[This copy brought to you by Andrew Oliver] FIRST AMERICAN TITLE COMPANY OF LA "SUBDIVISION" WHEN RECORDED, RETURN TO: COPY of Document Recorded RICHARDS, WATSON & GERSHON 12-11-91 91-1946719 Attorneys at Law Has not been compared with original. 333 South Hope, 38th Floor Original will be returned when Los Angeles, CA 90071-1469 processing has been completed. LOS ANGELES COUNTY REGISTRAR-RECORDER/COUNTY CLERK Att: Mark L. Lamken, Esq. DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS TRACTS 43932 and 43933 Los Angeles County, California TABLE OF CONTENTS ARTICLE I DEFINITIONS Section 1. "Association" Section 2. "Board of Directors" Section 3. "Owner" Section 4. "Properties" Section 5. "Debris Basins" Section 7. "Lot" Section 8. "Declarant" Section 9, "Mortgage" Section 10. "Mortgagee" Section 11. "Deed of Trust" Section 12. "Declaration" Section 13. "Member" Section 14. "Maintenance" Section 15. "Landscape Maintenance Areas" Section 16. "Open Space Lots" Section 17. "Downslope Lot" ARTICLE II (Omitted] ARTICLE III MEMBERSHIP AND VOTING RIGHTS Section 1 Section 2 Section 3 Section 4 ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS Section 1. Creation of the Personal Obligation for Assessments Section 2. Purpose of Assessments Section 3. Basis and Maximum of Regular Assessment Section 4. Special Assessments for Capital Improvements Section 5. Notice and Voting for Any Action Authorized Under Sections 3 and 4 Section 6. Uniform Rate of Assessment Section 7. Date of Commencement of Regular Assessments and Fixing Thereof Section 8. Certificate of Payment Section 9. Working Capital Fund ARTICLE V REMEDIES OF THE ASSOCIATION FOR NONPAYMENT OF ASSESSMENTS ARTICLE VI ARCHITECTURAL AND LANDSCAPE REVIEW Section 1. Architectural and Landscape Review Required Section 2. Appointment of Architectural Committee Section 3. Review Fees Section 4. Exceptions ARTICLE VII USE RESTRICTIONS Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 Section 15 Section 16 Section 17 Section 18 Section 19 ARTICLE VIII DUTIES AND POWERS OF THE ASSOCIATION Section 1. Duties and Powers Section 2. Maintenance of Easement Areas Section 3. Limitation on Powers Section 4. Financial Reports and Budgets Section 5. Entry Features ARTICLE IX ANNEXATION Section 1 Section 2 Section 3 Section 4 Section 5 ARTICLE X OBLIGATIONS OF OWNERS Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 ARTICLE XI PARTY WALLS Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 ARTICLE XII MORTGAGEE PROTECTION Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 ARTICLE XIII PRIVATE DRIVEWAY Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 ARTICLE XIV LANDSCAPE MAINTENANCE AREAS Section 1. Creation Section 2. Maintenance Section 3. Transfer of Maintenance Obligations Section 4. Authority of Association; Easements Section 5. Rights and Duties of Owner Section 6. No Obstruction of Landscape Maintenance Areas Section 7. Encroachment into Landscape Maintenance Area and Modification of Landscape Maintenance Area Boundary ARTICLE XV MAINTENANCE OF VIEW Section 1. Maintenance of View Section 2. View Maintenance Areas Section 4. Trimming of Landscaping Section 5. Relationship to Other Provisions ARTICLE XVI MAINTENANCE Section 1. Owners' Failure to Maintain or Repair Section 2. Access at Reasonable Hours ARTICLE XVII GENERAL PROVISIONS Section 1. Nuisance Section 2. Enforcement Section 3. Arbitration Section 4. Severability Section 5. Term Section 6. Construction Section 7. Amendments Section 8. Easement for Encroachments Section 9. Leasing Section 10. Conflicts in Documents Section 11. Effectiveness of Declaration EXHIBIT A Landscape Maintenance Areas and Debris Basins EXHIBIT B Property which May Be Annexed Pursuant To Section 2 of Article IX EXHIBIT C Oak Tree Maintenance Requirements EXHIBIT D Drainage Swale Maintenance Requirements EXHIBIT E View Maintenance Areas DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS TRACTS 43932 and 43933 Los Angeles County. California THIS DECLARATION, made on the date hereinafter set forth, by Crystal-Canoga, a California general partnership, comprised of UWC Canoga, a California limited partnership, and Canoga Partners, L.P,, a California limited partnership (hereinafter referred to as "Declarant"), WITNESSETH: WHEREAS, Declarant is the owner of certain property in the City of Los Angeles, County of Los Angeles, State of California, which is more particularly described as: Lots 11 through 52, inclusive, of Tract 43932, as per Map thereof recorded in Book 1089, Pages 4 through 8, inclusive, of Maps in the Office of the County Recorder of Los Angeles County, California, and Lots 1 through 14, inclusive, and Lots 42 through 55, inclusive, of Tract 43933, as per Map thereof recorded in Book 1089, Pages 9 through 12, inclusive, of Maps in the Office of the County Recorder of Los Angeles County, California,referred to hereinafter as "Residential Lots" or "Lots." NOW, THEREFORE, Declarant hereby declares that all of the properties described above shall be held, sold and conveyed subject to the following easements, restrictions, covenants and conditions which are for the purpose of protecting the value and desirability of, and which shall run with, the real property and be binding on all parties having any rights, title or interest in the described properties or any part thereof, their heirs, successors and assigns, and shall inure to the benefit of each Owner thereof. ARTICLE I DEFINITIONS Section 1. "Association" shall mean and refer to StoneGate at West Hills Homeowners Association. Section 2. "Board of Directors" shall mean the board of directors of the Association. Section 3. "Owner" shall mean and refer to the record owner, whether one or more persons or entities, of a fee simple title to any Lot which is a part of the Properties, including contract sellers, but excluding those having such interest merely as security for the performance of an obligation. Section 4. "Properties" shall mean and refer to that certain real property hereinbefore described, and such additions thereto as may hereafter be brought within the jurisdiction of the Association. Section 5. "Debris Basins" shall mean (a) those certain parcels of real property described in those two certain Easement Grant Deeds, each dated October 25, 1988, and recorded on November 10, 1988, as Instrument Nos. 88-1816112 and 88-1816113, respectively, in the Official Records of Los Angeles County, California, and (b) those additional certain areas depicted on Exhibit A hereto, over which an easement or easements for the maintenance and repair of one or more debris basins has or will have been granted to Association and with respect to which Association is to assume certain obligations as provided in Sections 1K and 1M of Article VIII hereof. Section 6. "View Maintenance Area" shall mean as that portion of any Downslope Lot lying within the two triangular areas bounded by the crest of the downslope, one of the side boundaries of the Lot, and a line drawn at a 45 degree angle to the side boundary of the Lot from a point on such side boundary fifteen feet toward the front of the Lot from the intersection of the side boundary and the crest of the slope, to the crest of the downslope, as depicted on Exhibit E hereto. Section 7. "Lot" shall mean and refer to any plot of land shown upon any recorded subdivision map of the Properties. Section 8. "Declarant" shall mean and refer to Crystal-Canoga, a California general partnership comprised of UWC Canoga, a California limited partnership, and Canoga Partners, L.P., a California limited partnership, its successors and assigns, if such successors or assigns should acquire more than four undeveloped lots from the Declarant for the purpose of development. Section 9. "Mortgage" shall mean the conveyance of any Lot or other portion of the Properties to secure the performance of an obligation, which conveyance shall be void upon the due performance of said obligation. Section 10. "Mortgagee" shall mean a person or entity to whom a mortgage is made; "first mortgagee" shall mean the holder of a mortgage which is senior in priority to any other consensual liens; "Mortgagor" shall mean a person or entity who mortgages his or its property to another, i.e., the maker of a mortgage. Section 11. wherever the word "Deed of Trust" is used herein, it shall mean and be synonymous with the word "Mortgage", and the same may be used interchangeably with the same meaning, and likewise, the word "Beneficiary" shall be synonymous with the word "mortgagee". Section 12. "Declaration" shall mean this Declaration of Covenants, Conditions and Restrictions, together with any amendments, supplements or modifications hereto. Section 13. "Member" shall mean and refer to any person or entity which holds membership in the Association. Section 14. "Maintenance" shall mean the exercise of reasonable care to keep slopes, landscaping, lighting, and other related improvements and fixtures in a state similar to their original condition; normal wear and tear excepted. Maintenance of landscaping shall further mean the exercise of regular fertilization, irrigation, and other garden management practices necessary to promote a healthy, weed free environment for optimum plant growth. Section 15. "Landscape Maintenance Areas" shall mean and refer to those portions of the properties identified on Exhibit A hereto, the uses of which are controlled by Article XIV hereof and any other areas over which an easement for repair and maintenance of slopes, fire clearance or similar activities has been or may be granted to Association, including but not limited to such areas within Open Space Lots. Section 16. "Open Space Lots" shall mean Lot 71 of Tract 43934, as shown on map recorded in Book 1125, pages 65 through 71, inclusive, of Maps, Official Records of Los Angeles County, California, and Lots 45 and 46 of Tract 34946 as shown on map recorded in Book 1135, pages 74 through 79, inclusive, of Maps, Official Records of Los Angeles County, California. Section 17, "Downslope Lot" shall mean a Lot which has a rear slope which slopes downward such that the rear boundary line of such Lot is below the level of the building pad. ARTICLE II [Omitted] ARTICLE III MEMBERSHIP AND VOTING RIGHTS Section 1. Every Owner of a Lot which 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 Lot which is subject to assessment. Section 2. The Association shall have two (2) classes of voting membership: A. Class A. Class A members shall be all Owners with the exception of the Declarant and shall be entitled to one (1) vote for each Lot owned. When more than one (1) person holds an interest in any Lot, all such persons shall be members. The vote for such Lot shall be exercised as they among themselves determine, but in no event shall more than one (1) vote be cast with respect to any Lot. B. Class B. Class B members shall be the Declarant and shall be entitled to three (3) votes for each Lot owned. The Class B membership shall forever cease and be converted to Class A membership on the happening of either of the following events, whichever occurs earlier: 1. Five (5) years from the date of recordation of the Declaration of Annexation most recently recorded pursuant to Section 3 of Article IX hereof, or, if no Declarations of Annexation have then been recorded, five (5) years from the date of recordation hereof, or 2. When the Class A membership reaches 180 without giving effect to any such conversion of Class B memberships. Section 3. A. Wherever in the Declaration, or in the Articles of Incorporation or the By-Laws of the Association, the vote or written assent of the membership is required for any action to be taken by the Association or as a prerequisite to the initiation of any action by or in the name of the Association, the vote or written consent of the prescribed percentage of each class of membership shall be required. B. Any requirement in said documents that the vote of Declarant shall be excluded from any such determination shall be applicable only if there has been a conversion of the Class B membership to Class A membership and such requirement shall be interpreted to require the vote of the prescribed percentage of all members, including the vote of the prescribed percentage of the members other than the Declarant. Section 4. No voting rights shall vest in any Owner with respect to any Lot until such time as that Lot is subject to assessment pursuant to Article IV hereof. ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS Section 1. Creation of the Personal Obligation for Assessments. The Declarant, for each Lot owned within the properties, hereby covenants, and each Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association (a) regular assessments or charges, and (b) special assessments for capital improvements, such assessments to be established and collected as hereinafter provided. The regular and special assessments, together with interest, costs and reasonable attorneys' fees, shall be the personal obligation of the person who was the Owner of such property at the time when the assessments fell due. Section 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety and welfare of the residents in the Properties and for the improvement and maintenance of the Landscape Maintenance Areas and of the other matters required to be undertaken by the Association. Section 3. Basis and Maximum of Regular Assessment. The basis and maximum amount of the regular assessments shall be as follows: A. Until July 1 of the year immediately following conveyance of the first Lot to an Owner, the maximum regular assessment shall not exceed the amount set forth in the budget prepared by Declarant and submitted to the Board of Directors for review. B. From and after July 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum monthly assessment may be increased by the Board of Directors of the Association without a vote of the membership provided that any such increase does not result in an annual assessment which is more than twenty per cent (20%) greater than the previous year's assessment. Such monthly assessment shall continue in effect for the following twelve (12) calendar months, which period shall be deemed to be the assessment period. C. From and after July 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum monthly assessment may be increased by the Board of Directors of the Association, provided, however, that the Board may establish a regular assessment for any fiscal year more than 20 percent above the regular assessment for the Association's preceding fiscal year only: 1. With the vote or written consent of Owners, constituting a quorum, casting a majority of the votes at a meeting or election of the Association, or 2. In the event of an emergency situation. For purposes hereof, an emergency situation is any one of the following: (i) An extraordinary expense required by an order of a court. (ii) An extraordinary expense necessary to repair or maintain the Property or any part thereof for which the Association is responsible where a threat to personal safety or the Property is discovered. (iii) An extraordinary expense necessary to repair or maintain the Property or any part thereof for which the Association is responsible that could not have been reasonably foreseen by the Board of Directors in preparing and distributing the pro forma operating budget for the Association. 3. Prior to the imposition or collection of an assessment under Section 3 C 2 above, the Board of Directors shall adopt a resolution containing written findings as to the necessity of the extraordinary expense involved and the reason (s) the expense was not or could not have been reasonably foreseen in the budgeting process. A copy of such resolution shall be distributed to each Owner with the notice of assessment. D. After consideration of current maintenance costs and future needs of the Association, the Board of Directors may fix the regular monthly assessment at a lesser amount that provided for above, Section 4. Special Assessments for Capital improvements. In addition to the regular assessments authorized above, the Board of Directors 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 construction, reconstruction, repair or replacement of any debris basin, any Slope Easement Area, or any Landscape Maintenance Area, provided that any such assessment which, in and of itself or when aggregated with other such assessments levied within the same calendar year, exceeds a sum equal to 5% of the budgeted gross expenses of the Association for that year, shall have the vote or written assent of Owners casting a majority of the votes at a meeting or in an election of the Association at which a quorum, as defined in Section 5 of this Article IV, is present in person or by proxy or has submitted a written ballot. Section 5. Notice and Voting for Any Action Authorized Under Sections 3 and 4, Any action authorized under Sections 3 and 4 shall be taken at a meeting called for that purpose, written notice of which shall be sent to all members not less than ten (10) days nor more than ninety (90) days in advance of the meeting. Such meeting or election shall be conducted in accordance with Chapter 5 (commencing with Section 7510) of Part 3 Division 2 of Title 1 of the California Corporations Code and Section 7613 of the California Corporations Code. For purposes of any such meeting or election, a quorum shall mean Owners holding the aggregate, more than fifty percent of the voting power of the Association. Section 6. Uniform Rate of Assessment. Regular and special assessments must be fixed at a uniform rate for all Lots and shall be collected on a monthly basis. Section 7, Date of Commencement of Regular Assessments and Fixing Thereof. A. The regular assessments provided for herein shall commence as to all Lots covered by this Declaration on the first day of the month following the closing of the sale of the first Lot to an individual owner. Declarant shall pay the regular and special assessments on all unsold Lots. Provided, however, that Declarant shall have the right to defer commencement of Maintenance Assessments, in whole or in part, provided that Declarant shall, during any such period of deferral, undertake to perform, at Declarant's sole expense, each and all or, in the case of a partial deferral, a portion of the duties and obligations of Association hereunder and shall, further in the case of a total deferral, pay to Association, monthly, the amount of any reserves for maintenance, repair and replacement of those facilities required to be maintained by Association hereunder which must be replaced on a periodic basis. The regular assessments as to Lots which shall have become subject to assessment by the Association by annexation, shall commence with respect to all Lots within each such area, on the first day of the month following the closing of the sale of the first Lot therein to an individual owner, subject the right of Declarant to defer such commencement as provided hereinabove. B. Subject to the provisions of Section 3 hereof, the Board of Directors shall determine and fix the amount of the regular assessment for each Lot at least thirty (30) days in advance of each assessment period. An assessment period shall be deemed to be for the twelve (12) months of each fiscal year beginning on July 1 and ending on June 30 of the following year, provided that if the month of the commencement of the initial assessments shall be a month other than July, the assessment period shall be deemed to be to the end of such fractional fiscal year. Written notice of the assessment shall be sent to every Owner subject thereto. The due dates shall be established by the Board of Directors. C. Anything herein to the contrary notwithstanding, with respect to any Lots owned by Declarant which do not include a structural improvement for human occupancy. Declarant shall not be obligated to pay that portion of any assessment which is for the purpose of defraying expenses and reserves directly attributable to the existence and the use of structural improvements, including, but not be limited to, expenses and reserves relating to roof replacement, exterior maintenance, walkway and carport lighting, refuse disposal, cable television, and domestic water supplied to the living units. This exemption shall be in effect only until the earliest of the following events: (i) A notice of completion for the structural improvements has been recorded. (ii) Occupancy or use of the dwelling unit. D. Anything herein to the contrary notwithstanding, with respect to any Lots owned by Declarant, Declarant shall not be obligated to pay that portion of any assessment which is for the purpose of defraying expenses and reserves directly attributable to the existence of an area or facility to be maintained by the Association that is not complete at the time assessments commence or which the Association is not yet obligated to maintain. Such exemption shall be in effect until the earlier of; (i) Completion for the facility. (ii) Commencement of the Association's obligation to maintain such facility or area. Section 8. Certificate of Payment. The Association shall, upon demand, furnish to any Owner liable for said assessment, a certificate in writing signed by an officer of the Association, setting forth whether the assessments on a specified Lot have been paid, and the amount of the delinquency, if any. A reasonable charge may be made by the Board for the issuance of these certificates. Such certificate shall be conclusive evidence of payment of any assessment therein stated to have been paid. Section 9. Working Capital Fund. The Association shall establish a working capital fund to insure that the Association will have cash available to meet unforeseen expenditures or to acquire additional equipment, or services deemed necessary or desirable to the Board of Directors of the Association. Each first Owner of a Lot (other than Declarant) shall be obligated to make a one time contribution to such fund of $100.00 at the date the particular Lot is conveyed to such Owner. In the event that Declarant makes such contribution with respect to any unsold Lot or Lots, the purchaser thereof shall be obligated to reimburse Declarant for such contribution at the date of conveyance of the Lot to such purchaser but shall not be obligated to make any additional contribution. Such contribution shall be considered a non-refundable contribution to capital and not an advance payment of regular assessments. The foregoing shall not apply to any Mortgagee of a Lot who acquires title Hereto by foreclosure or by deed in lieu of foreclosure (unless said Mortgagee shall take up residence in the Unit) but shall apply to any purchaser from the Mortgagee and to any other purchaser at any foreclosure sale. ARTICLE V REMEDIES OF THE ASSOCIATION FOR NONPAYMENT OF ASSESSMENTS Any assessment, which term, as used in this Article V, shall include regular and special assessments, and each and every type of assessment authorized by Article IV hereof or otherwise provided for in this Declaration, which is not paid when due, shall be delinquent. With respect to each assessment not paid within fifteen (15) days after its due date, the Association nay, at its election, require the Owner to pay a "late charge", in a sum to be determined by the Association, but not to exceed ten percent (10%) of the delinquent assessment or $10.00 per each delinquent assessment, whichever is the greater. If any such assessment is not paid within thirty (30) days after the due.. date the assessment shall bear interest thereafter at the rate of twelve percent (12%) per annum, and the Association may, at its option bring an action at law against the Owner personally obliged to Pay the same, and there shall be added to the amount of such assessment the late charge, the costs of preparing and filing the complaint in such action, and in the event a judgment is obtained, such judgment shall include said interest and reasonable attorneys' fees, together with costs of action. Each Owner vests in the Association, or its assigns, the right and power to bring all actions at law for the collection of such delinquent assessments. ARTICLE VI ARCHITECTURAL AND LANDSCAPE REVIEW Section 1. Architectural and Landscape Review Required. No building, fence, wall or other structure or landscaping shall be commenced, erected or maintained upon the properties, nor shall any exterior addition to or change (including change of external paint or other external colors, paneling, major relandscaping and the like) or alteration therein be made until the plans and specifications showing the "nature. kind. shape, height, materials, exterior colors and the location of the same shall have been submitted to and approved in writing as to harmony of external design and location in relation to surrounding structures and topography by the Architectural Committee provided for in Section 2 hereof. External colors which are consistent with the original color schemes employed by Declarant for the particular residence shall be deemed approved. In the event said Committee, or its designated representatives, fails to approve or disapprove such design and location within thirty (30) days after said plans and specifications have been submitted to it, approval will not be required, and this Article will be deemed to have been fully complied with. Neither Association, its officers or directors, the Architectural Committee, nor any member thereof, shall be responsible for structural or other defects of any kind, type or nature in plans or specifications submitted for approval or in the structures or improvements erected in accordance therewith. Section 2. Appointment of Architectural Committee. The Declarant shall initially appoint the Architectural Committee, consisting of three (3) members; provided, however, that after two (2) years from the date of recordation hereof, the Board shall appoint one member of the Architectural Committee, which appointee shall be a member of the Association. Said member shall remain in office until: (a) six (6) years from the date of recordation hereof; or (b) ninety percent (90%) of the Lots in the Properties have been conveyed, whichever shall first occur From and after such time or event, as the case may be, the Architectural Committee shall be composed of the Board of Directors of the Association or of five (5) representatives appointed by the Board, who shall be members of the Association. In the event of the death or resignation of any member of the Committee prior to the time when the Board of Directors of the Association is vested with authority, the Declarant shall have the right to appoint such member's successor; provided, however that if the resigned or deceased member is one appointed by the Board then the Board shall have the right to appoint the successor member. Section 3. Review Fees. The Board of Directors nay establish a schedule of reasonable fees payable to the Association to reimburse it for any out-of-pocket costs incurred in reviewing plans submitted in accordance with Section 1 of this Article VI. Payment of such fees, when and if established, shall be made at the time of such submission and shall be a condition precedent to approval of such plans. Section 4. Exceptions. Nothing herein shall be deemed to be applicable to or inhibit in any manner, the Declarant named herein in the development and construction of lots and residences within Tracts 43932 and 43933 or with any other tracts annexed or to be annexed hereto. Anything in this Declaration to the contrary notwithstanding. Declarant shall have the right to modify the original design of the incomplete portions of Project, including without limitation, modifying project grading, street design, lot configurations, other land improvements, the plan mix, the size, shape, color, materials, and floor plans, and all other matters whatsoever, provided, however, that such right to redesign shall not include the right to redesign any structures the sale of which has already closed, in whole or in part. Such right to redesign shall terminate seven (7) years from the date of recordation hereof. ARTICLE VII USE RESTRICTIONS In addition to all other covenants contained herein, the use of the Properties and each Lot therein is subject to the following: Section 1. None of the Lots shall be used except for residential purposes. No structure shall be erected, altered, placed or permitted to remain on any residential building plot other than one single-family dwelling not to exceed the lesser of two stories or forty-five feet (45') in height, and a private garage for not more than four (4) cars and other outbuildings incidental to residential use of the plot. Lot coverage, being the ratio of land lying beneath any buildings and structures and the total area of the Lot, shall not exceed sixty-five percent (65%). Section 2. All buildings erected or constructed on any lot shall conform to the ordinances and statutes pertaining thereto. Section 3. (a) No building shall be located on any lot nearer to any lot line than the minimum building setback lines as delineated in Los Angeles City Zoning Ordinance for the REll-1 zone, provided, however, that no building shall be located closer to the front property line than fifteen feet (15') and no closer to any side property line than five feet (5') and, then, only if constructed pursuant to a permit or other development approval duly and validly issued by the City of Los Angeles. (b) For the purposes of this covenant, eaves, steps, and open porches shall not be considered as a part of the building; provided, however, that this shall not be construed to permit any portion of a building on a lot to encroach upon another lot. Section 4. No part of the Properties shall ever be used or caused to be used or allowed or authorized in any way, directly or indirectly, for any business, commercial, manufacturing, mercantile, storing, vending or other such non-residential purposes, except Declarant, its successors or assigns, may use the Properties for a model home site, and display and sales office during the construction and sales period. Section 5. No sign or billboard of any kind shall be displayed to the public view on any portion of the Properties or any Lot, except one (1) sign for each building site, of not more than eighteen (18") inches by twenty-four (24") inches, advertising the property for sale or rent, or except signs used by Declarant, its successors or assigns, to advertise the property during construction and sales period. Section 6. No noxious or offensive activity shall be carried on upon any Lot or any part of the Properties, nor shall anything be done thereupon which may be, or may become, an annoyance or nuisance to the neighborhood, or which shall in any way interfere with the quiet enjoyment of each of the Owners of n?s respective dwelling unit, or which shall in any way increase the rate of insurance. Section 7. No structure of a temporary character, trailer, basement, tent, shack, garage, barn or other outbuilding shall be used on any Lot at any time as a residence, either temporarily or permanently. Section 8. No animals, livestock or poultry of any kind, shall be raised, bred or kept on any Lot, except that dogs, cats or other household pets. and no more than two (2) of any of them, may be kept on the Lots subject to such rules and regulations as may be adopted by the Association and provided they are not kept, bred or maintained for any commercial purpose or in unreasonable numbers. Notwithstanding the foregoing, no animals or fowl may be kept on the Properties which result in an annoyance or are obnoxious to residents in the vicinity. Section 9. No screens, sunshades or awnings (other than sun shades, awnings and patio covers approved by the Architectural Committee) shall be installed on any residential building. Section 10. No trailer, camper, mobile equipment, boat, commercial truck or inoperative automobile shall be parked on any street within the Properties, or on any Lot, unless, and only in the last instance, such trailer, camper, mobile equipment, boat, truck or inoperative automobile is located in a private garage or is otherwise screened from public view. Section 11. All rubbish, trash and garbage shall be regularly removed from the Properties, and shall not be allowed to accumulate thereon. All clotheslines, refuse containers, wood piles, storage areas and machinery and equipment shall be prohibited upon any Lot, unless obscured from view of adjoining Lots and streets by a fence or appropriate screen approved by the Architectural Committee. Section 12. No radio or television receiving or transmitting antennae, satellite antenna, or external apparatus shall be installed on any Lot. Normal radio and television installations wholly within a building are excepted. Section 13. The rights and duties with respect to sanitary sewer and water, cable television, electricity, gas and telephone lines and facilities shall be governed by the following: A. Whenever water, sanitary sewer, electricity, gas, cable television or telephone connections, lines, cables or any portion thereof, are or have been installed within the properties, the Owner of any Lot served by said installation shall have the right, and are hereby granted an easement to the extent necessary therefor, to enter upon or have a utility company enter upon any portion of the Properties in which said installations lie, to repair, replace and generally maintain said installations. B. The right granted in A, above, shall be only to the extent necessary to entitle the Owner or Association served by said installation to its full and reasonable use and enjoyment, and provided further that anyone exercising said right shall be responsible for restoring the surface of the easement area so used to its condition prior to such use. C. In the event of a dispute between Owners with respect to the repair or rebuilding of said connections, or with respect to the sharing of the cost thereof, upon written request of one of such Owners addressed to the Association, the matter shall be submitted to its Board of Directors, who shall decide the dispute, and the decision of the Board shall be final and conclusive on the parties. Section 14. Easements for installation and maintenance of the utilities, sewer pipelines and facilities and drainage facilities over each of said Lots, and all pipelines and other facilities located and to be located in said easements, are reserved as shown on the said recorded map. Within these easements no structure, planting or other materials shall be placed or permitted to remain which may damage or interfere with the installation and maintenance of utilities or which may change the direction in the flow of drainage channels in the easements, or which may obstruct or retard the flow of water through drainage channels in the easements. The easement area of each Lot and all improvements in it shall be maintained continuously by the owner of the Lot, except for those improvements for which a public authority or a utility is responsible. In addition, all sewer pipelines and other sewer facilities located and to be located within public roads, streets and highways abutting each of said Lots are reserved. Section 15. Each Owner shall maintain all slopes and slope plantings on his Lot (other than those located within a Landscape Maintenance Area) and will not in any way interfere with the established drainage pattern over his Lot from adjoining or other Lots in the Project or modify or damage drainage swales installed by Declarant. Each Owner will make adequate provisions for Proper drainage in the event it is necessary to change the established drainage over his Lot, such provisions to be subject to the prior approval of the Architectural Committee. In particular, no Owner shall in any manner obstruct crosslot drainage and any masonry or other walls on the property, other than the walls of the residential buildings, shall be constructed with open head joints in the first course. For the purposes hereof, "established" drainage is defined as the drainage which occurred at the time the overall grading of said tract, including the landscaping of each Lot in the Project, was completed by the undersigned Declarant. Each Owner shall permit free access by owners of adjacent or adjoining Lots to slopes or drainageways located on his property which affect said adjacent or adjoining Lots which such access is essential for the maintenance or Permanent stabilization on said slopes, or maintenance of the drainage facilities for the protection and use of property other than the Lot on which the slope or drainageway is located. Section 16. Except to the extent that the Association is specifically charged with the obligation therefor, each Owner shall maintain all perimeter walls and fences on or at the boundaries of such Owner's lot and landscaped medians adjacent thereto. Section 17. All garage doors will be kept closed when not in use. Section 18. All swimming pools and spas constructed or installed in or on the properties shall utilize active solar heating system to supplement the regular water heating system. Section 19. No Owner shall damage, modify or otherwise alter any Commonly Maintained Wall or any landscaped median, the maintenance of which is to be provided by Association in accordance with Section 1A of Article VIII hereof. ARTICLE VIII DUTIES AND POWERS OF THE ASSOCIATION Section 1. Duties and Powers. In addition to the duties and powers enumerated in its Articles of Incorporation and By-Laws, or elsewhere provided for herein, and without limiting the generality thereof, the Association shall: A. Maintain the Landscape Maintenance Areas, debris basins, and all other properties and/or facilities (including, without limitation any decorative, perimeter walls and/or landscaped medians identified on Exhibit C hereto or any similar exhibit to any Declaration of Annexation recorded pursuant hereto as being commonly maintained) the maintenance of which is required of Association hereunder. B. Pay any real and personal property taxes and other charges assessed against property owned by the Association. C. Have the authority to obtain, for the benefit of the areas to be maintained by Association, all water, gas, sewer and electric service and refuse collection and to pay for such services. D. Have the authority to contract for security guard, security patrol, and similar services for the Properties. E. Have the authority and obligation to employ a the members of the Association. F. Contract for and pay fire, casualty, liability, coverage is adequate. G. Contract for and pay maintenance, gardening, utilities (including irrigation water for the areas to be maintained by Association), materials and supplies, and services relating to the debris basis and Landscape Maintenance Areas and any other matters to be maintained by the Association hereunder and to employ personnel necessary for the operation of the Project, including legal and accounting; provided, however, that any such service contract shall be limited to a duration of one (1) year unless a longer term is approved by a majority of the members of this Association other than Declarant, and in no case shall the term exceed three (3) years. H. Should any contract or agreement of the type referred to in this Article VIII, Section 1, be entered into, then upon such contract or agreement shall provide for termination, upon ninety (90) days written notice by either party without cause and without fee, penalty or termination charge. I. Delegate its powers, other than the powers (i) to hold disciplinary hearings with respect to violations of the Declaration, By-Laws and rules and regulations of the Association and (ii) to impose disciplinary measures therefor, to its committees, officers and employees. J. Have the right to enter upon any Lot as necessary in connection with construction, maintenance or emergency repair for the benefit of any debris basin, Slope Easement Area, Open Space Lots or Landscape Maintenance Areas or the facilities thereon. K. With respect to the debris basin easements and the debris basins, as defined in Section 5 of Article I hereof, on certain real property described in the Easement Grant Deeds referred to hereinbelow (the "Servient Tenement"), the Association shall assume in writing and perform all of the obligations of the Grantee under the Easement Grant Deeds establishing the debris basin easements, such deeds having been recorded on November 10, 1988, as Instrument Nos, 88-1816112 and 88-1816113 respectively, in the Official Records of Los Angeles County, California, and which deeds include without limitation the following obligations: 1 To maintain such debris basin and any fences appurtenant thereto in accordance with the requirements contained in the grant deed establishing the easement, for such debris basin and otherwise, in accordance with the requirements of the City of Los Angeles and any other governmental agency or agencies of competent jurisdiction. 2. To maintain not less than $2,000,000.00 in general public liability insurance, such insurance to name as additional insureds the owner or owners, from time to time, of the servient tenement. 3. To indemnify and hold harmless the owner or owners, from time to time, of the servient tenement against any and all costs, charges, damages, losses, liabilities, and claims arising from or in connection with any injury to persons or damage to property related in any way to the presence of the Debris Basins on the servient tenement or to the presence or activities on the servient tenement of any person entering upon the servient tenement at the request, of the Association. 4. To indemnify, defend and hold harmless the owner or owner, from time to time, of the servient tenement against all costs, charges, damages, losses, liabilities and claims, including reasonable attorney's fees and court costs, due to any mechanics' or materialmen's liens filed against the servient tenement in connection with any work performed at or material delivered to the servient tenement at the request of the Association. In the event that Association fails to perform any of its obligations under the easement grant deed, the owner or owners of the servient tenement shall have the rights to enforce such obligations as provided thereunder, provided, however, that Association shall not be obligated to perform any maintenance obligations assumed by the City of Los Angeles. This provision is incorporated herein for the benefit of the owner or owners of the servient tenement from time to time and may be modified, rescinded or changed only with their prior written consent or as otherwise provided in the easement grant deeds. L. To the maximum extent permitted by law, indemnify each of its agents against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that any such person is or was an agent of the Association, and shall have the power to advance to each such agent expenses incurred in defending any such proceeding to the maximum extent permitted by law; provided, however, that such indemnification shall not extend an action by or in the right of the Association to procure a judgment in its favor. As used herein, an "agent" of the Association includes any person who is or was a director, officer, employee or other agent of the Association. M. Maintain the Debris Basins referred to in Section 5 of Article I hereof and any and all roads, whether within or without the Properties, providing access to any debris basin (whether depicted on Exhibit E or referenced in Section 1K of this Article VIII) or other facilities which Association is obligated to maintain. N. Cause all slopes and drainage devices within the Properties which are not owned or maintained by a governmental entity to be inspected by a qualified, private engineer at least annually. Such inspector shall file an inspection report with the Grading Division of the Department of Building and Safety of the City of Los Angeles, and the Association shall perform all corrective work required by such report with respect to areas the maintenance of which is the obligation of the Association hereunder. O. Provide weed abatement and maintenance of debris basins other drainage devices, fire buffers, planted slopes and irrigation systems on the Open Space Lots pursuant to such agreement or agreements as may be entered into between Declarant and the State of California, another public agency or any private non-profit entity in connection with the dedication or other transfer of such Open Space Lots as Permanent open space, or as may otherwise be required by the Los Angeles City Fire Department. Section 2. Maintenance of Easement Areas. Association shall maintain any areas with respect to which Association holds easements and shall cause Declarant and the owner or owners of the fee interests in the real property which are subject to such easements to be named as an additional insured on each policy of liability insurance maintained by Association in accordance herewith. Such obligations shall terminate only upon the termination of Association's easement rights pursuant to the terms of the original grant thereof. Section 3. Limitation on Powers. The Association shall not, without the vote or written assent of a majority of the voting power of the Association, excluding the votes of Declarant: A. Enter into a contract for the providing of goods and services for a term longer than one year, other than prepaid casualty or liability insurance policies of not more than three (3) years Duration provided that such policy provides for short rate cancellation by the insured. B. Incur 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 for that fiscal year. C. Sell, 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. Pay compensation to directors or to officers of the Association for services performed in the conduct of the Association's business provided, however, that the Board of Directors may cause a director or officer to be reimbursed for expenses incurred in carrying on the business of the Association. E. Fill a vacancy on the Board of Directors created by removal of a director. Section 4. Financial Reports and Budgets. The Association shall regularly prepare and distribute, or shall cause to be prepared and distributed, to all members, financial statements and budgets as follows: A. A pro forma operating budget for the immediately ensuing fiscal year, consisting of at least the following information and which shall be distributed not more than sixty (60) days nor less than forty-five (45) days prior to the beginning of such fiscal year; (i) Estimated revenue and expenses on an accrual basis. (ii) The amount of the total cash reserves of the Association currently available for replacement or major repair of common facilities and for contingencies. (iii) An estimate of the current replacement costs of, and the estimated remaining useful life of, and the methods of funding to defray repair, replacement or additions to major components of the areas and facilities which the Association is obligated to maintain. (iv) A general statement setting forth the procedures used by the governing body in the calculation and establishment of reserves to defray the costs of repair, replacement or additions to major components of the common areas and facilities for which the association is responsible. B. A balance sheet, as of an accounting date which is the last day of the month closest in time to six (6) months from the closing of the first sale of a lot within the Properties, and an operating statement for the period from the date of the first closing to said accounting date, which shall be distributed within sixty (60) days after the accounting date. C. An annual report consisting of the following shall be distributed within 120 days after the close of the fiscal year: (i) A balance sheet as of the end of the fiscal year. (ii) An operating (income) statement for the fiscal year. (iii) A statement of changes in financial position for the fiscal year. (iv) Any information required to be reported under Section 8322 of the Corporations Code, (v) For any fiscal year in which the gross income to the Association exceeds $75,000, a copy of the review of the annual report prepared in accordance with generally accepted accounting principles by a licensee of the California State Board of Accountancy. D. If the report referred to in C(v) above is not prepared by a independent accountant, it shall be accompanied by the certificate of an authorized officer of the Association that the statement was prepared from the books and records of the Association without independent audit or review. In addition, the holder of any first mortgage encumbering a Lot shall be entitled to have an audited statement prepared at its request, provided that, so long as there are less than fifty (50) Lots within the Properties, such request includes the written covenant to pay all of the costs of preparation of such statement. E. In lieu of the distribution of the pro forma operating budgets required by Sub-section 3 A., B. and C. of this Article VIII, the Board of Directors may elect to distribute a summary of the statements to all of its members with a written notice that the budget is available at the business office of the Association or at another suitable location within the Properties and that copies will be provided upon request and at the expense of the Association. If any Member requests a copy of the pro forma operating budget to be mailed to the Member, the Association shall provide the copy to the Member by first-class United States mail at the expense of the Association and delivered within five days of the receipt of the request. The written notice that is distributed to each of the Association Members shall be in at least 10-point bold type on the front page of the summary of the statement. F In addition to financial statements, the Board of Directors shall annually distribute within 60 days prior to the beginning of the fiscal year a statement of the Association's policies and practices in enforcing its remedies against members for defaults in the payment of regular and special assessments. Section 5. Entry Features. Certain Lots within the Properties may be conveyed subject to an easement for maintenance of an entry and corner features or monuments including, without limitation, piers, lighting, signs, walls, extended decorative side lot perimeter walls, and the like. Each such monument and the area immediately surrounding it, as described in the grant deed conveying the particular Lot, shall be maintained by the Association, and the Owner or Owners of such Lot shall not modify, damage or take any other action which would affect the monument and its surrounding area. The easements reserved to Association pursuant to Section 3b of Article XIV hereof shall be deemed to include such rights or entry as shall be necessary for Association to carry out its obligations hereunder, and the provisions of Section 4b of said Article XIV shall be applicable to each such monument and its surroundings. ARTICLE IX ANNEXATION Section 1. Additional residential property may be annexed to the Properties with the consent of two-thirds (2/3) of members other than Declarant, either directly or by merger or consolidation with any other similar Association. . Section 2. The properties described in Exhibit B hereto, or portions thereof, may be annexed, from time to time, to the Property and added to the scheme of this Declaration and subjected to the jurisdiction of the Association without the assent of the Association or its members, provided and on condition that: (a) Any annexation pursuant to this Section 2 shall be made prior to five (5) years from the date of.recordation of the Declaration of Annexation roost recently recorded pursuant to Section 3 of this Article XI, or, if no Declarations of Annexation have then been recorded, five (5) years from the date of recordation hereof. (b) A Declaration of Annexation, as described in Section 3 of this Article, shall be recorded covering the applicable portion of said real property, to which Declaration shall be appended the written agreement of Declarant to pay to Association, concurrently with the closing of the escrow for the first sale of a Lot in an annexed phase, appropriate amounts for reserves for replacement or deferred maintenance of matters to be maintained by Association pursuant to this Declaration in the annexed phase necessitated by or arising out of the use and occupancy of Lots in the annexed phase under a rental program conducted by Declarant which has been in effect for a period of at least one year as of the date of closing of the escrow for the first sale of a Lot in the annexed phase. (c). The total number of Residential Lots in the Project after all annexations is presently estimated to be two hundred thirty nine (239). Section 3. The additions authorized under the foregoing paragraphs shall be made by filing of record a Declaration of Annexation or similar instrument, with respect to the additional properties which shall extend the scheme of this Declaration to such properties. Such Declarations of Annexation contemplated herein may contain such complementary additions and modifications of the covenants and restrictions contained in this Declaration as may be necessary to reflect the different character, if any, of the added properties and as are not inconsistent with the scheme of this Declaration. In no event, however, shall any such Declarations of Annexation, merger or consolidation revoke, modify or add to the covenants established by this Declaration. Section 4. With respect to the annexations pursuant to Section 2 hereof, all assessments authorized in Article IV hereof shall begin on the first day of the month following the first closing of a sale of a Lot within the area annexed to an Owner other than Declarant; provided, however, that Declarant shall pay all costs of maintaining any Common Area within the area annexed incurred up to the date maintenance assessments are so commenced. Section 5. Declarant, or any mortgagee of Declarant who acquires title by foreclosure or a deed in lieu thereof, may delete all or a portion of the Properties from coverage of this Declaration and the jurisdiction of the Association, so long as Declarant is the Owner of all such portion previously added to the Properties and provided that a Notice of Deletion of Territory is recorded in the office of the County Recorder of the county in which the Project is located in the same manner as the applicable Declaration of Annexation was recorded. [This copy brought to you by Andrew Oliver] ARTICLE X OBLIGATIONS OF OWNERS Section 1. Each Owner shall fully comply with said Covenants and with such By-Laws and Rules and Regulations governing the use of the Project as are adopted by the Board. Section 2. Each Owner shall maintain and keep in a state of good repair and attractive condition his Lot, the landscaping thereon and the exterior surfaces of the improvements thereon, including without limitation all walls and fences the maintenance of which is not the obligation of the Association hereunder, slopes, slope plantings and drainage devices, such maintenance to include but not be limited to performance of any corrective work required pursuant to the annual inspection report referred to in Section 1N of Article VIII hereof (except to the extent that such matters are to be maintained or performed by Association hereunder). Each Owner shall also comply with the provisions of the Oak Tree Maintenance Requirements and the Drainage Swale Maintenance Requirements attached hereto as Exhibits E and F, respectively (except to the extent that such matters are to be maintained or performed by Association hereunder). Every Owner must perform promptly all maintenance, replacement and repair work within his Lot, which if omitted would adversely affect the Properties in its entirety or in part. Each Owner is expressly responsible for the damages and liabilities that his failure to do so may engender. Section 3. Each Owner shall be responsible for the repair and maintenance of such Owner's Lot, including the structural members of buildings occasioned by the presence of wood-destroying pests or organisms. Provided, however, that by the vote or written assent of the Owners of a majority of Lots within the Project, the Association may be required to undertake the repair and maintenance of any improvements on the Lots, including the structural members of buildings, occasioned by the presence of wood-destroying pests or organisms. If such duties are delegated to Association, the Association shall have the right to: (a) Cause periodic inspections of any structures within the Project to be made by qualified pest control personnel, (b) Levy a special assessment to defray the cost of such repair and maintenance, and (c) Require temporary relocation of the occupants of any affected Lot, at the expense of the Owner of the Lot, for such periods and at such times as a necessary for the prompt, effective treatment of the wood-destroying pests or organisms, provided that, not less than 15 days nor more than 30 days prior notice of the need to vacate temporarily is given by personal service or first class mail, postage prepaid, to occupants and to the Owner of the Lot, if other than the occupant. Such notice shall state: of the treatment; (i) The reason for the temporary relocation; (ii) The date and time for the commencement (iii) The anticipated date and time of the completion of the treatment; and (iv) That the occupants will be responsible for their own accommodations during the temporary relocation. Such notice will be deemed complete when a copy of thereof has been personally delivered or mailed, by first class mail, postage prepaid, to the occupant and mailed to any non-occupying Owner, first class mail, postage prepaid, at the most current address for such Owner shown on the records of the Association. Section 4. Should any Owner make any installation or change, or permit to be created or maintained, any condition on or abutting his Lot in violation of Article VI hereof or should any Owner fail to take corrective measures with respect to slopes and drainage devices to the extent such action is required of such Owner pursuant to Section 2 of this Article X, then the Association, its agents and employees, may, upon due notice to such Owner, and after a hearing at which such Owner shall have the opportunity to appear in his own defense, and upon express resolution adopted by the Board of Directors, enter onto the Lot for the purposes of performing such repair or rectifying such condition. All such actions shall be taken at the expense of such Owner. Section 5. Each Owner shall reimburse Association for the cost of repairing or replacing any part of the matters to be maintained by the Association hereunder, which is injured or damaged through the negligence or willful act of the owner. members of the owner's family or guests or invitees of the Owner. Section 6. Should any Owner fail to reimburse the Association for costs incurred by it pursuant to Sections 4 and 5 of this Article X or Section 7c(ii) of Article XIV, the Association shall be entitled to recover against the Owner or Owners for whose account any such maintenance or repair is made, all costs of such maintenance and repair together with interest at twelve percent (12%) per annum and costs of collection including actual attorneys' fees. Section 7. Within one hundred eighty (180) days after the close of each escrow for the conveyance of a Lot in the Properties upon which Declarant has constructed a residence, the Owner thereof shall plant a lawn or otherwise landscape his front yard in accordance with acceptable standards in the area, including, without limitation, installation of an irrigation system. Said landscaping shall be sufficient to prevent flow of soil or dirt from the Lot onto any adjacent sidewalks, streets, parkways or Lots, and the Owner shall be fully responsible for the maintenance thereof in accordance with Section 2 of this Article X. No tree, shrub or other planting of any kind shall be allowed to overhang or otherwise to encroach upon any sidewalk or other pedestrian way, from ground level to a height of ten (10) feet. Section 8. In addition to any other remedies provided in the Declaration for breach hereof, the obligations of the Owner under Section 6 of this Article X may be specifically enforced, it being understood that the other Owners within the Properties will suffer continuing and irreparable harm in the event that such obligations are not duly performed. ARTICLE XI PARTY WALLS The rights and duties of the Owners of Lots with respect to party walls shall be governed by the following: Section 1. Each wall or fence which is constructed and which is placed on the dividing line between separate Lots, shall constitute a party wall, and with respect to such wall, each of the adjoining Owners shall assume the burdens, and be subject to an easement for that portion of a party wall on his land, and be entitled to the benefits of these restrictive covenants and, to the extent not inconsistent herewith, the general rules of law regarding party walls and of liability for property damage due to negligence or willful acts or omissions, shall apply thereto. Section 2. If any such party wall is damaged or destroyed by fire or other casualty or by some cause other than the act of one of the adjoining Owners, his agents, or family (including ordinary wear and tear and deterioration from lapse of time), then, in such event, both such adjoining Owners shall proceed forthwith to rebuild or repair the same to as good condition as formerly, in proportion to their respective use of the party wall. Section 3. If any such party wall is damaged or destroyed through the act of one adjoining Owner or any of his agents or guests or members of his family (whether or not such acts negligent or otherwise culpable) so as to deprive the other adjoining Owner of the full use and enjoyment of such wall, then the first of such Owners shall forthwith proceed to rebuild and repair the same to as good condition as formerly, without cost to the adjoining Owner. Section 4. In addition to meeting the other requirements of these restrictive covenants and of any building code or similar regulations or ordinances, any Owner proposing to utilize, modify, make additions to or rebuild the party wall in any manner which requires the extension or other alteration thereof, shall first obtain the written consent of the adjoining Owner. Section 5. The right of any Owner to contribution from any other Owner under this Article shall be appurtenant to the land and shall pass to such other Owner's successors in title. Section 6. In the event of a dispute between Owners with respect to the use, repair or rebuilding of a party wall or with respect to the sharing of the cost thereof, then upon written request of one of such Owners addressed to the Association, the matter shall be submitted to its Board of Directors who shall decide the dispute, and the decision of such Board of Directors shall be final and conclusive upon the parties. ARTICLE XII MORTGAGEE PROTECTION Section 1. A first mortgagee, upon request, is titled to written notification from the Association of any default in performance by Owner of Lot subject to the mortgage of any obligation under this Declaration (or the other management documents governing the Properties) which is not cured within sixty (60) days. Section 2. Any first mortgagee who obtains title to a Lot in the Properties pursuant to the remedies provided in the mortgage, by foreclosure of the mortgage, or by Deed (or assignment) in Lieu of Foreclosure, shall be exempt from any "right of first refusal" which may hereafter be adopted. Section 3. Any first mortgagee who obtains title to a Lot pursuant to the remedies provided in the mortgage or foreclosure of the mortgage shall not be liable for such Lot's unpaid dues or charges which accrue prior to the acquisition of title to such Lot by the mortgagee. Section 4. Unless at least sixty-seven percent (67%) of the first mortgagees (based upon one vote for each first mortgage owned). or Owners (other than the Declarant) of the individual Lots in the Properties have given their prior written approval, the Association shall not be entitled to: A Change the method of determining the obligations, assessments, dues or other charges which may be levied against an Owner; B. By act of omission change, waive or abandon any scheme of regulations, or enforcement thereof, pertaining to the architectural design or the exterior appearance of Lots, the maintenance of party walls or common fences, or the upkeep of lawns and plantings in the Properties; Section 5. First mortgagees shall have the right to examine books and records of the Association. Section 6. The monthly maintenance assessments provided for in Article IV hereof shall include an adequate reserve fund for maintenance, repair, and replacement of those portions of the facilities maintained by the Association, which must be replaced on a periodic basis. Section 7. No breach of the covenants, conditions or restrictions herein contained, nor the enforcement of any lien provisions herein, shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value, but all of said covenants, conditions and restrictions shall be binding upon and effective against any Owner whose title is derived through foreclosure or trustee's sale, or otherwise. Section 8. No amendment of this Declaration or the Articles of Incorporation or the By-Laws of the Association, shall affect the rights of any Mortgagee whose lien was created prior to the recordation of such amendment unless such Mortgagee shall have consented thereto in writing. ARTICLE XIII PRIVATE DRIVEWAY Section 1. Lots 63 and 64 of Tract 43932 are subject to an easement as shown on the Final Map for Tract 43932 (the "Private Driveway"), for pedestrian and vehicular ingress, egress and driveway purposes for the joint and mutual benefit of Lots 63, 64 and 65 of said Tract. Each of the Owners of the three benefitted Lots (the "Benefitted Owners") shall assume the burdens and be entitled to the benefits of these restrictive covenants and, to the extent not inconsistent herewith, the general rules of law regarding mutual easements and of liability for property damage due to negligence or willful acts or omissions, shall apply thereto. Section 2. If the Private Driveway is damaged or destroyed through a casualty loss or by some cause other than the act of one of the adjoining Owners, such Owners' agents, guests or family (including ordinary wear and tear and deterioration from lapse of time), then, in such event, the three Benefitted Owners shall proceed forthwith to rebuild or repair the same to as good condition as formerly, sharing equally in the costs thereof. Section 3. If the Private Driveway is damaged or destroyed through the act of one of the Benefitted Owners or of such Owner's agents or guests or members of such Owner's family (whether or not such acts negligent or otherwise culpable) so as to deprive the other Benefitted Owners of the full use and enjoyment of the Driveway, then the first of such Benefitted Owners shall forthwith proceed to rebuild and repair the same to as good condition as formerly, without cost to the Benefitted Owners. Section 4. In addition to meeting the other requirements of these restrictive covenants and of.any building code or similar regulations or ordinances, any Benefitted Owner proposing to utilize, modify, make additions to or rebuild the Driveway in any manner which requires the extension or other alteration thereof, shall first obtain the written consent of the other Benefitted Owners. Section 5. The right of any Benefitted Owner to contribution from any other Benefitted Owners under this Article shall be appurtenant to the land and shall pass to such other Benefitted Owner's successors in title. Section 6. In the event of a dispute among the Benefitted Owners with respect to the use, repair or rebuilding of a Driveway or with respect to the sharing of the costs thereof, then, upon written request of one of the Benefitted Owners addressed to the Association, the matter shall be submitted to its Board of Directors who shall decide the dispute, and the decision of such Board of Directors shall be final and conclusive upon the parties. ARTICLE XIV LANDSCAPE MAINTENANCE AREAS Section 1. Creation. Certain areas on the Lots are designated as Landscape Maintenance Areas, as provided in Section 15 of Article I hereof. The maintenance and use of such areas shall be governed by this Article. Section 2. Maintenance. The Association shall, at all tines from and after the date upon which Declarant transfers the Landscape Maintenance Area maintenance obligation to Association (as provided in Section 3 hereof), maintain and otherwise manage all of the Landscape Maintenance Areas, and all facilities, improvements and landscaping thereon notwithstanding the fact that such Landscape Maintenance Areas are located on individually owned Lots. In performance of such maintenance, Association shall comply with all ordinances or laws respecting slope maintenance, of any governmental agency having jurisdiction over the Properties. For purposes hereof, maintenance of Landscape Maintenance Areas shall include but not be limited to: A. Trimming, cultivating, irrigating and otherwise maintaining landscaping and replacing any diseased, dead or dying plant material. In carrying out its obligations hereunder, Association shall not permit landscaping on any Landscape Maintenance Area to grow to a level which will unreasonably block the view from either the Lot on which the Landscape Maintenance Area is located or from any adjacent Lots, it being the intent hereof to preserve the view from the various Lots within the Properties. The foregoing shall not be deemed to apply to trees which are protected by any applicable law, statute or ordinance. B. Maintaining irrigation systems. C Cleaning, clearing and repairing all drains, ditches, berms and other drainage devices located within such Areas and removing, replacing and supplementing ground cover or other planting in such areas necessary or appropriate to prevent erosion or other damage to the slopes. D Maintenance of decorative perimeter sidewalls facing on public streets and all landscaped medians between such walls and the street itself, whether on the lot or on the public right of way. E. Compliance with and performance of all obligations under the Oak Tree Maintenance Requirements, attached hereto as Exhibit C with respect to the Landscape Maintenance Areas and all oak trees located thereon. F. Contracting for regular inspections, on a periodic basis, of the Landscape Maintenance Areas and facilities and other areas and facilities to be maintained by Association pursuant hereto, by qualified experts (such as agronomists, landscape architects, or landscape contractors, in the case of landscaping, or geologists or qualified civil or soils engineers, with respect to drainage and slope stability). Such contacts shall provide for the inspector's submission of written reports of such inspections, and the Association shall review all such reports and shall cause copies thereof to be provided to Declarant within ten days after the Association's receipt thereof. In the event that Association fails to obtain such inspections or provide copies of the inspection reports to Declarant in a timely manner, Declarant or its consultants shall have the right to enter onto the Project for the purpose of making such inspections. Association shall, further, provide Declarant with copies of its annual budgets and operating statements at the same time they are provided, or made available, to the members of the Association. Any inspection made by Declarant or its consultants, and any review of the annual budgets and operating statements shall be for its sole benefit of Developer, provided that Association may obtain a copy of any inspection report made by or at the instance of Declarant upon reimbursing Declarant for its out of pocket costs and expenses incurred in obtaining such reports. The right of Declarant to enter into the Project and make such inspections and to receive copies of the annual budgets and operating statements shall terminate at such time as all obligations of Declarant tor the condition of the development and the facilities therein, including any such Landscape Maintenance Areas and facilities annexed hereto, or for the repair or replacement thereof, whether under a theory of warranty (express or implied), strict liability, or otherwise, shall have expired. Section 3 Transfer of Maintenance Obligations. Subject to section 7A of Article IV hereof and subject further to any contractual relationship between Declarant and Association, Association's obligation to maintain any Landscape Maintenance Area and any walls, fences or other facilities to be maintained by the Association pursuant hereto, whether within a Landscape Maintenance Area or elsewhere on a Lot, shall commence upon Declarant's conveyance of the Lot on which such Landscape Maintenance Area, or other facilities exist, to an Owner. The obligation to maintain debris basins and Slope Maintenance Easements, and the limited obligation to maintain the Open Space Lots, and the obligations to provide Insurance in connection therewith, shall coimnence upon Declarant's recordation of one or more instruments delegating such obligations, as provided in the instruments creating such obligations. Association shall have no right, power, or authority to refuse to accept the obligation for such maintenance, but the Association shall have the full power to exercise all rights under any express or implied warranty with respect to such matters. Section 4, Authority of Association; Easements. a. In carrying out its duties under this Article, Association shall have all the rights and powers reserved to it pursuant to Article VIII hereof. All costs of maintenance shall be deemed to be general costs of the Association. b. There is created hereby an easement in favor of Association over those Lots which include Landscape Maintenance Areas for the purpose of ingress, egress, maintenance of irrigation systems, and compliance with the duties of Association set forth herein. Such easement rights shall be utilized only at reasonable hours and in such a manner as to cause minimum disturbance of any Owner in the enjoyment of such Owner's Lot. So long as Declarant is performing the maintenance obligations of Association, whether pursuant to Section 7A of Article IV hereof or to a contractual relationship between Association and Declarant, Declarant shall be entitled to exercise such easement rights. Section 5. Rights and Duties of Owner. a. Notwithstanding the fact that Association is obligated maintain the Landscape Maintenance Areas no Owner, other than the Owner of the Lot on which such a Landscape Maintenance Area is located, shall have any right to enter onto or make any use of such Landscape Maintenance Area or any part thereof. b. No Owner, including without limitation the Owner of the Lot on which a Landscape Maintenance Area is located, shall in any manner alter, modify or damage any Landscape Maintenance Area, or anything placed thereon (including, without limitation, plant materials and the irrigation system), without the prior approval of the Architectural Committee and, if required, the local governmental agency having jurisdiction over the Properties. c. Anything herein to the contrary notwithstanding, an Owner may construct a fence or wall of the same type as that originally constructed by Declarant on or at the boundary between of the Landscape Maintenance Area on such Owner's Lot and the pad area of such Lot (normally being the toe of the slope on those Lots having upward sloping Landscape Maintenance Areas and the crest of the slope on those Lots having downward sloping Landscape Maintenance Areas). In the event that such Owner exercises the rights reserved under Section 7 of this Article XIV, the such fence or wall nay be constructed (or reconstructed) on boundary line between the new pad area and the modified Slope Maintenance Area. Section 6. No obstruction of Landscape Maintenance Areas. No wall or fence of any description shall be erected by the Owner within any Landscape Maintenance Area nor shall any Owner block of impede access through the gates in side yard fences designed to be used by persons carrying out landscape and irrigation system maintenance on the Landscape Maintenance Areas and, in particular, those on the rear slopes of the Lots, it being the intent hereof to permit passage from the Landscape Maintenance Area of each Lot to those of all adjacent Lots or streets in order to permit the proper maintenance of the Landscape Maintenance Areas. Section 7. Encroachment into Landscape Maintenance Area and Modification of Landscape Maintenance Area Boundary. Owners shall have the right to encroach up to fifteen feet (15') the rear Landscape Maintenance Area on such Owner's Lot and to cause the boundary of the Landscape Maintenance Area to be moved up to fifteen feet (15') into the original rear Landscape Maintenance Area on such Owner's Lot (the "encroachment area"), subject to the following conditions: a. Such encroachment may be made only in conjunction with and as part of the extension of the building pad on the Lot and the construction of one or more retaining walls in connection therewith. b. No Owner shall undertake any such pad extension, nor shall any boundary change be effective, unless and until such Owner shall have submitted complete plans and specifications therefor to, and shall have obtained by approval of, the Architectural Committee in accordance with Article VI hereof. Such submission shall include: (i) Grading Plan (ii) Structural Plans for the retaining wall and any substitute fence. (iii) Drainage Plan (iv) Landscape and Irrigation Plans (v) Fencing Plan, if any. c. Upon approval of the plans by the Architectural Committee, and prior to commencement of any construction, the Owner shall: (i) obtain all required permits and other- approvals of the City of Los Angeles Building Department and all other governmental agencies of competent jurisdiction, and (ii) Upon obtaining such permits or other consents and prior to commencement of construction, give notice thereof to Association so that Association may cause the irrigation system within the Landscape Maintenance Area to be modified to remove or isolate the portion of the irrigation system within the encroachment area from the balance of the irrigation system. Such work shall be accomplished by or at the direction of Association and at the sole expense of the Owner, and the Owner shall reimburse Association for all costs which it shall incur in modifying the irrigation system as the result of the encroachment. d. If for any reason the work of extending the building pad is not commenced within ninety (90) days after notice of approval of an Owner's plans is given to the Owner, such approval shall lapse and be of no further force or effect provided, however, that the Architectural Committee, on application of the Owner made within such ninety (90) day period, and for good cause shown, may grant a reasonable extension of such period. e. Once commenced, all work must be accomplished within a reasonable time after commencement and without material deviation from the approved plans and specifications, and each Owner shall be responsible for causing such Owner's contractor to protect the slopes and surrounding areas from erosion or other damage arising out of or in connection or with or as the result of such work. f. Upon commencement of the work, Association shall be relieved of all further obligation to maintain that portion or the Landscape Maintenance Area within the encroachment area. Upon satisfactory completion of the work. Association and the owner shall enter into a written modification of Exhibit C hereto (or of any similar exhibit attach to any Declaration of Annexation applicable to the particular lot and recorded pursuant to Article IX hereof), in recordable form, reflected the revised boundary of the Landscape Maintenance Area on that Lot. Notwithstanding to the contrary in Section 7 of Article XVII hereof, recordation of such an instrument (which may include a graphic depiction of the modified boundary and/or Landscape Maintenance Area), signed only by Association and the affected Owner, shall be effective to amend said exhibit upon recordation thereof. g. At such time as such modification is recorded, the right of Association to enter into the area within the new pad area for purposes of maintenance pursuant to Section 4 of this Article XIV shall terminate. Nothing herein shall be deemed to terminate Association's entry rights under Section 2 of Article XVI hereof. ARTICLE XV MAINTENANCE OF VIEW Section 1. Maintenance of View. No Owner shall erect any wall or fence nor shall any Owner permit landscaping on such Owner's Lot to grow to a level which will unreasonably block the view from either such Owner's Lot or from any adjacent Lots, it being the intent hereof to preserve the view from the various Lots within the Properties. Neither the foregoing nor the balance of this Article shall be deemed to apply to trees which are protected by any applicable law, statute or ordinance. Section 2. View Maintenance Areas. In order to preserve views from, over and across Downslope Lots, no Owner shall, within any View Maintenance Area,: (a) Erect any fence or wall or other structure other than: (i) Wrought iron fences, not exceeding five feet (5.0') in height, substantially identical in color and style to those originally installed by Declarant. (ii) Decorative structures, not unreasonably blocking views, having (x) columns not exceeding twelve inches (12") in diameter not less than six feet on center, (y) horizontal members above grade not exceeding sixteen inches (16") in height, and (z) members at grade the highest point of which does not exceed a height of three feet (3.0') above the height of the building pad of the adjacent Lot having the higher building pad. (iii) Air conditioning equipment, provided that such equipment is fully screened with landscaping meeting the requirements of Section 2(b) hereinbelow. (b) Permit landscaping to grow to more than three feet (3 0') in height. The foregoing shall not apply to three trees planted by Declarant, on each in the View Maintenance Areas of Lots 32, 33 and 62 of Tract 43933, provided that this exception shall not apply to any replacement for any of such trees. (c) Construct or install any swimming pool or spa equipment/such as heaters, filters, or the like. Nothing herein shall be deemed to apply to retaining or similar walls installed by, or at the direction of, Declarant in connection with the grading of the Lots. Section 3. Variances. Anything herein to the contrary notwithstanding, the Architectural Committee may, for good cause shown, and after a noticed hearing at which all affected parties are given an opportunity to be heard, grant variances to the restrictions set forth in this Section 2 provided that the effect of such variances is not to create a violation of Section 1 of this Article XV. Decisions of the Architectural Committee may be appealed to the Board of Directors of the Association. Section 4. Trimming of Landscaping. Each Owner shall, at such Owner's sole cost and expense, cause all landscaping within the View Maintenance Area in such Owner's Lot to be trimmed to a level that will comply with the requirements hereof. Should any Owner fail to comply with such obligation, such failure shall be deemed a breach of this Declaration, and, in addition to any other remedies provided herein for breach, the Association or its agents shall have the right, after appropriate notice and a hearing in accordance with the Association's By-Laws, to enter onto the Lot and undertake the necessary trimming of the landscaping to comply herewith, and the Owner of such Lot shall reimburse Association for all of the costs thereof, together with interest at the rate of twelve percent (12%) per annum and all costs of collection including but not limited to attorney's fees. The foregoing Prohibition shall not apply to landscaping installed by Declarant on the Lot or on any Landscape Maintenance Area. Section 5. Relationship to Other Provisions. It is the intent hereof specifically to limit the discretion of the Association and of the Architectural Committee under Article VI hereof and to supplement the provisions of Article XI hereof. ARTICLE XVI MAINTENANCE Section 1. Owners' Failure to Maintain or Repair. The Association shall have the right to maintain and repair any Lot, dwelling or any portion of the Project required to be maintained or repaired by an Owner, if the Board of Directors determines that such is necessary to protect or preserver the appearance and value of the Project, and the Owners thereof have failed or refused to actually commence such maintenance or repair within a reasonable time after written notice of the necessity thereof shall have been given them by the Board of Directors; provided, however, that the Association shall be entitled to recover against the Owner or Owners for whose account any such maintenance or repair is made all costs thereof, together with interest thereon at twelve percent (12%) per annum and all costs of collection, including actual attorneys' fees. Section 2. Access at Reasonable Hours. For the purpose solely of performing the maintenance, reconstruction, or repair authorized by this Article, the Association's agents or employees shall have the right, after reasonable notice to the Owner, to enter any Lot of the building thereon at reasonable hours. ARTICLE XVII GENERAL PROVISIONS Section 1. Nuisance, The result of every action or omission whereby any covenant, condition, restriction, easement, reservation, lien or charge herein contained is violated in whole or part is hereby declared to be and to constitute a nuisance, and every remedy allowed by law or equity against an Owner, either public or private, shall be applicable against every such result and may be exercised by the Association or any Owner, including Declarant, subject to this Declaration. Section 2. Enforcement. The Association, Declarant, and any Owner, shall have the right to enforce by any proceeding at law or in equity, all restrictions, conditions, covenants reservations, liens and charges now or hereafter imposed by the Provisions of this Declaration or any amendment thereto; provided however, that with respect to assessments, the Association shall have the exclusive right to the enforcement Hereof Failure by the Association or by any Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter. Should any action be filed pursuant hereto, the prevailing party shall be entitled to recover, in addition to any other relief, all costs of suit, including reasonable attorneys' fees. Section 3. Arbitration. Anything herein to the contrary notwithstanding, in the event it becomes necessary to enforce any provision of this Declaration or in the event of any dispute between the Association, on one hand, and either (i) the Declarant, or (ii) an Owner, on the other hand, the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. In the event the dispute is one involving a construction matter, the Construction Industry Rules of the American Arbitration Association shall apply. Upon confirmation of the arbitrator's award, a court of competent jurisdiction may order relief in accordance with that award including but not limited to injunctive or other equitable relief. The foregoing provision requiring arbitration shall not apply to the collection of general and special assessments, including late charges, interest and costs of collection with respect thereto. Section 4. Severability. Invalidation of any one of these covenants or restrictions by judgment or court order shall in no way affect any other provisions, which shall remain in full force and effect. Section 5. Term. The Covenants and Restrictions of this Declaration shall run with and bind the Properties, and shall inure to the benefit of and shall be enforceable by the Association or the Owner of any land subject to this Declaration, their respective legal representatives, heirs, successors and assigns, for a term of forty (40) years from the date this Declaration is recorded, after which time said Covenants and Restrictions shall be automatically extended for successive periods of ten (10) years, unless an instrument, signed by a majority of the then Owners of the Lots, has been recorded within a six (6) months prior to the termination of the forty (40) year period or any successive ten (10) year period, agreeing to terminate said Covenants and Restrictions. Section 6. Construction. The provisions of this Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for the development of a residential planned unit development and for the maintenance of the Landscape Maintenance Areas. The Article and section headings have been inserted for convenience only, and shall not be considered or referred to in resolving questions of interpretation or construction. Section 7. Amendments. This Declaration of Covenants and Restrictions may be amended only by an affirmative vote of the Owners of not less than seventy-five per cent (75%) of the Lots including at least a majority vote of Owners, provided, however, that no part of Article XII may be amended without the concurrence in writing of sixty-seven percent (67%) of the holders of first mortgage liens upon Lots within the Project; and provided further that, so long as there are two classes of members, that affirmative vote shall be 75% of each class. The provisions hereof requiring the consent of sixty-seven percent (67%) of the holders of first mortgage liens to any amendment to Article XII shall not be amended without the consent of a like number of such mortgage lien holders. Any such amendment shall be recorded in the office of the County Recorder for the county in which the Properties are located and any such instrument must bear a certificate of the Association's President, attested to by the Association's Secretary, that there has been compliance with this Section 7. Section 8. Easement for Encroachments. Each Lot within the Properties is hereby declared to have an easement over all adjoining property for the purpose of accommodating any minor encroachment due to original engineering or surveying errors, errors in original construction, or settlement or shifting of a building or other structure, and for the purpose of maintaining such encroachment. Section 9. Leasing. Any lease executed by an Owner pertaining to his Lot must let the entire Lot. Any lease Severing less than the whole Lot shall be void and a violation of said Covenants. Each Owner shall be personally responsible for assuring compliance by such Owner's tenant and such tenant's family and guests with all provisions of the Declaration, the By-Laws of the Association and all rules and regulations adopted by the Association or its Board of Directors, and for all acts of such tenant and such tenant's family and guests. Section 10. Conflicts in Documents. In the event of any conflict between the terms of this Declaration and either the Articles of Incorporation of the Association or its Bylaws, the provisions of this Declaration shall control. In the event of a conflict between the Association's Articles of Incorporation and its Bylaws, the Articles shall control. Section 11. Effectiveness of Declaration. Wherever herein reference is made to any Lot which is not described on the first page hereof, the provisions hereof shall become binding upon such Lot only upon annexation thereof pursuant to Article IX hereof. IN WITNESS WHEREOF, the undersigned, being the Declarant herein, has executed this Instrument this 18th day of November, 1991. CRYSTAL-CANOGA, a California general partnership, By: UWC CANOGA A California Limited Partnership General Partner By: The Burnam Family Trust of 1982, General Partner By Norman Burnam, Trustee By: CANOGA PARTNERS, L.P. A California limited partnership Managing General Partner By: The Burnam Family Trust of 1982, General Partner By Norman Burnam, Trustee [This copy brought to you by Andrew Oliver]