any reserved easements shall be responsible for the restoration of any damage
done in connection with or use of such easements.
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13.7.3 To create and have non-exclusive easements for the purposes of: (i) affording
the Excluded Parcel and any improvements constructed or to be constructed thereon with
access to and from a public road; (ii) installing, repairing and maintaining any streets, roads,
or rights-of-way on which the easements hereby reserved may be located; and
(iii) performing such other acts as are necessary in order to afford any improvement
constructed or to be constructed on the Excluded Parcel with access to a public road.
Declarant, its successors or assigns, as the owner or owners of the Excluded Parcel, shall be
responsible for the restoration of any part of the Property which is disturbed in connection
with the use of such easements. The location of the easements shall, to the extent
practicable, be limited to the location of the streets, roads, easement areas and rights-of-way
existing within the Common Elements at the time or times that said easements are created.
13.7.4 The reserved easements may be created from time to time as required to
provide the necessary access and utility services to the Property and any Excluded Parcel.
As evidence of the creation of one or more of the reserved easements, the then owner or
owners of the Excluded Parcel for whose benefit the easement is created shall execute and
cause to be recorded an instrument establishing the easement, and setting forth a description
of the easements created and a description of the Excluded Parcel benefitted by the
easements. No consent or joinder of the Association or any Owner or any mortgagee or other
secured party in any Unit or the Excluded Parcel, nor any release therefrom, shall be required
to create the easements. In addition, the owner of the Excluded Parcel or of a platted lot
within the Excluded Parcel may at any time waive or terminate its easement rights by the
execution and recording of an instrument specifying such waiver or termination, and without
the necessity of any consent or joinder by the Association, any Owner, or any mortgagee or
other secured party in any Unit or any part of the Excluded Parcel. Such waiver or
termination shall not affect any obligations incurred by any owner of the Excluded Parcel
arising out of its acts or omissions prior to such determination.
13.7.5 If the reserved easements are created, the Unit Owners and the owner of the
Excluded Parcel benefitted by such easements shall, so long as the easements are in
existence, share-all expenses of maintaining, repairing and replacing the drives, streets, roads,
easement areas or rights-of-way, and the utility lines, pipes, wires and other facilities to the
extent that such expenses are not paid by the utility provider or govemmental authority. The
Association shall pay a portion of such expenses equal to a fraction, the numerator of which
is the number of Units, and the denominator of which is the total number of Units plus the
total number of dwellings, lots or other individual residential parcels within the Excluded
Parcel benefitted by such easements. The balance of any such expenses shall be paid by the
owner or owners of the Excluded Parcel benefitted by such easements. The portion of the
expenses paid by the Association shall be a Common Expense. Notwithstanding the
foregoing, if the Excluded Parcel benefitted by such easements is used for other than
residential purposes, then such costs and expenses shall be apportioned to, and shared by the
Owners and the owner or owners of, the Excluded Parcel based upon the relative usage of
the easement area, and improvements located therein, by the owners and users of the
respective parcels.
13.8 Scope and Non-Interference. Notwithstanding anything in this Declaration to the
contrary, no Owner or Occupant shall be denied reasonable access to his or her Unit or the right to
utility services thereto. The easements set forih in this Section 13 shall supplement and not limit any
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easements described elsewhere in this Declaration or recorded, and shall include reasonable access
to the easement areas through the Units and the Common Elements for purposes of maintenance,
repair, replacement and reconstruction. All easement rights shall include a right of reasonable access
to maintain, repair and replace the utility lines and related equipment.
SECTION 14
COMPLIANCE AND REMEDIES
Each Owner and Occupant, and any other Person owning or acquiring any interest in the
Property, shall be governed by and comply with the provisions of the Act, the Governing
Documents, the Rules and Regulations, and such amendments thereto as may be made from time to
time, and the decisions ofthe Association. A failure to comply shall entitle the Association to the
relief set forth in this Section, in addition to the rights and remedies authorized elsewhere by the
Governing Documents and the Act.
14.1 Entitlement to Relief. The Association may commence legal action to recover sums
due, for damages, for injunctiverelief or to foreclose a lien owned by it, or any combination thereof,
or an action for any other relief authorized by the Governing Documents or available at law or in
equity. Legal relief may be sought by the Association against any Owner, or by an Owner against
the Association or another Owner, to enforce compliance with the Governing Documents, the Rules
and Regulations, the Act or the decisions of the Association. However, no Owner may withhold any
Assessments payable to the Association, or take or omit other action in violation of the Governing
Documents, the Rules and Regulations or the Act, as a measure to enforce such Owner's position,
or for any other reason.
14.2 Remedies. In addition to any other remedies or sanctions, expressed or implied,
administrative or legal, the Association shall have the right, but not the obligation, to implement any
one or more of the following actions against Owners and Occupants and/or their guests, who violate
the provisions of the Governing Documents, the Rules and Regulations or the Act:
14.2.1 Commence legal action for damages or equitable relief in any court of
competent jurisdiction.
14.2.2 Impose late charges of up to the greater of twenty dollars, or fifteen percent
of the amount past due, for each past due Assessment or installl11ent thereof, and impose
interest at the highest rate permitted by law accruing beginning on the first day of the month
after the Assessment or installment was due.
14.2.3 In the event of default of more than thirty days in the payment of any
Assessment or installment thereof, all remaining installments of Assessments assessed
against the Unit owned by the defaulting Owner may be accelerated and shall then be
payable in full if all delinquent Assessments or installments thereof, together with all
attorneys' fees, costs of collection and late charges, are not paid in full prior to the effective
date of the acceleration. Not less than ten days advance written notice ofthe effective date
of the acceleration shall be given to the defaulting Owner.
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14.2.4 Impose reasonable fines, penalties or charges for each violation of the Act,
the Governing Documents or the Rules and Regulations.
14.2.5 Suspend the rights of any Owner to vote when the Assessments due with
respect to the Owner's Unit are past due, and suspend the rights of any Owner or Occupant
and their guests to use any Common Element amenities; provided, that the suspension of use
rights shall not apply to Limited Common Elements, or deck, balcony, porch or patio
easements, appurtenant to the Unit, and those portions of the Common Elements providing
utilities service and access to the Unit. Such suspensions shall be limited to periods of
default by such Owners and Occupants in their obligations under the Governing Documents,
and for up to thirty days thereafter, for each violation.
14.2.6 Restore any portions of any Common Elements, Unit, or Limited Common
Elements damaged or. altered, or allowed to be damaged or altered, by any Owner or
Occupant or their guests in violation of the Governing Documents, and to assess the cost of
such restoration against the responsible Owners and their Units.
14.2.7 Enter any Unit or Limited Common Element in which, or as to which, a
violation or breach of the Governing Documents exists which materially affects, or is likely
to materially affect in the near future, the health or safety ofthe other Owners or Occupants,
or their guests, or the safety or soundness of any Dwelling or other part of the Property or
the property ofthe Owners or Occupants, and to summarily abate and remove, at the expense
of the offending Owner or Occupant, any structure, thing or condition in the Unit or Limited
Common Elements which is causing the violation; provided, that any improvements which
are a part of a Dwelling may be altered or removed only pursuant to a court order or with the
agreement of the Owner.
14.2.8 Foreclose any lien arising under the provisions ofthe Governing Documents
or under law, in the manner provided by the Act
14.3 Rights to Hearing. Before the imposition of any of the remedies authorized by
Section 14.2.4, 14.2.5, 14.2.6 or 14.2.7, the Board shall, upon written request of the offender, grant
to the offender an opportunity for a fair and equitable hearing as contemplated by the Act. The
offender shall be given notice of the nature of the violation and the right to a hearing, and at least
ten days within which to request a hearing. The hearing shall be scheduled by the Board and held
within thirty days of receipt of the hearing request by the Board, and with at least ten days' prior
written notice to the offender. If the offender fails to timely request a hearing or to appear at the
hearing, then the right to a hearing shall be deemed waived and the Board may take such action as
it deems appropriate. The decision of the Board and the rules for the conduct of hearings established
by the Board shall be final and binding on all parties. The Board's decision shall be delivered in
writing to the offender within ten days following the hearing, ifnot delivered to the offender at the
hearing.
14.4 Lien for Assessments, Charges, Etc. Any Assessments, charges, fines, expenses,
penalties or interest imposed under this Section shall be a lien against the Unit of the Owner or
Occupant against whom the same are imposed and the personal obligation of such Owner in the
same manner and with the same priority and effect as Assessments under Section 6. The lien shall
attach as of the date of imposition of the remedy, but shall not be final as to violations for which a
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hearing is held until the Board makes a written decision at or following the hearing. All remedies
shall be cumulative, and the exercise of, or failure to exercise, any remedy shall not be deemed a
waiver of the Association's right to pursue any others.
14.5 Costs of Proceeding and Attorneys' Fees. With respect to any collection measures,
or any measures or action, legal, administrative, or otherwise, which the Association takes to enforce
the provisions of the Act, Governing Documents or Rules and Regulations, whether or not finally
determined by a court or arbitrator, the Association may assess the Unit owned by the violator with
any expenses incurred in connection with such enforcement, including without limitation fines or
charges previously imposed by the Association, reasonable attorneys' fees, and interest (at the
highest rate allowed by law) on the delinquent amounts owed to the Association. Such expenses
shall also include any collection or contingency fees or costs charged to the Association by a
collection agency or other Person acting on behalf of the Association in collecting any delinquent
amounts owed to the Association by an Owner or Occupant. Such collection or contingency fees
or costs shall be the personal obligation of the Owner and shall be a lien against the Owner's Unit.
14.6 Liability for Acts of Owners and Occupants. An Owner shall be liable for the
expense of any maintenance, repair or replacement of the Property rendered necessary by such
Owner's acts or omissions, or by that of Occupants or guests in the Owner's Unit, to the extent that
such expense is not covered by the proceeds of insurance carried by the Association or such Owner
or Occupant. However, any insurance deductible amount and/or increase in insurance rates, resulting
from the Owner's acts or omissions may be assessed against the Owner responsible for the condition
and against his or her Unit.
14.7 Enforcement by Owners. The provisions of this Section shall not limit or impair the
independent rights of other Owners to enforce the provisions of the Governing Documents, the Rules
and Regulations, and the Act as provided therein.
SECTION 15
Al\1ENDMENTS
15.1 Approval Requirements. Except for amendments by Declarant pursuant to
Section 18.1, this Declaration may be amended only by the approval of:
15.1.1 The Board.
15.1.2 Owners of Units to which are allocated at least sixty-seven percent of the total
votes in the Association.
15.1.3 The percentage of Eligible Mortgagees (based upon one vote per Unit
financed) required by Section 16 as to certain amendments referenced by said Section.
15.1.4 The V A or FHA, if either agency has approved the common interest
community or made or insured any Unit mortgage, as to the following matters during the
Declarant Control Period:
15.1.4.1 The annexation of Additional Real Estate.
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15.1.4.2 The merger or consolidation of the Association with another
association or other legal entity.
15.1.4.3 The acquisition, dedication or mortgaging of Common Elements.
15.1.4.4 The dissolution of the Association.
15.1.4.5 The amendment of this Declaration, or the Association's Articles of
Incorporation or Bylaws.
15.1.5 Declarant as to certain amendments as provided in Section 17.8.
15.2 Procedures. Approval of the Owners may be obtained in writing or at a meeting of
the Association duly held in accordance with the Bylaws. Consents of Eligible Mortgagees, the VA,
the FHA or Declarant, if required, shall be in writing. Any amendment shall be subject to any
greater requirements imposed by the Act. The amendment shall be effective when recorded as
provided in the Act. An affidavit by the Secretary of the Association as to the outcome ofthe vote,
or the execution ofthe foregoing agreements or consents, shall be adequate evidence thereof for all
purposes, including without limitation, the recording of the amendment.
SECTION 16
RIGHTS OF ELIGIBLE MORTGAGEES
Notwithstanding anything to the contrary in the Governing Documents, but subj ect to the Act
or other laws, Eligible Mortgagees shall have the following rights and protections:
16.1 Consent to Certain Amendments. The written consent of Eligible Mortgagees
representing at least fifty-one percent ofthe Units that are subject to first mortgages held by Eligible
Mortgagees (based upon one vote per Unit financed) shall be required for any amendment to the
Governing Documents. which causes any change in provisions including the following: (i) voting
rights; (ii) increases in Assessments over twenty-five percent; (iii) Assessment liens, or priority of
Assessment liens; (iv) reductions in reserves for maintenance, repair and replacement of Common
Elements; (v) responsibility for maintenance and repairs; (vi) reallocation of interests in the
Common Elements or Limited Conunon Elements, or rights to their use; (vii) redefinition of any
Unit boundaries; (viii) convertibility of Units into Common Elements or vice versa; (ix) expansion
or contraction of the Property or the addition, annexation or withdrawal of property to or from the
Property; (x) hazard or fidelity insurance requirements; (xi) imposition of restrictions on the leasing
of Units; (xii) imposition of any restrictions on an Owner's right to sell or transfer his or her Unit;
(xiii) a decision by the Association (if the common interest community involves fifty or more Units)
to establish self management when professional management is in effect as required previously by
the Goveming Documents or an Eligible Mortgagee; (xiv) restoration orrepair of the Property (after
a hazard damage or partial condemnation) in a manner other than that specified in the Governing
Documents; (xv) any action to tem1inate the legal status of the common interest conununity after
substantial destruction or condemnation occurs; or (xvi) any provisions that expressly benefit
Eligible Mortgagees, or insurers or guarantors of mortgages.
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16.2 Consent to Certain Actions. The written consent of Eligible Mortgagees representing
at least sixty-seven percent of the Units that are subject to first mortgages held by Eligible
Mortgagees (based upon one vote per Unit financed) shall be required to (i) abandon or terminate
the common interest community; (ii) change the allocations of voting rights, Common Expense
obligations or interests in the Common Elements; (iii) partition or subdivide a Unit except as
permitted by statute; (iv) abandon, partition, subdivide, encumber or sell any Common Elements;
or (v) use hazard insurance proceeds for other than the repair, replacement or reconstruction of the
Property, except as otherwise provided by law.
16.3 Consent to Subdivision. No Unit may be partitioned or subdivided without the prior
written approval of the Owner and Eligible Mortgagee thereof, and the Association.
16.4 No Right of First Refusal. The right of an Owner to sell, transfer or otherwise convey
his or her Unit shall not be subject to any right of first refusal or similar restrictions.
16.5 Priority of Lien. Any Person who comes into possession of a Unit by foreclosure of
the first mortgage on a Unit, or by deed or assignment in lieu of foreclosure ofthe first mortgage on
a Unit, takes the Unit free of any claims for unpaid Assessments or any other charges or liens
imposed against the Unit by the Association which have accrued against such Unit prior to the
acquisition of possession of the Unit by said Person; (i) except as provided in Section 6.1 0 and the
Act and (ii) except that any unreimbursed Assessments or charges may be reallocated among all
Units in accordance with their interests in the Common Elements.
16.6 Priority of Taxes and Other Charges. All taxes, Assessments and charges which may
become liens prior to the first mortgage under state law shall relate only to the individual Units and
not to the Property as a whole.
16.7 Priority for Condemnation Awards. No provision of the Governing Documents shall
give an Owner, or any other party, priority over any rights of the Eligible Mortgagee of the Unit
pursuant to its mortgage in the case of a distribution to such Owner of insurance proceeds or
condemnation awards .for losses to or a taking of the Unit and/or the Common Elements. The
Association shall give written notice to all Eligible Mortgagees of any condemnation or eminent
domain proceeding affecting the Property promptly upon receipt of notice from the condemning
authority.
16.8 Requirements for Management Agreements. The tenn of any agreement for
professional management of the Property may not exceed two years. Any such agreement must
provide at a minimum for termination without penalty or temlination fee by either party, (i) with
cause upon thirty days prior written notice, and (ii) \vithout cause upon ninety days prior written
notice.
16.9 Access to Books and Records! Audit. Eligible Mortgagees shall have the right to
examine the books and records of the Association upon reasonable notice during normal business
hours, and to receive free of charge, upon written request, copies of the Association's annual reports
and other financial statements. Financial statements, including those which are audited, shall be
available within one hundred twenty days of the end of the Association's fiscal year. Ifthe common
interest community consists of fewer than fifty Units, FNMA, or any institutional guarantor or
insurer of a mortgage loan against a Unit, may require that, at its own expense, an audit of the
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Association's financial statements be made for the preceding year, in which case the Association
shall cooperate in having an audit made and a copy given to the requesting party. If the common
interest community consists of fifty or more Units, the Association shall provide the requested audit
at its expense.
16.10 Notice Requirements. Upon written request to the Association, identifying the name
and address of the holder, insurer or guarantor of a mortgage on a Unit, and the Unit number or
address, the holder, insurer or guarantor shall be entitled to timely written notice of:
16.10.1 a condemnation loss or any casualty loss which affects a material portion of
the Property or the Unit securing the mortgage;
16.10.2 a sixty day delinquency in the payment of Assessments or charges owed by
the Owner of a Unit on which it holds a mortgage;
16.10.3 a lapse, cancellation or material modification of any insurance policy
maintained by the Association; and
16.10.4 a proposed action which requires the consent of a specified percentage of
Eligible Mortgagees.
SECTION 17
SPECIAL DECLARANT RIGHTS
Declarant hereby reserves exclusive and unconditional authority to exercise the following
special declarant rights within the meaning of Section 515B.1-103(31) of the Act for as long as it
owns a Unit, or for such shorter period as may be specifically indicated:
17.1 Complete Improvements. To complete all the Units and other improvements
indicated on the Plat, or otherwise included in Declarant's development plans or allowed by the
Declaration, and to make alterations in the Units and Common Elements to accommodate the
exercise of any special declarant rights.
17.2 Add Additional Real Estate. To add Additional Real Estate to the Property as
described in Section 18.
17.3 Relocate Boundaries and Alter Units. To relocate boundaries between Units and to
otherwise alter Units owned by it, to the extent permitted by Section 18 or the Act.
17.4 Sales Facilities. To construct, operate and maintain a sales office, management
office, model Units and other development, sales and rental facilities within the Common Elements,
and within any Units owned or leased by Declarant from time to time, located anywhere on the
Property.
17.5 Signs. To erect and maintain signs and other sales displays offering the Units for sale
or lease, in or on any Unit owned by Declarant and on the Common Elements.
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17.6 Easements. To have and use easements, for itself, its employees, contractors,
representatives, agents and prospective purchasers through and over the Common Elements and the
yard areas of the Units for the purpose of exercising its special declarant rights.
17.7 Control of Association. To control the operation and administration of the
Association, including without limitation the power to appoint and remove the members of the Board
pursuant to Section 515B.3-1 03 of the Act, until the earliest of: (i) voluntary surrender of control
by Declarant, (ii) an Association meeting which shall be held within sixty days after conveyance to
Owners other than Declarant of seventy-five percent of the total number of Units authorized to be
included in the Property or (iii) the date five years following the date of the first conveyance of a
Unit to an Owner other than Declarant. Notwithstanding the foregoing, the Owners other than
Declarant shall have the right to nominate and elect not less than thirty-three and one-third percent
of the directors at a meeting of the Owners which shall be held within sixty days following the
conveyance by Declarant of fifty percent of the total number of Units authorized to be included in
the Property.
17.8 Consent to Certain Amendments. Until such time as Declarant no longer owns any
Unit for initial sale, Declarant's written consent shall be required for any amendment to the
Governing Documents or Rules and Regulations which directly or indirectly affects Declarant's
rights under the Governing Documents or the Act.
SECTION 18
RIGHTS TO ADD ADDITIONAL REAL ESTATE
Declarant hereby expressly reserves the right to add the Additional Real Estate to the
Property, by unilaterally executing and recording an amendment to this Declaration pursuant to
Section 5158.2-111 of the Act, subject to the following conditions:
18.1 The right of Declarant to add the Additional Real Estate to the common interest
community shall terminate ten years after the date of recording of this Declaration or upon earlier
express written withdrawal of such right by Declarant or a successor Declarant, unless extended by
a vote of the Owners pursuant to Section 515B.2-1 06(2) of the Act. There are no other limitations
on Declarant's rights hereunder, except as may be imposed by law.
18.2 The Additional Real Estate is described in Exhibit C attached hereto. The Additional
Real Estate may be added to the Property in parcels consisting of one or more platted lots, or
portions thereof.
18.3 There are no assurances as to the times at which any part of the Additional Real
Estate will be added to the Property, the order in which it will be added, the number of parcels per
phase nor the size of the parcels. Declarant has no obligation to add the Additional Real Estate to
the Property. The Additional Real Estate may be developed by Declarant or its successors in interest
for other purposes, subject only to approval by the appropriate governmental authorities.
18.4 The maximum number of Units that may be created within the Additional Real Estate
described as such on the date of this Declaration is . All Units created on the
Additional Real Estate shall be restricted exclusively to residential use.
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18.5 Any Units, Dwellings and other structures created upon the Additional Real Estate
shall be compatible with the other Units, Dwellings and other structures which are part of the
Property in terms of architectural style, quality of construction, principal materials employed in
construction and size; subject (i) to any changes required by governmental authorities or lenders and
(ii) to any interior and exterior changes made by Declarant to meet changes in the market.
18.6 All covenants and restrictions contained in this Declaration affecting the use,
occupancy and alienation of Units shall apply to all Units created on the Additional Real Estate.
The statements made in this Sections 18 shall not apply to any Additional Real Estate which
is not added to the Property.
SECTION 19
MISCELLANEOUS
19.1 Severability. If any term, covenant, or provision of this instrument or any exhibit
attached hereto is held to be invalid or unenforceable for any reason whatsoever, such determination
shall not be deemed to alter, affect or impair in any manner whatsoever any other portion of this
Declaration or exhibits attached hereto.
19.2 Construction. Where applicable, the masculine gender of any word used herein shall
mean the feminine or neutral gender, or vice versa, and the singular of any word used herein shall
mean the plural, or vice versa. References to the Act, or any section thereof, shall be deemed to
include any statutes amending or replacing the Act, and the comparable sections thereof.
19.3 Tender of Claims. In the event that any incident occurs which could reasonably give
rise to a demand by the Association against Declarant for indemnification pursuant to the Act, the
Association shall promptly tender the defense of the action to its insurance carrier, and give
Declarant (i) written notice of such tender, (ii) written notice of the specific nature of the action, and
(iii) an opportunity to defend against the action.
19.4 Notices. Unless specifically provided otherwise in the Governing Documents or the
Act, all notices required to be given by or to the Association, the Board, the Association officers, or
the Owners or Occupants shall be in writing and shall be effective upon hand delivery, or mailing
if properly addressed with postage prepaid and deposited in the United States mail; except that
registrations pursuant to Section 2.2 ofthe Bylaws shall be effective upon receipt by the Association.
19.5 Conflicts Among Documents. In the event of any conflict among the provisions of
the Act, the Declaration, the Bylaws and any Rules or Regulations, the Act shall control unless it
permits the documents to control. As among the Declaration, the Bylaws and any Rules and
Regulations, the Declaration shall control, and as between the Bylaws and any Rules and
Regulations, the Bylaws shall control.
19.6 Duration of Covenants. The covenants, conditions, restrictions, easements, liens and
charges contained in this Declaration shall be perpetual, subject only to termination as provided in
this Declaration and the Act.
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IN \VITNESS WHEREOF, the undersigned has executed this instrument the day and year
first set forth in accordance with the requirements of the Act.
Heart of the Lakes Construction, Inc.,
a Minnesota corporation
By:
Title:
STATE OF MINNESOTA)
) ss.
COUNTY OF )
The .foregoing instrument was acknowledged before me this _ day of , 1999, by
, the of Heart of the Lakes Construction, Inc., a Minnesota
corporation, on behalf of said corporation.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
David B. Eide, Esq.
FELHABER, LARSON, FENLON & VOGT, P.A.
Attorneys at Law
601 Second Avenue South, Suite 4200
Minneapolis, Minnesota 55402-4302
(612) 373-8520
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COMMON INTEREST COMMUNITY NO.
KOLVILLE ESTATES
EXHIBIT A TO DECLARATION
LEGAL DESCRIPTION OF PROPERTY/SCHEDULE OF UNITS
[TO BE ADDED]
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COMMON INTEREST COMMUNITY NO.
KOLVILLE ESTATES
EXHIBIT B TO DECLARATION
LEGAL DESCRIPTION OF COMMON ELEMENTS
[TO BE ADDED]
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COMMON INTEREST COMMUNITY NO.
KOLVILLE ESTATES
EXHIBIT C TO DECLARATION
LEGAL DESCRIPTION OF ADDITIONAL REAL ESTATE
[TO BE ADDED]
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