BYLAWS OF STERLINGWOODS HOMEOWNERS ASSOCIATION
ARTICLE I – Definitions
ARTICLE II – Members
Membership
Suspension of
Membership
Classes and
Voting Rights
ARTICLE
III – Meetings of Members
Annual
Meeting
Special
Meetings
Notice of
Quorum
Majority Vote
Proxies
Waiver of
Notice
ARTICLE
IV – Board of Directors
Number
Nomination
Election
Removal
Vacancies
Compensation
ARTICLE
V – Meeting of Directors
Regular
Meetings
Special
Meetings
Quorum
Waiver of
Notice
Open Meetings
ARTICLE
VI – Powers and Duties of the Board of Directors
Powers
Duties
ARTICLE
VII – Committees
Appointment
of Committees
Nominating
Committee
Maintenance Committee
Other
Committees
Duties of
Committees
Architectural
Control Committee
ARTICLE
VIII – Officers
Designation
of Officers
Election of
Officers
Term
Resignation
and Removal
Vacancies
Duties
President
Vice‑President
Secretary
Treasurer
Compensation
ARTICLE
IX – Assessments
Personal
Obligations and Creation of Lien Assessments
Common Area
and Declarant Lots Exempt
Purpose of
Assessments
Establishing
Assessments
Annual
Assessment
Special
Assessments
Reserves for
Repair or Replacement
Uniform Rate
Date of
Commencement of Assessments; Due Dates
Effect of
Non‑Payment of Assessments; Remedies
Subordination
of the Lien to First Mortgages
Budget
Deficits during the Development Period
ARTICLE X – Books and Records
ARTICLE XI – Indemnification of Directors
and Officers
Indemnification
Limitation of
Liability
ARTICLE XIII – Amendment
ARTICLE XIII – Construction
ARTICLE XIV – Fiscal Year
ARTICLE XV – Date of Adoption
BYLAWS
OF
STERLINGWOOD HOMEOWNERS ASSOCIATION
The following
are the Bylaws of the Sterlingwood Homeowners Association, a
Washington nonprofit corporation (the “Association”).
ARTICLE I
Definitions
Section 1.
“Association” shall mean the STERLINGWOOD HOMEOWNERS
ASSOCIATION, a Washington nonprofit corporation, and its
successors and assigns.
Section 2. “Subdivision” shall mean that certain
real property described in the Plat of Sterlingwood, records of
King County, Washington, and such additions thereto as may be
hereafter brought within the jurisdiction of the Association.
Section 3. “Declaration” shall mean the
Declaration of Covenants, Conditions and Restrictions, with
amendments, modifications and extensions thereto, applicable to
the Subdivision recorded or to be recorded in the office of the
King County Auditor.
Section 4. “Declarant” shall mean Chaffey
Corporation, a Washington corporation, and any successors or
assigns engaged in land development and/or wholesale land sales
activities which are the same as, or similar to, those of
Chaffey Corporation, and who shall be assigned such position in
writing by Chaffey Corporation, or as required in the
Declaration.
Section 5. “Common Area” shall mean all areas,
properties or improvements designated as such on the Plat of
Sterlingwood, or in the Declaration, and/or maintained by the
Declarant or the Association for the purposes of assessments,
obligations and/or expenses of the Association.
Section 6. “Lot” shall mean any parcel of land
shown upon the recorded final plat map of the Subdivision, with
the exception of the Common Area, and any land conveyed or
dedicated to King County, the City of Sammamish or local
municipal corporations.
Section 7. “Member” shall mean every person or
entity who holds a membership in the Association.
Section 8. “Owner” shall mean the record owner,
whether one or more persons or entities and specifically
including the Declarant, of the fee interest in any Lot or Lots
which are a part of the Subdivision, but shall not include a
contract seller or a mortgagee.
Section 9. “Development Period” shall mean that
period of time beginning on the date of recording of the
Declaration and ending at the earlier of: (i) ten (10) years
from the date of recording of the Declaration, (ii) the 30th
day after Declarant has transferred title to individual
residential owners of ninety percent (90%) of the Lots, or
(iii) written notice from the Declarant to the Association in
which the Declarant elects to terminate the Development Period.
Section 10. “Development Plan” shall mean the
Declarant’s intended use and development of the property
included in the Subdivision, including and subject to any and
all regulations imposed by state, federal and local law or as
otherwise set forth in the final recorded Plat of Sterlingwood,
the Declaration, or any conditions imposed as a part of the
approval of the Subdivision.
Section 11. The term “real estate contract” shall
not include an earnest money receipt and agreement and the terms
“contract seller” and “contract purchaser” shall not include the
parties to any such earnest money receipt and agreement.
ARTICLE II
Members
Section 1. Membership. Every person or
entity who is the contract purchaser or Owner of any Lot or Lots
in the Subdivision is and shall be a Member of the Association,
provided, however, that if any Lot is held jointly by two (2) or
more persons or entities, the several Owners of such interest
shall designate one (1) of their number as the “Member.” The
foregoing is not intended to include persons or entities who
hold an interest merely as security for the performance of an
obligation. No Lot shall have more than one (1) membership.
Membership shall be appurtenant to and may not be separated from
ownership of or the contract purchaser’s interest in any Lot
which is subject to assessment by the Declarant or the
Association. Upon transfer of the fee interest to, or upon the
execution and delivery of a real estate contract for the sale of
(or of an assignment of a contract purchaser’s interest in) any
Lot, the membership in the Association shall ipso
facto be deemed to be transferred to the transferee,
grantee, contract purchaser or new contract purchaser.
Section 2. Suspension of Membership.
During any period in which a Member shall be in default in the
payment of any assessments, the voting rights and right to use
of the Common Area and facilities by such Member may be
suspended by the Board of Directors until such assessments have
been paid in full. During the Development Period, the Board of
Directors shall be required to exercise such right upon the
request of the Declarant. Such rights of a Member may also be
suspended after notice and hearing, for periods of time not to
exceed one hundred eighty (180) days, for any and each violation
of any rules and regulations established by the Board of
Directors. In the event of suspension, such Member shall
continue to incur and remain liable for any and all obligations,
including monthly, annual and special assessments.
Section 3. Classes and Voting Rights. The
Association shall have the following two (2) classes of voting
membership:
Class A. Class A Members shall
be all those Owners who qualify to become Members under
Article II, Section 1 of these Bylaws, with the exception of the
Declarant. For matters requiring the approval, consent, or
affirmative vote of the Members or the Association, Class A
Members shall be entitled to one (1) vote for each Lot in which
they hold the interest required for membership under Article II,
Section 1. When more than one person or entity holds such an
interest in any Lot, the vote for such Lot shall be exercised as
they among themselves determine, but in no event shall more than
one (1) vote be cast with respect to any Lot.
Class B. The sole Class B
Member shall be the Declarant (as defined in Article I, Section
4 above). The Class B member shall be entitled to three (3)
votes for each Lot Declarant owns and/or in which Declarant
holds an interest. The Class B membership shall cease and be
converted to Class A membership on the first to occur of the
following events: (a) the expiration of the Development Period,
(b) the Declarant terminates its involvement in the Subdivision
without having assigned its right to another person or entity,
or (c) upon written notice from the Declarant to the Association
in which the Declarant elects to terminate the Development
Period and convert its membership from Class B to Class A.
Notwithstanding anything to the contrary herein, during the
Development Period Class A Members shall not be entitled to vote
on any matters and the Subdivision shall be managed by the
Declarant, as provided in Article II of the Declaration, and the
Declarant may, in its sole discretion, take any action on behalf
of the Association without a vote of the Members of the
Association.
ARTICLE III
Meetings of
Members
Section 1. Annual Meeting. A meeting of
the Association are to be held at least once a year. The first
annual meeting of the Members shall be held at such time as
designated by the Declarant, the Board of Directors, or upon a
majority vote of the Members. In the event of an affirmative
vote of the Members, the Board of Directors shall be responsible
for giving proper notice of the time and place of the meeting.
Each subsequent regular annual meeting of the Members shall be
held on the same day of the same month of each year thereafter,
at such time as designated by the Board. If the day for the
annual meeting of the Members is a legal holiday, the meeting
will be held at the same hour on the first day following which
is not a legal holiday. Failure to conduct such meeting shall
not invalidate actions taken by the Directors in good faith.
Section 2. Special Meetings. Special
meetings of the Members may be called at any time by the
President, or by a majority of the Board of Directors, or upon
written request of the Members who are entitled to vote ten
percent (10%) of the votes of the Association.
Section 3. Notice of Meetings. Written
notice of each meeting of the Members shall be given by, or at
the direction of, the Secretary or person authorized to call the
meeting, by causing the notice to the hand delivered, or by
mailing by first class mail a copy of such notice, postage
prepaid, not less than fourteen (14) and not more than sixty
(60) days before such meeting to each Member entitled to vote
there at, addressed to the Member’s address last appearing on
the books of the Association, or supplied by such Member to the
Association in writing for the purpose of notice. Such notice
shall specify the place, day and hour of the meeting and in the
case of a special meeting, business to be placed on the agenda
by the Board of Directors for vote by the Members, including
proposed amendments to the Articles of Incorporation, Bylaws,
budget or budget modifications resulting in changes of
assessments, and proposals to remove a Director.
Section 4. Quorum. The presence at the
meeting of Members entitled to cast, or of proxies entitled to
cast, thirty‑four percent (34%) of the votes of the entire
membership shall constitute a quorum for any action except as
otherwise provided in the Articles of Incorporation, the
Declaration, or these Bylaws. If, however, such quorum shall
not be represented at any meeting, the Members entitled to vote
thereat shall have the power to adjourn the meeting from time to
time, without notice other than an announcement at the meeting,
until a quorum, as aforesaid, shall be present or represented.
Section 5. Majority Vote.
Except as otherwise
provided in the Declaration or these Bylaws, passage of any
matter submitted to vote at a meeting or adjourned meeting duly
called, where a quorum is in attendance in person or by proxy,
shall require the affirmative vote of more than fifty percent
(50%) or more of the total votes present in person or by proxy.
Section 6. Proxies. At all meetings of
Members, each Member may vote in person or by proxy. All
proxies shall be in writing and filed with the Secretary. Every
proxy shall be revocable and shall automatically cease upon the
conveyance by the Member of his or her Lot.
Section 7. Waiver of Notice. Any notice
required under these Bylaws, the Articles of Incorporation, the
Declaration, for otherwise required by law may be waived in
writing or by attendance and casting votes at the meeting for
which notice was not properly received.
ARTICLE IV
Board of
Directors
Section 1. Number. The affairs of this
Association shall be managed by a Board of three (3) Directors,
who need not be Members of the Association.
Section 2. Nomination. Nomination for
election to the Board of Directors may be made by a Nominating
Committee. Nominations may also be made from the floor at the
annual meeting of Members. The Nominating Committee shall
consist of a Chairman, and two or more Members of the
Association. The Nominating Committee may be appointed by the
Board of Directors prior to each annual meeting until the close
of the next annual meeting and such appointment shall be
announced at each annual meeting. The Nomination Committee may
make as many nominations for election to the Board of Directors
as it shall in its discretion determine, but not less than the
number of positions that are to be filled. Such nominations may
be made from among Members or nonmembers.
Section 3. Election. At the first annual
meeting, which, unless otherwise required, may be held after the
Development Period when the management and operations of the
Association is completely relinquished by the Declarant, the
Members shall elect one (1) Director for a term of one (1) year;
one (1) Director for a term of two (2) years; and one
(1) Director for a term of three (3) years. At each annual
meeting thereafter, the members shall elect one (1) Director for
a term of three (3) years. Election to the Board of Directors
may be by secret ballot. At such election, the Members or their
proxies may each cast their vote in accordance with the voting
rights provisions herein. The names receiving the largest
number of votes shall be elected. There shall be no cumulative
voting.
Section 4. Removal. Except for the initial
Directors and any Director affiliated with the Declarant during
the Development Period, any Director may be removed from the
Board, with or without cause, by a majority vote of the voting
power in the Association present, in person or by proxy, and
entitled to vote at any meeting of the Members at which a quorum
is present. In the event of death, resignation or removal of a
Director, his or her successor shall be selected by the
remaining members of the Board and shall serve for the unexpired
term of his or her predecessor.
Section 5.
Vacancies. Any vacancy occurring in the Board of
Directors and any directorship to be filled by reason of an
increase in the number of Directors may be filled by the
affirmative vote of a majority of the remaining Board of
Directors even though less than a quorum is present. Any
Director so appointed to fill a vacancy shall be appointed for
the unexpired term of his or her predecessor in office.
Section 6. Compensation. No Director shall
receive compensation for any service he or she may render to the
Association. However, any Director may be reimbursed for his or
her actual expenses incurred in the performance of his or her
duties.
ARTICLE V
Meetings of
Directors
Section 1. Regular Meetings. Regular
meetings of the Board of Directors may be held at such place and
hour as may be fixed by resolution of the Board. Regular
meetings of the Board are to be held at least on an annual
basis.
Section 2. Special Meetings. Special
meetings of the Board of Directors shall be held when called by
the President of the Association, by any two Directors, or by
Members having at least ten percent (10%) of the votes of the
Association. Not less than fourteen (14) or more than sixty
(60) days in advance of any meeting, the Secretary of the
Association, or such other officer as may be directed by the
President, shall cause notice to be hand‑delivered or sent
prepaid by first-class United States mail to the mailing address
of each Owner, or to any other mailing address designated in
writing by the Owner. The notice shall state the time and place
and the business to be placed on the agenda by the Board of
Directors for a vote by the Owners, including the general nature
of any proposed changes to the Articles of Incorporation,
Bylaws, any budget or changes in the previously approved budget
that result in a change in assessments, and any proposal to
remove a Director.
Section 3. Quorum. A majority of the
number of Directors shall constitute a quorum for the
transaction of business. Every act or decision done or made by
a majority of the Directors present at a duly held meeting at
which a quorum is present shall be regarded as the act of the
Board.
Section 4. Waiver of Notice.
Before or after any meeting
of the Board of Directors, any Director may, in writing, waive
notice of such meeting and such waiver shall be deemed
equivalent to the giving of notice. Attendance by a Director at
any meeting of the Board of Directors shall be a waiver of
notice by him of the time and place thereof. If all the
Directors are present at any meeting of the Board of Directors,
no notice shall be required and any business may be transacted
at such meeting.
Section 5. Open Meetings. Except as
provided in this subsection, all meetings of the Board of
Directors shall be open for observation by all Owners of record
and their authorized agents. The Board of Directors shall keep
minutes of all actions taken by the Board, which shall be
available to all Owners. Upon the affirmative vote in open
meeting to assemble in closed session, the Board of Directors
may convene in closed executive session to consider personnel
matters; consult with legal counsel or consider communications
with legal counsel; and discuss likely or pending litigation,
matters involving possible violations of the governing documents
of the Association, and matters involving the possible liability
of an Owner to the Association. The motion shall state
specifically the purpose for the closed session. Reference to
the motion and the stated purpose for the closed session shall
be included in the minutes. The Board of Directors shall
restrict the consideration of matters during the closed portion
of meetings only to those purposes specifically exempted and
stated in the motion. No motion, or other action adopted,
passed, or agreed to in closed session may become effective
unless the Board of Directors, following the closed session,
reconvenes in open meeting and votes in the open meeting on such
motion, or other action which is reasonably identified. The
requirements of this subsection shall not require the disclosure
of information in violation of law or which is otherwise exempt
from disclosure.
ARTICLE VI
Powers and
Duties of the Board of Directors
Section 1. Powers. The Board of Directors
shall have the power:
(a) To exercise for the
Association all powers, duties and authority vested in or
delegated to this Association not reserved to the membership by
other provisions of these Bylaws, the Articles of Incorporation,
or the Declaration;
(b) To adopt regular or special
budgets for the Association, provided however, before such
budget may be implemented, within thirty days after the adoption
by the Board of Directors of any proposed regular or special
budget of the Association, the Board shall set a date for a
meeting of the Owners to consider ratification of the budget not
less than fourteen (14) nor more than sixty (60) days after
mailing of the summary. Unless at that meeting the majority of
the votes in the Association reject the budget, in person or by
proxy, the budget is ratified, whether or not a quorum is
present. In the event the proposed budget is rejected or the
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 of Directors;
(c) To adopt and publish rules
and regulations governing the use of the Common Area and
facilities, and the personal conduct of the Members and their
guests thereon, and to establish penalties for the infraction
thereof;
(d) To declare the office of a
member of the Board of Directors to be vacant in the event such
member shall be absent from three (3) consecutive regular
meetings of the Board of Directors; and
(e) To employ managers,
independent contractors, professional advisors or such other
employees as they deem necessary, and to proscribe their duties,
including the specific delegation of any duties otherwise vested
with the Board of Directors.
Section 2. Duties. It shall be the duty of
the Board of Directors:
(a) To cause to be kept a
complete record of all acts and corporate affairs and to present
a statement thereof to the Members at the annual meeting of the
Members or at any special meeting, when such statement is
requested in writing by one‑fourth (1/4) of the Members who are
entitled to vote;
(b) To elect and supervise all
officers, agents and employees of this Association, and to see
that their duties are properly performed;
(c) To adopt budgets and
assessments for the Association;
(d) To keep financial and other
records sufficiently detailed to enable the Association to fully
declare to each Owner the true statement of its financial
status. All financial and other records of the Association,
including but not limited to checks, bank records, and invoices,
in whatever form they are kept, are the property of the
Association. The officer and/or managing agent of the
Association charged with the forgoing duties shall turn over all
original books and records to the Association immediately upon
termination of the management relationship with the Association,
or upon such other demand as is made by the Board of Directors.
All records turned over to the Association shall be made
reasonably available for examination and copying by the officer
or managing agent. An Association officer or managing agent is
entitled to keep copies of Association records;
(e) To keep and maintain all
records of the Association, including the names and addresses of
Owners and other occupants of the Lots;
(f) As more fully provided
herein and in the Declaration:
(1) to establish.
levy, assess, and collect the assessments or charges referred to
in the Declaration, as applicable to the Association; and
(2) to send written
notice of each assessment to every Owner or contract purchaser
subject thereto at least thirty (30) days in advance of each
annual assessment period;
(g) To issue, or to cause an
appropriate officer to issue, upon demand by any person, a
statement or certificate setting forth whether any assessment
has been paid. A reasonable charge may be made by the Board of
Directors for the issuance of these certificates. Such
certificate shall be conclusive evidence of any assessment
therein stated to have been paid;
(h) To procure and maintain
adequate liability insurance, if desired, and to procure
adequate hazard insurance on property owned by the Association;
(i) To cause all officers or
employees having fiscal responsibilities to be bonded, as it may
deem appropriate;
(j) To cause any Common Area
and facilities owned or maintained by the Association to be
maintained and/or repaired as appropriate; ande; and
(k) To take such action as is
necessary for the Association to perform its obligations.
ARTICLE VII
Committees
Section 1. Appointment of Committees.
The Board of Directors may
designate one or more committees, each of which shall consist of
two or more Directors. Such committees, to the extent provided
in these Bylaws or in the resolution establishing the committee,
shall exercise the authority of the Board of Directors in the
management of the Association, but the designation of such
committees shall not operate to relieve the Board of Directors
of any responsibility imposed upon it by law.
Section 2.
Nominating Committee. The Board of Directors may
appoint a Nominating Committee, as provided by Article IV,
Section 2 of these Bylaws
Section 3.
Other Committees. The Board of Directors may appoint
other committees as deemed appropriate in carrying out its
purposes, such as:
(a) A Recreation Committee which
shall advise the Board of Directors on all matters pertaining to
the recreational program and activities of the Association and
shall perform such other functions as the Board, in its
discretion, determines.
(b)
A Maintenance Committee
which shall advise the Board of Directors on all matters
pertaining to the maintenance, repair or improvement of the
Common Area, including the entry landscaping, irrigation and
lighting, and the planter islands, and shall perform such other
functions as the Board, in its discretion, determines.
(c) An Audit Committee may be
established to supervise the annual audit of the Association’s
books, and provide review and comment on any annual or special
budget and the statement of income and expenditures to be
presented to the membership for approval or rejection as
required herein. The Treasurer shall be an ex officio
member of the Committee.
(d) Other Committees as deemed
necessary or appropriate may also be established by the Board of
Directors or by a sixty percent (60%) vote of the Association,
provided that the objectives of the committee are set forth in
writing.
Section 4. Duties of Committees. It shall
be the duty of each committee to receive complaints from Members
on any matter involving the Association’s functions, duties. and
activities within its field of responsibility. It shall dispose
of such complaints as it deems appropriate, or refer them to
such other committee, Director, or office of the Association as
is further concerned with the matter presented.
Section
5. Architectural Control Committee. Upon
termination of the Development Period, the Board of Directors
shall appoint an Architectural Control Committee in accordance
with the provisions of the Declaration, to perform the duties
and functions described in the Declaration.
ARTICLE VIII
Officers
Section 1. Designation of Officers. The
officers of this Association shall be a President,
Vice‑President, Secretary and a Treasurer, and such other
officers as the Board may from time to time by resolution
create. Any two or more offices may be held by the same person,
or by persons on the Board, except the offices of the Secretary
and President.
Section 2. Election of Officers. The
election of officers shall be done by the Directors, and take
place at the annual meeting of the Board of Directors, or at a
special meeting of the Board of Directors in order to fill a
vacancy of any office.
Section 3: Term. The officers of the
Association shall be elected annually by the Board of Directors
and each shall hold office for one (1) year, unless he or she
shall sooner resign or shall be removed or otherwise
disqualified to serve.
Section 4. Resignation and Removal. Any
officer may be removed from office at any time, with or without
cause, by the Board. Any officer may resign at any time by
giving written notice to the Board, the President, or the
Secretary. Such resignation shall take effect on the date of
receipt of such notice or any later time specified therein, and
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. Vacancies. A vacancy in any
office may be filled in the manner prescribed for regular
elections. The officer elected to such vacancy shall serve for
the remainder of the term of the officer he or she replaces.
Section 6. Duties. The duties of the
officers are as follows:
(a) President. The
President shall generally preside at all meetings of the Board
of Directors, shall see that orders and resolutions of the Board
are carried out; shall sign all leases, mortgages, deeds and
other written instruments and shall sign all checks or
promissory notes authorized by the Board. The President and
Secretary shall prepare, execute, certify and record (if
appropriate) amendments to Articles of Incorporation, Bylaws, or
Declaration adopted by the Association.
(b) Vice‑President. The
Vice‑President shall act in the place and stead of the President
in the event of his or her absence, inability or refusal to act,
and shall exercise and discharge such other duties as may be
required of him by the Board.
(c) Secretary. The
Secretary shall record the votes and keep the minutes of all
meetings and proceedings of the Board and of the Members; keep
the corporate seal of the Association and affix it on all papers
requiring said seal; serve notice of meetings of the Board and
of the Members, keep appropriate current records showing the
Members of the Association, together with their addresses, and
shall perform such other duties as required by the Board.
(d) Treasurer. The
Treasurer shall keep financial and other records sufficiently
detailed to enable the Association to fully declare to each
Owner the true statement of its financial status. The Treasurer
shall also receive and deposit in appropriate bank accounts all
monies of the Association and shall disburse such funds as
directed by resolution of the Board of Directors; shall sign all
checks and promissory notes of the Association; shall keep
proper books of account; shall cause an annual audit of the
Association’s books to be made by a public accountant at the
completion of each fiscal year if required; and shall prepare a
statement of income and expenditures to be presented to the
membership at its regular annual meeting, and deliver a copy of
each to the Members.
Section 7. Compensation. No officer shall
receive compensation for any service he or she may render to the
Association. However, any officer may be reimbursed for his or
her actual expenses incurred in the performance of his or her
duties.
ARTICLE IX
Assessments
Section 1. Personal Obligations and Creation of
Lien Assessments. Subject to the provisions of Section 2
below, each Owner of any Lot, by acceptance of a deed therefor,
whether or not it shall be so expressed in such deed, is deemed
to covenant and agree to pay to the Association:
(a) annual or monthly
assessments or charges; and
(b) special assessments as
authorized herein or in the Declaration.
The
assessments, together with such interest thereon and cost of
collection thereof, as hereinafter provided, shall be a
continuing lien upon the Lot against which each such assessment
is made and shall run with the land. Each such assessment,
together with interest thereon and costs incurred in collecting
the assessment (including reasonable attorneys’ fees), shall
also be the personal obligation of the person who was the Owner
or contract purchaser of such property at the time when the
assessment fell due. No Owner or contract purchaser shall be
relieved of liability for the assessments by non‑use of the
Common Area or abandonment of any Lot. The personal obligation
for delinquent assessments shall not pass to successors in title
unless expressly assumed by them. The Association may take any
action deemed appropriate to effectuate collection of unpaid
assessments.
Section 2. Common Area and Declarant Lots
Exempt. The Common Area and all portions of the Property
dedicated to and accepted by a government or public authority,
and all Lots owned by Declarant, shall be exempt from
assessments by the Association.
Section 3. Purpose of Assessments. The
assessments shall be used for the purpose of promoting the
recreation, health, safety and welfare of the Owners and/or
their guests, including without limitation: the construction,
establishment, improvement, repair, maintenance and other
expenses of the Common Area and the services and facilities
related to the use and enjoyment of the Common Area; the payment
of utility charges, taxes and insurance; maintenance of
sensitive areas, open space, and native growth protection
easements and other obligations related thereto, if any, as set
forth in the Plat of Sterlingwood or otherwise required of the
Declarant and/or the Association by governmental agencies;
installation and maintenance of any properties, landscaping or
improvements desired or required in the Plat of Sterlingwood or
the Declaration; and other items deemed necessary and proper by
the Declarant or the Association to keep the Subdivision in a
good, clean, attractive and safe condition in compliance with
all applicable codes, laws, rules and regulations. Assessments
may also be levied to pay for any professional services, advice
or consultation incurred by the Declarant or by the Association
in carrying out its duties.
Section 4.
Establishing Assessments. The regular budget and any
revised or special budget of the Association, including any
reserves as provided herein, shall be adopted by the Board of
Directors and shall be ratified by the Members of the
Association as set forth herein or otherwise permitted under
Washington law. Within thirty (30) days after adoption by the
Board of Directors of any proposed regular or special budget,
the Board shall set a date for a meeting of the Members to
consider ratification of the budget. Written notice of the
meeting shall be sent to all Owners not less than fourteen (14)
days, nor more than sixty (60) days in advance of the meeting,
setting forth the purpose of the meeting. Unless at that
meeting a majority vote of the voting power of the Members who
are present, in person or by proxy, and entitled to vote at such
meeting rejects the budget, the budget shall be deemed ratified,
whether or not a quorum is present. During the Development
Period, the approval of the Declarant shall be required for
ratification of any proposed budget. The Board shall cause the
ratified budget and the assessments to be levied against each
Lot for the following year to be delivered to each Member at
least thirty (30) days prior to the end of the current fiscal
year. In the event the proposed budget is not ratified or the
Board fails for any reason to determine the budget for the
succeeding year, then and until such time as a budget shall have
been determined, as provided herein, the budget in effect for
the then current year shall continue for the succeeding year.
Section 5. Annual Assessment. Until
January 1, 2001, the annual assessment is estimated to be
$300.00 per Lot; fifteen percent (15 %) of which, or such higher
percentage as may be charged, shall be allocated and paid to the
Declarant for management services provided to the Association by
the Declarant or by a professional management firm. Such
allocation of funds to the Declarant shall cease when the
Development Period expires and the Association assumes
collection costs, bookkeeping, and other management
responsibilities.
Section 6.
Special Assessments. In addition to the annual
assessments authorized above, the Association may levy special
assessments through the use of a special budget adopted by the
Board of Directors and ratified by the Members as set forth in
Section 4 above. The special assessments may be used to cover
(1) unanticipated financial shortfalls, maintenance or liability
expenses, including without limitation the cost of legal fees
and costs incurred in legal actions in which the Association is
a party, or in which a member of either the Board or the
Architectural Control Committee is named as a party as a result
of a decision made or action performed while acting on behalf of
the Association, (2) extraordinary expenses such as the cost of
any construction, reconstruction, repair or replacement of a
capital improvement of the Common Area, property, street
lighting, fixtures or improvements of the Association, including
repairs or renovation, or (3) any other reasonable expenses
incurred by the Association.
Section 7. Reserves for Repair or Replacement
TC "Section 5. Reserves for Repair or Replacement" \f C \l "2"
. As a common expense and as a part of any regular or special
budget of the Association, the Declarant or the Association may
establish and maintain a reserve fund for repair or replacement
of improvements and community facilities thereon. The reserve
fund shall be expended only for the purpose of repair,
replacement or improvement to the Common Area and any
improvements and community facilities for which the Association
is responsible, and for start up expenses and operating
contingencies of a nonrecurring nature. The proportional
interest of any Owner in any such reserve shall be considered an
appurtenance of such Owner’s Lot and shall be deemed to be
transferred with such Lot in the event of a transfer or sale.
Section 8. Uniform Rate. All assessments
shall be fixed at a uniform rate for all Lots subject to
assessment; provided however, that Lots owned by the Declarant
are not subject to any assessment or charge hereunder.
Section 9. Date of Commencement of Assessments;
Due Dates. The assessments provided for herein shall not
commence prior to the first day of the month following the
conveyance of the first Lot from the Declarant. As to each
particular Lot involved, the liability for the assessments shall
begin on the first day of the calendar month following the date
that any deed or real estate contract for the Lot is transferred
or recorded, or on the first day of the calendar month following
occupancy of the premises, whichever is earlier. Said
assessment shall be due and payable on such date and on the
first day of each calendar month thereafter, or on a monthly,
quarterly or annual date designated by the Declarant or the
Board of Directors.
Section 10. Effect of Non‑Payment of Assessments;
Remedies. If any assessment is not paid within thirty (30)
days after it was first due and payable, the assessment shall
bear interest from the date on which it was due at the rate of
twelve percent (12%) per annum. Unpaid assessments, plus
interest, costs and attorney fees incurred by the Association in
collecting assessments, filing and recording liens, enforcing
the provisions of the Declaration or these Bylaws, or defending
itself in any litigation shall constitute a lien on the property
as provided in the Declaration and these Bylaws. The
Association may bring an action against the one personally
obligated to pay the same and/or foreclose the lien against the
property, and interest, costs and reasonable attorney’s fees of
any such action shall be included in any judgment or decree
entered in such suit. Each Owner hereby expressly vests in the
Association or its agents the right and power to bring all
actions against such Owner personally for the collection of such
assessments as debts and to enforce lien rights of the
Association by all methods available for the enforcement of such
liens, including foreclosure by an action brought in the name of
the Association in like manner as a mortgage of real property.
Each Owner hereby expressly grants to the Association the power
of sale in connection with such liens. The liens provided for
in this Section shall be in favor of the Association and shall
be for the benefit of the Association. The Association shall
have the power to bid in an interest at foreclosure sale and to
acquire, hold, lease, mortgage and convey the same.
Section 11. Subordination of the Lien to First
Mortgages. The lien of the assessment provided for herein
shall be subordinate to the lien of any first mortgage (and to
the lien of any second mortgage given to secure payment of the
purchase price) now or hereafter placed on the Lot, only in the
event that the lien for delinquent assessments has not been
recorded with the King County Auditor at the time of the
recording of the mortgage lien. Sale or transfer of any Lot
shall not affect the assessment lien. No sale or transfer shall
relieve such Lot from liability for any assessments thereafter
becoming due or from the lien thereof.
Section 12. Budget Deficits During Development
Period TC "Section 15. Budget Deficits During
Declarant Control" \f C \l "2" . During the Development
Period, Declarant may: (a) advance funds to the Association
sufficient to satisfy the deficit, if any, between the actual
operating expenses of the Association (but specifically not
including an allocation for capital reserves), and the sum of
the annual and special assessments (including reserves)
collected by the Association in any fiscal year, and such
advances shall be evidenced by promissory notes from the
Association in favor of the Declarant which shall bear interest
at reasonable interest rates not less than 10% per annum; or
(b) cause the Association to borrow such amount from a
commercial lending institution at the then prevailing rates for
such a loan. The Declarant in its sole discretion may guarantee
repayment of such loan, if required by the lending institution,
but no mortgage secured by the Common Area or any of the
improvements maintained by the Association shall be given in
connection with such loan.
ARTICLE X
Books and
Records
The books, records and papers of the Association shall at all
times, during reasonable business hours, be subject to
inspection by any Member, holders of mortgages on the Lots, and
their respective authorized agents on reasonable notice at the
offices of the Association or its managing agent. The
Declaration, Articles of Incorporation, and the Bylaws of the
Association shall be available for inspection by any Member at
the principal office of the Association. The Association may
impose and collect a reasonable charge for copies and any
reasonable costs incurred by the Association in providing access
to records.
At least annually, the Association shall prepare, or cause to be
prepared, a financial statement of the Association. In the
event the annual assessments are equal to or exceed fifty
thousand dollars ($50,000), the financial statement shall be
audited at least annually by an independent certified public
accountant, provided however, that the audit may be waived if
sixty‑seven percent (67%) of the votes cast by Owners, in person
or by proxy, at a meeting of the Association at which a quorum
is present. Any vote to waive the audit requirement shall be
valid for only one year, after which time the Association must
affirmatively waive the audit requirement again.
The funds of the Association shall be kept in accounts in the
name of the Association and shall not be commingled with the
funds of any other association, nor with the funds of any
manager of the Association or any other person responsible for
the custody of such funds.
ARTICLE XI
Indemnification
of Directors and Officers
Section 1. Indemnification.
To the full extent not
prohibited by the Washington Nonprofit Corporation Act and the
Washington Business Corporation Act, each member of the Board of
Directors, each member of an Association committee, each officer
of the Association, and the Declarant shall be indemnified by
the Association against all expenses and liabilities, including
attorneys' fees, reasonably incurred by or imposed in connection
with any proceeding to which he or she may be a party or in
which he or she may become involved by reason of holding or
having held the position of Director, Association committee
member, Association officer, or Declarant, or any settlement
thereof, whether or not he or she holds such position at the
time such expenses or liabilities are incurred, except to the
extent such expenses and liabilities are covered by insurance
and except in such cases wherein such person is adjudged guilty
of willful misfeasance in the performance of his or her duties;
provided that, in the event of a settlement, the indemnification
shall apply only when the Board of Directors approves such
settlement and reimbursement as being for the best interests of
the Association. Nothing herein shall, however, be deemed to
obligate the Association to indemnify any Owner of a Lot who is
or has been a Board member or officer of the Association with
respect to any duties or obligations assumed or liabilities
incurred by such Owner under and by virtue of the Declaration as
an Owner of a Lot covered thereby.
The foregoing right of indemnification shall not be exclusive of
other rights to which such Director, officer or committee member
may be entitled to through the Articles of Incorporation, the
Declaration, or as a matter of law. The Board of Directors, may
obtain insurance on behalf of any person who is or was a
Director, officer, employee, or agent against any liability
arising out of his or her status as such, whether or not the
Association would have power to indemnify such Director,
officer, employee, or agent against such liability.
Section 2. Limitation of Liability.
No Director, officer
or committee member shall
have liability to the Association or its Members for monetary
damages for conduct as a Director, officer or committee
member, except for acts or
omissions that involve intentional misconduct or a knowing
violation of law by the Director, officer or committee
member, or for any
transaction from which the Director, officer or committee
member will personally
receive a benefit in money, property or services to which the
Director, officer or committee member
is not legally entitled,
or for failure to exercise the degree of care and loyalty
required under RCW 24.03. The Association and all Members and
Owners waive any claims arising from or related to, directly or
indirectly, any conflicts (actual or apparent) arising from
agents of the Declarant also holding positions within the
Association (e.g., Director or officer) during the Development
Period.
ARTICLE XII
Amendment
During the
Development Period, the approval of the Declarant shall be
required for any amendments of these Bylaws and the Declarant
shall have the power to adopt amendments of these Bylaws without
the vote, consent or approval of the Members and/or the
Association. Except as provided in the preceding sentence,
these Bylaws may be amended at a regular or special meeting of
the Members, by a majority vote of the voting power in the
Association present, in person or by proxy, and entitled to vote
at any meeting of the Members at which a quorum is present.
ARTICLE XIII
Construction
Unless
contrary to or inconsistent with the Development Plan or the
Declarant's intent, any conflict between the Articles of
Incorporation and these Bylaws, the Articles shall control; and
any conflict between any provision in the Declaration and these
Bylaws, the Declaration shall control. Any conflicts arising by
mandatory statute or operation of law shall be governed by the
applicable statute or ordinance.
The provisions of these Bylaws shall be liberally construed to
effectuate the Declarant’s purpose of creating a plan for the
operation, maintenance, construction, appearance and harmony of
the project, and to provide the Declarant (during the
Development Period) and thereafter the Association control and
flexibility in managing and controlling activities within the
Subdivision. Any rules of construction or interpretation which
would otherwise construe these Bylaws or any other documents
utilized to implement the Development Plan (e.g., the Articles
of Incorporation, the Declaration, or any amendments thereto)
against the drafter are not applicable.
ARTICLE XIV
Fiscal
Year
The fiscal year of the Association shall begin on the first day
of January and end on the 31st day of December of every year,
except that the first fiscal year shall begin on the date of
incorporation.
ARTICLE XV
Date of Adoption
These Bylaws were duly adopted on the ___ day of
______________, 1999. |
