Declaration Draft

CONDOMINIUM DECLARATION 

FOR

VALLEY HI CONDOMINIUMS

EL PASO COUNTY, COLORADO

INTRODUCTORY

WHEREAS, the Association is the governing body of Valley Hi Condominiums, located in Colorado Springs, El Paso County, Colorado; and

WHEREAS, the Association desires to provide for the preservation of values and amenities of Valley Hi Condominiums and for the maintenance of common areas and facilities;

NOW, THEREFORE, the Association hereby declares that Valley Hi Condominiums, located in Colorado Springs, Colorado, shall be held, transferred, sold, conveyed, and occupied subject to the following covenants, conditions, restrictions, and easements.

ARTICLE I - DEFINITIONS AND TERMS

Section 1.1 - DEFINITIONS AND TERMS. Unless the context shall expressly provide otherwise, the following terms shall have the following meanings:

a. "Association" means Valley Hi Condominiums Association, a Colorado nonprofit corporation.

b. "Common Elements" means all portions of the Community other than the Units, including but not limited to the swimming pool, cabana, and grassy areas.

c. "Community" means the Valley Hi Condominiums complex consisting of 48 residential units and all associated common elements.

d. "Declaration" means this document and any amendments thereto.

e. "Common Elements" means all portions of the Condominium Property except the Units. The Common Elements include both the General Common Elements and the Limited Common Elements. Without limiting the generality of the foregoing, the Common Elements shall include all parts of the building and Property other than the Units, including the following:

The Land upon which the improvements are located, including all landscaped areas, walkways, driveways, parking areas, and entrance features. All foundations, columns, girders, beams, supports, main walls, roofs, halls, corridors, lobbies, stairs, stairways, fire escapes, entrances and exits of the building(s). All basements, yards, gardens, exterior storage areas, and parking areas, unless specifically designated as part of a Unit or as a Limited Common Element.

Any central services and utilities, including but not limited to the heating, air conditioning and ventilation systems serving the Common Elements, water, power, gas, hot and cold water, sewer, and storm drainage, but excluding those portions located within and serving only an individual Unit or designated as Limited Common Elements.

All tanks, pumps, motors, ducts, plumbing, wiring, electrical equipment, garbage and refuse facilities, cable television and telecommunications systems, and utility meters which serve more than one Unit or the Common Elements. All conduits, wires, and other utility installations to the extent they serve the Common Elements or more than one Unit, including the space actually occupied by the above items.

All exterior glass surfaces, including windows and doors (except as may be otherwise provided in the Declaration), the exterior of entrance doors to individual Units, and all exterior lighting. The roof and roof systems, including but not limited to roofing materials, roof deck, flashing, and waterproofing materials.

Any recreational facilities, amenities, and other areas or facilities designated for common use, including but not limited to swimming pools, fitness centers, clubhouses, meeting rooms, and associated equipment and furnishings. All lobbies, vestibules, foyers, and corridors not within the boundaries of any Unit.

All bearing walls, perimeter walls, main walls, and floor and ceiling slabs, including those portions of the walls, floors and ceilings that are not part of the Units. Elevator shafts, elevator cabs, elevator equipment rooms, elevator lobbies, and all mechanical and electrical systems serving the elevators.

All other parts of the Property and all apparatus and installations existing in the Building for common use or necessary or convenient to the existence, maintenance, safety, or use of the Property, except as may be specifically designated as part of a Unit or as a Limited Common Element in the Declaration or on the Plat.

The air space above the Property, to the extent not included within any Unit. All other elements of the buildings and Property rationally of common use or necessary to the existence, maintenance, and safety of the Condominium regime, or normally in common use.

The ownership, use, maintenance, and operation of the Common Elements shall be governed by the provisions of this Declaration and the Bylaws. The Association shall have the exclusive right to adopt Rules and Regulations governing the use of the Common Elements. The right to use the Common Elements shall be governed by the provisions of this Declaration, the Bylaws, and any Rules and Regulations adopted pursuant thereto.

The Common Elements shall remain undivided, and no Owner shall bring any action for partition or division of the whole or any part thereof except as provided in the Act or this Declaration. Except as provided in this Declaration or the Act, the Common Elements shall be owned by the Owners as tenants in common in accordance with their respective Percentage Interests.

f. “Limited Common Element” includes designated parking spaces, storage area, balconies and patios.

g. "Owner" means the record owner of a Unit, a person, firm, corporation, trust or other legal entity or any combination thereof, who owns, of Record, title to one or more Condominium Units.

h. "Unit" means a physical portion of the Community designated for separate ownership. "Unit" means: physical boundaries and space of the Community designated for separate ownership and exclusive use, bounded by and defined by reference to: The interior surfaces of the perimeter walls, floors, ceilings, windows, and doors; and all interior walls, partitions, floors, and ceilings contained within these boundaries, except for supporting columns, pipes, ducts, flues, chutes, conduits, wires and other utility installations that serve more than one Unit or the Common Elements.

The precise location and dimensions of each Unit as shown on the Condominium Plat and Plans, which are incorporated by reference herein referred in Exhibit A.  The square footage calculations for each Unit measured from: the interior surface of exterior walls and interior surface of corridor walls

Inclusions: all built-in or installed fixtures and improvements within the Unit boundaries, including but not limited to; built-in cabinets, countertops, and appliances, interior doors and door frames, electrical outlets and fixtures, plumbing fixtures, heating and cooling equipment serving only that Unit, window frames, glass, and screens, entry doors and door frames and any mechanical equipment or appurtenance designed to exclusively serve the Unit

Exclusions shall not be considered part of a Unit even if located within the Unit boundaries: load-bearing walls, columns, floors, and ceilings, common mechanical systems, pipes, ducts, flues, chutes, conduits, wires and other utility installations serving more than one Unit, any portion of the Common Elements

i. "Property" or "Premises" means all real property submitted to the provisions of this Declaration, including all land, buildings, improvements, structures, utilities, easements, rights, appurtenances, 

j. "Common Assessment" means the amount assessed against and payable by each Unit Owner to fund Common Expenses, including but not limited to: the costs of maintenance, management, operation, repair, and replacement of the Common Elements; costs of management and administration of the Association, including but not limited to compensation paid by the Association to managers, accountants, attorneys, and employees; the costs of utilities, insurance, and trash removal that are not separately metered or charged to individual Units; the costs of any master or cable television and/or internet services provided to all Units; landscape maintenance; security services; costs of maintaining, repairing and replacing all private streets, drives, and parking areas; expenses related to recreational facilities and amenities; routine exterior building maintenance and repair; property taxes and assessments, if any, assessed against Common Elements; contributions to reserve funds for future repair and replacement of Common Elements; and all other expenses incurred by the Association for the common benefit of all Unit Owners, which Common Assessments shall be allocated among all Units in accordance with their Percentage Interests unless otherwise specifically provided in this Declaration.

k. "Special Assessment" means any assessment levied by the Board against all Unit Owners, in addition to the Common Assessment, for the purpose of: defraying, in whole or in part, the cost of any construction, reconstruction, repair, or replacement of capital improvements, including fixtures and personal property related thereto; offsetting any operating deficit; funding unexpected or extraordinary expenses; covering unbudgeted expenses or expenses in excess of the budgeted amounts; funding insurance deductibles following casualty loss; complying with applicable laws, ordinances, or governmental requirements; or addressing any emergency or unforeseen circumstances, provided that any such Special Assessment in excess of [specific dollar amount or percentage of annual budget] in any fiscal year must be approved by [specified percentage] of Unit Owners at a meeting duly called for such purpose, with such Special Assessment being allocated among all Units in the same manner as Common Assessments unless otherwise specified in the Declaration or required by circumstances giving rise to the Special Assessment.

l. “Occupant” means a person or persons in possession of a Unit, regardless of whether said person is a Unit Owner.

m. “Condominium Owners Association” or “Association” means VALLEY HI WONERS ASSOCIATION, INC.,a Colorado non-profit corporation, the By-Laws of which shall be composed of all the Owners of the Condominium Units according to such By-Laws.

n. “May”, “Survey Map”, “Plat”, or “Plans” mean or include the engineering survey of the land, locating thereon all of the improvements, the floor and elevation plans and any other drawing or diagrammatic plan depicting a part of, or all of, the improvements, same being herewith filed, consisting of four (4) labeled, Exhibit “B” and incorporated herein.

ARTICLE II - CONDOMINIUM UNIT DESIGNATIONS AND DESCRIPTIONS

Section 2.1 - RECORDATION OF PLAT. The Plat of Valley Hi Condominiums has been recorded in the office of the Clerk and Recorder of El Paso County, Colorado.

Section 2.2 - DESIGNATION OF UNITS. The Property is hereby divided into four (4) separately designated building consisting of forty-eight (48) separately designated Units. Each Unit is identified by number and each building is identified by letter on the Map. The remaining portion of the Premises, referred as the Common Elements, shall be owned in common by the Owners. The Owners of each Unit shall own an undivided interest in said Common Elements, the percentage thereof for each Unit being as shown on the attached Plat.

Section 2.3 - LIMITED COMMON ELEMENTS. The Limited Common Elements reserved for the exclusive use of individual Owners are two automobile parking spaces per Unit, balcony areas, patio spaces and separate storage area, which are shown on the Plat. Such limited Common Elements shall be used in connection with the particular Unit, to the exclusion of the use thereof by the other Owners except by invitation.

Section 2.4 - REGULATION OF COMMON AREAS. The Board of Directors of the Association shall have the exclusive authority and responsibility to regulate, manage, and control the use and operation of all Common Elements within the Property. The Board, acting on behalf of the Association, shall establish, modify, and enforce rules, regulations, policies, and procedures governing the use, operation, and maintenance of all Common Elements, including but not limited to the swimming pool, cabana, grassy areas, parking areas, and storage areas. The Board shall have the power to adopt and amend rules regarding hours of operation, guest policies, reservation requirements, safety protocols, maintenance standards, and usage restrictions for all Common Elements. The Board may delegate the day-to-day administration and enforcement of such rules to the property manager, committee members, or other designated agents of the Association.

The Board shall have the authority to limit, restrict, or prohibit use of any Common Elements by any Unit Owner, tenant, guest, or other person for violation of the Association's rules and regulations or for delinquency in payment of any assessments or other charges. The Board may establish and collect reasonable fees for the use of certain Common Elements, require deposits or reservations for their use, and impose fines or other sanctions for violations of established rules. The Board shall also have the authority to close or restrict access to any Common Elements for maintenance, repair, renovation, or emergency purposes, or when deemed necessary for the safety and welfare of the Association members. Any rules, regulations, or restrictions adopted by the Board regarding the Common Elements shall be binding upon all Unit Owners, occupants, and their guests, and shall be enforced uniformly and consistently in accordance with the Association's governing documents.

Section 2.5 - INSEPARABLE UNITS Each Unit, together with its Limited Common Elements, shall be inseparable and may be conveyed, leased, or encumbered only as a complete Unit.

Section 2.6 - DESCRIPTIONS. Every contract, deed, lease, mortgage, or other instrument shall legally describe a Unit by its identifying Building Letter and Unit Number as shown on the Map followed by "Valley Hi Condominiums" and by reference to this recorded Declartion and Map.

Section 2.7 - ENCROACHMENTS. If any portion of the Common Elements encroaches upon a Unit, or if any Unit encroaches upon any portion of the Common Elements or another Unit, whether by reason of the original construction, reconstruction, repair, renovation, restoration, shifting, settlement, movement, or displacement of any portion of the improvements, a valid and perpetual easement shall exist for such encroachment and for the maintenance thereof. Such encroachments and easements shall continue to exist so long as the improvements shall stand. This easement shall include minor encroachments due to settlement or shifting, construction tolerances, reconstruction following damage or destruction by fire, casualty, or natural disaster, or repair or renovation of the buildings or any part thereof.

The validity of these easements shall not be affected by any damage, destruction, repair, or reconstruction of the encroaching improvements. These easements shall be deemed to run with the land in perpetuity and shall bind and inure to the benefit of the Association and all Unit Owners, their mortgagees, and their respective heirs, successors, and assigns. No Unit Owner shall be entitled to terminate, revoke, or otherwise limit such easements, nor shall any Unit Owner be entitled to any compensation or damages from the Association or any other Unit Owner on account of such encroachments. The rights and obligations of Unit Owners with respect to such easements shall be governed by this Declaration and applicable law.

These encroachment easements shall specifically include, but are not limited to: structural elements, bearing walls, columns, floors, ceilings, roofs, foundations, footings, supporting beams, load-bearing walls, slabs, perimeter walls, roofs, chimneys, flues, pipes, ducts, equipment, conduits, cable television and telecommunication lines, wires, public utility lines, and other facilities or installations that are either part of the Common Elements or serve more than one Unit. The easements shall also extend to any replacements or modifications of the original improvements that maintain or create similar encroachments, provided such work is performed in accordance with all applicable approvals and permits. Nothing in this Section shall be construed to allow the intentional construction of new improvements that encroach upon a Unit or Common Elements without proper authorization and compliance with all applicable requirements of this Declaration.

Section 2.8 - GOVERNMENTAL ASSESSMENT Declarant shall give written notice to the Assessor’s Office so that each Unit shall be assessed separately for taxes and other governmental assessments.

Section 2.9 - USE AND OCCUPANCY RESTRICTIONS. Each Unit shall be used exclusively for residential purposes. Notwithstanding the foregoing, Unit Owners may maintain a personal library and may keep their personal business or professional records or accounts within their Units; however, Units shall not be used for the receipt or meeting of clients, customers, or patients, nor shall any business activities be conducted that increase foot traffic, parking needs, or create any external evidence of business use. The conduct of any business activities within a Unit shall not be visible or audible from the exterior of the Unit, shall not involve regular deliveries or shipments, and shall comply with all applicable zoning ordinances and governmental regulations.

Occupancy of each Unit shall be limited to a maximum of four (4) persons, regardless of age or relationship status. For purposes of this restriction, "occupancy" shall be defined as residing in the Unit for more than thirty (30) consecutive days or for more than forty-five (45) days total in any calendar year. Temporary guests staying less than these specified periods shall not be counted toward the occupancy limit.

Unit Owners may keep a maximum of two (2) domesticated household pets per Unit, limited to dogs, cats, birds, or fish. All pets must be registered with the Association and must comply with all applicable local ordinances regarding licensing and vaccinations. Pets shall not be kept, bred, or maintained for any commercial purpose. Unit Owners shall be responsible for immediately cleaning up after their pets and ensuring their pets do not create a nuisance or unreasonable disturbance to other residents.

The number of Units that may be leased by Owners at any given time shall not exceed twenty percent (20%) of the total number of Units in the Community. For purposes of this restriction, a Unit shall be considered "leased" when occupied by anyone other than: (i) the Unit Owner or members of the Owner's immediate family; (ii) a trustee or beneficiary of a trust that owns the Unit; or (iii) an officer, director, shareholder, or designated occupant of a corporate or other entity Owner. All leases must be in writing, for a minimum term of twelve (12) months, and must require tenants to comply with all provisions of the Association's governing documents. Unit Owners must provide the Association with copies of all leases and tenant information as required by the Board.

Section 2.10 - GENERAL RESTRICTIONS. No Owner, tenant, or occupant shall store personal property or place any trash, refuse, vehicles, or debris in the Common Elements without prior written consent from the Board of Directors. The Common Elements shall be kept free and clear of all personal items, including but not limited to bicycles, toys, furniture, decorations, or storage containers. The Association reserves the right to remove and dispose of any unauthorized items at the owner's expense after providing reasonable notice.

No noxious or offensive activity shall be conducted within any Unit or upon the Common Elements, nor shall anything be done therein which may become an annoyance, nuisance, or cause unreasonable disturbance to other residents. This includes, but is not limited to, offensive odors, excessive noise, bright lights, or any other activity that interferes with the quiet enjoyment of other residents. The Board of Directors shall have sole discretion in determining what constitutes a nuisance or unreasonable disturbance.

No structure of a temporary character, including but not limited to trailers, tents, shacks, sheds, barns, tree houses, or other outbuildings shall be placed, erected, or permitted to remain upon the Property at any time, either temporarily or permanently. No temporary structures may be used as a residence. Holiday decorations may be permitted for reasonable periods as determined by the Board of Directors.

All garbage, trash, and recyclable materials must be placed in appropriate containers and stored in areas specifically designated for such purpose. No trash or garbage shall be stored or accumulated on patios, balconies, or other Common Elements. Residents shall comply with all waste disposal and recycling protocols established by the Association and local authorities. All trash must be properly bagged and secured before disposal.

Parking is permitted only in designated parking areas. Each Unit Owner shall park only in their assigned parking space(s) and shall not use or permit the use of any other parking spaces assigned to other Units. Guest parking areas shall be used only by guests and for temporary parking as specified in the Rules and Regulations. No vehicle maintenance, repair, or washing shall be performed in parking areas except in emergencies.

All vehicles parked on the Property must be in operating condition with current registration and insurance. No inoperable vehicles, vehicles with expired registration, vehicles leaking fluids, or vehicles in a state of disrepair shall be stored or parked on the Property. The Association reserves the right to tow any vehicle in violation of these restrictions at the owner's expense after providing reasonable notice, except in cases of emergency or safety hazards.

The breeding, raising, or keeping of animals for any commercial purpose is strictly prohibited. No animals shall be bred, raised, or kept within any Unit or upon the Common Elements, except for permitted household pets as defined in the Rules and Regulations. The Board of Directors may establish additional rules regarding pet ownership, including restrictions on size, type, and number of pets, and may require registration and proof of vaccination.

Section 2.10 - PARKING RESTRICTIONS. Parking along circular road facing the front doors of the Units, as shown on the Plat, shall not be permitted. Any vehicle belonging to a Unit Owner his tenants or his guest found in said area for more than fifteen (15) minutes shall be towed away at the Unit Owners expense, and the payment of which will be secured by a lien on the Owner’s Unit as set out in Article V herein. Repeated offenses may be subject to fines as set out in Rules and Regulations.

Section 2.11 - PROTECTIVE AGE COVENANT

1. Valley Hi Condominiums is designated as a 55+ community.

2. At least one occupant of each Unit must be 55 years of age or older.

3. This covenant complies with the Housing for Older Persons Act of 1995.

Section 2.12 - GUEST VISITATION PERIOD. Unit Owner and tenant guests shall be allowed to visit on an unlimited basis throughout the year; provided, no one visit shall exceed fourteen (14) days.

ARTICLE III - RIGHTS AND OBLIGATIONS OF OWNERSHIP

Section 3.1 - OWNERSHIP. Each Owner shall own their Unit in fee simple absolute, together with an undivided interest in the Common Elements as specified in the Plat and this Declaration.

Section 3.2 - PARTITION. The Common Elements, both General and Limited Common Elements, shall remain undivided and shall not be subject to any action for partition or division of the co-ownership thereof. By acceptance of a deed or other conveyance to any Unit in the Condominium, each Owner specifically and irrevocably waives their right to institute legal or equitable partition proceedings concerning any part of the Common Elements for the duration of the Condominium regime, and for so long as the Property remains subject to this Declaration. Each Owner specifically covenants that no action for physical partition of the Common Elements or any part thereof shall be brought or maintained by any Unit Owner(s), their heirs, administrators, executors, personal representatives, successors, or assigns.

No Unit Owner, or any other person acquiring any right, title, or interest in a Unit, shall have the right to seek or obtain judicial partition of the General or Limited Common Elements, or any of them, and any owner or person seeking to do so shall be strictly prohibited from bringing any court action for such purpose. To the extent any owner or other person seeks to avoid these covenants and initiates a partition action, by recording a lis pendens, obtaining a judgment, or otherwise attempting to accomplish partition, such person shall be in violation of this provision. Any partition action in contravention of this Section shall be null and void. The Association or any Unit Owner may seek an injunction against any attempted partition action, and the party bringing such partition action shall be liable for all costs and expenses incurred by the Association in defending against such action, including reasonable attorneys' fees and court costs.

Section 3.3 - EXCLUSIVENESS OF OWNERSHIP. Each Owner shall have the exclusive right to use and enjoy their Unit and designated Limited Common Elements, subject to the provisions of this Declaration and the Association's governing documents.

Section 3.4 - ONE-FAMILY RESIDENTIAL DWELLING. Each Unit shall be used exclusively as a one-family residential dwelling, consistent with Section 2.9 and the 55+ age restriction set forth in Section 2.11 of this Declaration.

Section 3.5 - MECHANIC'S AND MATERIALMAN'S LIENS. No labor performed or materials furnished for use in connection with any Unit shall create any right to file a statement of mechanic's lien against the Unit of any other Owner not expressly consenting to or requesting the same, or against any interest in the Common Elements.

Section 3.6 - RIGHT OF ENTRY. The Association, through its Board of Directors, managing agent, or other authorized representatives, shall have the right to enter any Unit at any reasonable hour of the day after providing reasonable notice to the Owner or occupant, except in cases of emergency where immediate entry is deemed necessary to prevent property damage or address an imminent risk to health and safety, in which case prior notice shall not be required. Such right of entry shall exist for the purpose of inspecting, maintaining, repairing, or replacing any Common Elements accessible from such Unit; performing emergency repairs therein necessary to prevent damage to Common Elements or to other Units; ensuring compliance with the provisions of this Declaration, Bylaws, and Rules and Regulations; or performing any work deemed necessary by the Association to maintain community standards or fulfill its obligations under the governing documents.

When entering any Unit, the Association's representatives shall endeavor to minimize disruption to the occupants and shall make reasonable efforts to schedule such entry at mutually convenient times, except in emergencies. Any damage to the Unit or personal property caused by such entry shall be repaired at the Association's expense, returning the Unit to its condition prior to entry, provided such damage was not caused by or necessitated by the Unit Owner's actions or negligence. The Association shall not be liable for any loss, damage, or theft of personal property within the Unit unless directly caused by the gross negligence or willful misconduct of its representatives during such entry. This right of entry shall be exercised in such manner as to protect the Owner's and occupant's privacy and property rights to the greatest extent practicable while still achieving the legitimate purposes for which entry is made.

Section 3.7 - OWNER MAINTENANCE. Each Unit Owner shall be responsible for the maintenance, repair, and replacement of all portions of their Unit, including all interior walls, floors, ceilings, windows, doors, and all electrical, plumbing, heating, cooling, and ventilation systems or fixtures that exclusively serve their Unit. The Owner shall maintain their Unit in a clean, sanitary, and attractive condition at all times, consistent with community standards and in a manner that prevents damage to other Units or the Common Elements. Unit Owners are additionally responsible for the maintenance, repair, and replacement of any Limited Common Elements allocated to their Unit, including but not limited to balconies, patios, parking spaces, and storage areas, unless otherwise specified in the Declaration. Each Owner has an affirmative duty to promptly report to the Association any defect or need for repairs for which the Association is responsible to maintain, repair, or replace. Failure to report such defects in a timely manner may result in the Owner being held responsible for any resulting damage or escalation of repair costs. The Association reserves the right to perform necessary maintenance or repairs within a Unit if the Owner fails to do so after reasonable notice, with all costs thereof charged to the Owner.

Section 3.8 - ALTERATION. No Unit Owner shall undertake any structural alteration, construction, modification, improvement, addition, removal, or replacement to their Unit or to any Common Elements, whether General or Limited, without first obtaining written approval from the Association's Board of Directors. Any proposed alterations must be submitted in writing with detailed plans and specifications for the Board's review. The Owner must obtain all necessary permits and approvals from appropriate governmental authorities prior to commencing any work and must ensure compliance with all applicable building codes, regulations, and safety standards. All work must be performed by licensed and insured contractors approved by the Association. The Board may condition its approval upon specific requirements regarding construction methods, materials, timing, contractor insurance, and other reasonable conditions to protect the interests of the Association and other Unit Owners. Any alterations made without required Board approval or in violation of this Section shall be subject to removal or modification at the Owner's expense, and the Owner may be subject to fines or other enforcement actions by the Association. The Board's approval of any alteration shall not constitute assumption of any responsibility by the Association for the alteration's structural integrity, safety, or compliance with applicable laws and regulations.

Section 3.9 - RESTRICTION OF OWNERSHIP. Title to the interior space of each Unit shall be subject to the following restrictions and limitations on ownership, division, and transfer. No Owner shall, by deed, plat, court decree, partition, or otherwise, subdivide or divide their Unit's interior space into smaller units or separate portions, nor shall any Owner create any exclusive use area or attempt to convert any portion of the Unit's interior space into a separate Unit or purported condominium unit. The interior space of each Unit must be maintained as a single, integrated living space and conveyed as a whole.

The foregoing prohibition specifically includes, but is not limited to: physical subdivision or partitioning of rooms or spaces within the Unit; legal subdivision of ownership interests in the Unit's interior space; creation of time-sharing or interval ownership arrangements; creation of cooperative or shared ownership structures within a single Unit; or any other arrangement that would result in multiple ownership rights or exclusive use claims to different portions of the Unit's interior space. Any attempt to subdivide, partition, or otherwise divide the ownership or use rights to the interior space of a Unit shall be void and of no effect.

This restriction shall not prohibit an Owner from reconfiguring the interior layout of their Unit, subject to compliance with Section 3.8 regarding alterations and receiving proper Association approval, provided such reconfiguration maintains the Unit as a single, integrated living space. Furthermore, nothing in this Section shall prohibit co-ownership of an entire Unit by multiple persons as tenants in common, joint tenants, or other lawful forms of concurrent ownership of the entire Unit, provided the Unit remains a single, undivided living space.

Section 3.10 - LIABILITY FOR NEGLIGENT ACTS. Each Unit Owner shall be legally and financially liable for any injuries, damages, or losses resulting from their own negligent or willful acts or omissions, including but not limited to damage to persons or property arising from the misuse, abuse, or neglect of the Common Elements, whether General or Limited, or from their failure to comply with any provisions of this Declaration, the Bylaws, or the Rules and Regulations of the Association. Unit Owners shall bear full responsibility and liability for any injuries, damages, or losses caused by their family members, tenants, guests, invitees, licensees, contractors, agents, pets, or any other person or animal entering the Property under their express or implied permission. This liability extends to any damage to other Units, Common Elements, personal property, or injury to persons that occurs due to the Owner's failure to properly maintain their Unit or any Limited Common Elements allocated to their use, including but not limited to damage from water leaks, fire, or other casualties originating from their Unit.

The Association may repair any damage to the Common Elements or another Unit caused by a Unit Owner's negligence or willful misconduct, or that of their tenants, guests, or pets, and assess all costs and expenses of such repair as a Special Assessment against the responsible Owner's Unit. Such liability shall include all reasonable attorneys' fees and costs incurred by the Association in enforcing these provisions or in defending any claims arising from an Owner's negligent acts or omissions. The Owner's insurance shall be primary with respect to any claim or loss arising from their negligence or that of their tenants, guests, or pets, and the Owner shall be responsible for any deductible or uncovered portion of any loss. This Section shall not be construed to limit any other remedies available to the Association or other Unit Owners under this Declaration or applicable law.

The Association may recover costs, including attorney fees, incurred due to an Owner's negligence or violations.

Section 3.11 - SUBJECT TO DECLARATION AND BY-LAWS. All present and future Unit Owners, their tenants, family members, guests, invitees, licensees, and occupants shall be  subject to and shall strictly comply with the provisions of this Declaration, the Association's Articles of Incorporation, the Association's Bylaws, and any Rules and Regulations adopted by the Association, as they may be amended from time to time, as well as all applicable Colorado laws, including but not limited to the Colorado Common Interest Ownership Act. The acceptance of a deed or conveyance, the entering into of a lease, or the act of occupancy of any Unit shall constitute an agreement that all such documents and laws are accepted, ratified, and will be complied with. Such agreement shall be deemed to be a covenant running with the land and shall bind any person having at any time any interest or estate in a Unit, whether such interest be fee simple, leasehold, security interest, or any other form of ownership or occupancy.

All governing documents shall be deemed incorporated in any deed, lease, or other instrument affecting title to any Unit. Each Owner shall be responsible for providing copies of all governing documents to their tenants, guests, and occupants, and for ensuring their compliance therewith. Failure to comply with any provision of the governing documents or applicable Colorado laws shall be grounds for an action by the Association to recover damages, injunctive relief, or any other remedy available at law or equity, including reasonable attorneys' fees and costs incurred in enforcing compliance. The Association's rights of enforcement shall be cumulative with all other rights and remedies available under the governing documents and applicable law. In the event of any conflict between the various governing documents, the order of priority shall be: first, the Declaration; second, the Articles of Incorporation; third, the Bylaws; and fourth, the Rules and Regulations, unless applicable law requires otherwise.

The acceptance of a deed to any Unit constitutes an agreement to comply with these governing documents.

ARTICLE IV - MANAGEMENT AND ADMINISTRATION

Section 4.1 - BY-LAWS. The administration and operation of the Association shall be governed by its By-Laws, which shall provide for the fundamental aspects of Association governance, including the conduct of annual and special membership meetings, election of the Board of Directors, appointment of officers, and methods for adopting and amending administrative rules and the By-Laws themselves. Any amendment to the By-Laws requires approval by sixty-seven percent (67%) of the total voting power of the Association, must be recorded in the El Paso County public records, and must be certified by both the Association President and Secretary. The initial By-Laws shall be adopted by the Board of Directors and may subsequently be amended either by the Members at a regular or special meeting or by the Board of Directors as permitted by Colorado law, provided that all such amendments comply with the requirements of the Colorado Common Interest Ownership Act (CCIOA). The By-Laws shall also include any other provisions deemed necessary for the proper administration of the Association and its affairs, consistent with this Declaration and applicable law.

Section 4.2 - SPECIFIC POWER TO RESTRICT USE AND ENJOYMENT. Every Owner and the Declarant shall have a beneficial interest of use and enjoyment in the Common Elements subject to the following limitations, restrictions and provisions:

1. The right of the Association to publish rules and regulations governing use of the Common Areas and the improvements and facilities and to establish and enforce penalties for infractions;

2. The right of the Association to charge reasonable fees for use of facilities within the Common Area if such facilities are not used aby all members equally;

3. The right of the Association to borrow money for the purpose of improving the Common Area and facilities and to mortgage said property; provided, however, that the rights of any such Mortgagee in such property shall be subordinate to the rights of the Owners and in no event shall any such Mortgagee have the right to terminate the Condominium Regime established by this Declaration;

4. The right and duty of the Association to suspend the voting rights and the right to the use of recreational facilities by an Owner for any period during which an assessment against the Owner’s Condominium Unit remains unpaid;

5. The right of the Association to adopt, implement and maintain a private security system for the Premises consistent with applicable laws;

6. The right of the Association to establish rules and regulations governing traffic within the common Area, and to establish sanctions for any violation or violations of such rules and regulations;

7. The right of the Association to regulate noise within the Premises, including, without limitation, the right of the Association to require mufflers on engines and to prohibit the use of devices producing excessive noise;

8. The right of the association to control the visual attractiveness of the Property, including, without limitation the right to require Owners to eliminate objects which are visible from the Common Area, which in the Association’s judgment, detract from the visual attractiveness of the Property. 

Section 4.3 - MEMBERSHIP, VOTING, QUORUM, PROXIES. Membership in the Association shall be appurtenant to and inseparable from Unit ownership. Each Owner shall automatically become a member upon acquiring title to a Unit, and membership shall automatically terminate when ownership ceases. Membership rights cannot be separated from Unit ownership through any means, including lease, contract, or other agreement. Each Unit shall be entitled to exactly one membership in the Association, regardless of the number of Owners of such Unit.

Each Unit shall be allocated one vote in Association matters. When a Unit is owned by multiple persons or entities, such co-owners shall designate in writing one individual to exercise the Unit's voting rights. Similarly, any Unit owned by a corporation, partnership, trust, or other legal entity must designate in writing a natural person authorized to exercise its voting rights. No fractional votes shall be permitted under any circumstances. The Association shall suspend voting rights for any Unit where the Owner is delinquent in payment of assessments beyond the period specified in the Bylaws.

Quorum requirements are established to ensure adequate representation in Association decision-making. General membership meetings require participation (in person, by proxy, or by written ballot) of twenty-five percent (25%) of the total voting power to constitute a quorum. Special assessment approvals require a quorum of fifty-one percent (51%) of the total voting power, while amendments to governing documents require a quorum of sixty-seven percent (67%). If a quorum is not achieved at any meeting, the meeting may be adjourned and reconvened with a reduced quorum requirement as specified in the Bylaws, provided that two attempts to achieve the original quorum requirement have been made.

Owners may vote by proxy, subject to specific requirements. All proxies must be in writing, signed by the Unit Owner, and filed with the Association Secretary at least forty-eight (48) hours before the meeting at which they will be used. Unless otherwise specified in the proxy document, proxies shall remain valid for eleven (11) months from the date of execution. Any proxy shall be revocable at will by the Owner who granted it. Proxies automatically terminate upon: transfer of ownership of the Unit; death of the Owner who granted the proxy; or ninety (90) days after execution, unless a shorter term is specified. The Association shall maintain records of all proxies filed and verify their validity before each meeting.

Section 4.4 - INSURANCE

1. Required Coverage:

   a) Property Insurance:

   - Full replacement cost

   - All-risk coverage

   - Building ordinance coverage

   - Inflation guard

   - Special condominium endorsement

   - Deductible not to exceed $10,000

   b) Liability Insurance:

   - Minimum $2,000,000 per occurrence

   - Coverage for all Common Elements

   - Directors and Officers coverage

   - Host liquor liability

   - Cross liability endorsement

   c) Workers Compensation:

   - As required by law

   - Voluntary compensation endorsement

   d) Fidelity Insurance:

   - Coverage for all persons handling funds

   - Minimum coverage of three months assessments plus reserves

   - Name Association as obligee

2. Optional Coverage:

   a) Flood insurance if in flood zone

   b) Earthquake insurance

   c) Environmental insurance

   d) Umbrella liability

   e) Equipment breakdown coverage

3. Insurance Trustee:

   a) Board may designate trustee

   b) Processing of claims

   c) Distribution of proceeds

   d) Reconstruction oversight

4. Claims Procedures:

   a) Notice requirements

   b) Deductible responsibility

   c) Owner notification

   d) Claim filing timeline

   e) Proof of loss requirements

5. Owner Responsibilities:

   a) Individual unit coverage (HO-6 policy)

   b) Personal property insurance

   c) Personal liability insurance

   d) Loss assessment coverage

   e) Deductible coverage

6. Policy Requirements:

   a) Primary coverage provision

   b) Waiver of subrogation

   c) Notice of cancellation

   d) Mortgagee notification

   e) Annual coverage review

7. Claims Adjustment:

   a) Board authority

   b) Owner notification

   c) Mortgagee rights

   d) Distribution of proceeds

   e) Repair requirements

8. Each Unit Owner shall obtain his own insurance upon his unit.

This Article provides comprehensive management and administrative guidelines while ensuring compliance with Colorado Common Interest Ownership Act (CCIOA) requirements.

ARTICLE V - MAINTENANCE ASSESSMENTS

Section 5.1 - ASSESSMENTS FOR COMMON EXPENSES. The Association, through its Board of Directors, shall have the power and authority to levy assessments against each Unit for Common Expenses in proportion to their respective percentage interests in the Common Elements. These assessments shall be payable in monthly installments due on the first day of each month and shall fund various Common Expenses including, but not limited to: management and administration costs; insurance premiums for property and liability coverage; utilities serving the Common Elements; landscape maintenance and snow removal; pool and cabana maintenance and operation; common area cleaning and maintenance; professional services such as legal counsel and accounting; security services; and contributions to the reserve fund for future capital expenditures and replacements. Any assessment payment not received by the fifteenth day of the month shall incur a late fee equal to ten percent (10%) of the monthly assessment amount, and interest shall accrue at eighteen percent (18%) per annum on all delinquent amounts. A fee of $50.00 shall be charged for any returned checks, and the Association may assess administrative fees related to collection efforts. The Association may adjust these fees and charges from time to time as deemed necessary by the Board of Directors.

Section 5.2 - PURPOSE OF ASSESSMENTS. The fundamental purpose of assessments is to promote the recreation, health, safety, and welfare of the Community's residents while ensuring proper maintenance and improvement of the Common Elements and efficient administration of Association affairs. Assessments shall be used to fund authorized expenditures that advance these objectives, including but not limited to: ongoing maintenance and repairs of Common Elements; implementation of capital improvements that enhance the Community; procurement and maintenance of appropriate insurance coverage for the Association and its assets; engagement of professional services necessary for Association operations; payment of utilities and essential services; addressing emergency expenses as they arise; funding adequate reserves for future repairs and replacements; and covering administrative costs essential to Association operations. The Board shall exercise its reasonable business judgment in determining the necessity and appropriateness of all expenditures funded by assessments, maintaining a balance between the need to preserve and enhance the Community's assets and the financial burden placed on Unit Owners. All assessment funds shall be held in trust by the Association for the benefit of the members and shall be expended solely for the purposes authorized in this Declaration and applicable law.

Section 5.3 - DETERMINATION OF ASSESSMENTS. The Board of Directors shall annually prepare a proposed budget for the Association's upcoming fiscal year, providing for all anticipated Common Expenses and reserve contributions. This proposed budget shall be distributed to all Unit Owners at least thirty (30) days prior to its adoption, accompanied by notice of a budget ratification meeting. The proposed budget shall be deemed approved unless rejected by at least sixty-seven percent (67%) of all Unit Owners at the ratification meeting. Upon approval, the Board shall calculate monthly assessments by dividing the total budgeted expenses by twelve months and allocating the resulting amount among all Units according to their respective percentage interests, with amounts rounded to the nearest dollar. Written notice of the annual assessment amount and payment schedule shall be provided to all Unit Owners. To ensure adequate long-term financial planning, the Association shall conduct a professional reserve study every five years, with annual reviews and updates, maintaining a detailed component inventory and thirty-year projection of capital repair and replacement costs. This reserve study shall guide the Board in establishing appropriate funding goals and assessment levels to meet the Community's future needs.

Section 5.4 - SPECIAL ASSESSMENTS FOR IMPROVEMENTS. The Board of Directors may propose Special Assessments for the purpose of defraying extraordinary expenses, funding capital improvements, addressing emergency repairs, covering budget shortfalls, paying insurance deductibles, or funding unbudgeted major repairs that cannot be funded through regular assessments. Any proposed Special Assessment must be preceded by a Board determination of necessity, written notice to all Owners, and a special meeting called with at least thirty (30) days notice. Approval of any Special Assessment requires an affirmative vote of sixty-seven percent (67%) of all Unit Owners, with written notification of the outcome provided to all Owners. Upon approval, the Board shall establish payment terms, which may include options for installment payments subject to interest charges. The Board may impose reasonable handling fees to cover administrative costs associated with Special Assessment collection. All collection procedures, including late fees, interest charges, and enforcement mechanisms, shall be the same as those applicable to regular assessments. The Board shall provide detailed accounting of all Special Assessment funds collected and expended, ensuring transparency in the use of such funds for their designated purposes.

Sections 5.5 - ASSESSMENT ADMINISTRATION AND ENFORCEMENT. Assessment obligations commence upon the first conveyance of a Unit from the Developer to a purchaser, with amounts prorated for partial months. Each Unit purchaser shall make a non-refundable working capital contribution equal to two months' assessments at closing, which shall be transferred to the Association to fund initial operating expenses and reserves. The Developer remains responsible for assessments on all unsold Units. No Owner may claim exemption from assessment obligations for any reason, including non-use of Common Elements, abandonment, leasing, vacancy, or transfer of the Unit. The assessment obligation constitutes a personal obligation of each Owner that passes to successors in title and binds all heirs and assigns with joint and several liability, surviving any sale or transfer of the Unit.

Upon assessment, the Association automatically acquires a statutory lien against the Unit, which holds priority over most other liens except: prior recorded First Mortgages, governmental tax assessments, and previously filed mechanics liens. The lien secures all unpaid assessments, late charges, interest, collection costs, and reasonable attorney fees. The Association may enforce its lien rights through recording a notice of lien, providing notice to the Owner and Mortgagee, and pursuing foreclosure or other legal action as authorized by law. The assessment lien is subordinate to first Mortgages but maintains a six-month super priority period for regular assessments as provided by the Colorado Common Interest Ownership Act (CCIOA). Mortgagees have rights to receive notice of delinquencies, cure defaults, obtain assessment statements, receive meeting notices, and review budgets.

Upon written request and payment of the prescribed fee, the Association shall provide a written statement within ten days specifying: current assessment amounts and due dates; any unpaid assessments, late charges, and interest; and collection costs or fees. For property sales, a comprehensive status letter shall be provided, with amounts updated through closing. Rush fees may apply for expedited service, and the Board may prescribe standardized forms and permit electronic delivery. Such statements bind the Association and may be relied upon by third parties. The failure to provide a statement within ten days renders the Association liable for any damages caused by such failure to any person who reasonably relied upon such statement.

ARTICLE VI - DESTRUCTION OR OBSOLESCENCE OF IMPROVEMENTS

Section 6.1 - DESTRUCTION OR OBSOLESCENCE. The determination of Total Destruction shall be established when damage exceeds sixty-seven percent (67%) of the property's replacement value. This assessment must be certified by two independent appraisers and verified by an insurance adjuster to ensure accurate valuation. A professional engineering report detailing structural damage and safety concerns, along with complete photographic documentation, shall be required for insurance and historical records. Partial Destruction is established when damage is less than sixty-seven percent (67%) of replacement value but exceeds normal maintenance, including situations involving structural integrity issues, disruption of essential services, compromised safety systems, or units becoming uninhabitable due to code violations or health hazards.

Obsolescence determination shall be based on multiple factors, including the age of improvements relative to typical building lifespan and current codes, maintenance and repair costs exceeding reasonable operational budgets, market conditions showing significant property value decline, structural assessment revealing systemic building deficiencies, building code compliance gaps, safety considerations that cannot be remedied through normal repairs, and economic feasibility studies comparing reconstruction costs to property value.

Emergency response to any damage requires immediate implementation of safety measures, including installation of barriers and warning signs, property securing through board-up services, professional utility shutoff when necessary, and implementation of security measures as required by insurance. Professional assessment requirements include structural engineering evaluation within thirty days of damage, detailed cost estimates from three licensed and bonded contractors, specific timeline for repairs, and evaluation of temporary relocation needs. The Association must provide comprehensive owner communication, including written notice of damage extent, special meetings for discussion and voting, status of insurance claims, and detailed action plans.

When reconstruction is approved, certain mandatory triggers require action, including damage assessment less than sixty-seven percent (67%) of replacement value, sufficient insurance proceeds, local building ordinance requirements, mortgage holder demands, and safety requirements. All construction must meet or exceed original specifications while complying with current building codes, including required energy efficiency upgrades and modern safety improvements. Contractor selection requires current licensing and bonding, comprehensive insurance coverage, performance bonds, detailed completion timelines, and minimum five-year warranties.

In cases where Association termination becomes necessary, the process requires written approval from sixty-seven percent (67%) of owners and all first mortgage holders, along with local government approval of demolition plans. The property sale procedure must include independent commercial appraisal, professional marketing through a commercial broker, structured bidding process, and proportional distribution of proceeds based on ownership percentages. The Association shall assist with owner relocation efforts, including provision for moving costs. All termination documents must be properly recorded with the county, and insurance carriers must be notified of the intent to terminate.

The Association shall maintain detailed records of all assessments, decisions, and actions taken throughout any damage or obsolescence determination process, ensuring transparency and compliance with all legal requirements and owner rights. All procedures must be conducted in accordance with applicable state laws, local ordinances, and the Association's governing documents.

Section 6.2 - JUDICIAL PARTITION. Each Unit Owner, by acceptance of a deed to their Unit, expressly waives and abandons all rights to seek or maintain any action for judicial partition of the Common Elements or the Property as a whole, except under specifically defined circumstances as set forth herein. Such partition rights may only be exercised when: (i) Total Destruction of the Property has been officially determined according to the standards and procedures set forth in this Declaration; (ii) a super-majority of sixty-seven percent (67%) of all Unit Owners have voted in favor of termination of the condominium regime; (iii) a court order has been obtained through appropriate legal action determining partition is necessary; (iv) insurance proceeds have been conclusively demonstrated to be insufficient for reconstruction of the Property; or (v) professional engineering studies have confirmed that reconstruction is physically infeasible due to the extent of damage or structural conditions.

In the event partition becomes permissible under any of the above circumstances, the sale of the Property shall be conducted according to professional marketing standards and requirements. Such marketing shall include, at minimum, listing the Property on commercial Multiple Listing Services (MLS), conducting a national advertising campaign in recognized real estate publications, and consideration of a professional auction process if traditional sale methods prove unsuccessful within a reasonable time period. The Association shall engage a qualified commercial real estate broker with demonstrated experience in homeowners association properties to manage the sale process. An adequate marketing budget shall be established based on the Property's value and current market conditions, with such expenses to be paid from insurance proceeds or Association reserves as available. The proceeds from any such sale shall be distributed to Unit Owners in proportion to their respective percentage interests in the Common Elements, subject to the rights of any lienholders.

Section 6.3 - CONDEMNATION. In the event of any taking of the Property or any portion thereof by eminent domain or other governmental acquisition, the Board of Directors shall act as the exclusive representative of the Association and all Unit Owners in the condemnation proceedings. The Board shall have full authority to negotiate with condemning authorities for fair and adequate compensation, including the retention of specialized legal counsel experienced in eminent domain proceedings and engagement of qualified appraisal and valuation experts. The Board shall provide regular updates to all Unit Owners throughout the condemnation process, ensuring transparency in all negotiations and proceedings.

In cases of partial taking, the Association shall conduct a comprehensive impact analysis to determine the viability of the remaining property. This analysis shall include a professional engineering assessment of reconstruction options, a detailed plan for allocating costs associated with necessary modifications to the remaining property, determination of any special assessment requirements to fund such modifications, and evaluation of reserve fund adequacy to address long-term implications of the taking. The Board shall ensure that any reconstruction or modification of the remaining property maintains, to the extent feasible, the functional integrity and value of the Community.

Severance damages and compensation received for the taking shall be distributed according to a carefully structured allocation method that accounts for direct unit damage or loss, fair distribution of common area impact damages, documented loss of amenity value, and professionally assessed decreases in overall property value. The allocation shall be based on objective criteria and professional valuations, ensuring equitable distribution among affected Unit Owners. Where applicable, compensation may include coverage for provable business interruption losses directly resulting from the taking.

Unit Owners retain the right to pursue separate claims for certain individual losses distinct from the Association's claims. These individual claims may include compensation for personal property damage or loss, documented relocation expenses, verifiable business income losses, special circumstances damages unique to the individual Owner, and actual moving expenses supported by receipts. Such individual claims shall not interfere with or diminish the Association's claims for damages to the Common Elements or overall property value. The Board shall coordinate with Unit Owners to ensure that individual claims complement rather than conflict with the Association's primary claims, maximizing total recovery for all affected parties while maintaining an orderly and efficient condemnation process.

ARTICLE VII - PROTECTION OF MORTGAGES

Section 7.1 - NOTICE TO ASSOCIATION

1. Required Mortgage Information:

   a) First Mortgagee must provide documentation to ensure proper notification and protection:

   - Complete name and mailing address of mortgage holder for official communications

   - Loan number and county recording information to properly identify the mortgage

   - Specific unit number(s) that serve as loan collateral

   - Principal amount of mortgage to determine voting rights percentage

   - Direct contact information for time-sensitive notices and approvals

   - Servicing agent details if loan servicing is handled by a third party

2. Association Record Keeping Requirements:

   a) Association must maintain accurate mortgage records through:

   - Comprehensive database listing all First Mortgagees and their contact information

   - Monthly verification and updates to ensure current contact information

   - Systematic procedures to verify mortgage satisfaction or transfers

   - Electronic notification system for immediate communication when required

   - Secure backup system for all mortgage-related documentation

3. Changes in Mortgagee Status:

   a) Notice Requirements protect mortgagee rights during servicing transfers:

   - Written notification required within 30 days of any loan servicing transfer

   - Updated contact information for new servicer to ensure continuous communication

   - New payment instructions to prevent misapplied payments

   - Effective date of transfer to ensure proper timing of notices

   - Association must confirm receipt to document compliance

Section 7.2 - NOTICE OF DEFAULT

1. Default Notification Requirements protect mortgagee's security interest:

   a) Association must notify Mortgagee when:

   - Assessment delinquencies exceed 60 days, potentially affecting property value

   - Covenant violations continue beyond 30 days, impacting community standards

   - Unit modifications occur without approval, potentially affecting collateral

   - Insurance coverage is cancelled or reduced, exposing the property to risk

   - Unit is used in unauthorized manner that could affect property value

2. Notice Content Requirements ensure clear communication:

   a) Written notice must detail:

   - Specific nature of default to identify the problem

   - Exact amount of any delinquency for accurate accounting

   - Required actions to remedy the default

   - Specific deadline for curing the default

   - Detailed consequences if default remains uncured

3. Mortgagee Intervention Rights:

   a) Rights to protect security interest:

   - Authority to pay delinquent assessments to protect lien priority

   - Power to correct violations to maintain property value

   - Right to be reimbursed by adding costs to loan balance

   - Priority status for payments made on owner's behalf

   - Right to demand association cooperation in curing defaults

Section 7.3 - EXAMINATION OF BOOKS

1. Mortgagee Access Rights protect investment:

   a) Records available for review include:

   - Current financial statements showing association's fiscal health

   - Meeting minutes documenting decision-making process

   - Insurance policies confirming adequate coverage

   - Reserve studies showing long-term financial planning

   - Contracts affecting property value or maintenance

   - Assessment records showing collection effectiveness

   - Violation notices indicating compliance issues

   - Litigation documents that could affect property value

   - Maintenance records showing property care

   - Construction documents for capital improvements

2. Inspection Procedures ensure orderly access:

   a) Request requirements protect association resources:

   - Written notice submitted 10 days before desired inspection

   - Specific list of documents needed for efficient preparation

   - Inspection limited to normal business hours

   - Copying fees charged at association's actual cost

   - Confidentiality agreements required for sensitive information

Section 7.4 - RESERVE FUND

1. Mandatory Reserve Requirements protect long-term property value:

   a) Minimum balance requirements ensure financial stability:

   - 25% of annual budget maintained as minimum balance to handle emergencies

   - Separate account required to prevent commingling with operating funds

   - Professional reserve study every 5 years to assess future needs

   - Monthly contributions ensure steady accumulation of funds

   - Investment restrictions protect principal while allowing growth

2. Reserve Study Components ensure comprehensive planning:

   a) Required elements provide complete assessment:

   - Detailed inventory of all components requiring future replacement

   - Professional assessment of current condition of each component

   - Engineering analysis of expected useful life of components

   - Current replacement cost estimates using local market data

   - Detailed funding plan to meet future obligations

   - 30-year projection to ensure long-term planning

   - Annual updates to reflect changing conditions and costs

3. Use Restrictions protect fund integrity:

   a) Permitted expenditures limited to:

   - Major repairs exceeding normal maintenance

   - Scheduled component replacement at end of useful life

   - Emergency repairs threatening property value

   - Board-approved capital improvements

   - Coverage of high insurance deductibles in claims

Section 7.5 - ANNUAL AUDITS

1. Professional Audit Requirements ensure financial transparency:

   a) Annual CPA audit must include:

   - Complete financial statements prepared to GAAP standards

   - Detailed income statement showing all revenue and expenses

   - Balance sheet reflecting current financial position

   - Analysis of reserve account adequacy

   - Comparison of actual expenses to budget

   - Management letter identifying control weaknesses

   - Review of internal control procedures

   - Testing of compliance with declaration

   - Preparation of federal and state tax returns

   - Written representations from Board regarding disclosures

2. Distribution Requirements ensure informed stakeholders:

   a) Audit copies must be provided to:

   - First Mortgagees to protect their security interest

   - Unit Owners upon request for transparency

   - Permanent Association records for historical reference

   - Managing agent for operational guidance

   - Insurance carrier for underwriting purposes

Section 7.6 - NOTICE OF MEETINGS. All First Mortgagees of record shall be entitled to receive notice of Association meetings that may materially affect their security interests in the Property, ensuring their rights to participate in significant decisions affecting the Community. Such notice requirements specifically extend to annual meetings where budgets are presented for approval, special meetings where actions affecting property values are considered, budget ratification meetings involving assessment changes, meetings called to consider amendments to the Declaration, and any special meetings called to vote on special assessments. First Mortgagees shall receive these notices within the same time period required for Unit Owner notification, ensuring equal opportunity for preparation and participation.

The content of all meeting notices must be sufficiently detailed to allow for informed participation in the decision-making process. Each notice shall include, at minimum: the specific date, time, and location of the meeting to facilitate participation planning; a comprehensive listing of agenda items that may affect mortgagee interests; detailed descriptions of any proposed actions requiring approval; clear explanation of voting requirements and approval thresholds for each action item; and complete information regarding proxy voting procedures and requirements. The Association shall maintain records confirming delivery of required notices to First Mortgagees, ensuring compliance with these notice provisions and protecting the interests of all parties involved in the Community's governance process.

Section 7.7 - APPROVAL FOR AMENDMENTS. Any amendment to the Declaration that materially affects the rights or security interests of First Mortgagees shall require the approval of eligible mortgage holders representing at least fifty-one percent (51%) of the votes of Units subject to mortgages. Such amendments include, but are not limited to: changes to assessment allocation methods or payment priority; modifications to required insurance coverage types or amounts; alterations to reserve funding requirements or calculation methods; implementation of new restrictions on unit leasing or changes to existing rental policies; modifications to permitted unit uses or occupancy restrictions; reallocation of maintenance responsibilities between the Association and Unit Owners; alterations to unit boundary definitions or calculations; modifications to voting rights or allocation formulas; changes affecting fundamental property rights; and any revisions to the amendment procedures themselves. The Association shall maintain accurate records of all mortgagee approvals and provide written certification of compliance with these requirements.

Certain fundamental changes to the Community structure or operations shall require an enhanced approval threshold of sixty-seven percent (67%) of eligible mortgage holders. These material changes include: any modification to the priority status of assessment liens; reductions in required insurance coverage below lender-required minimums; changes to damage restoration requirements or procedures; significant alterations to Common Elements affecting property value or use; permission for unit subdivision or combination; modifications to Community termination provisions or procedures; changes to age restriction requirements or qualifications; and modifications to rental restriction caps or limitations. This higher threshold recognizes the substantial impact these changes may have on mortgage security interests and property values. First Mortgagees who do not deliver a written response to a proposed amendment within thirty (30) days after receipt of proper notice shall be deemed to have approved such amendment. The Association shall document all efforts to obtain mortgagee approval and maintain records of all responses or lack thereof.

Section 7.8 - NOTICE OF DAMAGE. The Association shall promptly notify all First Mortgagees of record of any damage to or destruction of Common Elements or individual Units that affects their security interest in the Property. Such notice shall be required when: any damage occurs that will exceed $10,000 in repair costs; the Property becomes subject to any governmental condemnation proceedings; complete destruction of improvements occurs from any cause; partial destruction affects the value or habitability of any Unit; environmental hazards are discovered on the Property; building code violations are cited by governmental authorities; or structural safety concerns are identified by professional inspection. This notification requirement ensures that First Mortgagees can take appropriate action to protect their security interests in affected Units and the Property as a whole.

Each damage notification must contain sufficient detail to allow First Mortgagees to make informed decisions regarding their security interests. Required content shall include: a comprehensive description of the damage extent and affected areas; professional repair cost estimates from qualified contractors; current status of applicable insurance coverage and claims; projected timeline for completion of necessary repairs or reconstruction; and a professional analysis of how the damage may impact the mortgage security value. Such notice shall be delivered to First Mortgagees within ten (10) days of the damage occurrence or discovery, with subsequent updates provided as additional information becomes available. The Association shall maintain records of all damage notifications and mortgagee responses to protect the interests of all parties involved.

Section 7.9 - MANAGEMENT AGREEMENTS. Any management agreement entered into by the Association that could materially affect First Mortgagees' security interests shall require their prior review and approval. Such approval shall be specifically required for: management contracts with terms exceeding three (3) years in duration; agreements lacking reasonable cancellation provisions; contracts containing fee structures that exceed prevailing market rates for comparable services; agreements providing special benefits or considerations to interested parties, including Board members or their affiliates; and contracts containing automatic renewal clauses that could extend the relationship beyond the initial term without explicit Board approval. This requirement ensures proper oversight of long-term management relationships that could impact the Community's financial stability and operational efficiency.

All management agreements must incorporate specific protective provisions to safeguard the Association's interests. These mandatory terms shall include: the Association's right to terminate the agreement with thirty (30) days written notice without cause and without penalty or termination fee; clearly defined and measurable performance standards for evaluating management effectiveness; strict financial control requirements including regular reporting, auditing rights, and separate account maintenance; comprehensive insurance coverage requirements including professional liability, fidelity bonding, and workers' compensation coverage; and professional bonding requirements for all management personnel handling Association funds. The Association shall maintain copies of all management agreements and related approvals in its permanent records, ensuring transparency and compliance with these requirements. Any management agreement that fails to include these mandatory provisions shall be voidable at the option of the Association or First Mortgagees.

Section 7.10 - RIGHT TO PARTITION. No Unit may be partitioned or subdivided by the Owner without the prior written approval of all First Mortgagees.

Section 7.11 - TAXES AND ASSESSMENTS. All taxes, assessments and charges which may become liens prior to the first mortgage under local law shall relate only to the individual Condominium Units and not to the Condominium Project as a whole.

Section 7.12 - OTHER ACTS BY ASSOCIATION REQUIRING APPROVAL OF FIRST MORTGAGEES OR OWNER. Unless all of the First Mortgagees and Owner of the individual Condominium Units have given their prior written approval, the Association shall not be entitled:

1. By act or omission, seek to abandon, partition, subdivide, encumber, sell or transfer the Common Elements; and

2. Use hazard insurance proceeds for losses to any Condominium Property (whether to Units or to Common Elements) for otter than the repair, replacement or reconstruction of such improvements, except as provided by statute in case of substantial loss to the Units or as otherwise provided in this Declaration. The granting of easements for public utilities or for other public purposes consistent with the intended use of the Common Elements by the Association shall not be deemed a transfer within the meaning of this paragraph. 

ARTICLE VIII - MISCELLANEOUS PROVISIONS

Section 8.1 - AMENDMENT. This Declaration may be amended according to a structured process designed to protect owner rights while ensuring necessary flexibility for Community governance. Standard amendments require approval by sixty-seven percent (67%) of all Unit Owners to ensure broad community support for substantive changes. Amendments addressing emergency situations affecting safety or legal compliance require a higher threshold of seventy-five percent (75%) owner approval, reflecting the gravity of such changes. Technical corrections or non-substantive clarifications may be approved by fifty-one percent (51%) of Owners. All amendments must additionally secure First Mortgagee approval as specified in Article VII of this Declaration, and where required by law, obtain appropriate City and/or County approval prior to implementation.

The documentation of amendments must satisfy specific requirements to ensure legal validity and enforceability. Each amendment shall be prepared in written format complying with Colorado state law requirements, including proper certification by authorized Association officers and notarization of all required signatures. The Association shall engage legal counsel to review proposed amendments for compliance with applicable laws and governing documents, and shall utilize professional drafting services when the complexity or significance of the amendment warrants such expertise.

Recording requirements must be strictly followed to protect the enforceability of all amendments. The Association shall record all approved amendments with the El Paso County Recorder's Office within thirty (30) days of approval, accompanied by payment of all required recording fees. Within fifteen (15) days of recording, the Association shall distribute copies of the recorded amendment to all Unit Owners. The Association's official records shall be promptly updated to reflect all amendments, and the management company shall be formally notified of any changes affecting Community operations.

Implementation of amendments shall follow a carefully structured process to ensure smooth transition and consistent application. The Board shall determine the effective date for each amendment, providing reasonable notice to all affected parties. The Association's governing documents shall be updated to incorporate all amendments, with appropriate training provided to staff and management personnel when operational changes are involved. The Association shall develop and execute an owner education program when amendments significantly affect owner rights or responsibilities, ensuring clear understanding and consistent compliance throughout the Community. Detailed records shall be maintained documenting the complete amendment process, from initial proposal through final implementation.

Section 8.2 - CHANGE IN DOCUMENTS. The Association's governing documents shall maintain a clear hierarchical structure to establish precedence and resolve potential conflicts. The Declaration shall serve as the primary governing document, having the highest authority and priority in establishing the fundamental rights, obligations, and restrictions affecting the Property and Unit Owners. The Articles of Incorporation shall rank second in authority, governing corporate matters and establishing the Association's legal existence and basic operational framework. The Bylaws shall rank third, providing detailed operational procedures and governance structures for the Association. The Rules and Regulations shall rank fourth, addressing daily operational matters and specific use restrictions. Policies and procedures shall rank last, providing detailed guidance on specific operational issues and implementation of higher-ranking document requirements.

In the event of any conflict between provisions of different governing documents, the document higher in the established hierarchy shall control and prevail. When conflicts or ambiguities arise, the Board may engage legal counsel for review and interpretation of the relevant provisions. The Board shall have the authority to interpret and apply the governing documents in good faith, subject to the members' right to challenge such interpretations through appropriate procedures. If conflicts cannot be satisfactorily resolved through interpretation, the Board shall initiate the amendment process for the lower-ranking document to achieve consistency with higher-ranking documents. All interpretations and resolutions of conflicts shall be documented and maintained in the Association's records to ensure consistent application and provide guidance for future situations.

Section 8.4 - NOTICE. All notices required or permitted under this Declaration shall be delivered through specific authorized methods to ensure effective communication and proper documentation. Legal notices, including those pertaining to enforcement actions, amendments, or matters affecting property rights, shall be sent via certified mail, return receipt requested. Routine operational notices may be sent via first-class mail. Personal hand delivery with written acknowledgment of receipt is acceptable for all notice types. Electronic delivery, including email or other digital communication methods, is permitted for Unit Owners who have provided written consent to receive notices electronically and have furnished the Association with the required electronic contact information. Community-wide notices may be posted in designated common areas or through approved electronic platforms accessible to all Owners.

Specific timing requirements apply to different types of notices to ensure adequate response time and proper procedure. Notices for meetings involving voting matters must be delivered at least thirty (30) days prior to the meeting date. Regular meeting notices require fifteen (15) days advance notice. Emergency meetings may be called with forty-eight (48) hours notice when circumstances require immediate action. Assessment changes, including modifications to regular or special assessments, require ten (10) days advance notice. Violation notices must be delivered at least five (5) days before any enforcement action, allowing reasonable time for cure or response.

All notices must contain specific content elements to ensure clarity and facilitate appropriate response. Each notice shall clearly state its purpose and the specific action required from the recipient, if any. Notices must specify any applicable response deadlines and include relevant contact information for questions or submissions. When applicable, notices shall clearly state the consequences of non-response or failure to take required action. The Association shall maintain records of all notices, including delivery method, date, recipient, and content, to ensure compliance with these requirements and facilitate resolution of any disputes regarding notice delivery or adequacy.

Section 8.5 - INVALIDATION OF PARTS. If any of the provisions of this Declaration or any paragraph, sentence, clause, phrase or world, or the application thereof in any circumstance be invalidated, such invalidity shall not affect the validity of the remainder of this Declaration and the application of any such provision, paragraph, sentence, clause, phrase or work in any other circumstances shall not be affected thereby.

Section 8.6 - OMISSIONS. In the event of the omission from this Declaration of any work, sentence, clause, provision or stipulation which shall be necessary for th accomplishment of the intent and purposes hereof, or any part hereof, then such omitted matter shall be supplied by inference and/or by reference to the Act.

Section 8.7 - CCIOA

1. Statutory Compliance:

   a) Colorado Common Interest Ownership Act governs:

   - Automatic application of new requirements

   - Supersedes conflicting provisions

   - Minimum standards established

   - Required disclosures

   - Enforcement procedures

2. Implementation Requirements:

   a) Association obligations include:

   - Regular legal review for compliance

   - Update of governing documents

   - Owner notification of changes

   - Staff training on requirements

   - Annual audit of procedures

Section 8.8 - GENDER. Throughout this Declaration and all Association governing documents, all terms, pronouns, and references shall be interpreted and applied in a gender-neutral manner. Any gender-specific pronouns or references shall be construed to include all genders, and any singular terms shall be deemed to include the plural, and vice versa, whenever the context so requires. This interpretation rule ensures inclusive application of all provisions and promotes equal treatment of all Unit Owners, occupants, and other persons affected by this Declaration, regardless of gender identity.