Every owner whose property is subject to assessment shall be a member of the association. Membership shall be appurtenant to, and may not be separated from, ownership of any property which is subject to assessment. Ownership of a property shall be the sole qualification for membership. Not more than one membership shall exist based upon ownership of a property. [Section 4.01]

Creation of the Lien and Personal Obligation for Assessments. Each property owner is deemed to covenant and agree to pay to the Association: (1) regular annual assessments; (2) special assessments, and (3) reimbursement assessments, such assessments to be established and collected as hereinafter provided. The regular annual, special and reimbursement assessments, together with interest, costs, and reasonable attorneys' fees, shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made. Each such assessment, together with interest, costs and reasonable attorneys' fees, shall also be the personal obligation of the person who was the owner of such property at the time when the assessment was due. The personal obligation for delinquency assessments shall not pass to his/her successors in title unless expressly assumed by the successors. [Section 5.01]

Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the health, safety, and welfare of the owners and for the improvement and maintenance of the common area. [Section 5.02]

Maximum Regular Annual Assessment. The regular annual assessment may be set by the board of directors at any amount which is not more than 20% greater than the regular assessment for the immediately preceding fiscal year without the vote or written assent of a majority of the voting power of the Association residing in members. [Section 5.03]

Special Assessments for Capital Improvements. In addition to the regular annual assessments authorized in Section 5.03, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any reconstruction, repair or replacement of a capital improvement upon the common area, including fixtures and personal property related thereto. Any such assessment which, in the aggregate, exceeds five percent (5%) of the budgeted gross expenses of the Association for that fiscal year requires the vote or written assent of a majority of the voting power of the Association residing in members. [Section 5.04]

Uniform Rate of Assessment. Both regular annual assessments and special assessments shall be fixed at a uniform rate for all lots and may be collected on a monthly basis. [Section 5.05]

Date of Commence of Regular Annual Assessments. The board of directors shall fix the amount of the regular annual assessment against each lot at least thirty (30) days in advance on each annual assessment period. Written notice of the regular annual assessment shall thereupon be promptly sent to every owner subject to the assessment. The board of directors shall establish the due dates. [Section 5.06]

Certificate of Payment. The Association shall, upon request, and for a reasonable charge, furnish a certificate signed by an officer or authorized agent of the Association setting forth whether the assessment on a specified lot has been paid. Such certificate shall be conclusive evidence of such payment upon any third party relying thereupon in good faith. [Section 5.07]

Reimbursement Assessment. The Association shall levy a reimbursement assessment against any owner if, as a result of his/her failure to comply with the Declaration, the bylaws, or Association rules, monies were or will be expended by the Association in performing its duties or rights. Such assessment shall be for the purpose of reimbursing the Association, shall be limited to the monies expended or to be expended, and shall be due and payable to the Association when levied. [Section 5.08]

No Offsets. All assessments shall be payable in the amount specified and no offsets against such amount shall be permitted for any reason whatsoever including, without limitation, a claim that the Association is not properly exercising its duties of enforcement. [Section 5.09]

Reserve Account. The regular annual assessments shall include reserves for the future periodic maintenance, repair or replacement of all or a portion of the common area. All amounts collected as reserves shall be deposited by the board in a separate bank account to be held in trust for the purpose for which they are collected and are to be segregated from any other funds of the Association. [Section 5.10]

Nonpayment of Assessments. Any assessment provided for in this Declaration which is not paid when due shall be delinquent and subject to a late charge in an amount as determined by the Association periodically. If such assessment is not paid within thirty (30) days after the due date, it shall accrue interest from the due date at the rate of ten percent (10%) per annum. In the event of a default or defaults in payment of any such assessment(s), and in addition to any other remedies herein or provided by law, the Association may enforce each such obligation by proceeding as is set forth in (a) and (b) below:

• (a)A lawsuit to collect delinquent assessments shall be brought in the name of the Association. The Association shall be deemed to be acting on behalf of all the owners. Any judgment or award rendered in any such action against any such owner may include actual attorneys' fees reasonably incurred to be fixed by the court, interest at ten percent (10%) per annum to date of judgment, and collection costs. Upon satisfaction of any such judgment, any authorized offer or agent of the Association shall, on behalf of the Association, execute and deliver to the judgment debtor an appropriate satisfaction thereof; or
• (b)The Association shall provide written notice to the defaulting owner, specifying the date of the delinquency, the amount of the delinquency and demanding payment thereof. If such delinquency is not paid within ten (10) days after giving such notice, the Association may record a Notice of Default and Election to Cause Sale pursuant to Declaration of Covenants, Conditions and Restrictions against the lot of the delinquent owner. Such claim shall state: (1) the name of the delinquent owner; (2) a description of the lost against which the claim of lien is made; (3) the amount claimed, including late charges and interest at ten percent (10%) per annum from the due date of the unpaid delinquency, plus actual attorneys' fees and collection costs; (4) that the lien is asserted by the Association pursuant to the terms of this Declaration (giving the book and page references of the record in the San Diego County Recorder's Office), and (5) that a foreclosure sale will be held unless the default is remedied within three (3) months from the date of recording such Notice.

The lien may be foreclosed by judicial foreclosure proceedings or in the manner provided by law for the foreclosure of powers of sale contained in mortgages or deeds of trust in accordance with California Civil Code Sections 2924, et. Seq. In the event such foreclosure is by judicial foreclosure proceedings, actual attorneys' fees shall be allowed to the extent permitted by law. In the event the foreclosure is a power of sale contained in a mortgage or deed of trust, any person designated by the Association, in writing, shall be deemed to be acting as the agent of the Association and shall be entitled to actual expenses and such fees as may be allowed by law. The Association, on behalf of the owners, shall have the power to bid in the lot at the foreclosure sale and to thereafter sell, lease, hold and mortgage the same. [Section 5.11]

Subordination of Lien to First Mortgages. The lien of the assessments provided for herein shall be subordinate to the lien of any first mortgage. Sale or transfer of any property shall not affect the assessment lien. However, the sale or transfer of any property pursuant to foreclosure of a first mortgage shall extinguish the lien of such assessments as to payments which became due prior to such sale or transfer. No sale or transfer shall relieve such property from liability for any assessments thereafter becoming due or from the lien thereof. [Section 5.12]

Waiver of Exemptions. Each owner does hereby waive, to the extent of any liens created pursuant to Article V, the benefit of any homestead or exemption laws of the State of California, including Code of Civil Procedure Section 690.31, or any similar section which may be in effect at the time any assessment, or installment thereof, becomes delinquent or any lien is imposed pursuant to the terms hereof. [Section 5.13]

Single Family Residence. No lot shall be used for any purpose other than for one single-family residence. No mobile home, trailer, tent, shack, garage, basement or any temporary building or structure or uncompleted building or structure shall be used at any time as a residence, either temporarily or permanently. [Section 9.01]

Recreational Vehicles. No recreational vehicle, trailer, large truck or bus may be parked or stored on any lot or street in such a manner as will be visible from neighboring properties. Any recreational vehicle may be parked on a driveway of any lot or on any street within the properties by guests of any owner for a period not to exceed seventy-two (72) hours; and by the owner for the sole and express purpose of loading, unloading, washing, and polishing, but not in excess of twenty-four (24) hours within any single week. [Section 9.02]

Architectural Approval. No building, fence, wall or other structure (including patio covers) shall be commenced, erected, painted, re-painted, refurbished, remodeled, maintained, or installed upon the property. No exterior addition to or change or alteration therein, shall be made until the plans and specifications showing the nature, kind, shape, height, materials, color and location of the same shall have been submitted to and approved in writing as to: (1) harmony of external design, location and color in relation to surrounding structures and topography; (2) preservation of the view from other lots, and (3) compliance with the Covenants, Conditions, and Restrictions contained in this Declaration by the Association's Architectural Committee composed of not less than three (3) nor more than five (5) representatives appointed by the board of directors, with such conditions as the committee may impose. [Section 6.01]

Landscaping Approval. No trees, bushes, shrubs or plants which at maturity, and without clipping or pruning, would exceed the height of six (6) feet shall be planted until the plans and specifications for the placement of any such trees, bushes, shrubs or plants have been submitted to and approved in writing by the Architectural Committee as to the preservation of the view and aesthetic beauty which owners are intended to enjoy with such conditions imposed by the committee. The submitted plans shall detail the proposed elevations and locations of trees, bushes, shrubs or plants, including the location and elevation of same in relation to other properties subject to those restrictions. The Architectural Committee may withhold approval of such plans if, in the reasonable opinion of the committee, the view of any property would be substantially impaired by the planting of such tree, bush, shrub or plants, or in any other manner. The Architectural Committee shall have the right to require any member to remove, trim, top, or prune any tree or shrub which, in the reasonable belief of the committee, substantially impairs the view of any property. [Section 6.02]

Failure to Approve. If the Architectural Committee fails to approve or disapprove such design and location within thirty (30) days after said plans and specifications have been submitted to the committee, approval will not be required and the property owner will be deemed to be in full compliance with Article VI. [Section 6.04]

Approval of Plans. The approval by the Architectural Committee of any plans or specifications shall not be deemed as a waiver by the committee of its right to object to any of the features or elements embodied in such plans and specifications, if or when the same features or elements are included in any subsequent plans and specifications submitted for to the committee for approval. The Architectural Committee or a member thereof shall not be liable to any property owner for a mistake in judgment, negligence or nonfeasance resulting from or in connection with the approval, disapproval or the failure to approve or disapprove any plants. [Section 6.06]

Appeal Process. If the Architectural Committee disapproves a plan and/or specification in whole or in part, the party or parties submitting the plans and specifications may appeal to the board of directors by submitting a written request for appeal. The written request shall be submitted to the board not more than thirty (30) days following the final decision of the Architectural Committee. The board shall submit such request to the Architectural Committee for review; the Architectural Committee shall submit a written recommendation to the board. Within forty-five (45) days following receipt of the request for appeal, the board shall render a written decision and failure of the board to do so shall be deemed a decision in favor of the property owner. [Section 6.07]

Appointments. The Association's board of directors shall appoint members to the Architectural Committee. Members appointed to the committee shall be members of the Association. [Section 6.03]

Powers of the Architectural Committee. Approval of said plans and specifications may be withheld not only because of non-compliance with any of the specific Conditions, Covenants, and Restrictions contained in this Declaration, but also by reason of the reasonable dissatisfaction of the Architectural Committee with the plan, color scheme, finish, design, proportions, architecture, shape, height, style and appropriateness of the proposed structures or altered structures, the materials used therein, the kind, pitch or type of roof proposed to be placed thereon. The Architectural Committee may disapprove said plans if it determines the proposed improvement will be inharmonious or inconsistent with the general plan or improvement of the properties; or the plan would substantially impair the view from other properties. The approval of such work shall be deemed conditional upon the commencement of such work within ninety (90) days after approval has been granted or within a period of time specified by the Architectural Committee at the time of its approval. Work must be completed within a reasonable period of time and, in any event, prior to any deadline specified by the committee. [Section 6.05]

General Duties and Powers. The powers and duties of the board of directors of the Association shall include, but not be limited to, the following:

• (a) Enforcement of the provisions of the Declaration, articles, bylaws, Association rules and other instruments for the ownership, management and control of properties;
• (b) Payment of taxes and assessments which are, or could become, a lien on the common area or a portion thereof;
• (c) Delegation of its powers to committees, officers or employees of the Association as expressly authorized by the governing bodies;
• (d) Contracting for goods and/or services for the common area, facilities and interests, or for the Association subject to the limitations set forth;
• (e) Contracting for casualty, liability and other insurance on behalf of the Association;
• (f) Ownership, maintenance and management of the common area and slope easement areas and landscaping, and all other property acquired by the Association;
• (g) Obtaining for the benefit of the common area, all necessary utility services;
• (h) Granting of easements where necessary for utilities and sewer facilities over the common area to serve the properties;
• (i) Establishment and maintenance of a working capital and contingency fund in an amount to be determined by the board;
• (j) Maintenance of architectural control over the Loire Valley properties and appointment of an architectural committee pursuant to Article VI.
• (k) Borrowing of money and incurring of indebtedness for the purpose of maintenance of the Association's property and executing and delivering therefore, in the Association's name, promissory notes, bonds, deeds of trust, mortgages, pledges or other evidences of debt and security;
• (l) Preparation of budgets and financial statements for the Association as prescribed in the governing bodies;
• (m) Formulation of rules of operation of the common area and facilities owned or controlled by the Association;
• (n) Initiation and execution of disciplinary proceedings against members of the Association for violations of provisions of the governing bodies in accordance with procedures set forth in the Association's Declaration, articles, bylaws or rules;
• (o) Entering upon any privately-owned property, as necessary, for emergency repair or maintenance for the benefit of the common area or the owners in common;
• (p) Election of officers of the Association
• (q) Filling of vacancies on the board of directors except for a vacancy created by the removal of a director; and
• (r) Adoption and use of a corporate seal. [Section 7.01]

Limitations on Powers. The board of directors of the Association shall be prohibited from taking any of the following actions, except with the vote or written assent of a majority of the voting members of the Association:

• (a) Entering into a contract with a third person to furnish goods or services for the common area or the Association for a term longer than one year with the following exceptions:
  1. A contract with a public utility if the rates charged for the materials or services are regulated by the Public Utilities Commission provided, however, that the term of the contract shall not exceed the shortest term for which the supplier will contract at the regulated rate;
  2. Prepaid casualty and/or liability insurance policies not to exceed three years in duration provided that the policy permits short rate cancellation by the insured.
• (b) Incurring aggregate expenditures for capital improvements to the common area in any fiscal year in excess of 5% of the budgeted gross expenses of the Association that fiscal year.
• (c) Selling, during any fiscal year, property of the Association having an aggregate fair market value greater than 5%of the budgeted gross expenses of the Association for that fiscal year.
• (d) Paying compensation to directors or to officers of the Association for services performed in the conduct of Association business provided, however, that the board of directors may cause a member or officer to be reimbursed for expenses incurred in carrying out business for the Association.
• (e) Filling of a vacancy on the board of directors created by the removal of a director. [Section 7.02]

Association Rules. The Association shall also have the power, pursuant to the procedures set forth in the bylaws, to adopt, amend and repeal such rules and regulations as it deems reasonable. The Association rules shall govern such matters in furtherance of the purposes of the Association including, without limitation, the use of the common area and architectural and landscaping approval. However, the Association rules may not discriminate among owners and shall not be inconsistent with this Declaration, the Articles or bylaws. If Association rules are adopted, amended or repealed, a copy of the rules shall be mailed or delivered to each owner and shall have the same force and effect as this Declaration. In the event of any conflict or inconsistency between Association rules, other provisions of this Declaration, the articles or bylaws, the provisions of the Association rules shall take precedence. [Section 7.03]

Delegation of Powers. The Association shall have the right to delegate any of its powers under this Declaration, the articles and bylaws; provided, however, that such delegation, whether to a professional management company or otherwise, does not relieve the Association of its responsibility to perform its delegated duties. [Section 7.04]

Mailboxes shall be uniform in design and color. The maintenance of each mailbox shall be the duty of the Association. [Article XIV]