HomeMy WebLinkAbout38_DRAFT Declaration of Covenants, Conditions and Restrictions_2024-0325
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After recording return to:
Hamlet of Pleasant Harbor, Inc.
Attn:
__________________________________________________________________________
(Space above this line for recorder's use only)
DOCUMENT TITLE: Declaration of Covenants, Conditions and
Restrictions for the Hamlet of Pleasant Harbor
REFERENCE NUMBER(S) OF
RELATED DOCUMENTS:
Additional reference numbers on page(s) of document.
GRANTOR: Pleasant Harbor Marina and Golf Resort, LLP
GRANTEE: The Owners of Lots and Units
ABBREVIATED LEGAL
DESCRIPTION:
Additional legal on page(s) ___ of document.
ASSESSOR'S TAX PARCEL
NO(S).
502153002, 502153003, 502153023, 502154002,
502152005, 502153020, 502153021 and
502153022.
Exhibit 38
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Exhibit 38
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Declaration of Covenants, Conditions, Restrictions and
Easements for The Hamlet of Pleasant Harbor
A Plat Community created pursuant to the
Washington Uniform Common Interest Ownership Act
Chapter 64.90 RCW
THIS DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND
EASEMENTS FOR THE HAMLET OF PLEASANT HARBOR (“the CC&Rs” or “Declaration”)
is made this ____ day of ______, 2024 by Pleasant Harbor Marina and Golf Resort, LLP ., a
Washington limited liability partnership (“Declarant”).
Recitals
Whereas, Declarant is the owner of certain real property located in Jefferson County,
Washington, commonly known as the “Hamlet of Pleasant Harbor” and legally described in
Exhibit A, attached hereto (“Property”);
Whereas, the Property is subject to that Development Agreement By and Between
Jefferson County Washington and Pleasant Harbor Marina and Golf Resort, LLP Relation to the
Development Commonly Known as the Pleasant Harbor Marina and Golf Master Planned Resort
dated June 4, 2018 (“Development Agreement”);
Whereas, the Property is a Plat Community as that term is defined in the Washington
Uniform Common Interest Ownership Act, chapter 64.90 RCW:
Whereas the Declarant has created a not-for-profit corporation known as the Pleasant
Harbor Association (“Association”) to take ownership of certain Common Elements and to
administer the CC&Rs;
Whereas, the Association shall be delegated and assigned the duties and powers of owning,
maintaining, and administering all Common Elements and related facilities in the Communication
and enforcing these covenants, conditions and restrictions as set fort h more fully below;
NOW, THEREFORE, DECLARANT hereby declares, covenants and agrees as follows:
Article I. Creation of the Hamlet of Pleasant Harbor
Section 1.01 Incorporation of Recitals
The Recitals are hereby incorporated as if fully set forth herein.
Section 1.02 Name of Community.
The name of the community is the Hamlet of Pleasant Harbor (“Hamlet”).
Section 1.03 Purpose and Intent
Declarant intends and declares that by recording this Declaration to create a general plan
of development for the Hamlet of Pleasant Harbor. The Association shall administer and enforce
Exhibit 38
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this Declaration and the other Governing Documents in a manner consistent with the Uniform
Covenant Act, chapter 64.90 RCW.
Section 1.04 Binding Effect
The Hamlet of Pleasant Harbor shall be owned, used, and conveyed subject to all the
provisions of this Declaration and other Governing Documents. This Declaration and Governing
Documents shall bind the Declarant, Association, all Owners and any other persons having any
right, title or interest in any portion of the Hamlet of Pleasant Harbor, their heirs, successors,
executors, administrators, devisees or assigns.
This Declaration and other Governing Documents shall be enforceable by Declarant, the
Association, any Owner, and their heirs, successors and assigns.
Section 1.05 Interpretation
The terms used in this Declaration shall be given their ordinary meaning unless otherwise
defined in the Act or defined in Article II of this Declaration.
Article II. Definitions
Section 2.01 “Act” shall mean the Washington Uniform Common Interest Ownership Act,
chapter 64.90 RCW.
Section 2.02 “Allocated Interest” shall mean the Common Expense Liability and the votes in
the Association allocated to each Lot and Unit. The formula for the Allocated Interests is an
equal share to each Lot and Unit for the total to equal 100.00 percent. The total number of Lots
and Units on the Property shall not exceed 890 without the approval of Jefferson County .
Section 2.03 “Assessment” shall mean all assessments imposed pursuant to this Declaration,
including, but not limited to, fines, penalties or fees levied or imposed by the Association
pursuant to the Governing Documents, interest and late charges on any delinquent account, and
all costs of collection incurred by the Association in connection with the collection of a
delinquent account, including reasonable attorneys' fees.
Section 2.04 “Association” shall mean the Pleasant Harbor Homeowner’s Association, which
shall be incorporated as a Washington not-for-profit corporation in accordance with the Act, its
successors and assigns.
Section 2.05 “Common Elements” shall mean all real estate other than the Lots and Tracts X -1
through X-10 that is depicted on the Plat and conveyed to the Association and all improvements
thereon, including the following:
Tracts PR-1, PR-2 and PR-3; and
Tracts A through C, D3, G, and I through W.
Exhibit 38
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Section 2.06 “Common Expenses” shall mean all costs and expenses incurred by the
Association, including, but not limited to, allocations to reserves allocated to the Owners in
accordance with their Allocated Interest.
Section 2.07 “County” shall mean Jefferson County.
Section 2.08 “Declarant” shall mean Hamlet of Pleasant Harbor Inc.
Section 2.09 “Declaration” shall mean this Declaration of Covenants, Conditions and
Restrictions.
Section 2.10 “Development Agreement” shall mean the Development Agreement by and
between Jefferson County, Washington and Pleasant Harbor Marina and Golf Resort, LLC dated
June 4, 2018.
Section 2.11 “Golf Course Property” shall mean Tracts X-1 through X-4 as depicted on the
Plat.
Section 2.12 “Governing Documents” shall mean the Declaration, Plat, Development
Agreement, any supplemental Map attached to this Declaration to show additional survey
matters required by RCW 64.90.245(14), Association Rules, and the Article and Bylaws of the
Association, all as amended from time to time.
Section 2.13 “Lot” shall mean each of the lots shown on the Plat but excluding Tracts.
Section 2.14 “Owner” shall mean the owner of record of any Lot or Unit.
Section 2.15 “Property” shall mean the real property described with particularity in Exhibit A.
Section 2.16 “Plat” shall mean and refer to the Plat of The Hamlet of Pleasant Harbor approved
by Jefferson County and recorded in Jefferson County under Auditor File No. []
Section 2.17 “Protected Trees” shall mean any pre-existing tree or a tree planted by the
Declarant on a Lot, Tract or Common Element at the time the Lot is purchased by a Lot Owner
or identified by Declarant for protection pursuant to the Vegetation Management Plan in the
Development Agreement. A Protected Tree is owned by the Association. Any tree located
fifteen (15) feet of a Common Element and at least 6’ DBH shall be presumed to be a Protected
Tree unless the Association or Declarant confirm otherwise in writing .
Section 2.18 “Restrictions” The Restriction set forth in Article IV as they may be
supplemented, amended, or repealed, which govern the use of Lots and Units, activities and
conduct within the Hamlet of Pleasant Harbor.
Section 2.19 “Short-Term Visitor Accommodations” shall mean residential units reserved for
occupancy for periods equal to or less than 30 consecutive calendar days.
Exhibit 38
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Section 2.20 “Specialty Allocated Expense” means those expenses of the Association that are
allocated in a manner permitted by RCW sections 64.90.480(4) through 64.90.480(8) rather than
in accordance with the Common Expense Liability. Specialty Allocated Expenses include those
expenses described in Section 8.10.
Section 2.21 “Tracts” shall mean all parcel of land so designed on the Plat.
Section 2.22 “Unit” shall mean and refer to the portions of the structures constructed on Tracts
X-5 through X-8 and X-10 that are designated for separate residential ownership or occupancy.
Article III. Easements, Common Elements and Rights of Enjoyment
Section 3.01 Additional Easements
In addition to the easement and use rights granted to the Owners and Declarant by RCW
64.90.280, the additional easements described in the Article are also granted and reserved.
Section 3.02 Easement of Enjoyment
Every Owner shall have a non-exclusive easement and right in and to the sidewalks, roads
and existing trials within the Common Elements which easement shall be appurtenant to and shall
pass with title to every Lot or Unit subject to the following provisions:
3.02.2 The right of the Association to suspend the right to use of the Common Elements
by any Member (i) for any period during which any Assessment against such Owner’s Unit or
Lot remains delinquent; (ii) for a period not to exceed sixty (60) days for any infraction of this
Declaration or supplement thereto; and (iii) for a successive sixty (60) day periods if any such
infraction is not corrected during a prior suspension period.
3.02.3 The right of the Association to dedicate, grant or transfer such permits, licenses
and easements for utilities, roads and/or other purposes consistent with the intended use of the
Common Elements, or as otherwise provided in this Declaration and reasonably necessary or
desirable for the proper use, maintenance or operation of any portion of Pleasant Harbor Resort;
3.02.4 The right of the Association to regulate the use of the Common Elements through
the Pleasant Harbor Rules and to prohibit access to those Common Elements, such as drainage
easements and stormwater ponds, not intended for use by Members.
3.02.5 The right of the Declarant, reserved hereby, to non-exclusive use of all Limited
Common Elements, Common Elements for display, sales, promotional and other purposes
deemed useful or necessary by Declarant and its agents and representatives, in Declarant’s sole
discretion, in advertising or promoting Pleasant Harbor Resort. This right shall permit Declarant
to allow unlimited use by guests and prospective customers of all Limited Common Elements,
Common Elements and Recreational Facilities and shall terminate at the end of the Development
Period.
Section 3.03 Easements Reserved by Declarant
In addition to any easements shown on recorded plats, Declarant hereby reserves or grants,
as applicable, the following perpetual easements:
Exhibit 38
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3.2.1 Adjacent Common Elements. The Owner of any Lot or Tract which adjoins any
Common Elements shall, if the Declarant or Association elects from time to time to so
require, permit the entry upon the Lot or Tract to perform maintenance of such Common
Elements.
3.2.2 Utility Easements. Easement for the benefit of Declarant, the Pleasant Harbor
Association or Pleasant Harbor Water and Sewer for installation and maintenance of
utilities and drainage facilities are reserved over portions of certain Lots and Common
Elements as shown on the recorded plat or as otherwise reserved in any recorded document.
Within the easements, no structure, planting or other material shall be placed or permit to
remain which may damage or interfere with the installation or maintenanc e of utilities, or
which may change the direction or obstruct the flow of water through drainage systems.
3.2.3 Easements for Encroachments. Declarant grant reciprocal appurtenant easements
of encroachment, and for maintenance and use of any permitted encroachment, between
each Lot and any adjacent Common Elements and between adjacent Lots due to the
unintentional placement of the Improvements constructed thereon (in accordance with the
terms of this Declaration and Design Guidelines) to a distance of not more than three feet,
as measured from any point on the common boundary line.
3.2.5 Easement for Maintenance, Emergency and Enforcement. Declarant grants to the
Association easements over the Property as necessary to enable the Association to fulfill
its maintenance responsibilities including, but not limited to, stormwater maintenance. The
Association shall also have the right, but not the obligation, to enter upon any Lot for
emergency, security and safety reasons. The easement rights provided in this section may
be exercised by any member of the Board or any duly authorized agents. Except in the
event of an emergency, entry shall be permitted during reasonable hours after notice to the
Owner.
3.2.7 Reservation of Rights to Storm Water Runoff and Water Reclamation . Declarant
reserves for itself, and its designees, all rights to ground water, surface water, and
stormwater runoff with Pleasant Harbor, and each Owner agrees, by acceptance of a deed
to a Lot, Unit or Tract that Declarant shall have and retain all such rights.
Section 3.04 Conveyance of Common Elements.
As further described on the Plat, Declarant grants, confirms and conveys to the
Association for the undivided common use and enjoyment of the Association and
Owners, the Common Elements Tract Tracts PR-1, PR-2 and PR-3, Tracts A through C,
G, and I through W subject to the easements on the Plat and described herein.
Section 3.05 Maintenance of Common Elements.
The Association shall have the right and, as provided in Section 3.06, the obligation to maintain
the Common Elements (except to the extent such maintenance is required to be provided by
utility providers) and all expenses relating thereto shall be Common Expenses.
Exhibit 38
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Section 3.06 Required Maintenance
The Association shall maintain the Common Elements and all improvements thereon in a good
and useful condition customary of resort areas and as required by applicable laws including the
following standards:
3.06.01 All lighting located in the Common Elements shall be maintained
consistent with the standards in Appendix S to the Development Agreement.
3.06.02 All stormwater facilities shall be maintained so stormwater is captured and
infiltrated on site without direct discharge to Hood Canal.
3.06.03 All improvements constructed to comply with Appendix P of the
Development Agreement and located within the Common Elements shall be maintained so they
achieve their intended purpose.
Section 3.07 Water Monitoring. The Association shall be responsible for Water Quality
Monitoring required by the Development upon expiration of the Declarant Control Period.
Article IV. Uses and Restrictions
Section 4.01 Authority to Enact Use Restrictions.
Subject to the provisions of RCW 64.90.510 and the Governing Documents, the Board may adopt,
modify, cancel, limit, or expand the Restrictions. The Board shall provide Notice to each Owner
of any proposed action authorized by this Section at least ten (10) business days prior to the Board
meeting at which such proposed action will be considered. The Notice shall provide a copy of the
proposed new Restriction or explanation of changes to or removal of an existing Restriction. The
Board shall provide Owners a reasonable opportunity to be heard prior taking action.
Board action shall be effective unless disapproved at a meeting by the Owners. The Board shall
call a meeting of the Owners upon receipt of a petition for a Special Meeting the fulfills the
requirements of RCW 69.90.445(1)(b). Any proposed action shall not become effective until after
the Special Meeting is held and the action voted upon.
Nothing in this Section shall be construed to allow or authorize the Board or Owners to modify,
repeal or expand the Residential Design Guidelines or other provisions of this Declaration.
Section 4.02 Owner’s Acknowledgement and Notice to Purchasers.
All Owner’s are given notice by this Section that the use of their Units, Lots and Common
Elements is limited by the Use Restrictions as they may be amended, expanded or otherwise
modified as provided in this Declaration. Each Owner, by acceptance of a de ed for a Unit or
Lot, acknowledges and agrees that the use, enjoyment and marketability of a Unit or Lot can be
affected by this Declaration and that the Use Restrictions may change from time to time.
Section 4.03 Restrictions
The following Initial Restrictions shall apply to the Hamlet of Pleasant Harbor until such time as
they are amended, modified or repealed by the Association :
Exhibit 38
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4.03.01 Unit, Lot, Common Area and Limited Common Area Control. No improvements,
alterations, repairs, excavation, grading, landscaping or other work which in any way alters
the exterior appearance of any Unit, Lot, Common Area or Limited Common Area within
Pleasant Harbor from its natural or Declarant improved condition shall be made or
approved without prior approval of the Board, expect as otherwise expressly providing in
this Declaration. Other than as constructed by Declarant, no building, structure or
landscaping shall be commenced, erected, planted, maintained, painted, improved, altered,
or made without the prior written approval of the Board. All subsequent additions to,
changes or alterations in any building, structure or landscaping, including exterior color
scheme, and all changes in the grade of Lots, Limited Common Elements, or Common
Elements, shall be subject to the prior written approval of the Board. All original
construction as well as any modification or additions thereto as shall be c onstructed by
Declarant shall be deemed exempt from this paragraph.
4.03.2 Animals. No animals of any kind shall be raised, bred or kept in or upon any Lot,
or Unit except dogs, cats and such other household pets as may be approved by the Board,
and only provided they are not kept, bred or maintained for any commercial purposes or in
unreasonable numbers. Permitted animals shall not be allowed to roam, off -leash outside
the boundaries of the Lot or Unit. The Pleasant Harbor Association may adopt reasonable
rules designed to minimize damage and disturbance to other Owners and occupancies,
including regulations related to barking noise and waste removal.
4.03.3 Temporary Occupancy and Temporary Buildings. No trailer, tent, shack, garage,
barn or other outbuilding or building or any structure of a temporary or moveable character
erect or placed on a Lot shall be used as living quarters.
4.03.4 Storage Sheds and Outside Storage. No storage buildings or sheds, whether
permanent or temporary, shall be moved, placed, assembled or otherwise constructed on
any Lot.
4.03.5 Landscaping. All landscaping must be in accordance with the Hamlet at Pleasant
Harbor Design Guidelines. Landscaping shall emphasize removal of elimination invasive
plants (i.e. Scoth Broom) plantings that are native to the area and drought tolerant. No
Owner may plant or maintain species identified as invasive or noxious by the Washington
Invasive Species Council. An Owner shall substantially complete all landscaping of a Lot
within 180 days of receiving an occupancy permit from Jefferson County. Landscaping
shall be maintained to provide a neat and attractive appearance. Irrigation systems shall
utilize drip irrigation where practicable.
4.03.6 Nuisances; Construction; Hazardous Activities, No garbage, rubbish or other
debris of any kind shall be placed or permitted to accumulate upon any Lot or Tract. No
firearms may be discharged in the Hamlet of Pleasant Harbor. No explosives (including
fireworks) may be stored or used within the Hamlet of Pleasant Harbor; provided, however,
that the Association may organize community fireworks shows to celebrate h olidays. No
Exhibit 38
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open fires or flames shall be permitted on any Lot or Tract except in a confined and
contained outdoor fireplace, heating unit or barbecue unit while attended.
4.03.7 Lighting. All artificial outdoor lighting within the Hamlet of Pleasant Harbor shall
meet dark sky guidelines and directed so that no more than one foot candle of illumination
leaves the Lot or Tract boundaries.
4.03.7 Maintenance. Each Owner, at such Owner's sole cost and expense, shall promptly
and continuously maintain, repair and restore such Owner's Lot or Tract (including the
structures, yard and landscaping) and other improvements located thereon, in a good, clean,
attractive, safe and sanitary condition and in full compliance with all applicable
governmental laws, rules and regulations and the provisions of this Declaration and the
rules and regulations of the Association.
4..03.8 Antennas or Satellite Systems. No antenna, satellite dish or other similar type of
exterior equipment shall be allowed on any Lot unless approved in writing by the ACC. As
a condition of approval, the ACC may require reasonable shielding of such antenna,
satellite dish or equipment from view from the street and the ground level of adjacent Lots
or Common Elements. In no event shall any satellite dish or similar antenna greater than
one (1) meter in diameter be permitted.
4..03.9 Trash Containers and Collection. The Owner of a Lot or Tract shall ensure that no
garbage can, recycling bin or other receptable will be visible from any pla ce outside the
residence except immediately prior to and after collection day.
4.03.10 Wildlife Protection. The capturing, trapping, injuring or killing of wildlife
within the Hamlet is expressly prohibited, except when reasonably necessary to avoid
imminent threat of personal injury or death to any person, or except when reasonably
necessary to protect property from damage from rodents or other pests and then only to the
extent permissible by applicable law.
4.03.11 Signs. No signs of any kind, nor for any uses, shall be erected, posted,
painted or displayed on any Lot or Common Element whatsoever. Notwithstanding the
foregoing, the Board of Directors or ACC shall, by appropriate rule: (i) permit temporary
placement of a sign, at a place and of a size and appearance designated by the Board,
indicating that a Unit or Lot is for sale or lease; (ii) allow the display of the "flag of the
United States" as defined in RCW 64.90.501(1) in an appropriate manner, time a nd place;
and (iii) allow signs regarding candidates of public or Association office, or ballot issues,
in an a. appropriate manner, time, place, size and number. This Section shall not apply to
Declarant.
4..03.12 Restriction on Further Subdivision. No Lot or Tract shall be further
subdivided by and Owner. This Restriction shall not be construed to prohibit the Declarant
from subdividing Tracts.
4..03.13 Change Contours. The surface grade or elevation of the various Lots shall
not be substantially changed or altered in any manner which would affect the relationship
Exhibit 38
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of such Lot with other Lots, or which would result in materially obstructing the view from
any other Lot, or which would otherwise produce an effect out of harmony with the general
develop of the immediate area in which said Lot is located.
4.03.14 Utilities. Each Lot and Tract shall be connected to sanitary sewer and water
utilities provided by the [name of utility operator(s)],Pleasant Harbor Water and Sewer
District, their successor and assigns and shall remain connected to said utilities. Owners
shall be subject to reasonable monthly or periodic service charges as determined by the
UtilityPleasant Harbor Water and Sewer District. Owners may also be required to pay a
reasonable connection charge to connect to the sanitary sewer and/or water utility. No
Owner, other than Declarant, may construct or install a groundwater well or septic system
on any Lot or Tract.
4.03.15 Walls, Fences and Hedges. Other than as initially constructed or approved
by Declarant, no walls, or fences of any type shall be constructed or maintained on any Lot
or Tract. An Owner may plant a landscaped privacy screen the meets landscaping
requirement and is approved by Declarant or PIC.
4.03.16 Trailers, RVs, Campers and Boats. The Lots, Tracts and Common Elements
located in the Hamlet of Pleasant Harbor shall not be used for the storage and/or overnight
parking of any vehicle other than private family automobiles, trucks, motorcycles and
commercial vehicles operated by a person residing at the Lot or Unit (provided that such
commercial vehicles contain a single rear axle). Boats, boat trailers, house trailers,
campers, trucks, trucks with campers or other recreation vehicles or similar object may not
stored and/or parked overnight outdoors in any part of the Hamlet of Pleasant Harbor
excepts as may be permitted by Rules established by the Board. No inoperable vehicles of
any kind shall be parked, stored, or maintained on any Lot, Tract or Common Element
unless stored in a garage. A Lot Owner that stores a recreational vehicle off -site may park
the vehicle in the driveway for 48 hours for the purpose of preparing for departure or return
from travel.
4.03.18 Motor Vehicles and Parking. Unless substantially screened from view from
the street or from the ground level of adjacent Lots and Common Element in a manner
reasonably approved by the ACC, no recreational vehicles, commercial vehicles,
construction or like equipment, motorcycles, or trailers (utility, boat, camping, horse, or
otherwise), shall be allowed to be parked or stored on any Lot or street for a cumulative
period in excess of fourteen (14) days in any one (1) calendar year. No motor vehicle s of
any kind shall be parked overnight on any street adjoining any Lot or Common Element;
provided that, such vehicles belonging to guests of an Owner may occasionally be so
parked so long as such parking will not violate any other provision of this Section 4.03.18.
No motor vehicle of any kind that is inoperative because of mechanical failure shall be
parked or stored on any Lot or in any right-of-way or street adjoining any Lot or Common
Element for more than seventy-two (72) hours. The Board shall have full authority to
determine, in its sole discretion, if any vehicle is obnoxious or undesirable to other Owners
and to enforce this covenant. Pursuant to Article 6.04 of this Declaration, the Association Formatted: Not Highlight
Exhibit 38
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may levy fines or have vehicles that are parked in violation of this Section towed and
impounded at the Owner's expense.
4.03.21 Prohibited Materials. In order to protect the environment, sensitive areas
and water quality precautions must be taken with the storm drainage system on site. The
following materials shall not be permitted to enter any surface or subsurface part of the
stormwater drainage system: (i) petroleum products including, but not limited to, oil,
gasoline, grease, fuel oil and heating oil; (ii) trash and/or debris; (iii) animal waste; (iv)
chemicals or paint; (v) washing uncured concrete for cleaning or fi nishing purposes; (vi)
pesticides, herbicides or fertilizers.
Any Owner found to have failed to comply with applicable law govern the use, handing,
disposal or storage of these items shall immediately remove the items and remedy the
deficient condition upon written notice of the Association or the Local Jurisdiction.
4.03.22 Building Height. Except with the permission of the ACC, no building
height shall exceed thirty-five (35) feet, as measured from the average grade elevation at
the perimeter of the house to the maximum point on the roof; provided, however, that this
restriction shall not apply to Tracts X-5 through X-10.
4.03.23 Short-Term Residential Use. The Units on Tracts X-5, X-6, X-8 of the
Plat shall be limited to Short-Term Visitor Accommodations as required by the
Development Agreement. The Declarant or the Association may not amend this section
without the prior written consent of Jefferson County.
4.03.24 Golf Course Property. The Golf Course Property shall be designed and
maintained as a golf course open to the public on an as available basis for a fee. Golf
course operations shall comply with the King County Best Management Practices for
Golf Course Development and Operation (1993) or its substantial equivalent.
Article V. Architecture and Landscaping
Section 5.01 General.
No structure or thing shall be placed, erected, or installed upon any Lot within the Hamlet and no
improvement or other work (including staking, clearing, excavation grading, vegetation removal)
shall take place within the Hamlet, except in compliance with this Article and the Residential
Design Guidelines attached as Appendix [] and adopted pursuant to this Declaration. Buildings
should be constructed to blend into the terrain based on Northwest Contemporary Architecture.
No approval of shall be required to repaint the exterior of a structure, if in accordance with the
originally approved color scheme, or to rebuild in accordance with originally approved plans and
specifications. Any Owner may remodel, paint, or redecorate the interior of his or her structure or
unit without approval, provided that the work performed complies with all applicable laws and
regulations. However, modifications to the interior of screened porches, patios, and similar
portions of a structure on a Lot or Tract visible from outside the structure and modifications to
enclosed garages as living space shall be subject to approval. All dwellings constructed on any
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portion of the Plat Community shall be designed by and built in accordance with the plans and
specifications of a licensed architect or licensed building designer unless otherwise approved by
Declarant or Declarant's designee, in its sole discretion.
Section 5.02 Design Review.
5.02.1 By Declarant. Each Owner, by accepting a deed or other instrument conveying any
interest in any Lot, Tract or Unit, acknowledges that Declarant has a substantial interest in
ensuring that the improvements within the Plat Community enhance Declarant's reputation
as a community developer or builder and do not impair Declarant's ability to market, sell,
or lease their property. Therefore, each Owner agrees that no activity within the scope of
this Article ("Work") shall be commenced unless and until Declarant or Declarant's
designee has given its prior written approval for such Work, which approval may be
granted or withheld in Declarant's or Declarant's designee's sole discretion.
In reviewing and acting upon any request for approval, Declarant or its designee shall be
acting solely in Declarant's interest and shall owe no duty to any other Person. Declarant's
rights reserved under this Article shall continue so long as Declarant ow ns any portion of
the Plat Community or any real property which may be added to the Plat Community,
unless earlier terminated in writing, executed and Recorded by Declarant. Declarant may,
in its sole discretion, designate one or more Persons from time to time to act on Declarant's
behalf in reviewing applications hereunder.
Declarant may from time to time, but shall not be obligated to, delegate all or a portion of
the Declarant's reserved rights under this Article to the Board. Any such delegation shall
be in writing, specifying the scope of responsibilities delegated, and shall be subject to (i)
Declarant's right to revoke such delegation at any time and reassume jurisdiction over the
matters previously delegated; and (ii) Declarant's right to veto any decision which
Declarant determines, in Declarant's sole discretion, to be inappropriate or inadvisable for
any reason. So long as Declarant has any rights under this Article, the jurisdiction of the
foregoing entities shall be limited to matters specifically delegated by Declarant.
5.02.2 By Board. Upon delegation by Declarant or upon expiration or termination of the
period of Declarant control, the Association, acting through the HOA Board, shall assume
jurisdiction over design, property modification and architectural matters in the Plat
Community. Unless and until such time as Declarant delegates all or a portion of its
reserved rights to the Board or Declarant's rights under this Article terminate, the
Association shall have no jurisdiction over architectural matters. For the purposes of this
article the entity having jurisdiction in a particular case shall be referred to as the
"Reviewer." Guidelines and Procedures.
Exhibit 38
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5.02.1 Residential Design Guidelines. The Residential Design Guidelines are not the
exclusive basis for decisions and compliance with the Residential Design Guidelines does
not guarantee approval of any application.
Declarant shall have sole and full authority to amend the Residential Design Guidelines in
a manner consistent with the Governing Documents during the period of Declarant control,
notwithstanding a delegation of reviewing authority to the Board, unless Declarant also
delegates the power to amend to the Board. Upon termination or delegation of Declarant's
right to amend, the Board shall have the authority to amend the Residential Design
Guidelines in a manner consistent with the Governing Documents. Any amendments to the
Residential Design Guidelines shall be prospective only and shall not apply to require
modifications to or removal of structures previously approved once the approved
construction or modification has commenced. Except for conditions of the Governing
Documents, there shall be no limitation on the scope of amendments to the Residential
Design Guidelines, and such amendments may remove requirements previously imposed
or otherwise make the Residential Design Guidelines less restrictive.
5.03.2 Procedures. No Work shall commence on any portion of the Plat Community until
an application for approval has been submitted to and approved by the Reviewer. Such
application shall include plans and specifications ("Plans") showing site layout, structural
design, exterior elevations, exterior materials and colors, landscaping, drainage, exterior
lighting, irrigation, and other features of proposed construction, as applicable. The
Residential Design Guidelines and the Reviewer may require the submission of such
additional information as may be reasonably necessary to consider any application. In
reviewing each submission the Reviewer may consider any factors it deems relevant,
including, without limitation, harmony to external design with surrounding structures and
environment. Decisions may be based on pure aesthetic considerations. Each Owner
acknowledges that determinations as to such matters e purely subjective and opinions may
vary as to the desirability and/or attractiveness of particular impro vements.
The Reviewer shall respond to the applicant by giving Notice pursuant to RCW 64.90.515.
The response may (i) approve the application, with or without conditions; (ii) approve a
portion of the application and disapprove other portions; or (iii) disapprove t he application.
The Reviewer may, but shall not be obligated to, specify the reasons for any objections
and/or offer suggestions for curing any objections. If the Reviewer fails to respond in a
timely manner (as provided in the Residential Design Guidelines), approval shall be
deemed to have been given, subject to Declarant's right to veto approval by the Board
pursuant to this Section. However, no approval, whether expressly granted or deemed
granted pursuant to the foregoing, shall be inconsistent with the Residential Design
Guidelines unless a differing design proposal has been approved pursuant to Section 5.0 4.
Until expiration of the period of Declarant control, the Board shall notify Declarant in
writing within three (3) business days after the Board has approved any application relating
to proposed Work within the scope of matters delegated to the Board by Declarant. The
notice shall be accompanied by a copy of the application and any additional information
Exhibit 38
15
which Declarant may require. Declarant shall have ten (10) days after receipt of such notice
to veto any such action, in its sole discretion, by notice to the Board and the applicant.
If construction does not commence on a project for which Plans have been approved within
one (1) year after the date of approval, such approval shall be deemed withdrawn, and it
shall be necessary for the Unit Owner to reapply for approval before commencing the
proposed Work. Once construction is commenced, it shall be diligently pursued to
completion. All Work shall be completed within two (2) years of commencement unless
otherwise specified in the notice of approval or unless the Reviewer grants an exten sion in
writing, which it shall not be obligated to do. If approved Work is not completed within
the required time, it shall be considered nonconforming and shall be subject to enforcement
action by the Association, Declarant or any aggrieved Owner.
The Reviewer may, by resolution, exempt certain activities from the application and
approval requirements of this Article, provided such activities are undertaken in strict
compliance with the requirements of such resolution.
Section 5.03 No Waiver.
Each Owner acknowledges that the people reviewing applications under this Article will change
from time to time and that opinions on aesthetic matters, as well as interpretation and application
of the Residential Design Guidelines, may vary accordingly. In addition, each Owner
acknowledges that it may not always be possible to identify objectionable features of proposed
Work until the Work is completed, in which case it may be unreasonable to require changes to the
improvements involved, but the Reviewer may refuse to approve similar proposals in the future.
Approval of applications or Plans for any Work done or proposed, or in connection with any other
matter requiring approval, shall not be deemed to constitute a waiver of the right to withhold
approval of any similar applications, Plans, or other matters subsequently or additionally submitted
for approval.
Section 5.04 Variances.
The Reviewer may authorize variances from compliance with any of its guidelines and procedures
when site-specific circumstances such as topography, natural obstructions, hardship, or aesthetic
or environmental considerations require, but only in accordance with the law. Such variances may
only be granted, however, when unique circumstances dictate and no variance shall (a) be effective
unless in writing; (b) be contrary to this Declaration; or (c) stop the Reviewer from denying a
variance in other circumstances. For the purposes of this Section, the inability to obtain approval
of any governmental agency, the issuance of any permit, or the terms of any financing shall not be
considered a hardship warranting a variance.
Exhibit 38
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Article VI. Lot Maintenance and Repair
Section 6.01 Maintenance. Each Owner shall maintain his or her Lot or Tract, and all
landscaping and improvements on the Lot or Tract, and all landscaping improvements on the Lot
or Tract, in a manner consistent with the Governing Documents, the Community -Wide Standard,
and all applicable covenants, unless such maintenance responsibility is otherwise assumed by or
assigned to the Association. An Owner shall install all landscaping, surrounding all sides of the
residential dwelling contained on the Lot or multi-family structure on a Tract, within six (6) months
after the initial transfer of a completed residential dwelling to a n Owner from the Declarant or a
third-party builder. Each Owner shall also be responsible for maintaining and irrigating the
landscaping within that portion of any adjacent Common Area or public right-of-way lying
between the Unit boundary and any wall, fence, curb, or water's edge located on the Common Area
or public right-of-way adjacent to the Unit boundary, unless such area is maintained by the
Association; provided, there shall be no right to remove trees, shrubs or similar vegetation from
this area without prior approval of the Association. Each Owner shall perform at the Owner's
expense the maintenance and upkeep of, Protected Trees (if located on a Lot or Tract), drainage
swales and/or underground drain lines and catch basins installed on their Lot or Tract, unless such
components of the Units are made a part of the Common Elements maintained by the Association.
Section 6.02 Repair and Replacement.
Unless otherwise specifically provided in the Governing Documents or in other instruments
creating and assigning maintenance responsibility, responsibility for maintenance shall include
responsibility for repair and replacement, as necessary to maintain th e Lot to a level consistent
with the Community-Wide Standard. Repair and replacement may include improvement if
necessary to comply with applicable building codes or other regulations or if otherwise deemed
appropriate, in the Board's reasonable discretion.
Each Owner further covenants and agrees that in the event of damage to or destruction of structures
on or comprising such Owner's Lot or Tract, the Owner shall proceed promptly to repair or to
reconstruct in a manner consistent with the original construction or such other plans and
specifications as are approved in accordance with Article V. Alternatively, the Unit Owner shall
clear the Unit and maintain it in a neat and attractive condition consistent with the Community-
Wide Standard. The Unit Owner shall pay any costs which are not covered by insurance proceeds.
Section 6.03 Preservation of Protected Trees
The Owners and the Association shall have primary responsibility for the care and preservation of
all Protected Trees that are planted in the Plat Community. The division of responsibility between
the Owners, and the Association for different aspects of the care and preservation of the Protected
Trees may be established by notations on the face of the Map, or if there are no such notations, by
Rule, or instruction by the Declarant. The Owners and the Association shall provide such
maintenance to the Protected Trees that is appropriate, based upon good nursery practices and
requirements imposed by the Map or Declarant.
If any Owner or the Association fails to maintain the Protected Trees, a Declarant may elect to
maintain the Protected Trees and may charge the Association and the Unit Owners the cost of such
maintenance. The obligation arising under this section shall be a lien on the Plat Community in
Exhibit 38
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favor of Declarant, which Declarant may enforce (in place of the Association) in the manner
described in Chapter 61.12 RCW.
In the event that an Owner removes or alters inappropriately a Protected Tree without written
permission of a Declarant (until the Declarant's Bond is released or forfeited, and then the
Association or the Local Jurisdiction, if the Local Jurisdiction assumes responsibility for the
Protected Trees), the removal shall be a breach of the Unit Owner's duties described this
Declaration. Declarant, (until Declarant's Bond is released in full without claim, and then the
Association or the Local Jurisdiction), may bring an action to restrain the remove of any
ProtectedTree, or for damages arising from such removal, including such additional, treble
damages, attorney's fees litigation expenses and costs that are available under this Declaration or
state law.
Declarant's rights and duties described herein shall cease and automatically terminate upon (1)
release in full, without claims, and delivery to Declarant the Declarant's Bond, (2) recovery of
compensation by Declarant for all sums deducted from the bond, or (3) a date six (6) years from
the date of any Bond forfeiture, whichever' event occurs first. After Declarant's performance and
maintenance bonds are released or forfeited, and the Declarant has received the full exoneration
of the Bond without claims, or compensation for any payments made from the Bond, the
Association may apply to the Local Jurisdiction or its successor for approval to terminate or amend
the restrictions imposed upon the removal or alteration of Protected Trees. Such an application
may be made if a majority of the Unit Owners approve of the Association's application for
termination or alteration of the Street Tree restrictions. Upon written notification from the Local
Jurisdiction of the termination or alteration of the restrictions upon Protected Trees contained
herein, the Association a copy of the notice shall be Recorded. Upon Recordation of such notice,
the provisions of this related to Protected Trees shall terminate or be amended in the manner
described in the notice.
Section 6.04 Remedies for Failure to Maintain.
If any Owner shall fail to conduct maintenance as required by this Article to maintain the Unit in
the same condition as a reasonably prudent homeowner, or in a manner which preserves the
drainage for other Units, the Association shall notify the Unit Owner in writing of the maintenance
required. If the maintenance is not performed within thirty (30) days of the date notice is delivered,
the Association shall have the right to enter upon the Unit and provide such maintenance, and to
levy an Assessment against the non-performing Unit Owner and Unit for the cost of providing the
maintenance pursuant to RCW 64.90.480(4). The Assessment shall constitute a lien against the
Unit owned by the non-performing Unit Owner and may be collected and foreclosed in the same
manner as any other delinquent Assessment. If emergency repairs are needed to correct a condition
on a Unit which poses a substantial risk of injury of significant property damage to others, the
Association may immediately perform such repairs as may be necessary after the Association has
attempted to give Notice to the non-performing Unit Owner of the repairs necessary. Emergency
repairs performed by the Association, if not paid for by the non -performing Unit Owner, may be
collected by the Association in the manner provided for herein notwithstanding the failure of the
Association to give the non-performing Owner the thirty (30) day notice.
Exhibit 38
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Article VII. Pleasant Harbor Homeowner’s Association Powers and Responsibilities
Section 7.01 Formation of Pleasant Harbor Association.
The Pleasant Harbor Association shall be incorporated as a nonprofit corporation in accordance
with chapter 24.03 RCW. The Pleasant Harbor Association shall be charged with the duties and
vested with the powers prescribed by the Act and set forth in the Governing Documents. Neither
the Articles nor Bylaws of the Pleasant Harbor Association shall, for any reason, be amended or
otherwise changed or interpreted so as to be consistent with this Declaration.
Section 7.02 Membership.
Every Person that is an Owner of a Lot or Unit (including Declarant as to Lots or Units its owns)
shall be a member of the Association. Membership shall be appurtenant to the Lot or Unit and may
not be separated from ownership of any Lot or Unit and shall not be assigned or conveyed in any
way except upon the transfer of title to such Unit and then only to the transferee of title to the Lor
or Unit. All Owners shall have the rights and duties specified in the Governing Documents.
Section 7.03 Voting.
Owners, including Declarant, shall be entitled to one vote for each Lot or Unit owned. When
more than one Person owns an interest in any Lot or Unit, the vote for that Lot or Unit shall be
exercised as the Owners of such lot decide to exercise that vote, but in no event shall more than
one vote be cast with respect to any Unit, nor shall any vote be divided. A majority of the votes
entitled to be cast by Owner present or represented by proxy at a meeting at which a quorum is
present shall be necessary and sufficient for the adoption of any matter voted upon by Owners
unless a greater proportion is required by this Declaration, the Articles or these Bylaws.
7.03.1 Voting Representative. There shall be one (1) voting representative of each Lot
or Unit. Declarant shall be considered an "Owner" and shall be the voting representative with
respect to any Unit owned by Declarant. If a Person (including Declarant) owns more than one
Lot or Unit, such Person shall have the votes for each Lot or Unit owned. The voting
representative shall be designated by the Owner but need not be an Owner. The designation shall
be revocable at any time by actual Notice to the Association from the Owner, or by actual Notice
to the Association of the death or judicially declared incompetency of the representative. This
power of designation and revocation may be exercised by the guardian of an Owner, and the
administrators or executors of an Owner's estate. Where no designation is made, or where a
designation has been made but is revoked and no new designation has been made, the voting
representative of each unit shall be the group composed of all its Owners.
7.03.2 Joint Owner Disputes. The vote of a Lot or Unit must be cast as a single vote, and
fractional votes shall not be allowed. If joint Owners are unable to agree among themselves as to
how their votes shall be cast, they shall lose their right to vote on the matter in question. If more
than one vote is cast for a Lot or Unit, none of such votes shall be counted and such votes shall
be deemed void.
7.03.3 First Mortgagee as Proxy. If an Owner is in default under a First Mortgage on a
Unit for ninety (90) consecutive days or more, such Mortgagee shall automatically be authorized
Exhibit 38
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to declare at any time thereafter that such Owner has given his or her vote on all issues to the
Mortgagee as such Owner's proxy during the continuation of the default. If such Mortgagee
notifies the Association that it has declared itself as such Owner's proxy, or if such Owner has
otherwise appointed such Mortgagee as its proxy for votes rega rding special matters under a
fully recorded First Mortgage, or to the vendor under a duly recorded real estate contract, then
only the vote of such Mortgagee or vendor will be recognized regarding such special matters if a
copy of the instrument with this appointment has been filed with the Association. Amendments
to this Section shall only be effective if approved by Owners holding sixty -seven percent (67%)
of the total votes in the Association and a majority of the First Mortgagees.
7.03.4 Voting by Ballot. The Association may conduct a vote by ballot without a
meeting as follows:
7.03.4.1 The Association must deliver to every Owner a Notice stating that:
(a) the vote will be taken by ballot;
(b) The time and date by which a ballot must delivered to the Association
to be counted, which date shall not be fewer than fourteen (14) calendar days after the date of the
Notice;
(c) the percent of votes necessary to meet the quorum;
(d) the precent of votes necessary to approve each matter other then
election of Board Members; and
(e) the time, date, and manner by which Owners wishing to deliver
information to all Owners regarding the subject of the vote may do so.
7.03.4.2 The Association must deliver to every Owner along with the
Notice required in in Subsection 7.03.4.1 a ballot that sets forth each proposed action and
provides an opportunity to vote for or against the action.
7.03.4.3 Any action by ballot shall be approved if the number of votes cast by
ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, as
provided in Section 7.03.4.1. A ballot is not effective until received by the Association.
7.03.4.4 If an action fails to receive the required number of votes, the Board may
extend the deadline for a reasonable period not to exceed eleven months upon further Notice to
all Owners as provided in Subsection 7.03.4.1. All votes previously cast on the proposal shall be
counted unless subsequently revoked.
7.03.4.5 A ballot cast pursuant to this Section 7.03.4 may be revoked only by
actual Notice to the Association of revocation. A revocation is not effective until received by the
Association.
7.03.4.6 The Association must give notice to Owners of any action taken
pursuant to this Section 7.03.4 within a reasonable time after the action is taken. A record of the
Exhibit 38
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action, including the ballots or a report of the persons appointed to tabulate such ballots, must be
kept with the minutes of meetings of the Association.
Section 7.04 Meetings.
7.04.1 Annual Meetings. There shall be an annual meeting of the Owners every
calendar year, or such other fiscal year as may be adopted by the Association. The
Association shall give Notice to all Owners no less than fourteen days and no
more than fifty days prior to the date fixed for such meeting, specifying the date,
time and place of the meeting, and an agenda of the matters to be considered,
including the text of any proposed amendment to any of the Organizational
Documents; any changes in the previously approved Budget that result in a
change in Assessment obligations; and any proposal to remove a Board member
or Officer.
7.04.2 Special Meetings. Special meetings of the Owners may be called at any
time for the purpose of considering matters which by the terms of this Declaration
require the approval of all or some of the Owners, or for any other reasonable
purpose. Special meetings of the Owners may be called by the president, a
majority of the Board, or by Owners having twenty percent of the votes in the
Association. Notice for special meetings shall be delivered not less than fourteen
days and no more than fifty days prior to the date fixed for such meeting. The
Notice shall specify the date, time and place of the meeting, and an agenda of the
matters to be considered, including the text of any proposed amendment to any of
the Organizational Documents; any changes in the previously approved Budget
that result in a change in Assessment obligations; and any proposal to remove a
Board member or Officer.
7.04.3 Quorum Requirements for Association Meeting. At all meetings of the
Owners, twenty percent (20%) of the voting Owners present in person or by proxy
shall constitute a quorum. A majority of Owners present and entitled to vote,
either in person or by proxy, shall be sufficient for the passage of any motion or
the adoption of any resolution, except as otherwise specified in the Governing
Documents. If the required quorum is not present, another meeting may be called
subject to the requirement of written Notice sent to all Owners at least fourteen
(14) days in advance of such meeting, and the required quorum at the subsequent
meeting shall be one-half (½) of the required quorum for the preceding meeting.
In the absence of a quorum at an Owner's meeting, a majority of those present in
person or by proxy may adjourn the meeting to another time but may not transact
any other business. An adjournment for lack of a quorum shall be to a date not
less than five (5) nor more than thirty (30) days from the original meeting date.
7.04.4 Minutes. Minutes of all Owner meetings shall be maintained in a record,
including the decision on each matter voted upon at such meeting.
Exhibit 38
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Section 7.05 Bylaws of Harbor Association.
Bylaws may be adopted and amended by the Board. The Bylaws may contain provisions which
are supplementary to, and consistent with this Declaration and the Act.
Section 7.06 Powers of the Association.
7.06.1 The Association shall (a) adopt organizational documents; (b) adopt Budgets; (c)
impose Assessment for Common Expenses on the Owners; (d) prepare financial
statements; and (e) deposit and maintain the funds of the Harbor Association in
accordance in accordance with Section 9.12.
7.06.2 The Association shall also have the powers enumerated below, any powers
reasonably implied from the grant of enumerated powers, any powers necessary and
proper for the governance and operation of the Harbor Association· and all other powers
that may be exercised in Washington state by a plat community including, but not limited
to:
7.06.2.1 Purchase policies of liability and property insurance on the Common
Elements and the Buildings, directors' and officers' liability insurance and such other
insurance as the Board deems advisable, and take all actions which may be necessary or
convenient in dealing with any insurance recovery or any insurance company;
7.06.2.2 Purchase legal and accounting services, if necessary, for the
administration of Association affairs, administration of the Common Elements, or the
enforcement of this Declaration;
7.06.2.3 Arrange for the maintenance, repair and replacement of the Common
Elements;
7.06.2.4 If necessary, maintain any Unit if such maintenance is reasonably
necessary in the judgment of the Board to preserve the appearance and value of the
Community as a whole pursuant to Section 4.03.
7.06.2.5 Pay any amount necessary to discharge any lien or encumbrance levied
against the entire Property or any part thereof which is claimed or may, in the opinion of
the Board, constitute a lien against the Property or a portion thereof and/or against the
Common Elements. Where one or more Owners are responsible for the existence of such
liens, they shall be jointly and severally liable for the cost of discharging it and any costs
or expenses, including reasonable attorneys' fees and costs of title sea rch incurred by the
Board by reason of such lien or liens. Such fees and costs shall be assessed against the
Owner or Owners and the Lot responsible to the extent of their responsibility.
7.06.2.6 Pay all utility charges attributable to Common Elements:
7.06.2.7 Maintain or support certain activities within the Property designed to
make the Owners and occupants safer than they might otherwise be. However, neither the
Association nor Declarant shall in any way be considered an insurer or guarantor of
security within the Property nor shall either be held liable for any loss or damage by
Exhibit 38
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reason of failure to provide adequate security or ineffectiveness of security measures
undertaken.
7.06.2.8 Hire and discharge managing agents and other employees, agents, and
independent contractors ;
7.06.2.9 Adopt, publish and amend Association Rules governing the Owners,
Occupants and guests and establish reasonable penalties for any infraction thereof ;
7.06.2.10 Employ a property manager, to keep the books of the Association, and
take such other actions as the Association may deem appropriate;
7.06.2.11 Impose Special Assessments to pay for Common Expenses;
7.06.2.12 Exercise all powers, duties and authority vested in or delegated to the
Association and not reserved to the membership by other provisions of the Governing
Documents;
7.06.2.13 Acquire by gift pledge or otherwise, own, hold, improve, build upon,
operate, maintain, insure, convey, sell, lease, transfer, dedicate for public use or
otherwise dispose of real or personal property in connection with the affairs of the
Association;
7.06.2.14 Borrow money, and with the consent of at least 80% of the Owners,
mortgage, pledge, encumber or hypothecate any or all of its real or personal property as
security for money borrowed or debts incurred;
7.06.2.15 With the consent of at least 80% of the Owners, dedicate, sell, transfer,
all or any part of the Common Element to any public agency, authority or utility for such
purposes and subject to such conditions as may be agreed upon by the Board ;
7.06.2.16 Adopt and amend budgets;
7.06.2.17 Enter into contract and incur liabilities as provided in the Governing
Documents;
7.06.2.18 Grant easements, leases, licenses and concessions through or over the
Common Elements;
7.06.2.19 Impose and collect any reasonable payments, fees or charges for: (a) the
use rental, or operation of the Common Elements; (b) service provided to Owners; (c)
moving in, moving out, or transferring title to Units; (d) recordation of amendments to the
declaration, resale certificates required pursuant to the Act, lender questionnaires, or
statements of unpaid assessments; and
7.06.2.20 Provide for the indemnification of its officers and board members to the
extent provided in RCW 23B.17.030.
7.06.3 The Pleasant Harbor Association and Declarant shall have no authority, liability or
responsibility with respect to construction defects in any residence, and such issues shall
Exhibit 38
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be governed solely by the purchase and sale contract between each Owner and the builder
constructing the residence.
Section 7.07 Records.
The Board shall keep complete, detailed and accurate records of the following (collectively
“Records”):
7.07.1 Current budget, detailed records of receipts and expenditures affecting the operation
and administration of the Association, and other appropriate accounting records within the last
seven years;
7.07.2 Minutes of all meetings of the Owners and the Board, other than executive sessions;
a record of all actions taken by the Owners or Board without a meeting; and a record of all actions
taken by a Committee in place of the Board on behalf of the Association;
7.07.3 The names of current Owners and the addresses used by the Association to
communicate with them;
7.07.4 The original or restated Declaration and Organizational Documents and
amendments thereto;
7.07.5 Current Association Rules;
7.07.6 All financial statements and tax returns of the Association for the past seven years;
7.07.7 The names and address of the current Board members and Officers;
7.07.8 The Association’s most recent annual report;
7.07.9 Financial and other records sufficiently detailed to enable the Harbor Association
to provide information required by the Act including ,but not limited to, resale certificates required
by RCW 64.90.640;
7.07.10 Copies of contracts that the Association is a party to for a period of seven years
after termination of the contract;
7.07.11 Materials relied upon by the Board to approve or deny any requests for design or
architectural approval for period of seven years after such decision is made;
7.07.12 Materials relied upon by the Board or any Committee concerning a decision to
enforce the Governing Documents for a period of seven years after such decision is made;
7.07.13 Copies of all insurance policies under this the Association is named as an insured;
7.07.14 Any current warranties provided to the Association;
7.07.15 Copies of all notices provided to Owners or the Association as required by the
Governing Documents or the Act; and
7.07.16 Ballots, proxies, absentee ballots, and other records related to voting by Owners
for one year after the election, action, or vote to which they relate.
Exhibit 38
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Section 7.08 Examination of Records.
Subject to the following, all Records must be made available for examination and copying by all
Owners, Mortgagees, and their respective authorized agents:
7.08.1 Records may be inspected during reasonable business hours at the Association's
offices or at a mutually convenient time and location;
7.08.2 Records retained by an association may be withheld from inspection and copying
to the extent that they concern: (a) personnel and medical records relating to specific individuals;
(b) contracts, leases, and other commercial transactions to purchase or prov ide goods or services
currently being negotiated; (c) existing or potential litigation, mediation, arbitration, or
administrative proceedings; (d) existing or potential matters involving federal, state, or local
administrative or other formal proceedings before a governmental tribunal for enforcement of the
Governing Documents; (e) legal advice or communications that are otherwise protected by the
attorney-client privilege or the attorney work product doctrine, including communications with
any agents of the Association; (f) information the disclosure of which would violate a court order
or law; (g) records of an executive session of the Board; (h) individual Lot files other than those
requested by the Owner of that Lot; (i) unlisted telephone number or electronic address of any
Owner or Occupant; (i) security access information provided to the Association for emergency
purposes; and (k) Agreements that for good cause prohibit disclosure to the Owners.
7.08.3 The Association shall provide copies by photocopy or through electronic
transmission, if available, upon request by the person inspecting the Records. The Association
may charge a reasonable fee for producing and providing copies of any Records and for
supervising the inspection. The Association is not obligated to compile or synthesize any
information.
Article VIII. Association Finances
Section 8.01 Budget Preparation.
Not less than thirty days prior to the beginning of each fiscal year, the Board shall adopt a proposed
Budget containing:
8.01.1 The projected income to the Association by category;
8.01.2 The projected Common Expenses and those Specially Allocated Expenses that are
subject to being budgeted, both by category;
8.01.3 The amount of the Assessments per Unit and the date the Assessments are due;
8.01.4 the current amount of regular Assessments budgeted for contribution to the Reserve
Account;
8.01.5 A statement of whether the Association has a Reserve Study or is exempt pursuant
to Article IX.
8.01.6 If a Reserve Study has been prepared, a statement of the extent to which the Budget
meets or deviates from the recommendations of that reserve study; and
Exhibit 38
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8.01.7 6.1.7 The current deficiency or surplus in reserve funding expressed on a per Lot
basis.
The Budget shall be based on an estimate of the charges for Common Expenses to be paid during
the year, which may also make provision for creating, funding and maintaining reserves for
contingencies, operations, insurance, an maintenance, improvement, repa ir, replacement and
acquisition of Common Elements, including Common Element Structures, and which takes into
account any expected income and any surplus available from the prior year's operating fund.
Section 8.02 Ratification of Budget.
With respect to any Budget adopted after the Transition Date, the Board shall set a date for a
meeting of the Owners to consider ratification of the Budget. The date of the meeting shall be not
less than ten days and no more than fifty days after a summary of the annual Budget or special
Assessment supplemental Budget is mailed to each Owner. Unless at that meeting a majority of
the Owners reject the Budget, the Budget is ratified, whether or not a quorum is present. If the
proposed Budget is rejected or th e required Notice is not given, the periodic Budget last ratified
by the Owners shall be continued until such time as the Owners ratify a subsequent Budget
proposed by the Board.
Section 8.03 Supplemental Budget/Special Assessment.
If during the fiscal year the Budget proves to be inadequate for any reason, including nonpayment
for any reason of any Owner's Assessment or an unbudgeted Common Expense, the Board may
prepare a supplemental Budget for the remainder of the year that inclu des a special Assessment.
Any supplemental Budget that results in an increase in the Assessment charged to a Lot must be
ratified pursuant to Section 8.02 above. The Board shall have the authority to determine the date
payment of any special Assessment is due. The Board has the duty and/or right under various
provisions of this Declaration to assess sums against specific Owners (and not against all Owners).
Such Assessments against Owners shall be Assessments for all other purposes under this
Declaration. In addition, the Association may levy a special Assessment against a Lot for the costs
incurred by the Association to bring the Owner's Lot into compliance with this Declaration or the
other Governing Documents. Special Assessments may be levied either before or after the work is
done, in the discretion of the Board.
Section 8.04 Unit Assessment.
The annual expenditures contained in the Budget, net of budgeted income, shall be assessed in
equal shares against each Unit. Annual Assessments shall commence on and become due and
payable in twelve equal monthly installments, due on the first day of each month, or in any other
manner as the Board may reasonably require. Each Owner shall be obligated to pay Assessments
made pursuant to this Declaration as provided above by automatic withdrawal from the Owner’s
credit card or bank account or in any other reasonable manner as the Board shall designate. Owner
shall provide the Board with it account information for automatic withdrawal of Annual
Assessments within thirty (30) days of acquiring ownership of any Lot or Unit. Any Assessment
not paid in full when due shall be delinquent and shall bear interest as specified herein until paid.
Each Owner of a Lot, for himself or herself, and for his or her heirs, personal representatives,
Exhibit 38
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successors and assigns, hereby covenants and agrees, and each subsequent Owner of a Lot by
acceptance of a deed therefore, whether or not it shall be so expressed in the deed, is deemed to
covenant and agree to pay to the Association for each Lot owned any and all Assessments charged
by the Association pursuant to this Declaration. No Owner may exempt himself or herself from
liability for payment of Assessments for any reason, including waiver of use or enjoyment of any
of the Common Elements or abandonment of the Owner's Lot.
Section 8.05 Purpose of Assessment. The Assessments imposed by the Association shall be used
(a) to promote the recreation, health, safety, and welfare of the residents of the Property, (b) for
the improvement, maintenance, upkeep , repair, replacement, operation, and use of the Common
Elements, (c) for legal fees and damages , incurred in any action in which the Association or a
member of the Board, acting on behalf of the Association is named as a party, (d) for legal fees
incurred by the Association, and (e) for any other reasonable expenses incurred by the Association
Section 8.06 Commencement of Assessment.
Upon the conveyance of the first Lot, Assessments shall commence on all Lots; provided,
Declarant may delay commencement of Assessments for some or all Common Expenses or
Specially Allocated Expenses, provided Declarant pays all such expenses that have bee n delayed
in equal monthly installments on or before the first day of each month during such year, or in such
other reasonable manner as the Board shall designate.
Section 8.07 Omission of Assessment.
The omission by the Board before the expiration of any year to adopt the Budget and Assessments
for that or the next year shall not be deemed a waiver or modification in any respect of the
provisions of this Declaration or a release of an Owner from the obligation to pay the Assessments
or any installment thereof for that or any subsequent year, but the Assessment established for the
preceding year shall continue until a new Assessment is fixed.
Section 8.08 Capitalization of Association.
Upon the first sale only of each Lot by the Declarant (whether to a builder or otherwise), each
Owner, at the time of his or her purchase of the Lot, shall pay to the Association a contribution to
the initial working capital in the amount of $500.00. Such contribution shall be in addition to any
annual Assessment provided for in this Article 8. If Declarant has made such working capital
contribution for the subject Lot, then Declarant shall be reimbursed at the closing of the first sale
of such Lot. Notwithstanding the foregoing, Declarant shall not be required to pay a working
capital contribution for any Lots owned by Declarant.
Section 8.09 Special Assessments.
In addition to the annual Assessments authorized above, the Association may levy, in any
assessment year, a special Assessment, applicable to that year only, for the purpose of defraying,
in whole or in part, any expenses that were not included in the budget, either because those
expenses were not anticipated or exceeded the budgeted amount. Those expenses may include (a)
the cost of any capital improvements to the Common Elements, (b) legal fees and damage costs,
or (c) any other reasonable expenses incurred by the Association .
Exhibit 38
27
Section 8.10 Specially Allocated Expenses.
8.10.01 Benefitted Lots. The Board may elect that any expense of the Association or
portion thereof that benefit fewer than all Lots must be assessed exclusively against the
Lots benefitted.
8.10.02 Insurance Costs. The Board may elect that the costs of insurance must be assessed
in proportion to risk.
8.10.02 Utility Costs. The Board may elect that the costs of utilities, if any, must be
assessed in proportion to usage.
8.10.03 Assessment for Judgment. Assessments to pay a judgment against the Association
may be made only against the Lots in the Community at the time the judgment was entered
in proportion to their Common Expense ·Liabilities at the time the judgment was entered.
8.10.4 Owner Misconduct. To the extent that any expense is caused by the misconduct
of any Owner, the Association shall assess that expense against the Owner's Lot.
Section 8.11 Reallocation.
If the Common Expense Liability is recalculated, for example upon the exercise of a right
reserved under Section 10.04, the Assessments for Common Expense and any installment thereof
not yet due shall be recalculated in accordance with the recalculated Common Expense
Liabilities.
Section 8.12 Association Funds. The Association shall prepare an annual financial statement
in accordance with accrual-based accounting practices. If the Association's annual Assessments
total fifty thousand dollars ($50,000) or more, then the financial statements must be audited
annually by a certified public accountant. If the Association's annual Assessments are less than
fifty thousand dollars ($50,000), then the audit may be waived on an annual basis by a majority
vote of the Owners, excluding the votes for Lots owned by Declarant. The Association shall keep
all funds of the Association in the name of the Association with a qualified financial institution.
The funds shall not be commingled with the funds of any other person or entity or kept in any
trust account or custodial account in the name of any trustee or custodian.
Section 8.13 Account Reconciliation.
The Association shall establish and maintain its accounts and records in a manner that enables it
to credit Assessments for Common Expenses and Specially Allocated Expenses, including
Allocations to Reserves, and other income to the Association, and to charge expenditures, to the
account of the appropriate Lots in accordance herewith. Unless the Board determines that a
reconciliation would not result in material savings to any Owner, the accounts must be
reconciled at least annually. Any surplus funds remai ning after the payment of or provision for
Common Expenses and any prepayment of Reserves shall be credited to Owners to reduce future
Common Expense Assessments.
Exhibit 38
28
Section 8.14 Lien for Assessments.
8.14.1 Lien. The Association has a lien on each Lot for any unpaid Assessments levied
against that Lot from the date the Assessment is due.
8.14.2 Priority. A lien under Section 8.14.1 shall be prior to all other liens and
encumbrances on a Lot except: (a) liens and encumbrances recorded before the recording
of this Declaration; (b) a Mortgage on the Lot recorded before the date on which the
Assessment sought to be enforced became delinquent; and (c) liens for real estate taxes
and other governmental assessments or charges against the Lot.
8.14.3 Mortgage Priority. Except as provided in Sections 8.14.4 and 8.14.5, the lien for
Assessments shall also be prior to the Mortgages described in Section 8.14.2(b) to the
extent of Assessments for Common Expenses, excluding any amounts for capital
improvements, based on the periodic Budget adopted by the Association pursuant to
Section 8.1, which would have become due during the six months immediately
preceding the date of the sheriffs sale in an action for judicial Foreclosure by either the
Association or a Mortgagee, the date of a trustee's sale in a non-judicial Foreclosure by a
Mortgage or the date of recording of this Declaration of forfeiture in a proceeding by the
vendor under . eat estate contract. "Foreclosure" means a statutory forfeiture or a judicial
or nonjudicial for foreclosure of a Mortgage or other conveyance in leu of foreclosure.
8.14.4 Mortgagee Notice. The priority of the Association's lien against Lots encumbered
by a Mortgage held by a First Mortgagee or by a Mortgagee which has given the
Association a written request for a notice of delinquent Assessments shall be reduced by
up to three months if and to the extent that the lien priority under Section 8.14.3 includes
delinquencies which relate to a period after such holder becomes a First Mortgagee or has
given such request for notice and before the Association gives the holde r a written notice
of the delinquency.
8.14.5 Recoding as Notice. The recording of this Declaration constitutes record notice
and perfection of the Association's lien for Assessments. While no further recording of
any claim of lien for Assessments under this Section shall be required to perfect the
Association's lien, the Association may record a notice of claim of lien for Assessments
in the real estate records of the County in which the Community is located. Such
recording shall not constitute the written notice of delinquency to a Mortgagee referred to
in Section 8.14.3.
8.14.6 Limitation on Action. A lien for unpaid Assessments and the personal liability for
payment of Assessments is extinguished unless proceedings to enforce the lien or collect
the debt are instituted within six years after the amount of the Assessments sought to be
recovered becomes due.
8.14.7 Foreclosure. The Association may not foreclose its lien unless: (i) the delinquent
amounts secured by such lien exceed an amount equal to three months of Assessments for
Exhibit 38
29
Common Expenses and Specially Allocated Expenses; (ii) the Board approves
commencement of the Foreclosure action for the subject Lot; and (iii) methods of
collection and such Foreclosure under this Section are commercially reasonable.
[add judicial/ non-judicial foreclosure options]
8.14.8 Receiver. From the time of commencement of an action by the Association to
foreclose a lien for nonpayment of delinquent Assessments against a Lot that is not
occupied by the Owner thereof, the Association shall be entitled to the appointment of a
receiver to collect from the lessee thereof the rent for the Lot as and when due. If the rent
is not paid, the receiver may obtain possession of the Lot, refurbish it for rental up to a
reasonable standard for rental Lots in the Community, rent the Lot, and apply the rents
first to the cost of the receivership and attorneys' fees thereof, then to the cost of
refurbishing the Lot, then to the costs, fees, and charges of the Foreclosure action, and
then to the payment of the delinquent Assessments. Only a receiver may take possession
and collect rents under this Section. A receiver shall not be appointed less than ninety
days after the delinquency. The exercise by the Association of the foregoing rights shall
not affect the priority of preexisting liens on the Lot.
8.14.9 Mortgagee Liability. Except as provided in Section 8.14.3, the holder of a
Mortgage or other purchaser of a Lot who obtains the right of possession of the Lot
through Foreclosure shall not be liable for Assessments or installments thereof that
became due prior to such right of possession. Such unpaid Assessments shall be deemed
to be Common Expenses collectible from all the Owners, including such Mortgagee or
other purchaser of the Lot. Foreclosure of a Mortgage does not relieve the prior Owner of
personal liability for Assessments accruing against the Lot prior to the date of suc h sale
as provided in this Section.
8.14.10 Lien Survives Sale. The Association's lien shall not be affected by the sale or
transfer of the subject Lot except in the event of sale through Foreclosure, as provided in
Section 8.14.9.
8.14.11 Waiver of Homestead. Each Owner hereby waives, to the extent of any liens
created pursuant to this Article, the benefit of any homestead or exemption law in effect
at the time any assessment or installment thereof becomes delinquent, or any lien is
imposed pursuant to the terms hereof.
Section 8.15 Owner Liability.
In addition to constituting a lien on the Lot, each Assessment shall be the joint and several
obligation of the Owner of the Lot to which the same are assessed as of the date the Assessment
is due. In a voluntary conveyance, the new Owner (purchaser) of a Lot shall be jointly and
severally liable with the former Owner (seller) for all unpaid Assessments against the Lot up to
the date of closing of such conveyance, without prejudice to the new Owner's right to recover
from the former Owner the amounts paid by such new Owner therefor. Suit to recover a
personal judgment for any delinquent Assessment shall be maintainable in any court of
competent jurisdiction without foreclosing or waiving the lien securing such sums. No Owner
Exhibit 38
30
shall be entitled to asse1t as a setoff or defense against an obligation to pay Assessments any
obligation or liability due from, or claim assessed against, the Association or any other person.
Section 8.16 Late Charges.
The Association may from time to time establish reasonable late charges and a rate of interest to
be charged on all subsequent delinquent Assessments or installments thereof. In the absence of
another established non-usurious rate, delinquent Assessments shall bear interest from the date of
delinquency at the maximum rate permitted under RCW 19.52.020 on the date on which the
Assessments became delinquent.
Section 8.17 Attorneys’ Fees and Costs.
The Association shall be entitled to recover any costs and reasonable attorneys' fees incurred in
connection with the collection of delinquent Assessments, whether or not those collection
activities result in suit being commenced or prosecuted to judgment. In addition, the prevailing
party shall be entitled to recover any costs and reasonable attorneys' fees incurred in connection
with the collection of delinquent Assessments, whether or not such collection activities result in
suit being commenced or prosecuted to judgment. In addition, the prevailing party shall be
entitled to recover costs and reasonable attorneys' fees if it prevails on appeal and in the
enforcement of a judgment.
Section 8.18 Assessment Certificate.
The Association, upon written request, shall furnish to an Owner or a Mortgagee a statement
signed by an Officer or authorized agent of the Association setting forth the amount of unpaid
Assessments or the priority amount against that Lot, or both. The statement shall be furnished
within fifteen days after receipt of the request and is binding on the Association, the Board, and
every Owner, unless and to the extent known by the recipient to be false.
Section 8.19 Acceleration.
In the event any monthly or special Assessment for a Lot remains delinquent for more than sixty
days, the Board may, upon fifteen days' written notice to the Owner of such Lot, accelerate and
demand immediate payment of all, or such portion as the Board determines, of the monthly and
special Assessments which the Board reasonably determines will become due during the next
succeeding twelve months for such Lot.
Article IX. Reserve and Study Accounts
Section 9.01 Reserve Study.
Unless the Association has only nominal reserve costs or the cost of a reserve study or update
would exceed 10% of the Association's annual budget, the Association shall:
9.01.1 Cause to be prepared an initial reserve study and annual updates in accordance
with RCW 64.90.545 and 64.90.550 (collectively, "Reserve Study"). The initial Reserve Study
and every third-year update, if required, shall be prepared by an independent reserve study
professional in accordance with the Act); and
Exhibit 38
31
9.01.2 Establish one or more interest-bearing accounts ("Reserve Account") for the
deposit of any funds for the replacement costs of reserve components ("Reserve Components")
identified in the Reserve Study.
Section 9.02 Reserve Account.
The Reserve Account shall be administered and under the direct control of the Board.
9.02.1 The Board may withdraw funds from the Reserve Account to pay for replacement
costs of Reserve Components not included in the Reserve Study.
9.02.2 The Board may withdraw funds from the Reserve Account to pay for unforeseen
or unbudgeted costs that are unrelated to replacement costs of the Reserve Components,
provided:
9.02.2.1 The Board shall adopt a schedule to replace the withdrawn reserves
within twenty-four months unless the Board determines that repayment within
twenty-four months would impose an unreasonable burden on the Owners.
9.02.2.2 The amount of any such withdrawal, the current deficiency in reserve
funding on per Lot basis, and the repayment plan shall be included with the
annual Budget provided to Owners.
9.02.3 All withdrawals from the Reserve Account shall be recorded m the Association's
minute books.
Section 9.03 Owner Demand for Reserve Study.
Should the Board fail to prepare a required Reserve Study for a period of three years or more
Owners holding at least 20% of the total votes in the Association may issue a written demand
referencing 64.90.555 that the cost of a Reserve Study be included in the next annual Budget and
that the Reserve Study be prepared by the end of that Budget year. Upon receipt of such demand,
the Board shall include the cost of a Reserve Study in the next Budget and, if that Budget is not
rejected by a majority vote of the Owners, arrange for the preparation of a Reserve Study. One or
more Owners may bring an action to enforce the requirements of this Article 9. In such an action,
a court may order specific performance and may award reasonable attorneys' fees and costs to
the prevailing party. An Owner's duty to pay Assessments is not excused because of the
Association's failure to comply with this Article 9. A Budget ratified by the Owners is not
invalidated because of the Association's failure to comply with this Article 9.
Section 9.04 Liability.
Except for an award for attorneys' fees and costs under Section 7.3, the Association shall not be
liable for monetary damages or other liability awarded against or imposed upon the Association,
its Officers, or Board members, or upon any person who may have provided advice or assistance
to the Association, its Officers, or Board members, for failure to establish or replenish a Reserve
Account or have a current Reserve Study prepared or updated, or to include information
regarding Reserve Account withdrawals in the Budget.
Exhibit 38
32
Article X. Special Declarant Rights
Section 10.01 Declarant Control Period.
"Declarant Control Period" shall mean that period of time from the date of recording this
Declaration until the earlier of: (a) sixty days after Declarant has transferred title to the
purchasers of Lots representing 75% of the total lots in the Plat; (b) t wo years after the last
conveyance of a Lot, except to a Dealer; and (c) the date on which Declarant, by written Notice
to all Owners, records an amendment to the Declaration voluntarily surrendering all rights to
appoint and remove officers and board members.
Section 10.02 Assignment of Declarant Rights.
Declarant may, at any time, by recorded instrument (a "Declarant Assignment"), assign and/or
delegate all or a portion of its rights and obligations under this Declaration to another Person.
The scope of the rights assigned and the liability assumed shall be limited solely to those
specified in such Declarant Assignment. The original Declarant shall be deemed released from
any obligations which is assumed by a Successor Declarant and shall not be liable for any act or
omission by a successor Declarant.
Section 10.03 Expenditure During Declarant Control Period.
During the Declarant Control Period, the Board shall have the sole discretion to use and consume
all or so much of the dues paid, and initial capital contributions, as in the Board's judgment is
necessary or expedient in maintaining the Common Elements and carrying out the other
functions of the Association. Maintenance of Common Elements include, but are not limited to,
(1) replacement of all dead or missing landscaping; (2) irrigation costs and repairs; and (3) costs
of repairing damage due to vandalism or other destruction. Other expenditures may include, but
are not limited to, any legal fees associated with carrying out any duties during the Declarant
Control Period, including all costs associated with turning over the Association after the
expiration of such Declarant Control Period.
Section 10.04 Special Declarant Rights
As more particularly provided in this Section, Declarant, for itself and any successor Declarant,
has reserved the following Special Declarant Rights, which rights may only be transferred in
accordance with RCW 64.90.425:
10.04.1 to complete any improvements indicated on the Map or in this Declaration;
10.04.2 to exercise any development right;
10.04.3 to maintain sales offices, management offices, models, and signs advertising the
Community and Lots for sale therein;
10.04.4 to use easements through the Common Elements for the purpose of making
improvements within the Community or within real estate that may be added to the Community;
10.04.5 to make the Pleasant Harbor Association subject to a master association;
Exhibit 38
33
10.04.6 to merge consolidate the Community or Harbor Association with another
common interest community of the same form of ownership;
10.04.7 to appoint or remove any Officer or Board Member of the Association in
accordance with Sections [Board provisions], and or to veto or approve a proposed action of the
Board or Association;
10.04.8 to control and construction, design review, or aesthetic standards or process;
10.04.9 to attend meetings of the Owners, the Association, and, except during an
executive session, the Board; and
10.04.10 to have access to the Records of the Association to the same extent as an
owner.
Section 10.05 Other Declarant Rights.
As more particularly provided in this Section, Declarant, for itself and any successor Declarant,
has reserved the following Declarant Rights:
10.05.1 To subdivide, combine or adjust the boundary lines of Lots owned by Declarant
or convert Lots owned by Declarant into Common Elements. Whenever Declarant exercises a
Development Right to subdivide, combine or convert a Lot previously created into additional
Lots, Common Elements, or both:
10.05.1.1 If Declarant converts a Lot entirely to Common Elements, Declarant
shall record an amendment to this Declaration reallocating the Allocated Interests among the
remaining Lots in the Community in accordance with the formula stated in Section [];
10.05.1.2 If Declarant subdivides a Lot into two or more Lots, whether or not any
part of the Lot is converted into Common Elements, Declarant shall record an amendment to this
Declaration reallocating the Allocated Interests of the subdivided Lot among the Lots cre ated by
such subdivision in any reasonable and equitable manner prescribed by the Declarant; and
10.05.1.3 If Declarant combines two or more Lots, Declarant shall record an
amendment to this Declaration allocating to the new Lot those Allocated Interests of the former
Lots that were combined;
10.05.2 To add Real Estate or improvements to the Community;
10.05.3 To create Lots or Common Elements with Real Estate included or added to the
Community;
10.05.4 To withdraw Property from the Community subject to the following limitations:
10.05.4.1 If all the Property is subject to withdrawal, and this Declaration, or the
Map or amendment thereto, does not describe separate portions of Property subject to that
right, none of the Property may be withdrawn if a Lot in that portion of the Property is
owned by a Person other than the Declarant; and
Exhibit 38
34
10.05.4.2 If a portion or portions are subject to withdrawal as described in this
Declaration, or in the Map or in any amendment thereto, no portion may be withdrawn if a Lot in
that portion of the Property is owned by a Person other than the Declarant.
10.05.5 Declarant shall prepare, execute, and record an amendment to this Declaration in
accordance with Article [].
Section 10.06 Limitation of Declarant’s Rights.
It is understood that that the total Community shall not exceed the total number of residential
units permitted under the Development Agreement.
Section 10.07 Termination of Development Rights.
Except as otherwise provided in this Declaration, the foregoing Development Rights and Special
Development Rights shall continue so long as the Declarant is completing improvements which
are within or may be added to this Community, or the Declarant owns any Lots, or any Special
Declarant Rights remain in effect; provided, that Declarant may voluntarily terminate any or all
of such Development Rights or Special Development Rights at any time by recording an
amendment to this Declaration, which amendment specifies which Right is thereby terminated.
Article XI. Transition of Management from Declarant to Association
Section 11.01 Notice of Transition.
Within thirty days following the end of the Declarant Control Period, Declarant shall send
written Notice to Owners of the transition meeting of the Association ("Transition Meeting").
The Notice shall be given in the manner prescribed by Section 18.1 and specify that the purpose f
the Transition Meeting is to elect new Officers and Board members of the Association.
Notwithstanding any provision of the Articles or Bylaws to the contrary, for the purpose of this
meeting the presence, either in person or by proxy, of the Owners of 10% of the Lots shall
constitute a quorum. The Board of Directors and Officers of the Association may be elected by a
majority vote of· such quorum. The Owners shall adopt voting procedures designed to assure
that the expiration dats for the term of the Board members are staggered. If a quorum shall not be
present, the Declarant Control Period shall nevertheless terminate on that date specified in such
Notice, the term in office of any Board member or Officer appointed by Declarant shall be
deemed terminated, and it shall thereafter be the responsibility of the Owners to provide for the
operation of the Association.
Section 11.02 Transfer of Property.
No later than thirty days following the date of the Transition Meeting, Declarant shall deliver or
cause to be delivered to the Board elected at the Transition Meeting all Property of the Owners
and Association, including:
11.02.1 The original or a copy of the recorded Declaration and any amendments;
11.02.2 The organization documents of the Association;
Exhibit 38
35
11.02.3 The minute books and other books and records of the Association;
11.02.4 The Financial Records;
11.02.5 Insurance policies secured by the Association;
11.02.6 All tangible personal property of the Association;
11.02.7 All written warranties that are still in effect for the Common Elements, or any
other areas or facilities;
11.02.8 Lease to which the Association is a party;
11.02.9 All contract to which the Association is a party.
Section 11.03
Within sixty days of the Transition Meeting, the Board must retain the services of a certified
public accountant to audit the records of the Association as of the date of the Transition Meeting,
in accordance with generally accepted auditing standards, unl ess a majority the Owners,
excluding the Declarant, elect to waive the audit. The cost of the audit is a Common Expense.
The accountant performing the audit must examine supporting documents and records, including
the cash disbursements and related paid invoices, to determine if expenditures were for
Association purposes and the billings, cash receipts, and related records to determine if the
Declarant was charged for and paid the proper amount of Assessments.
Article XII. Pleasant Harbor Association Board of Directors, Officers and Committees
Section 12.01 Management of Association.
The Board shall have the power and authority to exercise all the rights, duties and functions and
generally exercise all powers necessary to carry out the provisions of this Declaration, including
but not limited to enacting Association Rules, contracting for required services, obtaining
property and liability insurance, and collecting and expending all Assessments and Association
funds. The Board shall have the exclusive right to contract for all goods and services, payment
for which is to be made from any monies collected from Assessments. All Association Rules
shall be reasonable. Following the adoption or amendment of any Association Rules, the Board
shall notify Owners of its action and provide a copy of any new or revised Association Ru le.
Section 12.02 Board Members. All Board members other than those appointed by Declarant
pursuant to Section [] must be Owners, or the officer, director, or agent of an Owner which is an
entity; any Board Member who no longer qualifies shall cease to be a Board Member. Board
Members shall serve for two-year terms of office unless otherwise provided in the Bylaws. The
number of directors and titles of the officers are stated in the Bylaws.
12.02.1 Appoint During Declarant Control Period. During the Declarant Control Period,
Declarant may appoint and remove Association Officers and Board members, provided,
the Board shall be constituted as follows:
Exhibit 38
36
12.02.1.1 Upon creation of the Association, the Declarant shall have sole
authority to appoint all Board members who need not be members of the Association.
12.02.1.2 Not later than 60 days after conveyance of 25% of the Lots to
Owners other than Declarant, Owners other than Declarant shall elect at least one Board
member, but in no case less than 25% of the total number of Board members.
12.02.1.3 Not later than 60 days after conveyance of 50% of the Lots to
Owners other than Declarant, one-third of the Board members shall be elected by Owners
other than Declarant.
12.02.1.4 Until such Board members are elected and take office, the existing
Board may continue to act on behalf of the Association.
Section 12.03 Organization Board Meeting.
The first meeting of a newly elected Board shall be held immediately following the Transitional
Meeting of the Association at which they were elected, and no Notice shall be necessary to the
newly-elected Board members to legally constitute such meeting.
Section 12.04 Removal of Board Members.
12.04.1 By the Board. The Board may remove a board member if the Board member is
more than sixty days' delinquent in the payment of Assessments and such delinquency
remains uncured for thirty days after receiving Notice of the Board's intent to remove
such Board Member.
12.04.2 By Owners. At any regular meeting or at any special meeting called for that
purpose, at which a quorum is present, the Owners present in person, by proxy, or by
absentee ballot may remove any Board Member elected by the Owners, with or without
cause, by affirmative vote of the lesser of (a) a majority of all Owners or (b) two-thirds of
those Owners present at the meeting. Removal may not be voted on unless consideration
of such removal was noted on the meeting Notice. Any Board member whose remova l
has been so proposed by the Owners shall be given an opportunity to be heard at the
meeting. Following removal of a Board member, the Owners may immediately elected a
successor Board member in accordance with the Governing Documents.
Section 12.05 Vacancies.
Vacancies in the Board caused by any reason other than the removal of a Board Member by a
vote of the Association shall be filled by vote of the majority of the remaining Board members,
even though they may constitute less than a quorum; and each person so elected shall be a Board
member until a successor is elected at the next annual meeting of the Association.
Exhibit 38
37
Section 12.06 Compensation.
No Board member shall receive compensation for any service he may render to the Association
as a Board member. However, any Board member may be reimbursed for his or her actual
expenses incurred in the performance of his or her duties.
Section 12.07 Board Meetings.
12.07.1 During Declarant Control Period. During the Declarant Control Period, the
Board must meet at least four times a year. At least one of those meetings must be held at
the Community or at a place convenient for the Owners.
12.07.2 After Declarant Control Period. Regular meetings of the Board may be held at
such time and place as shall be determined, from time to time, by a majority of the Board
members, provided:
12.07.2.1 All Board meetings must be at the Community or at a place convenient
for the Owners, unless the Owners amend the Bylaws to vary the location of Board
meetings; and
12.07.2.2 At least one Board meeting shall be held during each fiscal year; and
12.07.2.3 One such meeting shall be held immediately following the annual
meeting of Owners.
12.07.3 Special Meetings. Special meetings of the Board shall be called by the President,
Secretary or written request by two or more Board members.
12.07.4 Owner Attendance. Owners shall have the right to attend meetings of the Board
and Committees, except during an executive session; provided, the chair of the meeting
may expel or prohibit attendance by any person who, after warning by the chair of the
meeting, disrupts the meeting. The Board shall make reasonably available to Owners any
materials that were distributed to the Board before the meeting. The Board shall provide a
reasonable opportunity at every meeting for Owners to comment regarding m atters
affecting the Association.
12.07.5 Electronic Conferencing. One or more Board members may participate in a
Board meeting by telephonic, video, or other conferencing process, provided the
meeting Notice states the conferencing process to be used and provides information
explaining how Owners may participate; and the process provides all Owners the
opportunity to hear or perceive the discussion and to comment as provided in Section
12.07.4.
12.07.6 Declarant Veto. During the Declarant Control Period, Declarant may veto or
approve a proposed action of the Board.
12.07.7 Proxies. Board members may not vote by proxy or absentee ballot.
Exhibit 38
38
12.07.8 Minutes. Minutes of all Board meetings, excluding executive sessions, must be
maintained in a record, including the decision on each matter voted upon at such meeting.
12.07.9 Notice. Unless a meeting is called to deal with an emergency, or included in a
schedule given the Owners, Notice of meetings of the Board and Committees shall be
given to all Board Members and Owners not less than fourteen days prior to the day
named for such meeting.
12.07.10 Waiver of Notice. Before, at, or after any meeting of the Board, any Board
member may, in writing, waive Notice of such meeting and such waiver shall be deemed
equivalent to the giving of such Notice. Attendance by a Board member at any meeting of
the Board shall be a waiver of Notice by him or of the time and place thereof. If all the
Board members are present at any meeting of the Board, no Notice shall be required and
any business may be transacted at such meeting.
12.07.11 Executive Sessions. The Board and Committees may hold executive session
during a regular or special meeting only to (a) consult with the Association's attorney
concerning legal matters; (b) discuss existing or potential litigation or mediation,
arbitration, or administrative proceedings; (c) discuss labor or personnel matters; (d)
discuss contracts, leases, and other commercial transactions to purchase or provide goods
or services currently being negotiated, including the review of bids or propos als, if
premature general knowledge of those matters would place the Association at a
disadvantage; or (e) prevent public knowledge of the matter to be discussed if the Board
or Committee determines that public knowledge would violate the privacy of any person.
No final vote or action may not be taken during an executive session .
12.07.12 Qurom. At all meetings of the Board, a majority of the members of the Board
shall constitute a quorum for the transaction of business, and the acts of a majority of the
Board members present at a meeting at which a quorum is present shall be the acts of the
Board. If, at any meeting of the Board, there is less than a quorum present, the majority
of those present may adjourn the meeting from time to time. An adjournment for lack of a
quorum shall be to a date not less than five nor more than thirty days from the original
meeting date. At any such adjourned meeting, any business which m ight have been
transacted at the meeting as originally called may be transacted without further not ice.
Section 12.08 Officers.
The Officers of the Association shall consist of president, treasurer, secretary, and any other
officers of the Association specified in the Bylaws ("Officer"). During the Declarant Control
Period, all Officers of the Association shall be appointed by Declarant. After the Transition
Meeting, all Officers of the Association shall be elected by the Board. All Officers shall be
Owners.
Exhibit 38
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Section 12.09 Fidelity Bonds.
The Board may require that all officers and employees of the Association handling or responsible
for Association funds shall furnish adequate fidelity bonds. The premiums on such bonds shall
be paid by the Association.
Article XIII. Limitation of Liability
Section 13.01 Liability for Utility Failure, Etc.
Except to the extent covered by insurance obtained by the Board pursuant to Article 14, the
Association, Board members (including the Declarant if a Board member), Officers, and
Committee members shall not be liable for: (i) any failure of any utility or other service to be
obtained and paid for by the Board; (ii) for injury or damage to Person or Property caused by the
elements, or resulting from electricity, noise, smoke, water, rain (or other liquid), dust or sand
which may leak or flow from outside or from any parts of the Buildings, or from any of its
pipes, drains, conduits, appliances, or equipment, or from any other places; or (iii) for
inconvenience or discomfort resulting from any action taken to comply with any law, ordinance
or orders of a governmental authority. No diminution or abatement of Assessments shall be
claimed or allowed for any such utility or service failure, or for such injury or damage, or for
such inconvenience or discomfort.
Section 13.02 No Personal Liability.
The Association, Board members (including the Declarant if a Board member), Officers, and
Committee members who have acted in good faith, without willful or intentional misconduct,
upon the basis of such information as may be possessed by such Person and such Person's
evaluation of such information, shall not be personally liable to any Owner, or other Person,
including the Association, for any damage, loss or prejudice suffered or claimed on account of
any act, omission, error or negligence, including any discretionary decision, or failure to make a
discretionary decision by such Person in such Person's official capacity. Without limiting the
generality of the foregoing, the term "discretionary decisions" shall include evaluating and
deciding whether or not (act in response to reports, investigations or recommendations received
by such Person, and shall include deciding whether or not to commence, defend, continue, or
settle lawsuits or arbitration/mediation or other legal proceedings involving the Association or
Community (or any part thereof). Provided, that this Section shall not apply where the
consequences of such act, omission, error or negligence are covered by insurance obtained by the
Board pursuant to Article 14.
Section 13.03 Indemnification of Board Members.
Each Board member, Committee member, and Officer (including Declarant in its capacity as a
Board or Committee member or Officer), shall be indemnified by the Association against all
expenses and liabilities, including attorneys' fees, reasonably incurred b y or imposed in
connection with any proceeding to which he may be a party, or in which he may become
involved, by reason of being or having held such position at the time such expenses or liabilities
arose or are incurred, except in such cases wherein such Person is adjudged guilty of either
willful or intentional misconduct, a knowing violation of the law in the performance of his duties
Exhibit 38
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and except in such cases where such Person has participated in a transaction from which such
Person will personally receive a benefit in money, Property or services to which such Person is
not legally entitled. Provided, that, in the event of a settlement, the indemnification shall apply
only when the Board approves such settlement and reimbursement as being in the best interest of
the Association.
Article XIV. Insurance
Section 14.01 General Requirements.
Commencing not later than the time of the first conveyance of a Lot to a Person other than the
Declarant, the Association shall maintain, in its name, to the extent reasonably available, a policy
or policies and bonds necessary to provide: (a) commercial g eneral liability insurance; (b)
property insurance; (c) fidelity bonds; (d) workers' compensation insurance to the extent required
by applicable laws; (e) directors and officers liability insurance; and (f) such other insurance as
the Board deems advisable. The Board shall review at least annually the adequacy of the
Association's insurance coverage. All insurance shall be obtained from insurance carriers with a
minimum A VIII Best's financial rating and authorized to do business in the state of Washington,
and, if required, meet the specific requirements of any Federal Mortgage Agency regarding the
qualifications of insurance carriers. Notwithstanding any other provisions herein, the Association
shall continuously maintain in effect liability insurance and fidelity bonds that meet any
applicable requirements established by any Federal Mortgage Agency so long as any of them is a
holder of a Mortgage or Owner of a Lot, except to the extent such coverage is not available or
has been waived in writing by them. All such insurance policies and fidelity bonds shall
provide that coverage may not be canceled or substantially modified without at least thirty
days' (ten days' cancellation , for nonpayment of premium) prior written notice to all insureds
named therein, including Owners, Mortgagees, and designated servicers of Mortgages.
Section 14.02 Property Insurance.
The policy for property insurance shall insure the Common Elements, insuring against risks of
direct physical loss commonly insured against, which insurance, after application of any
deductibles, must be not less than 80% of the actual cash value of the insured Property at the
time the insurance is purchased and at each renewal date, exclusive of land, excavations,
foundations, and other items normally excluded from property policies.
Section 14.03 Liability Insurance.
The policy of public liability insurance, including medical payments insurance, shall insure the
Board, the Association, the Owners, and any managing agent, and cover all of the Common
Elements in the Community with a "Severability of Interest Endorsement" or equivalent
coverage which would preclude the insurer from denying the claim of an Owner because of the
negligent acts of the Association or of another Owner, and shall cover liability of the insureds for
property damage and bodily injury and death of persons arising out of the operation,
maintenance, and use of the Common Elements, liability in connection with employment
contracts of the Association, host liquor liability, employers' liability (stop gap) insurance, non -
owned and hired automobile liability insurance, and such other risks as are customarily covered
Exhibit 38
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with respect to projects of similar construction, location and use. The limits of liability shall be
in amounts generally required by mortgages for projects of similar construction, location and use
but shall be at least $1,000,000 bodily injury and property damage per occurrence and
$2,000,000 general aggregate.
Section 14.04 Insurance Trustee; Power of Attorney. The named insured under the policies
referred to above shall be the Association, as trustee for each of the Owners. The insurance
proceeds may be made payable to any trustee with which the Association enters into an
insurance trust agreement, or any successor trustee, who shall have exclusive authority to
negotiate losses under the policies. Each Owner appoints the Association, or any insurance
trustee or successor trustee designated by the Association, as attorney -in-fact for the purpose of
purchasing and maintaining such insurance, including the collection and appropriate disposition
of the proceeds thereof, the negotiation of losses and execution of releases of liability, the
execution of all documents and the performance of all other acts necessary to accomplish such
purposes.
Section 14.05 Additional Policy Provisions.
The insurance obtained shall contain the following provisions and limitations :
14.05.1 Each Owner is an insured Person under the policy with respect to liability arising
out of the Owner's interest in the Plat or membership in the Association ;
14.05.2 Such policies shall not provide for contribution by (or Assessment against)
Mortgagees or become a lien on the Property superior to the lien of a First Mortgage. If at the
time of the loss under the policy, there is other insurance in the name of the Owner covering the
same risk covered by the policy, the Association's policy provides primary insurance .
14.05.3 Coverage shall not be prejudiced by (a) any act, omission or neglect of the
Owners when such act or neglect is not within the scope of the Owner's authority on behalf of
the Association, or (b) failure of the Association to comply with any warranty or condition with
regard to any portion of the premises over which the Association has no control.
14.05.4 A waiver of subrogation by the insurer as to all claims against the Association,
the Owner, and/or their respective agents, members of the Owner's household, employees, or
lessees, and of any defenses based upon co-insurance or upon invalidity arising from the acts of
the insured.
14.05.5 A standard mortgage clause which shall: (a) provide that any reference to a
mortgagee in the policy shall mean and include all holders of Mortgages of any Lot or Lot lease
or sublease in their respective order of preference, whether or not named therein; (b) provide
that such insurance as to the interest of any mortgagee shall not be invalidated by any act or
neglect of the Board or Owners or any Persons under any of them; (c) waive any provision
invalidating such mortgagee clause by reason of the failure of any Mortgagee to notify the
insurer of any hazardous use or vacancy, any requirement that the Mortgagee pay any premium
thereon, and any contribution clause; and (d) provide that, without affecting any protection
afforded by such mortgagee clause, any proceeds payable under such policy shall be payable to
the Association or the insurance trustee.
Exhibit 38
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Section 14.06 Fidelity Bond/Directors and Officers Insurance.
The required fidelity bonds shall afford coverage to protect against dishonest acts on the part of
Officers, Board members, trustees, and employees of the Association and all other Persons who
handle or are responsible for handling funds of, or funds administered by the Association. All
managers hired by the Association shall maintain fidelity bonds for its officers, employees, and
agents who handle or who are responsible for handling funds of, or funds administered by the
Association. All such fidelity bonds shall name the Association as an obligee and shall be not
less than three months' aggregate Assessments. The bonds shall contain waivers of any defense
based upon the exclusion of Persons who serve without compensation from any definition of
"employee" or similar expression. The Association shall obtain directors and officers liability
insurance which shall at a minimum insure each Board member and Officer of the Association
against any loss arising from any claim for any alleged wrongful act made by such person while
acting in his/her capacity as Board member or Officer of the Association.
Section 14.07 Owner’s Insurance.
Each Owner shall maintain property insurance for the full replacement cost of all insurable
improvements located on its Lot, less a reasonable deductible. The Board shall have the authority
to further define or expand such requirements by rule, and to prescribe enforcement mechanisms.
If the Association assumes responsibility for obtaining any insurance coverage on behalf of Lot
Owners, the premiums for such insurance shall be levied as an Assessment against the benefited
Lot and the Lot Owner pursuant to RCW 64.90.480(4).
Article XV. Damage or Destruction; Condemnation
Section 15.01 Common Elements.
If all or any portion of any Common Element is damaged, the Association shall rebuild, repair
and replace the same, unless (a) rebuild, repair or replacement would be illegal; (b) 80% of the
Owners vote not to rebuild, repair and replace; (c) it is to open space natural areas and the
damage does not impact the natural aesthetic; or (d) the Association is terminated. Any
uninsured portion of the cost of rebuild, repair and replacement shall be a Common Expense.
Section 15.02 Residence.
If any Residence is damaged or destroyed by fire or other casualty, the Owner thereof shall
repair or reconstruct the Residence in a manner which will restore it substantially to its
appearance and condition immediately prior to the casualty and in compliance with the
Residential Design Guidelines and the Governing Documents, acting with all reasonable
diligence and as soon as reasonably possible.
Section 15.03 Condemnation.
In the event any part of the Common Elements is made the subject matter of any condemnation
or eminent domain proceeding or is otherwise sought to be acquired by any condemning
authority, the Association shall give prompt notice of any such proceeding or proposed
acquisition to the Owners and to the holders of all First Mortgages who have requested from the
Association notification of any such proceeding or proposed acquisition. All compensation,
Exhibit 38
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damages, or other proceeds therefrom, shall be payable to the Association. The Association shall
represent the Owners in any proceedings, negotiations, settlements or agreements regarding a
condemnation of any part of the Community, and any condemnation proceeds shall be payable to
the Association for the benefit of the Owners of affected Lots and their Mortgagees.
Article XVI. Dispute Resolution
Section 16.01 Dispute Resolution Methods.
The provisions of this Article shall govern the resolution of all claims, disputes and controversies
involving the application or enforcement of this Declaration (“Claims”). Claims, disputes and
controversies shall be resolved pursuant to the Arbitration Agreements described in section 1 6.04
unless expressly prohibited by the Act. Exempt claims may by resolved by a court of competent
jurisdiction.
Section 16.02 Bound Party.
A “Bound Party” shall include Declarant, the Association, its officers, directors, and committee
members, all Persons subject to this Declaration, any Dealer or builder, and any Person not
otherwise subject to this Declaration who agrees to submit to this Article by contract with a
bound party or by stipulation shall be a Bound Party for the purposes of this Article 16. A
Dealer is a Bound Party if the contract between the Dealer and a Purchaser provides for
submission of disputes to this Article.
Section 16.03 Arbitration Agreements.
Each Bound Party covenants and agrees to submit all Claims to the arbitration procedures set forth
in this Section 16, in lieu of filing suit in any court. Any dispute concerning the interpretation or
the enforceability of the Arbitration Agreements described in this paragraph, including, without
limitation, revocability or voidability for any cause, the scope of arbitrable issues, and any defense
based upon waiver or estoppel, shall be decided by the Arbitrator. The decision of the Arbitrator
shall be final and binding and may be entered as a judgment in any court of competent jurisdiction.
This Arbitration Agreement shall inure to the benefit of, and be enforceable by, Declarant and
Declarant's subcontractors, agents, vendors, suppliers, design professionals, insurers and any other
person alleged to be liable for any defect in or to any Lot, Unit or the Common Elements; and shall
be binding upon all family members and tenants of the Owners and the Association. No
participation of a party in a judicial proceeding involving a matter which is arbitrable under these
Arbitration Agreements shall be deemed a waiver of the right of such party to enforce the
Arbitration Agreements. If any provision of these Arbitration Agreements shall be determined by
the Arbitrator or any court to be unenforceable or to have been waived, the remaining provisions
shall be deemed to be severable therefrom and enforceable according to their terms. Any party
shall be. entitled to recover reasonable attorney's fees, litigation expenses and cost s incurred in
enforcing the Arbitration Agreements, as provided in Section 1 6.078.
Section 16.04 Mandatory Dispute Resolution Procedure for Claims.
Exhibit 38
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16.04.1 Notice. Any Bound Party having a Claim ("Claimant") against any other Bound
Party ("Respondent") (collectively, the "Parties") shall notify each Respondent in writing
(the "Notice"), stating plainly and concisely: (a) the nature of the Claim, including the
Persons involved and Respondent's role in the Claim; (b) the legal basis of the Claim (i.e.,
the specific authority out of which the Claim arises); (c) Claimant's proposed remedy; and
(d) that Claimant will meet with Respondent to discuss in good faith ways to resolve the
Claim.
16.04.2 Negotiation and Mediation. The Parties shall make every reasonable effort to
meet in person and confer for the purpose of resolving the Claim by good faith negotiation.
If requested in writing, accompanied by a copy of the Notice, the Association's Board may
appoint a representative to assist the Parties in negotiation. If the Parties do not resolve the
Claim within 30 days of the date of the Notice (or within such other period as may be
agreed upon by the Parties) (''Termination of Negotiations"), Claimant shall have 30
additional days to submit the Claim to mediation under the auspices of any Local
Jurisdiction dispute resolution center or, if the Parties otherwise agree, to an independent
agency providing dispute resolution services in the area. If Claimant does not submit the
Claim to mediation within such time, or does not appear for the mediation, Claimant shall
be deemed to have waived the Claim, and Respondent shall be released and discharged
from any and all liability to Claimant on account of such Claim; provided, nothing herein
shall release or discharge Respondent from any liability to any Person other than th e
Claimant.
Any settlement of the Claim through mediation shall be documented in writing by
the mediator and signed by the Parties. If the Parties do not settle the Claim within thirty
(30) days after submission of the matter to the mediation, or within such time as determined
by the mediator, the mediator shall issue a notice of termination of the mediation
proceedings ("Termination of Mediation"). The Termination of Mediation notice shall set
forth that that the Parties are at an impasse and the date that mediation was terminated.
Within five (5) days of the Termination of Mediation, the Claimant shall make a
final written settlement demand ("Settlement Demand") to the Respondent, and the
Respondent shall make a final written settlement offer ("Settlement Offer'') to the Claimant.
If the Claimant fails to make a Settlement Demand, Claimant's original Notice shall
constitute the Settlement Demand. If the Respondent fails to make a Settlement Offer,
Respondent shall be deemed to have made a "zero" or "take nothing" Settlement Offer.
16.04.3 Final and Binding Arbitration. If the Parties do not agree in writing to a settlement
of the Claim within 15 days of the Termination of Mediation, the Claimant shall have 15 additional
days to submit the Claim to arbitration in accordance with Section 1 6.04. If not timely submitted
to arbitration or if the Claimant fails to appear for the arbitration proceeding, the Claim shall be
deemed abandoned, and Respondent shall be released and discharged from any and all liability to
Claimant arising out of such Claim; provided, nothing herein shall release or discharge Respondent
from any liability to Persons other than Claimant. This subsection is an agreement to arbitrate and
is specifically enforceable under federal and state arbitration laws. The arbi tration award (the
Exhibit 38
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"Award") shall be final and binding, and judgment may be entered upon it in any court of
competent jurisdiction to the fullest extent permitted under federal and Washington State laws.
Section 16.05 Allocation of Fees and Costs. Each Party shall bear its own costs, including
attorney's fees, and each Party shall share equally all charges rendered by the mediator(s) and all
filing fees and costs of conducting the arbitration proceeding ("Post Mediation Costs"), except as
otherwise ordered by the arbitrator pursuant. Any Award which is equal to or more favorable to
Claimant than Claimant's Settlement Demand shall add Claimant's Post Mediation Costs to the
Award, such costs to be borne equally by all Respondents. Any Award which is equal to or less
favorable to Claimant than any Respondent's Settlement Offer shall award to such Respondent its
Post Mediation Costs, except as otherwise provided in this subsection.
Section 16.06 Enforcement.
If the Parties agree to a resolution of any Claim through negotiation or mediation in accordance
with Section 16.4 and any Party thereafter fails to abide by the terms of such agreement, or if the
Parties agree to accept the Award following arbitration and any Party thereafter fails to comply
with such Award, then any abiding or complying Party may file suit or initiate administrative
proceedings to enforce such agreement or Award without the need to again comply with the
procedures set forth in Section 16.4. In such event, the Party taking action to enforce the agreement
or Award shall be entitled to recover from the non-complying Party (or if more than one non-
complying Party, from all such Parties pro rata) all costs incurred in enforcing such agreement o r
Award, including, without limitation, attorneys' fees and court costs. If the Bound Parties litigate
an Exempt Claim, the prevailing party in such litigation shall be entitled to payment of all
attorney's fees, litigation and costs by the non-prevailing party.
Article XVII. Changes in Ownership of Lots and Units
Any Owner desiring to sell or otherwise transfer title to a Lot or Unit shall give the Board Notice
of the name and address of the Purchaser or transferee, the date of such transfer of title, and such
other information as the Board may reasonably require. Each Purchaser or transferee of a Lot or
Unit shall, within ten (10) days of taking title, confirm the information provided by the transferor
to the Association is complete and accurate. The transferor shall continue to be jointly and
severally responsible with the transferee for all obligations of the Owner, including Assessment
obligations, until the date upon which such notice is received by the Board, notwithstanding the
transfer of title.
Article XVIII. Privately Owned Amenities
Section 18.01 General.
Portions of the Hamlet of Pleasant Harbor may be privately owned and used by their respective
owners for commercial or other purposes including, without limitation, Golf Courses, sports or
recreational facilities, spas and private clubs (“Privately Owned A menity”). Neither membership
in the Association nor ownership or occupancy of a Lot or Unit shall confer any ownership
interest in or right to use any Privately Owned Amenity. The right to use the Privately Owned
Exhibit 38
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Amenities will be granted only to such persons, and on such terms and conditions, as may be
determined from time to time by the respective owners of the Privately Owned Amenities.
Section 18.02 Rights of Access and Parking.
There is hereby granted for the benefit of each Privately Owned Amenity and their members
(regardless of whether such members are Owners hereunder), guests, invitees, employees,
agents, contractors, and designees, a right and nonexclusive easement of access and use over all
roadways located within the Hamlet reasonably necessary to travel between the entrance to the
Hamlet and the Privately Owned Amenity and over those portions of the Common Areas
reasonably necessary to the operation, maintenance, repair, and replacement of the Privately
Owned Amenity. Without limiting the generality of the foregoing, members of the Privately
Owned Amenity and guests and invitees of the Privately Owned Amenity shall have the right to
park their vehicles on the roadways located within the Hamlet at reasonable times before, during,
and after golf tournaments and other special functions held by or at the Privately Owned
Amenity to the extent that the Privately Owned Amenity has insufficient parking to
accommodate such vehicles; provided, however, such roadways must be kept free and clear of all
obstructions and in a safe condition for vehicular use at all times.
Section 18.03 Ownership and Operation of Privately Owned Amenities.
All Persons, including all Owners, are hereby advised that no representations or warranties have
been or are made by Declarant or any other Person with regard to the continuing existence,
ownership or operation of any Privately Owned Amenity, including, without limitation, any Golf
Course, and no purported representation or warranty in such regard, either written or oral , shall
ever be effective without an amendment to this Declaration executed or joined into by Declarant
Further, the ownership and/or operation of any Privately Owned Amenity, if any, may change at
any time and from time to time by virtue of, but without limitation, (a) the sale to or assumption
of operations of the Privately Owned Amenity by an independent entity or entities; (b) the creation
or conversion of the ownership and/or operating structure of the Privately Owned Amenity to an
"equity" club or similar arrangement whereby the Privately Owned Amenity or the rights to operate
it are transferred to an entity which is owned or controlled by its members; or (c) the transfer of
ownership or control of the Privately Owned Amenity to one or more affiliates, shareholders,
employees, or independent contractors of Declarant. Declarant may cause any Privately Owned
Amenity to initially be public or private, to convert any public Privately Owned Amenity to a
private Privately Owned Amenity available to specified members only, and to convert any private
Privately Owned Amenity to a public Privately Owned Amenity with the approval of the requisite
number of the Privately Owned Amenity members pursuant to the Governing Documents for the
Privately Owned Amenity. No consent of the Association or any Owner shall be required to
effectuate such transfer or conversion.
Exhibit 38
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Section 18.04 Golf Course Uses. Any Golf Course is intended to be used for activities typically
associated with the game of golf and except for golf carts and vehicles used by the Golf Course
Owner to improve, maintain and repair any Golf Course, no motorized vehicles, including
snown1obiles, all-terrain vehicles, dirt bikes and other vehicles designed primarily for off-road
use shall be permitted on any Golf Course. Snowshoeing and cross-country skiing during
appropriate periods will be allowed only with the Golf Course Owner's consent. Additionally, the
following provisions relate to any Golf Course and to portions of the Residential Areas:
18.04.1 All Common Areas immediately adjacent to any Golf Course shall be
subject to an easement for Golf Course purposes, including signs, cart paths, irrigation
systems and the right of ingress and egress for making improvements and changes to any
Golf Course, Golf Course management, Golf Course maintenance and repair, and for
players during the regular course of play on any Golf Course ;
18.04.2 Any portion of the Hamlet immediately adjacent to any Golf Course is
hereby burdened with a non-exclusive easement in favor of the adjacent Golf Course for
overspray of water from the irrigation system serving such Golf Course to the extent
reasonably required for the maintenance of such Golf Course and for golf balls to come
onto the property. Under no circumstances shall the Association or the owner of such
Golf Course be held liable for any damage or injury resulting from such overspray, the
entry of golf balls, or the exercise of this easement.
Exhibit 38
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Section 18.05 Waiver and Indemnity. In some cases, golf balls may have sufficient force and
velocity to do serious harm to persons, pets, Improvements or personal property. Each Owner,
for such Owner's family members, visitors, tenants, licensees, invitees and guests, assumes such
risk and waives any right any such persons otherwise would have against Declarant, the
Association, the Design Review Committee and the Golf Course Owner, operator and designer,
to the fullest extent permissible by law, for each injury resulti ng from the design of any Golf
Course, or the location of a Lot, Unit, Common Area or Village Common Area in relation to any
Golf Course, and agrees to indemnify and hold Declarant, the Association, the Design Review
Committee and the Golf Course Owner, operator, designer and contractor harmless from and
against all claims and liability, including without limitation, legal fees and costs, in the event any
person while on or in the vicinity of a Lot, Unit, Common Area or Village Common Area,
receives any injury or suffers property damage and thereafter seeks to recover against such
persons or entities for compensation for such injury or damage, whether directly or indirectly, or
as a result of a third-party claim or cross claim. Each Owner and such Owner's fa mily members,
visitors, tenants, licensees, invitees and guests waives each and every claim or right they may
have to claim that the normal and customary operation of any such Golf Course constitutes a
nuisance, or that any aspect of any such Golf Course operation should be limited to any specific
hours of the day or to any specific days of the week. Each such person assumes the risks which
are associated with the game of golf and the flight of golf balls over and upon their Lot, Unit, the
Common Areas and Limited Common Areas, including, without limitation, the possibility of
damage to their property, real or personal, and injury to themselves, their family, pets, friends,
visitors, tenants, licensees, invitees, guests, or any other person .
Section 18.06 Limitation on Amendments. In recognition of the fact that the provisions of this
Article are for the benefit of the Privately Owned Amenities, no amendment to this Article, and no
amendment in derogation of any other provisions of this Declaration benefiting any Privately
Owned Amenity, may be made without the written approval of the affected Privately Owned
Amenity, The foregoing shall not apply, however, to amendments made by Declarant in exercising
any rights reserved under this Declaration.
Article XIX. Miscellaneous Additional Provisions
Section 19.01 Notices.
Section 19.02 Severability.
The provisions of this Declaration shall be independent and severable, and the unenforceability
of any one provision shall not affect the enforceability of any other provision, if the remainder
affects the common plan. This Declaration shall be effective upon recording.
Section 19.03 Inflationary Increase.
Any dollar amounts specified in this Declaration in connection with any proposed action or
decision of the Board or Association shall be proportionately increased on January 1 of each year
by the percentage change in the consumer price index specific in RCW 64.90.065 , as if RCW
64.90.065 applied to such amounts.
Exhibit 38
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Section 19.04 Assignment by Declarant.
Declarant reserves the right to assign or delegate all or any of its rights, duties, and obligations
created under this Declaration.
IN WITNESS WHEREOF, Declarant has executed this Declaration this ____day of
_____, 2023.
Exhibit 38