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Bylaws of Homeowner's AssociationBYLAWS OF GATEWAY ORCHARD VILLA ESTATES HOMEOWNER'S ASSOCIATION These bylaws are to govern the course of the conduct the aforesaid homeowners association. The property affected hereby upon which these bylaws were on together with covenants and declarations where appropriate as more particularly described as Gateway Orchard Villa, a subdivision in Flathead County, Montana and any re - subdivisions or amendments thereof and any areas added thereto as stated in the Declaration of Covenants. ARTICLE I. PLAN OF OWNERSHIP SECTION 1. APPLICABILITY OF BYLAWS: The provisions of theses bylaws are applicable to the town houses, here after referred to as units, and to the use and occupancy thereof. The term property, as used herein shall include the land, the buildings, and all other improvements thereon, all easements, rights and appurtenances belonging thereto, and all other property, personal or mixed, intended for the use in connection therewith, all of which have been submitted to the provisions of the aforesaid Declaration of Covenants. SECTION 2. APPLICATION: ALL present and future owners, mortgagees, lessees, and occupants of units and their employees, and any other persons who may use the facilities in any manner are subject to these bylaws, the Declaration of Covenants, and rules and regulations pertaining to use and operation of the property, unless specifically excepted by a provision of the Declaration of these bylaws. The acceptance of a deed or conveyance, or the entering into a tease, or the act of occupancy of an unit shall constitute an acceptance of the provisions of these instruments and an agreement to comply therewith. SECTION 3. OFFICE The office of the Association shall be located at SECTION 4. SPONSOR The term sponsor as used herein shall mean the developers of the project know as Gateway Orchard Villa, a subdivision, as they appear in the Declaration of Covenants filed herewith. ARTICLE II. BOARD OF DIRECTORS SECTION 1. QUALIFICATION: When these bylaws refer to a member of the Board of Directors who is a sponsor designate, such designate may be any person of the sponsor's choosing, including himself. When these bylaws refer to a member of the Board of Directors elected by the unit owners, such a member must be a person holding title to a unit, whether such title is sole and absolute or in common with others, or in the case of partnership owners or mortgagees, shalt be members of employees or such partnership, or in the case of corporate owners or mortgagees, shalt be officers, shareholders, or employees of such corporation, or in the case of fiduciary owners or mortgagees, shall be the fiduciaries, or officers or employees of such fiduciary. SECTION 2. CONSTITUTION OF THE BOARD: The affairs of the association shalt be governed by a Board of Directors constituted as follows: (a) Until the earliest occurrence of one of the following two events, the Board of Directors shall consist of the "sponsor" and such people as they may designate in their sole and absolute discretion: (1) Ninety days after 72 units representing 80% of the common interest are sold by the sponsor, or a corporation hereinafter formed by them; or (2) Four years from the date of the first sale to a unit purchaser. (b) Commencing after the earliest occurrence of one of the events set forth in sub -part (a) above, the Board shall consist of five members all of whom shalt be elected as hereinafter provided. SECTION 3. POWERS AND DUTIES: The Board of Directors shall have the powers and duties necessary for the administration of the affairs of the association, except such powers and duties as by law or by the Declaration, or by theses bylaws, that may not be delegated to the Board of Directors by the unit owners. The powers and duties to be exercised by the Board of Directors shall include, but shalt not be limited to, the following: a. Operation, care, upkeep and maintenance of the common elements; b. Determination of the amounts required for operation, maintenance, and other affairs of the association; c. Collection of the common charges from the unit owners; d. Employment and dismissal of the personnel, as necessary for the efficient maintenance and operation of the association; e. Adoption and amendment of rules and regulations covering the details of the operations and 11 use of the association property; f. Opening of bank accounts on behalf, of the association and designating the signatories required therefor; g. Purchasing, leasing, or otherwise acquiring in the name of the Board of Directors, or its designee, corporate or otherwise,on behalf of all unit owners, units offered for sale or lease or surrendered by their owners to the Board of Directors. h. Purchasing units at foreclosure of other judicial sate in the name of the Board of Directors, or its designee, corporate or otherwise, on behalf of all unit owners; i. Selling, leasing, mortgaging, voting the voting appurtenant to (other than for the election of members of the Board of Directors), or otherwise dealing with units acquired by, and subleasing units Leased by the Board of Directors or its designee, corporate or otherwise, on behalf of all unit owners; j. Organizing corporations to act as designees of the Board of Directors in acquiring title to or leasing of units on behalf of all unit owners; k. Leasing laundry rooms, if any, and granting licenses for vending machines, if there by any; t. Obtaining insurance if the same is determined to be necessary; m. Making repairs, additions, and improvements to, or alterations of the property, and repairs to and restoration of the property in accordance with the other provisions of these bylaws, after damage or destruction by fire or other casualty, or as a result of condemnation for eminent domain proceedings, if necessary, n. Acting as the approving entity for construction and engaging in any other activity authorized by the bylaws or Declaration. SECTION 4. MANAGING AGENT AND MANAGER: The Board of Directors may employ a managing agent and manager at a compensation established by the Board of Directors, to perform such duties and services as the Board of Directors shall authorize. However, any management agreement for the project will provide a clause to the effect that the agreement is terminable by the owners association for causes upon 30 days written notice thereof, and that such an agreement may not exceed one year in duration nor be renewable for more than one year at any given time. SECTION 5. ELECTIONS: When the Board of Directors is to be constituted as provided in Article II, Section 2 (b), of these bylaws, an election shall be held upon call of sponsor as set forth in Article III, Section 1 (a), with subsequent elections to be held at each annual meeting of unit owners thereafter to elect directors as provided in these bylaws. All members of the Board of Directors which are permitted to be designated as such by sponsor, serve at the sufferance of the sponsor. Unless earlier terminated at the will or sponsor or by the provisions of Article II, Section 2(b) of these bylaws, at[ members of the Board of Directors designated as such by sponsor serve for one year terms, but they may be designated as directors by sponsor for more than one term, and their reappointment need not occur at the Annual Meeting of the unit owners, nor need it be accompanied by any formal action on the behalf of sponsor. SECTION b. REMOVAL OF MEMBERS OF THE BOARD OF DIRECTORS: At any regular or special meeting of unit owners, any one or more of the members of the Board of Directors, except those designated as such by Sponsor, may be removed with or without cause by a two-thirds (2/3) vote of the unit owners, and a successor may then and there or thereafter be elected to fill the vacancy thus created. Any member of the Board of Directors whose removal has been proposed by the unit owners shall be given an opportunity to be heard at the meeting. SECTION 7. VACANCIES: Vacancies in the Board of Directors, except a vacancy of a Board Member designated as such by Sponsor, caused by any reason other than the removal of a member thereof by a vote of the unit owners, shalt be filled by a vote of a majority of the remaining members at a special meeting of the Board of Directors held for that purpose promptly after the occurrence of any such vacancy, even though the members present at such meeting may constitute less than a quorum, and each person so elected shalt be a member of the Board of Directors until the next Annual Meeting of the unit owners, at which time the unit owners shall elect a successor by a majority vote who shall serve out the remainder of the unexpired term. SECTION 8. ORGANIZATION MEETING: The first meeting of the members of the Board of Directors following the Annual Meeting of the unit owners shall be held within ten (10) days thereafter, at such time and place as shalt be set by the unit owners at the meeting at which such Board of Directors shall have been elected, and no notice shall be necessary to the newly elected members of the Board of Directors in order legally to constitute such meeting, providing a majority of the Board of Directors shall be present thereat. SECTION 9. REGULAR MEETINGS; Regular meetings of the Board of Directors may be held at such time and place as shall be determined from time to time by a majority of the members of the Board of Directors. Notice of regular meetings of the Board of Directors shall be given to each member of the Board by mail or telegraph at Least five (5) business days prior to the day named for such meeting. 0 SECTION 10. SPECIAL MEETINGS: Special meeting s of the Board of Directors may be called by the president on five (5) business days notice to each member of the Board of Directors, given by mail or telegraph, which notice shall state the time, place and purpose of the meeting. Special meetings of the Board of Directors shall be called by the president or secretary in like manner and on like notice on the written request of at least two members of the Board of Directors. SECTION 11. WAIVER OF NOTICE: Any member of the Board of Directors may, at any time, waive notice of any meeting of the Board of Directors in writing, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a member of the Board of Directors at any meeting of the board shall constitute a wavier of notice by him of the time and place thereof. If all the members of the Board of Directors are present at any meeting of the board, no notice shall be required and any business may be transacted at such meeting. SECTION 12. QUORUM OF BOARD OF DIRECTORS: At all meeting of the Board of Directors, a majority of the members thereof shatc constitute a quorum for the transaction of business, and the votes of a majority of the members of the Board of Directors present at a meeting at which a quorum is present shall constitute the decision of the Board of Directors. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time. At any such adjourned meeting at which a quorum is present, any business which might have been transacted at the original meeting, may be transacted without further notice. SECTION 13. FIDELITY BONDS: The Board of Directors shall obtain adequate fidelity bonds for all officers and employees of the association handling or responsible for association funds. The premiums on such bonds shall constitute a common expense. SECTION 14. COMPENSATION: No member of the Board of directors shall receive any compensation of more than $25.00 per meeting from the association for acting as such. No compensation will be paid without approval and upon resolution of the board and approval of the membership at an annual meeting. SECTION 15. LIABILITY OF THE BOARD OF DIRECTORS: The members of the Board of directors shall not be liable to the unit owners for any mistake of judgment, negligence, or otherwise except for their own individual willful misconduct or bad faith. The unit owners shalt indemnify and hold harmless each member of the Board of Directors against all contractual liability to others arising out of contracts made by the Board of Directors on behalf of the association. It is also intended that the liability of any unit owner arising out of any contract made by the Board of Directors, or out of the indemnity in favor of the members of the Board of Directors, shall be limited to such proportion determined by using the number of units owned by the owner divided by the number of units built and having been or being occupied at the time of the claim. Every agreement made by the Board of Directors or by the managing agent or by the manager on behalf of the association shall provide that the members of the Board of Directors, or the managing agent, or the manager, as the case may be, are acting only as agents for the unit owners and shall have no personal liability thereunder (except as unit owners), and that each unit owner's liability thereunder is limited as above stated. ARTICLE III. UNIT OWNERS SECTION 1. ANNUAL MEETINGS: (a) The first annual meeting of the unit owners will be held upon call of sponsor, within 30 days of the earliest occurrence of one of the two events set forth in Article Ii, Section 2 (a). (b) Thereafter, the annual meeting of the unit owners shall be held on the last Tuesday of July of each succeeding year, unless such date shall occur on a holiday, in which event the meeting shall be held on the succeeding working day. At such meeting the Board of Directors, except those designated as such by Sponsor, shall be elected by ballot of the unit owners in accordance with the requirements of Article II, Section 5 of these bylaws. The unit owners may transact any other business at such meeting as may properly come before them. SECTION 2. PLACE OF MEETINGS: Meetings of the unit owners shall be held at the principal office of the association, or at such other suitable place convenient to the owners as may be designated by the Board of Directors. SECTION 3. SPECIAL MEETINGS; It shall be the duty of the president to call a special meeting of the unit owners if so directed by resolution of the Board of Directors, or upon a petition signed and presented to the secretary by unit owners owning a total of at least twenty-five percent (25%) of the units. The notice of any special meeting shall state the time, place and purpose of the meeting. No business shall be transacted at special meeting except as stated inn the notice. SECTION 4. NOTICE OF MEETINGS: the secretary shall mail to each unit owner of record a notice of each annual 3 or special meeting of the unit owners, stating the purpose thereof, as well as the time and place where it is to be held, at the building or at such other address as such unit owners shalt have designated by notice in writing to the secretary. The mailing of a notice of meeting in the manner provided in this section shalt be considered service of notice. SECTION 5. ADJOURNMENT OF MEETINGS: If any meeting of unit owners cannot be held because a quorum has not attended, either in person or by proxy, the president wilt adjourn the meting to a time not less than 48 hours from the time the original meting was called, in order that a quorum may be obtained. SECTION 6. ORDER OF BUSINESS: The order of business at all meetings of the unit owners shalt be as follows: a. Rol[ call b. Proof of notice of meeting c. Reading of the minutes of preceding meeting d. Report of Officers e. Report of the Board of Directors f. Report of Committees g. Election of inspectors of election (when so required) h. Election of members of Board of Directors (when so required) i. Unfinished business; and j. New business. SECTION 7. VOTING: On all matters to be decided by the Association, unless excluded by the declaration or this document, each unit owner shalt have one vote. A majority of the unit owners or a majority of unit votes represented by the owner of the votes present at any meeting or by proxy shalt be sufficient to act on matters brought before the Association. Meetings of the Association shalt only be conducted when a quorum is present, as defined herein. Each unit or apartment in the described property shall have one (1) vote, but that vote shall be proportionally distributed between all owners. As used herein, the owners of the property shall be the person holding possession and title (including herein a purchaser under direct contract for deed), but shalt not include a mortgagee or a contract seller. Until 90% of the presently proposed units are built and sold, developer shall have two votes for each unit be retained. The presently proposed units number 88. SECTION 8. MAJORITY OF UNIT OWNERS: As used in these bylaws, the term "majority of unit owners" shall mean those unit owners having more than 50% of the authorized votes of all unit owners present in person or by proxy and voting at any meeting of the unit owners determined in accordance with the provisions of Section 7 of this Article III. SECTION 9. QUORUM: Except as otherwise provided in these bylaws, the presence in person or by proxy of unit owners having one-half of the total authorized votes of all unit owners shalt constitute a quorum at all meetings of the unit owners. Upon proof of the notice being sent for the annual meting to all unit owners, the number of unit owners present at the annual meeting shalt constitute a quorum. SECTION 11. MAJORITY VOTE: The vote of a majority of unit owners at meeting at which a quorum shall be present shalt be binding upon all unit owners for all purposes except where a higher percentage vote is required by law, by the Declaration, or by these bylaws. Meetings of the Association shalt only be conducted when a quorum is present, as defined herein. ARTICLE IV. OFFICERS SECTION 1. DESIGNATION: The principal officers of the association shalt be the president, the vice -present, the secretary, and the treasurer, all of whom shall be elected by the Board of Directors. The Board of Directors may appoint an assistant treasurer, an assistant secretary, or such other officers as in its judgment may necessary. The president and vice-president must be members of the Board of Directors. The officers of Secretary and treasurer may be combined. SECTION 2. ELECTION OF OFFICERS: Officers shalt be elected annually by the Board of Directors at the organization meeting of each new Board of Directors and shall hold office at the pleasure of the Board of Directors. SECTION 3. REMOVAL OF OFFICERS: Upon affirmative vote of a majority of the members of the Board of Directors, any officer may be removed, either with or without cause, and his successor may be elected at any regular meeting of the Board of Directors, or at any special meeting of the Board of Directors called for such purpose. S SECTION 4. PRESIDENT: The president shall be the chief executive officer of the association. He shalt preside at all meetings of the unit owners and of the Board of Directors. He shall have all of the general powers and duties which are incident to the office of president of a corporation organized under the Business Corporation Law of the State of Montana, including but not limited to the power to appoint from among the unit owners any committee which he decides is appropriate to assist in the conduct of the affairs of the association. SECTION 5. VICE-PRESIDENT: The vice-president shalt take the place of the president and perform his duties whenever the president shall be absent or unable to act. If neither the president nor the vice-president is able to act, the Board of Directors shalt appoint some other member of the Board of Directors to act in the place of the president, or an interim basis. The vice-president shalt also perform any other duties as shall from time to time be imposed upon him by the Board of Directors or by the president. SECTION 6. SECRETARY: The secretary shalt keep the minutes of all meetings of the unit owners and of the Board of Directors; he shall have charge of such books and papers as the Board of Directors may direct; and he shall, in general, perform all the duties incident to the office of secretary of a corporation organized under the Business Corporation Law of the State of Montana. SECTION 7. TREASURER: The treasurer shall have the responsibility for association funds and securities, and shalt be responsible for keeping full and accurate financial records and books of account showing all receipt and disbursements, and for the preparation of all required financial statements. He shalt be responsible for the deposit of all money and other valuable effects in the name of the Board of Directors, or the managing agent, in such depositories as may from time to time be designated by the Board of Directors, and he shall, in general, perform all the duties incident to the office of treasurer of a corporation organized under the Business Corporation Law of the State of Montana. The offices of Secretary and Treasurer may be served by one person. SECTION 8. AGREEMENTS CONTRACTS DEEDS CHECKS ETC.: ALL agreements, contracts, deeds, leases, checks, and other instruments shall be executed by any two officers or by such other person or persons as may be designated by the Board of Directors. SECTION 9. COMPENSATION OF OFFICERS: No officer shall receive any compensation for acting as such unless the same is approved first by the Board of Directors and then by a majority vote of the unit owners present in person or by proxy at the annual meeting. ARTICLE V. OPERATION OF THE PROPERTY SECTION 1. DETERMINATION OF COMMON EXPENSES AND COMMON CHARGES: The Board of Directors shall from time to time, and alt least annually prepare the budget for the association, determine the amount of the common charges required to meet the common expenses, and allocate and assess such common charges against the unit owners in proportion to the number of units owned by them divided by the number of units built and at one time occupied. The common expenses shall include, among other things, the cost of all insurance premiums on all policies of insurance, if any, which have been obtained by the Board of Directors. The common expenses may also include such amounts as the Board of Directors may deem proper for the operation and maintenance of the property, including, without limitation, an amount for working capital , for a general operating reserve, for a reserve fund for replacements, and to make up any deficit in the cannon expenses for any prior year. The common expenses may also include such amounts as may be required for the purchase of lease by the Board of Directors or its designess, corporate or otherwise, on behalf of all unit owners, if any unit whose owner has elected to sell or lease such unit or of any unit which is to be sold at a foreclosure of other judicial sold. The Board of Directors shalt advise each owner in writing of the amount of common charges payable by him, and shalt furnish copies of each budget on which such common charges are based to all unit owners and to their mortgagees. SECTION 2. INSURANCE: The Board of Directors may in their discretion and with the consent of a majority of unit owners acquire any type of insurance they and the majority of unit owners deem necessary or appropriate. This provision does not require the Board to acquire any insurance. the use of proceeds of insurance shall be determined in the resolution approving the purchase of the same. SECTION 3. PAYMENT OF COMMON CHARGES: All unit owners shalt be obligated to pay the common charges assessed by the Board of Directors at such time or times as the Board of Directors shall determine. No unit owner shalt be liable for the payment of any part of the common charges assessed against his unit subsequent to a sale, transfer, or other conveyance by him thereof (made in accordance with the provisions of Section 1 of Article VII of these bylaws). A unit owner may, subject to the conditions specified in these bylaws, and provided that his unit is free and clear of liens and encumbrances other than a permissible first mortgage and the statutory lien for unpaid common charges, but not including contracts for deed without the consent of the seller convey his unit to the Board of directors, or its designee, corporate or otherwise, on behalf of all other unit owners, and in such event be exempt from common charges thereafter assessed. A 5 purchaser of a unit shall be liable for the payment of common charges assessed against such unit, except that a mortgagee, trust indenture beneficiary or other purchaser of an unit, who canes into possession at a foreclosure sale of such unit or at other proceeding in lieu of foreclosure, shalt not be liable for and such unit shall not be subject to a lien for the payment of common charges assessed prior to the foreclosure sale. SECTION 4. COLLECTION OF ASSESSMENTS: The Board of Directors shalt assess common charges against the unit owners from time to time and at least annually and shalt take prompt action to collect from a unit owner any common charge due which remains unpaid by him for more than 30 days from the due date for payment. SECTION 5. DEFAULT IN PAYMENT OF COMMON CHARGES: In the event of default by any unit owner in paying to the Board of Directors the assessed common charges, such unit owner shalt be obligated to pay interest at the legal rate on such common charges from the due date thereof, together with all expenses, including attorneys fees, incurred by the Board of Directors in any proceeding brought to collect such unpaid common charges. The Board of Directors shalt have the right and duty to attempt to recover such common charges together with interests thereon, and the expenses of proceeding, including attorneys fees, in an action brought against such unit or unit owner. SECTION 6. FORECLOSURE OF LIEN FOR UNPAID COMMON CHARGES: In any action brought by the Board of Directors to foreclose a lien on a unit because of unpaid common on charges, the unit owner shalt be required to pay a reasonable rental for the use of his unit, and the plaintiff in such foreclosure action shalt be entitled to the appointment of a receiver to collect such rental. The Board of Directors, acting on behalf of all unit owners, shall have power to purchase such unit at the foreclosure sale and to acquire, hold, lease, mortgage, vote the votes appurtenant to, convey, or otherwise deal with the same. A suit to recover a money judgment for unpaid common charges shall be maintainable without foreclosing or waiving the lien securing the same. SECTION 7. STATEMENT OF COMMON CHARGES: the Board of Directors shalt promptly provide any unit owner, who makes a request in writing with a written statement of his unpaid common charges. SECTION 8. ABATEMENT AND ENJOINING OF VIOLATIONS: The violation of any rule or regulation adopted by the board of directors or the beach of any bylaw contained herein, or the breach of any provisions of the Declaration, shall give the Board of Directors the right, in addition to any other right set forth in theses bylaws: a. To enter the unit in which, or as to which, such violation or breach exists and to summarily abate and remove, at the expense of the defaulting unit owner, any structure, thing, or condition that may exist therein contrary to the intent and meaning of the provisions hereof, and the Board of Directors shall not thereby be guilty in any manner of trespass; or b. To enjoin, abate, or remedy such thing or condition by appropriate legal proceedings. SECTION 9. MAINTENANCE AND REPAIR: a. ALL maintenance of and repair to any unit, structural or non-structural, ordinary or extraordinary, (other than maintenance of any repairs to any common element contained therein not necessitated by the negligence, misuse, or neglect of the owner of such unit) shall be made by the owner of such unit. Each unit owner shalt be responsible for all damages to any other units and to the common element resulting from his failure to effect such maintenance and repairs. b. ALL maintenance, repairs, and replacements to the general common elements, whether located inside or outside of the unit (unless necessitated by the negligence, misuse, or neglect of a unit owner, in which case such expense shall be charged to such unit owner), shall be made by the Board of Directors and be charged to all the unit owners as a common expense. c. All maintenance, repairs, and replacements to the limited common elements, whether located inside or outside of the units (unless necessitated by the negligence, misuse, or neglect of a unit owner, in which case such expense shalt be charged to such unit owner), shalt be made by the Board of Directors and be charged to the unit owners having an interest in the respective limited common elements. SECTION 10. BALCONIES AND PATIOS: A balcony or patio to which a unit has sole access from the inside, shall be for the exclusive use of the owner of such unit. Such unit owner shall keep such balconies and patios free and clear of snow, ice, and any accumulation of water and shall make all repairs thereto. SECTION 11. USE OF UNITS: Is restricted in the covenants. SECTION 12. ALTERATIONS ADDITIONS OR IMPROVEMENTS BY BOARD OF DIRECTORS: Whenever, in the judgment of the Board of Directors, the common element shall require additions, alterations, or improvements, costing in excess of $500.00, and the making of such additions, alterations, or improvements shall have been approved by a majority of the unit owners, and by those mortgagees or sellers under contracts for deed holding mortgages or contracts constituting first liens upon three or more units, the Board of Directors shalt proceed with such additions, alterations, or improvements and shall assess all unit owners for the cost thereof as a common M charge. Any additions, alterations, or improvements costing $500.00 or less may be made by the Board of Directors without approval of the unit owners, mortgagees, or setters under contracts for deed, and the cost there of shall constitute a common charge. SECTION 13. ADDITIONS ALTERATIONS OR IMPROVEMENTS BY UNIT OWNERS: No unit owner shall make any structural addition, alterations, or improvement in or to his unit, without the prior written consent thereto of the Board of Directors. The Board of Directors shall have the obligation to answer any written request by a unit owner for approval of a proposed structural addition, alternation, or improvement in such unit owner's unit, within 30 days after such request, and failure to do so within the stipulated time shall constitute a consent by the Board of Directors to the proposed addition, alteration, or improvement. Any application to any governmental authority for a permit to make any addition, alteration or improvement in or to any unit shall be executed by the Board of Directors. The board shall not be liable to any contractor, subcontractor, or materialman, or to any person sustaining personal injury or property damage, for any claim arising in connection with such addition, alteration or improvement. The provisions of this Section shall not apply to units owned by the sponsor until such units have been initially sold by the sponsor and one-half of the amount paid for. SECTION 14. RIGHT OF ACCESS: A unit owner shalt grant the right of access to his unit to the manager, the managing agent, and any other person authorized by the Board of Directors, the manager, or the managing agent, to make inspections; to correct any condition originating in his unit, and threatening another unit or a common element; to install, alter o repair mechanical or electrical services or other common elements in his unit or elsewhere in the building; and to correct any condition which violates the provisions of any mortgage, or contract for deed, covering another unit. Requests for such entry shall be made in advance, and such entry shall be scheduled for a time reasonably convenient to the unit owner, However, in case of any emergency, such right of entry shalt be immediate, whether the unit owner is present at the time of not. SECTION 15. RULES OF CONDUCT: Rules and regulations concerning the use of the units and the common element may be promulgated and amended by the Board of Directors with the approval of a majority of the unit owners. Copies of such rules nd regulations shall be furnished by the Board of Directors to each unit owner prior to their effective date. Initial rules and regulations which shall be effective until amended by the Board of directors with approval of a majority of the unit owners may be promulgated by the sponsor. SECTION 16. UTILITIES AND TELEVISION TO UNITS : Electricity, water, telephone, television and any gas shall be supplied by the public and private utilities companies serving the area directly to each unit through a separate meter and each unit owner shall be required to pay the bills for gas and electricity consumed or used in his unit. The utilities serving the common areas shall be separately metered and the Board of Directors shall pay all such as a common expense. Changes in metering shall require approval of the Board of Directors but shall not require a change in these bylaws. ARTICLE VI. MORTGAGES AND CONTRACTS FOR DEED SECTION 1. NOTICE TO BOARD OF DIRECTORS: A unit owner who mortgages his unit shall notify the Board of Directors of the name and address of his mortgagee and shall file a conformed copy of the note and mortgage with the Board of Directors. The Board of Directors shalt maintain such information in a book entitled "Mortgages of Units". SECTION 2. NOTICE OF UNPAID COMMON CHARGES: The Board of directors, whenever so requested in writing by a mortgagee of an unit or a holder of contract for deed, shalt promptly report any then unpaid common charges or other default by the owner of the mortgaged or contracted unit. SECTION 3. NOTICE OF DEFAULT: The Board of Directors, when giving notice to a unit owner of a default in paying common charges of other default, shall send a copy of such notice to each holder of a mortgage or setter under a contract for deed covering such unit, whose name and address has theretofore been furnished to the Board of Directors. SECTION 4. EXAMINATION OF BOOKS: Each unit owner and each mortgagee or setter under a contract for deed shall be permitted to examine the books of account of the association at reasonable times, on business days, but not more often than once annually. SECTION 7. FIRST LIEN HOLDERS' RIGHTS: a. A holder or insurer of a first mortgage, upon written request to the owners association, (such request to state the name and address of such holder or insurer and the unit number), will be entitled to timely written notice of 1. Any proposed amendment of the association instruments affecting a change in (1) the boundaries of any unit, (2) the undivided interest in the common elements appertaining to any unit or the liability for common expenses appertaining thereto, (3) the number of votes in the owners association 7 appertaining to any unit; or (4) the purposes to which any unit or the common elements are restricted; 2. Any proposed termination of the association regime; 3. Any condemnation or eminent domain proceeding affecting the association regime or any portion thereof; 4. Any significant damage or destruction to the common elements; 5. Any default under the Declaration or bylaws which gives rise to a cause of action against the owner of a unit subject to the mortgage of such holder or insurer, where the default has not been cured in 60 days. b. The Declaration shall provide that the holder and insurer of the first mortgage on a unit shall be entitled, upon request, to: (a) inspect the books and records of the owners association during normal business hours, and (b) require the preparation of and, if preparation is required, receive an annual audited financial statement of the owners association for the immediately preceding fiscal year, expect that such statement need not be furnished earlier than 90 days following the end of such fiscal year. The Declaration shall also provide that all unit owners shall have reasonable access to inspect the books, records and financial statements of the owners association, including annual audited financial statements when such are prepared. ARTICLE VII. SALES AND LEASES OF UNITS SECTION 1. ASSUMPTION OF PROVISIONS: All deeds shall provide that the acceptance thereof by the grantee shalt constitute an assumption of the provisions of the Dectaration,the bylaws and the rules and regulations, as the same may be amended from time to time. All leases shalt be consistent with these bylaws and shalt provide than the Board of Directors shall have power to terminate such lease and to bring summary proceeding s to evict the tenant in the name of the landlord thereunder in the event of default by the tenant in the performance of such Lease. SECTION 2. PAYMENT OF ASSESSMENTS: No unit owner shall be permitted to convey, mortgage, pledge, hypothecate, sell, or tease his unit unless and until he shall have paid in full to the Board of Directors att unpaid common charge theretofore assessed by the Board of Directors against his unit and until he shalt have satisfied all unpaid liens against such unit, except permitted mortgages and contracts for deed. SECTION 3. CONDEMNATION: In the event of a taking in condemnation or by eminent domain of part of all of the common elements, the award made for such taking shall be payable to the unit owners in proportion to their ownership in the entire project, with it understood that the Developers or Sponsors are determined to be unit owners for the sake of this provision. ARTICLE IX. RECORDS SECTION 1. RECORDS AND AUDITS: The secretary shall keep detailed records of the actions of the Board of Directors, minutes of the meetings of the Board of Directors, and minutes of the meetings of the unit owners. The treasurer shall keep financial records and books of account of the association, including a chronological Listing o receipts and expenditures, as well as a separate account for each unit which, among other things, shalt contain the amount of each assessment of common charges against such unit, the date when due, the amount paid thereon and the balance remaining unpaid. A written report, summarizing all receipts and expenditures of the association shall be rendered by the Board of Directors to all unit owners at least quarter -annually. In addition, an annual report of receipts and expenditures of he association, certified by an independent Certified Public Accountant, shalt be rendered by the Board of Directors to all unit owners and to all mortgagees of units or sellers under contracts for deed or units who have requested the same, promptly after the end of each fiscal year. ARTICLE X. MISCELLANEOUS SECTION 1. NOTICES: ALL notices to the Board of Directors shall be sent by registered or certified mail, in care of the managing agent, or if their is no managing agent, to the office of the Board of Directors, or to such other address as the Board of Directors may hereafter designate from time to time. All notices to any unit owner shall be sent by registered or certified mail to the building or to such other address as may have been designated by him from time to time, in writing, to the Board of Directors. ALL notices to mortgagees of units or sellers under contracts for deed, shall be sent by registered or certified mail to their respective addresses, as designated by them from time to time, in writing, to the Board of Directors. All notices to the sponsor, unless hereinafter changed in writing, shall be sent to Dale Crosby -Newman at the address stated opposite his name below and shalt be sent registered or certified mail. ALL notices shalt be deemed to have been given when mailed, except notices of change of address which shall be deemed to have been given when received. E:� SECTION 2. INVALIDITY: The invalidity of any part of these bylaws shall not impair or affect in any manner the validity, enforceability, or affect of the balance of these bylaws. SECTION 3. CAPTIONS AND GENDER: The captions herein are inserted only as a matter of convenience and for reference, and in no way define, limit, or describe the scope of these bylaws, or the intent of any provision thereof. The use of the masculine gender in these bylaws shall be deemed to include the feminine gender and the use of the singular shall be deemed to include the plural and vice -versa, whenever the context so requires. SECTION 4. MORTGAGE: As used in these bylaws, the term 'mortgage' shalt include 'trust indenture' and contracts for deed; the term 'mortgagee' shall include 'trust indenture beneficiary' and sellers under a contract for deed, and the term 'foreclosure' shall include any proceedings in lieu of 'foreclosure'. SECTION 5. WAIVER: No restriction, condition, obligation or provision contained in these bylaws shall be deemed to have been abrogated or waived by reasons of any failure to enforce the same, irrespective of the number of violations or breaches thereof which may occur. ARTICLE XI. AMENDMENTS TO BYLAWS Except as hereinafter provided otherwise, these bylaws may be modified or amended by the vote of 75% in number and in common interest of all unit owners at a meeting of unit owners duly held for such proposes, but only with the written approval of those mortgagees holding mortgages constituting first liens upon 75% or more units or the approval of a setter under a contract for deed holding contacts constituting first liens upon 75% or more units. If so approved, it shalt be the responsibility of the Association to file the amendment with the Clerk and Recorder's Office in Flathead County, Montana. To record such amendment, the President and Secretary of the Association shall certify on the face of the amendment the vote. The Association will maintain for four years records of the unit owners votes. The signature of no other party is necessary on the amendment. ARTICLE XII. CONFLICTS In case any of these bylaws conflict with the provisions of a statute or of the Declaration, the provisions of such statute or of the Declaration, as the case may be, shall control. DONE AND DATED thisday of President j S ' retary `J 01 CERTIFICATE AND ACKNOWLEDGMENT STATE OF MONTANA } ss. County of Flathead ) The undersigned, President and Secretary, respectively, of j --i--. (`).,_.�_ .� /> _�v e . hereby certify and acknowledge as follows: that the copy of the Bylaws of �JoT:.. (? pia t,'.; i �; =to which this Certificate and Acknowledgement is annexed is a true, compared and correct copy of the Bylaws of said passed, approved and adopted by the holders of on the date thereof. That the undersigned President and Secretary of �'r� 'v t���,� t �) ,_��._ (G,_ _ (k subscribed to the said Bylaws of 0 of which the attached instrument is a copy, and executed the same as President and Secretary of said `u_ (� .`, , 1? i �µ �� respectively, and hereby acknowledge execution thereof. res'de� e retary g SUBSCRIBED AND SWORN TO before me on this '� day of 19f2, by �, , k S•l.. , F ( .,/ known to me to be the President of and known to me to be the Secretary of G�.i... . respectively, and who acknowledged to me they execution of the instrument to hick this Certificate and Acknowledgement is attached. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seat the day and year in this certificate provided. �.irt�c�-Ti='s-. Notary Public for the ate of Montana Residing at Kalispell, Montana My Comm! ss i on Expi res: m