THIS DECLARATION is made this 23rd day of March, 1978, by BROADMOORE HOMES, INC., a California corporation ("Broadmore"). Broadmoor shall be referred to hereinbelow as the "Declarant."

The terms set forth hereinbelow in this Article I are defined, for purposes of this Declaration, as follows:

Section 1. "Articles" and "By-Laws" shall mean and refer to the Articles of Incorporation and By-Laws of the Association as the same may be amended from time to time.

Section 2. "Assessment" shall mean and refer to any or all, as the context in which the term is used shall require, of the assessments hereinbelow defined:

(a) "Capital Improvement Assessment" shall mean and refer to a charge against each Owner and his Condominium representing a portion of the cost to the Association for the installation or construction of any capital improvements on any Recreation Area or Maintenance Area as provided for in this Declaration.

(b) "Reconstruction Assessment" shall mean and refer to a charge against each Owner and his Condominium representing a portion of the cost to the Association for the reconstruction of any portion or portions of any Condominium Building, the Common Area or Recreation Area as provided for in this Declaration.

(c) "Regular Assessment" shall mean and refer to a charge against each Owner and his Condominium representing that portion of the Common Expenses attributable to such Owner and his Condominium as provided for in this Declaration.

(d) "Special Assessment" shall mean and refer to a charge against a particular Owner and his Condominium directly attributable to such Owner, for certain costs incurred by the Association or the Declarant as provided for in this Declaration.

Section 3. "Association" shall mean and refer to Rancho Dominguez Townhomes Community Association, a nonprofit corporation, incorporated or to be incorporated under the laws of the State of California, and its successors and assigns.

Section 4. "Association Rules" shall mean and refer to rules adopted by the Association pursuant to the Article of this Declaration entitled "Duties and Powers of the Association."

Section 5. "Board" shall mean and refer to the Board of Directors of the Association.

Section 6. "Common Area" shall mean and refer to the entirety of each project except the Units in each such project and, without limiting the generality of the foregoing, specifically including all structural projections within a Unit which are required for the support of a Condominium Building, gas, water, waste pipes, all sewers, all ducts, chutes, conduits, wires and other utility installations of the structures wherever located (except the outlets thereof when located within Units), the land upon which the structures are located, the air space above these structures, all bearing walls, columns, floors, the roof, the slab foundation, common stairways, window glass and the like.

Section 7. "Common Expenses" shall mean and refer to the actual and estimated costs of: maintenance, management, operation, repair and replacement of the Common Area and Recreation Area (unless the cost of such repair and replacement is otherwise provided for in the Article hereof entitled "Destruction of Improvements") and any Maintenance Area; unpaid Assessments; management and administration of the Association, including, but not limited to, compensation paid by the Association to managers, accountants, attorneys and other employees; utilities, trash pick-up and disposal, gardening and other services benefiting the Common Area, Recreation Area and any Maintenance Area; fire, casualty, liability, workmen's compensation and other insurance covering the Common Area, Recreation Area and any Maintenance Area; reasonable reserves as appropriate; bonding of the members of the management body; taxes paid by the Association; amounts paid by the Association for the discharge of any lien or encumbrance levied against the Common Area or Recreation Area or any portion thereof; amounts paid or incurred by the Association in collecting Assessments pursuant to Section 1 of Article VI hereof, including amounts expended to purchace a Condominium in connection with the foreclosure of an Assessment lien against such Condominium; and expenses incurred by the Association for any reason whatsoever in connection with the Common Area, Recreation Area or any Maintenance Area, this Declaration or any Supplementary Declaration of Covenants, Conditions and Restrictions recorded in accordance with Article II of this Declaration, the Articles or By-Laws or in furtherance of the purposes of the Association or in the discharge of any obligations imposed on the Association or the Board by this Declaration or any such Supplementary Declaration.

Section 8. "Condominium" shall mean and refer to an estate in real property in a project (as to that project only) consisting of a fractional undivided fee interest in common with the other Owners in the project in the Common Area of such project, together with a separate fee interest in a Unit and all right, title and interest appurtenant thereto. Such fractional undivided interest in common of each Owner shall be as described in the instrument conveying a Condominium to such Owner and shall not be changed except as provided in Section 10 of Article XIII hereof and in Section 8 of Article XIV hereof.

Section 9. "Condominium Building" shall mean and refer to a separate building containing one or more Units or elements of Units.

(a) "Garage" shall mean and refer to that portion of a Unit designed for use as a garage, and shall be identified on the Condominium Plan by a Unit number and the letter "G" and shall consist of the interior undecorated surfaces of the perimeter walls, floors, ceilings, windows (if any) and doors of each Garage element and the space encompassed thereby, including the outlets of all utility installations therein.

(b) "Patio" shall mean and refer to that portion of a Unit designed for use as a patio, and shall be identified on the Condominium Plan by a Unit number and the letter "B" and shall consist of the contiguous surfaces of any Common Area walls or fences, the surfaces of the walls of contiguous Condominium Buildings, with the upper and lower horizontal boundary of the Patio element being planes as shown on the Condominium Plan, and the space encompassed by all of the foregoing. In the event that the contiguous Common Area land or improvements do not completely enclose the Patio element, the remaining boundaries of the airspace contained within said Patio element shall be as delineated on the Condominium Plan.

(c) "Residential Element" shall mean and refer to that portion of a Unit designed for use as a residence, and shall be identified on the Condominium Plan by a Unit number only and shall consist of the interior undecorated surfaces of the perimeter walls, floors, ceilings, windows and doors of each Residential Element and the space encompassed thereby, including the outlets of all utility installations therein and also including the interior surfaces of the firebox of each fireplace extending from the floor to the top of each fireplace, if any, and the space encompassed thereby, which adjoins any Residential Element.

Section 10. "Condominium Plan" shall mean and refer to the Condominium plan for each project recorded by Declarant in the Office of the County Recorder of Orange County, California, and any amendments or modifications thereto.

Section 11. "Declarant" shall mean and refer to Broadmoor and such of its successors as shall acquire Broad-moor's entire fee interest in Rancho Dominguez Townhomes as of the date of acquisition thereof. Persons or entities who acquire less than all of such fee interest (including, without limitation, those acquiring less than all of the Condominiums owned by Broadmoor for purposes of development or residential use) shall not be successors of Broadmoor for purposes of this Declaration, but rather shall be Owners. However, nothing herein contained shall be deemed to preclude the Declarant from assigning any of its rights or duties to anyone as provided in Article XVII, Section 16 hereof.

Section 12. "Declaration" shall mean and refer to this Declaration or Covenants, Conditions and Restrictions for Rancho Dominguez Townhomes as the same may be amended, supplemented, modified or changed from time to time.

Section 13. "Deed of trust" shall be deemed to include a mortgage, "beneficiary" shall be deemed to include the mortgagee of a mortgage and "trustor" shall be deemed to include the mortgagor of a mortgage.

Section 14. "Family" shall mean and refer to one or more persons related to each other by blood, marriage or legal adoption, or a group of not more than three persons not so related, together with his or their domestic servants, maintaining a common household in a Unit.

Section 15. "First Beneficiary" shall mean and refer to the first beneficiary under a deed of trust of record or the first mortgagee under a mortgage of record covering a Condominium or condominiums in Rancho Dominguez Townhomes.

Section 16. "Maintenance Area" shall mean and refer to any area within or outside of Rancho Dominguez Townhomes which is not Common Area or Recreation Area but which the Association is required to maintain by this Declaration or any Supplementary Declaration of Covenants, Conditions and Restrictions recorded in accordance with Article II hereof.

Section 17. "Member" shall mean and refer to every person or entity who holds membership in the Association as provided in Article III, Section 1 hereof.

Section 18. "Owner" shall mean and refer to one or more persons or entities who are the record owner, including the Declarant, or the record vendee of a Condominium under an installment sales contract, of the fee simple title to any Condominium, but shall not mean or refer to those having such interest merely as security for the performance of an obligation.

Section 19. The term "project" shall mean and refer to Project No. 1 and each other parcel of real property, including all structures thereon, annexed thereto in accordance with Article II hereof, which is divided, or which is to be divided, into Condominiums.

Section 20. "Project No. 1" shall mean and refer to the Property.

Section 21. "Rancho Dominguez Townhomes" shall mean and refer to the Property together with such additions thereto as may become subject to this Declaration or any Supplementary Declaration of Covenants, Conditions and Restrictions pursuant to the provisions of Article II hereof.

Section 22. "Recreation Area" shall mean and refer to Lot 6 of Tract 9954, as shown on a map recorded in Book 421, Pages 23 to 28. inclusive, of Miscellaneous Maps, records of Orange County, California, and any other property, including property which may be annexed pursuant to Article II hereof, and all facilities and improvements thereon, if any, owned or leased by the Association for the common use and enjoyment of the Owners within Rancho Dominguez Townhomes.

Section 23. "Unit" shall mean and refer to the elements of the Condominium which are not owned in common with the Owners of other Condominiums in a project and shall consist of a Residential Element, together with one or more of the other Condominium elements set forth in this Article. Each Unit shall be identified on the Condominium Plan with a separate number. In interpreting deeds, leases, declarations and plans, the existing physical boundaries of a Unit constructed in substantial accordance with the Condominium Plan shall be conclusively presumed to be its boundaries rather than the description expressed in the deed, lease, declaration or plan regardless of settling or lateral movement of the Condominium Building and regardless of minor variances between boundaries as shown on the plan or in the deed, lease or declaration and those of the Condominium Building as constructed.

ARTICLE III

Membership and Voting Rights in the Association

Section 1. Membership. Every person or entity who is a record owner of a fee interest in any Condominium which is subject by this Declaration to assessment by the Association shall be a Member of the Association. Any person or entity having any such interest merely as security for the performance of an obligation shall not be a Member. Membership in the Association and the right to vote shall be appurtenant to, and may not be separated from, the fee ownership of any Condominium which is subject to assessment by the Association. Ownership of such Condominium shall be the sole qualification for membership in the Association.

Section 2. Transfer. The membership held by any record Owner of a Condominium shall not be transferred, pledged or alienated in any way except upon the sale or assignment of such Condominium and then only to the purchaser or assignee thereof. Any attempt to make a prohibited transfer will be void and will not he reflected upon the books and records of the Association. In the event any Owner shall fail or refuse to transfer the membership registered in his name to the purchaser of his Condominium, the Association shall have the right to record the transfer upon the books of the Association.

Section 3. Voting Rights. The Association shall have two classes of voting membership as follows:

(a) Class A. Class A Members shall be all those Owners entitled to membership as defined in Section 1 of this Article III, with the exception of the Declarant. Class A Members shall be entitled to one (1) vote for each Condominium in which they hold the interest required for membership by Section 1. When more than one person holds such interest in any Condominium, all such persons shall be Members, and the vote for such Condominium shall be exercised as they determine among themselves, but in no event shall more than one vote be cast with respect to any such Condominium. Any votes cast with regard to any such Condominium in violation of this provision shall be null and void.

ARTICLE IV

Members Use of Common Area and Property Rights in the Recreation Area

Section 1. Members' Easements of Enjoyment. Subject to the provisions of Section 3 hereinbelow, every Member shall have a right and easement of access, use and enjoyment in and to the Recreation Area and such easement shall be appurtenant to and shall pass with the title to every Condominium subject to assessment.

Section 2. Title to Recreation Area. At any time prior to t conveyance of the first Condominium in Project No. 1, the Declarant shall convey to the Association tee simple title to the Recreation Area within Project No. 1, free and clear of all liens and encumbrances, except current real property taxes, which taxes shall be prorated to the date of transfer, and reservations, easements, covenants, conditions and restrictions then of record, including those set forth in this Declaration.

Section 3. Extent of Members' Easements. The rights and easements of access, use and enjoyment created by Section 1 hereinabove shall be subject to the following:

(a) The right of the Association, in accordance with its Articles and By-Laws, to borrow money for the purpose of improving the Recreation Area and facilities thereon, if any, and in aid thereof, to deed in trust said Recreation Area; provided, however, that the rights of any beneficiary under such deed of trust shall be subordinate to the rights of the Members of the Association; and

(b) The right of the Association to take such steps as are reasonably necessary to protect the Recreation Area against foreclosure; and

(c) The right of the Association, as provided in its By-Laws, to suspend the voting rights and/or use or enjoyment rights to recreational or social facilities within the Recreation Area of any Member for any period during which any Assessment against his Condominium remains unpaid and delinquent, and for a period not to exceed thirty (30) days for any infraction of the Association Rules; and

(d) The right of the Association to dedicate or transfer all or any part of the Recreation Area to any public agency, authority or utility or any other entity for such purposes and subject to such conditions as may be agreed to by its Members; provided, that no such dedication or transfer shall be effective unless approved by the vote or written consent of not less than two-thirds (2/3) of each class of Members and an instrument in writing is recorded and signed by the Secretary of the Association certifying that such dedication or transfer has been approved by the required vote and/or written consent; provided further, that the granting of easements for public utilities or for other public purposes consistent with the intended use of the Recreation Area shall not require such prior written consent; and

(e) The right of the Association to establish and enforce reasonable rules and regulations pertaining to the use and enjoyment of the Recreation Area and the facilities thereon; and

(f) The right of the Association to limit the number of quests of Members and to limit the use of the Recreation Area by persons not in possession of a Condominium, but owning a portion of the interest in a Condominium required for membership; and

(g) The right of the Association to charge reasonable admission and other fees for the use of any facility situated upon the Recreation Area; and

(h) The right of the Association to perform its duties and exercise its powers under Article IX hereof, including the power of the Association to grant easements on the Recreation Area as provided in said Article; and

(i) Any limitations, restrictions or conditions affecting the use, enjoyment or maintenance of the Recreation Area imposed by the Declarant or any city or county or other governmental agency having jurisdiction to impose any such limitations, restrictions or conditions, and whether by agreement with the Association, the Declarant or otherwise; and

(j) Such other rights of the Association, the Architectural Committee, the Board, the Owners and the Declarant with respect to the Recreation Area as may be provided for in this Declaration.

Section 4. Delegation of Use. Subject to the limitations of Section 3 of this Article IV, any Member may delegate, in accordance with the By-Laws, his right of use and enjoyment to the Recreation Area and facilities thereon to the members of his Family, his tenants and contract purchasers who reside in his Unit.

Section 5. Use of Common Area. Every Member shall have a nonexclusive easement for use and enjoyment in and to the Common Area, regardless of the Project in which such Member is an Owner, and such easement shall be appurtenant to and shall pass with the title to every Condominium subject to assessment, subject to all of the easements, covenants, conditions, restrictions and other provisions contained in this Declaration, including, without limitation, the following provisions:

(a) The right of the Association, as provided in its By-Laws, to suspend the voting rights and/or use or enjoyment rights to recreational or social facilities within the Common Area of any Member for any period during which any Assessment against his Condominium remains unpaid and delinquent, and for a period not to exceed thirty (30) days for any infraction of the Association Rules; and

(b) The right of the Association to establish and enforce reasonable rules and regulations pertaining to the use and enjoyment of the Common Area and the facilities thereon; and

(c) The right of the Association to limit the number of guests of Members and to limit the use of the Common Area by persons not in possession of a Condominium, but owning a portion of the interest in a Condominium required for membership; and

(d) The right of the Association to charge reasonable admission and other fees for the use of any facility situated upon the Common Area; and

(e) The right of the Association to grant easements on, over and under the Common Area to public utilities or governmental entities or agencies; provided that any such easement shall not unreasonably interfere with the right of any Owner to the use and enjoyment of his Unit and the Common Area. No such easement shall be effective unless an instrument signed by Members entitled to cast two-thirds (2/3) of the voting power of the Members residing in the Project in which the easement will be granted has been recorded agreeing to the granting of such easement. The certificate of the President and Secretary of the Association attached to such instrument certifying that the Members signing such instrument represent two-thirds (2/3) of the voting power of the Members residing in the Project in which the easement will be granted shall be deemed conclusive proof thereof.

(f) The right of the Association to perform its duties and exercise its powers under this Declaration; and

(g) Any limitations, restrictions or conditions affecting the use, enjoyment or maintenance of the Common Area imposed by the Declarant or any city or county or other governmental agency having jurisdiction to impose any such limitations, restrictions or conditions, and whether by agreement with the Association, the Declarant or otherwise; and

(h) Such other rights of the Association, the Architectural Committee, the Board, the Owners and the Declarant with respect to the Common Area as may be provided for in this Declaration.

Section 6. Delegation of Use of Common Area. Subject to the limitations of Section 5 hereinabove, any Member may delegate, in accordance with the By-Laws, his right of use and enjoyment to the Common Area and facilities thereon to the members of his Family, his tenants and contract purchasers who reside in his Unit.

ARTICLE V

Covenant for Assessments

Section 1. Creation of the Lien and Personal Obligation of Assessments. The Declarant for each Condominium owned by it within Rancho Dominguez Townhomes hereby covenants, and each Owner of any Condominium within Rancho Dominguez Townhomes by acceptance of a deed or other conveyance therefor, whether or not it shall be so expressed in any such deed or other conveyance, is and shall be deemed to covenant and agree to pay to the Association: (a) Regular Assessments, (b) Special Assessments, (C) Capital Improvement Assessments and (d) Reconstruction Assessments, such Assessments to be levied, fixed, established and collected from time to time as hereinbelow provided. The Assessments, together with such interest thereon and costs of collection thereof as are provided hereinbelow in Section 1 of Article VI, shall be a charge on the real property and shall be a continuing lien upon the Condominium against which each such Assessment is made. The lien shall become effective upon recordation of a notice of claim of lien in accordance with Section 2 of Article VI of this Declaration. Each such Assessment, together with such interest and costs, shall also be the personal obligation of the person or entity who was the Owner of such Condominium at the time when the Assessment, or any portion thereof, fell due and shall bind his heirs, devisees, personal representatives, successors and Assigns; provided, however, the personal obligation shall not pass to his successors in title unless expressly assumed by them.

Section 2. Purpose of Assessments. The Regular Assessments levied by the Association shall be collected, accumulated and used exclusively for the purpose of providing for and promoting the pleasure, recreation, health, safety and social welfare of the Members, including the enhancement of the value, desirability and attractiveness of Rancho Dominguez Townhomes, the improvement and maintenance, of the Common Area, Recreation Area and facilities thereon, the improvement and maintenance of Maintenance Areas, if any, and the discharge of any obligations or duties imposed on the Association or the Board by this Declaration. Special, Capital Improvement and Reconstruction Assessments shall be used exclusively for the purposes for which such Assessments were levied as provided for in this Declaration.

Section 3. Regular Assessments.

(a) Amount and Time of Payment. Regular Assessments shall be levied on a calendar or fiscal year basis ("Assessment Period") as determined by the Board and the amount and time of payment of said Assessments shall be determined by the Board after giving due consideration to the Common Expenses of the Association. In the event the amount budgeted to meet Common Expenses for an Assessment Period proves to be excessive in light of the actual Common Expenses, the Board, in its discretion, may, by resolution, reduce the amount of the Regular Assessments.

(b) Date of Commencement of Regular Assessments. The Regular Assessments provided for herein shall commence as to all Condominiums in Project No. 1 on the first day of the month following the conveyance of the first Condominium within Project No. 1 to an Owner. The Regular Assessments for Condominiums added hereafter to Project No. 1, provided said Condominiums have become subject to assessment by the Association, shall commence with respect to all Condominium within such added property on the first day of the month following the conveyance of the first Condominium within said added property to an Owner.

(c) Assessment Procedures. At least thirty (30) days in advance of each Assessment Period, the Board shall estimate the total Common Expenses to be incurred by the Association for such forthcoming Assessment Period and shall at that time determine and fix the amount of the Regular Assessments against each Condominium subject thereto for such Assessment Period. Written notice of such Regular Assessment shall be sent to every Owner subject thereto at least fifteen (15) days in advance of each Assessment Period. Each Owner shall thereafter pay to the Association his Regular Assessment in the installments established by the Board; provided, however, that such installments shall be paid on a monthly basis until such time as the Board determines otherwise. In the event the Board shall determine at any time that the Regular Assessments levied for a current Assessment Period are, or will become, inadequate to meet all Common Expenses for any reason, it shall immediately determine the approximate amount of such inadequacy, issue a supplemental estimate of the total Common Expenses and revise and fix the amount of Regular Assessments against each Owner.

(d) Regular Assessment Limitations. No Regular Assessment for an Assessment Period shall be in an amount which is more than twenty percent (20%) greater than such Assessment for the immediately preceding Assessment Period without the approval by vote or written consent of a majority of each class of Members.

Section 4. Capital Improvement Assessments. In addition to the Regular Assessments, the Association may levy, for any Assessment Period, Capital Improvement Assessments, applicable to that Assessment Period only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of a described capital improvement upon the Recreation Area, to the extent the same is not covered by the provisions for Reconstruction Assessments herein, or any unexpected improvement to or maintenance of any Maintenance Area, including the necessary fixtures and personal property related thereto; provided that any such Capital Improvement Assessments which in the aggregate exceed five percent (5%) of the budgeted Common Expenses for such Assessment Period shall have the approval by vote or written consent of a majority of each class of Members. Capital Improvement Assessments shall be due and payable at the times and in the amounts fixed by the Board.

Section 5. Special Assessments. Special Assessments may be levied (a) by the Board from time to time against Condominiums with respect to which particular costs or expenses have been incurred by the Association for materials or services furnished at the request, or with the consent, of the Owner of any such Condominium or (b) by the Declarant and/or the Association in accordance with the provisions of this Declaration (including, without limitation, Section 4 of Article XVII hereinbelow). Special Assessments levied by the Association shall be due and payable at the times and in the amounts fixed by the Board. Special Assessments levied by the Declarant shall be due and payable at the times and in the amounts which the Declarant establishes.

Section 6. Certificate of Payment. Upon demand, the Association shall furnish to any Owner liable for Assessments a certificate in writing signed by an officer or authorized agent of the Association setting forth whether said Assessments or any portions thereof have been paid. Such certificate shall be conclusive evidence of payment of any Assessments or portions thereof therein stated to have been paid. A reasonable charge may be made by the Board for the issuance of any such certificate.

Section 7. Assessment of Condominiums Owned by Declarant. Without exception, each Condominium owned by the Declarant shall be subject to assessment to the same extent and in the same manner as any other Condominium owned by any Owner.

Section 8. Nonuse and Abandonment. No Owner may waive or escape personal liability for the Assessments provided for herein, nor release the Condominium owned by him from the liens and charges hereof, by nonuse of the Common Area or Recreation Area or abandonment of his Condominium.

Section 9. Uniform Rate of Assessment. All Regular, Capital Improvement and Reconstruction Assessments shall be fixed at a uniform rate for all Condominiums.

Section 10. Exempt Property. The following property subject to this Declaration shall be exempt from the Assessments, charges and liens created herein: (a) all properties dedicated to, and accepted by, a public authority; (b) all Recreation Area; and (c) all properties exempted from taxation by the laws of the State of California, upon the terms and to the extent of such legal exemption. Notwithstanding any provision in this Section, no real property or improvements devoted to residential dwelling use shall be exempt from said Assessments, charges or liens.

Section 11. Offsets. All Assessments shall be payable in the amount specified in the Assessment levied by the Association or the Declarant and no offsets against such amount shall be permitted for any reason, including, without limitation, a claim that the Association is not properly exercising its duties of maintenance or enforcement.

ARTICLE VI

Non-Payment of Assessments

Section 1. Delinquency and Remedies of Association. If any Assessment, or any portion thereof, is not paid on the date when due, then such Assessment or portion thereof shall become delinquent and shall, together with interest and costs of collection as provided hereinbeiow, thereupon become a continuing lien on the Condominium against which such Assessment was made as more particularly described in Section 1 of Article V hereinabove. If the Assessment, or any portion thereof, is not paid within thirty (30) days after the delinquency date, a late charge of Ten Dollars ($10.00) may be levied by the Board and the Assessment shall bear interest from the date of delinquency at a rate set by the Board, which rate shall not exceed the maximum permitted by law. In addition to all other legal and equitable rights or remedies which it may have, the Association may, at its option, bring an action at law against the Owner personally obligated to pay such Assessment, and/or upon compliance with the notice provisions set forth in Section 2 hereinbelow, bring an action to foreclose the lien against the Condominium, and there shall be added to the amount of such Assessment or any portion thereof, and interest thereon, the late charge and all costs and expenses, including reasonable attorneys' fees, incurred by the Association in collecting the delinquent Assessment. Each Owner vests in the Association, and its successors or assigns, the right and power to bring all actions at law or lien foreclosure against such Owner or other Owners for purposes of collecting delinquent Assessments.

In lieu of judicially foreclosing the lien, the Association, at its option, may foreclose such lien by proceeding under a power of sale as provided hereinbelow in Section 3, such a power of sale being given to the Association as to each and every Condominium, for the purpose of collecting delinquent Assessments.

Section 2. Notice of Claim of Lien. No action shall be brought to foreclose the lien, or to proceed under the power of sale, sooner than thirty (30) days after the date that a notice of claim of lien, executed by a duly authorized representative of the Association, is recorded with the Orange County Recorder. Said notice shall set forth the amount claimed to be delinquent (which may include the late charge, interest and costs of collection, including reasonable attorneys' fees), a good and sufficient legal description of the Condominium being assessed, the name of the record Owner or reputed Owner thereof, and the name and address of the Association as claimant. A copy of said notice shall be deposited in the United States mail, certified or registered, and postage prepaid, to the Owner of the Condominium.

Section 3. Foreclosure Sale. Any such sale under the power of sale provided for above shall be conducted in accordance with the provisions of Sections 2924, 2924b, and 2924c of the Civil Code of the State of California, applicable to the exercise of powers of sale in deeds of trust, or in any other manner permitted or provided by law. The Association, through its duly authorized agents, shall have the power to bid on the Condominium at foreclosure sale, using Association funds or funds borrowed for such purpose, and to acquire and hold, lease, mortgage and convey the same.

Section 4. Curing of Default. Upon the timely curing of any default for which a notice of claim of lien was recorded by the Association, any officer of the Association is hereby authorized to file or record, as the case may be, an appropriate release of such notice, upon payment by the defaulting Owner of a fee to be determined by the Association, but not to exceed a reasonable fee, to cover the costs of preparing and filing or recording such release together with the payment of such other charges, costs, interest or fees as shall have been incurred.

Section 5. Cumulative Remedies. The Assessment lien and the rights to foreclosure and sale thereunder shall be in addition to, and not in substitution for, all other rights and remedies which the Association and its successors and assigns may have hereunder and by law.

ARTICLE VII

Architectural and Landscaping Control

Section 1. Architectural Approval. No fence, wall, building, sign or other structure (including basketball standards), or exterior addition to or change or alteration thereof (including painting) or landscaping, shall be commenced, constructed, erected, placed, altered, maintained or permitted to remain on Rancho Dominguez Townhomes or any portion thereof, until plans and specifications shall have been submitted to and approved in writing by an architectural committee, initially to be appointed by the Declarant (the "Architectural Committee"). Said plans and specifications shall be prepared by a duly licensed architect or other person approved by the Architectural Committee and shall include, where appropriate, the following: (a) plot plans, showing the location of all structures and showing grade elevations and drainage; (b) building plans, including floor, foundation and roof plans, with all materials there-for; (C) exterior elevations, surfaces, and sections, structural design and salient exterior details; (d) general exterior color schemes; and (e) landscaping plans, showing type, location and elevation of trees, bushes, shrubs, plants, hedges and fences. All such plans and specifications shall be submitted in writing over the signature of the Owner of the property or such Owner's authorized agent. Approval shall be based, among other things, on adequacy of Site dimensions; adequacy of structural design and material; conformity and harmony of external design with neighboring structures; effect of location and use of improvements and landscaping on neighboring property, improvements, landscaping, operations and uses; relation of topography, grade and finished ground elevation of the property being improved to that of neighboring property; proper facing of main elevations with respect to nearby streets; preservation of view and aesthetic beauty with respect to fences, walls and landscaping; assurance of adequate access to the Association in connection with the performance of its duties and the exercise of its powers hereunder; conformity with such rules and regulations as may be adopted by the Architectural Committee in accordance with this Article; and conformity of the plans and specifications to the purpose and general plan and intent of this Declaration. In any event, the Architectural Committee shall have the right, but not the obligation, to require any Member to remove, trim, top, or prune any shrub, tree, bush, plant or hedge which such Committee reasonably believes materially obstructs the view of any Residential Element. The Declarant shall not be required to comply with any of the provisions of this Section 1.

Section 2. Number of Members and Term of the Architectural Committee Appointed by Declarant. The Architectural Committee shall consist of not less than three nor more than five members. The Declarant shall have the right to appoint all of the members of the Architectural Committee and their replacements until the first anniversary of the issuance by the California Department of Real Estate of the original public report for Project No. 1 (the "Anniversary Date"). After the Anniversary Date, the Declarant shall have the right to appoint a majority of the members of such Committee and their replacements until ninety percent (90%) or more of the Condominiums within Rancho Dominguez Townhomes have been sold, or until the fifth anniversary of the date of original issuance by the California Department of Real Estate of the final subdivision public report for Project No. 1 (the "Fifth Anniversary Date"), whichever shall first occur. After the Anniversary Date, the Board shall appoint all of the members of the Architectural Committee not appointed by the Declarant. After ninety percent (90%) or more of the Condominiums within Rancho Dominguez Townhomes have been sold or after the Fifth Anniversary Date, whichever shall first occur, the Board shall appoint all of the members of the Architectural Committee. Those appointed to the Architectural Committee by the Board shall be Members; the Declarant, however, need not appoint Members to the Architectural Committee. Those Members of the Architectural Committee appointed by the Board may be dismissed and replaced at any time and from time to time as determined by the Board in its sole and absolute discretion.

Section 3. Failure to Approve or Disapprove Plans and Specifications. In the event the Architectural Committee, or its representatives designated in accordance with Section 8 hereinbelow, fails to either approve or disapprove such plans and specifications within thirty (30) days after the same have been submitted to it, it shall be conclusively presumed that the Architectural Committee has approved such plans and specifications. All improvement work approved by the Architectural Committee shall be diligently completed and constructed in accordance with approved plans and specifications.

Section 4. No Liability. Neither the Declarant, the Association, the Architectural Committee, nor the members or designated representatives thereof shall be liable in damages to anyone submitting plans or specifications to them for approval, or to any Owner of property affected by this Declaration by reason of mistake in judgment, negligence or nonfeasance arising out of or in connection with the approval or disapproval or failure to approve or disapprove any such plans or specifications, or for any defect in any structure constructed from such plans and specifications. Such plans and specifications are not approved for engineering design. Every person who submits plans or specifications to the Architectural Committee for approval agrees, by submission of such plans and specifications, and every Owner of any of said property agrees that he will not bring any action or suit against the Declarant, the Association, the Architectural Committee, or any of the members or designated representatives thereof to recover any such damages.

Section 5. Notice of Noncompliance or Non-completion. Notwithstanding anything to the contrary contained herein, after the expiration of (a) one (1) year from the date of issuance of a building permit by municipal or other governmental authority for any improvements or (b) one (1) year from the date of the commencement of construction within Rancho Dominguez Townhomes of any improvements, said improvements shall, in favor of purchasers and encumbrancers in good faith and for value, be deemed to be in compliance with all provisions of this Article VII, unless actual notice of such noncompliance or non-completion, executed by the Architectural Committee or its designated representatives, shall appear of record in the office of the County Recorder of Orange County, California, or unless legal proceedings shall have been instituted to enforce compliance or completion.

Section 6. Rules and Regulations. The Architectural Committee may, from time to time, in its sole discretion, adopt, amend and repeal reasonable rules and regulations interpreting and implementing the provisions hereof and establishing reasonable architectural standards for Rancho Dominguez Townhomes.

Section 7. Variances. Where circumstances such as topography, location of property lines, location of trees, configuration of lots, or other matters require, the Architectural Committee, by the vote or written consent of a majority of its members, may allow reasonable variances as to any of the covenants, conditions or restrictions contained in this Declaration under the respective jurisdiction of such Committee, on such terms and conditions as it shall require; provided, however, that all such variances shall be in keeping with the general plan for the improvement and development of Rancho Dominguez Townhomes.

Section 8. Appointment and Designation. The Architectural Committee may, from time to time, by a majority of the members thereof, delegate any of its rights or responsibilities hereunder to one or more duly licensed architects or other qualified persons who shall have full authority to act on behalf of the Architectural Committee in all matters delegated.

Section 9. Review Fee and Address. All plans and specifications required by Section 1 hereof shall be submitted in writing for approval together with a reasonable processing fee. The address of the Architectural Committee is 17500 Red Hill Avenue, Suite 100, Irvine, California 92714, or such other place as may from time to time be designated by such Committee by a written instrument recorded in the office of the County Recorder of Orange County. The last instrument so recorded shall be deemed the Architectural Committee's proper address. Such address shall be the Place where the current rules and regulations, if any, of such Committee shall be kept.

Section 10. Inspection. Any member or agent of the Architectural Committee may, from time to time, at any reasonable hour or hours and upon reasonable notice, enter and inspect any property subject to the jurisdiction of the Architectural Committee as to its improvement or maintenance in compliance with the provisions hereof.

ARTICLE VIII

General Restrictions

Section 1. Except as provided in Section 11 of Article XVII hereof, no building, structure or improvement shall be constructed, erected, altered, placed or permitted to remain on any Common Area within Project No. 1 other than one or more Condominium Buildings containing Units and customary appurtenances designed for occupancy by not more than one Family.

Section 2. Neither Rancho Dominguez Townhomes, nor any portion thereof, shall be used for any purpose tending to injure the reputation thereof, or to disturb the neighborhood or occupants of adjoining property, or to constitute a nuisance, or in violation of any public law, ordinance or regulation in any way applicable thereto.

Section 3. None of the Condominiums shall be used or caused to be used or allowed or authorized in any way, directly or indirectly, for any business, commercial, manufacturing, mercantile, storing, vending or other such nonresidential purposes.

Section 4. Subject to the provisions of Section 3 of Article IV, the Recreation Area, if any, for each project shall be used for recreational, social, pedestrian and vehicular movement and other purposes authorized under this Declaration and such Supplementary Declarations as may be recorded pursuant to the provisions of Article II hereof.

Section 5. No projections of any type which are attached or affixed to any Condominium Building or any other building shall be placed or permitted to remain above the roof of any such Building or any other building with the exception of one or more chimneys and one or more vent stacks. No outside television or radio pole or antenna or other electronic device shall be constructed, erected or maintained on any Condominium Building, any other building or on any property within Rancho Dominguez Townhomes or connected in such manner as to be visible from the outside of any such building unless and until the same shall have been approved by the Architectural Committee.

Section 6. No shed, tent or temporary building shall be erected, maintained or used on any property within Rancho Dominguez Townhomes; provided, however, that temporary buildings for use and used only for purposes incidental to the initial construction and sale of improvements and dwellings on any portion of Rancho Dominguez Townhomes may be erected, maintained and used, provided that such erection, maintenance and use has been approved by the Architectural Committee and provided further that said temporary buildings shall be promptly removed upon the completion of such construction work.

Section 7. When Garages are not in use, Garage doors shall be closed. Garages shall be used only for the purpose of parking automobiles and other vehicles and equipment and storing an Owner's household goods; provided, however, that all such uses shall be accomplished so that Garage doors can be closed. No open carport, if any, shall be used for the storage of any item other than an automobile. Owners shall park in their Garages and not, without Board approval, in parking spaces provided for guests.

Section 8. No mobile home, boat, truck, trailer, recreational vehicle of any kind or similar equipment shall be kept, stored, parked (other than temporarily), maintained, constructed or repaired, on any property within Rancho Dominguez Townhomes in such a manner as to be visible from any neighboring property; provided, however, that the provisions of this Section shall not apply to emergency vehicle repairs. Temporary parking shall mean parking of vehicles belonging to guests of Owners, delivery trucks, service vehicles and other commercial vehicles being used in the furnishing of services to the Association or the Owners and parking of vehicles belonging to or being used by Owners for loading or unloading purposes.

Section 9. No privy shall be erected, maintained or used upon any portion of Rancho Dominguez Townhomes, but a temporary privy may be permitted during the course of construction of a building, provided that such erection, maintenance or use has been approved by the Architectural Committee. Any lavatory, toilet or water closet which shall be erected, maintained or used upon any portion of Rancho Dominguez Townhomes shall be enclosed and located within a building permitted under this Declaration to be erected within Rancho Dominguez Townhomes, shall be properly connected with the sewer system and shall be so constructed and operated that no offensive odor shall arise or otherwise escape therefrom.

Section 10. No animals, fowl, reptiles, insects or poultry shall be kept within Rancho Dominguez Townhomes, except that domestic reptiles, dogs, cats, birds and fish may be kept as household pets upon said property, provided that they are not kept, bred or raised thereon for commercial purposes or in unreasonable quantities. All dogs permitted to be kept by this Section shall be kept on a leash within Rancho Dominguez Townhomes when not within an enclosed area of a Unit.

Section 11. Except for a sign of customary and reasonable dimensions, the area of which shall not exceed four (4) square feet and advertising a Condominium for sale, such sign to be located within the Unit of such Condominium, no sign or other advertising device of any character shall be erected, maintained, or displayed upon any portion of Rancho Dominguez Townhomes; provided, however, that Declarant, its agents and designees, may erect and maintain such signs and other advertising devices or structures as they may deem necessary or proper in connection with the conduct of the Declarant's operations for the development, improvement, subdivision and sale of the Condominiums within Rancho Dominguez Townhomes.

Section 12. No weeds, rubbish, debris, objects or materials of any kind shall be placed or permitted to accumulate upon any property within Rancho Dominguez Townhomes which render such property unsanitary, unsightly, offensive or detrimental to any property in the vicinity thereof or to the occupants of any such property in such vicinity. Trash, garbage, rubbish and other waste shall be kept only in sanitary containers. All service yards or service areas, clothesline areas, sanitary containers and storage piles on any property within Rancho Dominguez Townhomes shall be enclosed or fenced in such a manner that such yards, areas, containers and piles will not be visible from any neighboring property or street. Sanitary containers may be set out for a reasonable period of time before and after scheduled trash pick-up times.

Section 13. No plants or seeds infected with noxious insects or plant diseases shall be brought upon, grown or maintained upon any part of Rancho Dominguez Townhomes.

Section 14. No noxious or offensive activity shall be carried on upon any property within Rancho Dominguez Townhomes, nor shall anything be done or maintained thereon which may be or become an annoyance or nuisance to the neighborhood.

Section 15. All buildings and other structures upon Rancho Dominguez Townhomes and each portion thereof shall at all times be maintained in good condition and repair and well and properly painted. No windows shall be covered, either inside or outside, with aluminum foil or any other similar material.

Section 16. No structure, planting or other material shall be placed or permitted to remain or other activities undertaken on any slope area or any other area within Rancho Dominguez Townhomes which might damage or interfere with established slope ratios, create erosion or sliding problems, or interfere with established drainage systems or patterns. Any area drains, gutters, downspouts, berms, swales and other drainage facilities and systems not maintained by the Association shall be maintained by the Owner thereof in a neat, orderly, safe and sanitary condition and in such a manner as to facilitate the orderly discharge of water by means of same.

Section 17. All landscaping of every kind and character, including shrubs, trees, grass and other plantings shall be neatly trimmed, properly cultivated and maintained continuously by the Owner thereof, other than such landscaping, if any, within the Common Area maintained by the Association, in a neat and orderly condition and in a manner to enhance its appearance.

Section 18. During reasonable hours and after reasonable notice, the Association, or the Declarant or any agent thereof, so long as the Declarant is an Owner of at least twenty-five percent (25%) of the Condominiums, shall have the right to enter upon and inspect Rancho Dominguez Townhomes or any portion thereof and the improvements thereon for the purpose of ascertaining whether or not the provisions of this Declaration are being complied with and shall not be liable for or deemed guilty of trespass by reason thereof.

Section 19. Each Member shall be liable to the Association for any damage to the Common Area, Recreation Area or any Maintenance Area under the Association's jurisdiction or to any of the equipment or improvements thereon which may be sustained by reason of the negligence or willful misconduct of said Member or of his Family, relatives, guests or invitees, both minor and adult.

Section 20. As used herein, the term "drainage pattern and system" includes, but is not necessarily limited to, underground drain pipes and patterns of drainage over Common Area and Recreation Area. The owner of the Common Area or Recreation Area shall have the right to use the established drainage pattern and system for the purpose of draining his Common Area or Recreation Area and improvements thereon; provided that such right of drainage shall not include the right to discharge noxious or offensive matter. Water from any Common Area or Recreation Area and the improvements thereon may drain or flow into adjacent streets. Water shall not be allowed to drain or flow on to adjacent Common Area or Recreation Area, except to the extent provided for by the established drainage pattern and system. All slopes or terraces on any Common Area or Recreation Area shall be maintained as provided herein so as to prevent any erosion thereof upon adjacent streets or adjoining property.

Section 21. No property within Rancho Dominguez Townhomes shall be used in any manner to explore for or to remove any water, oil or other hydrocarbon minerals of any kind, gravel, earth or any earth substance or any other mineral of any kind. No machinery or equipment of any kind shall be placed, operated or maintained upon a project, except such machinery or equipment as is usual and customary in connection with the use or maintenance of a private residence.

Section 22. None of the restrictions contained within this Article shall limit or be deemed to limit the rights of Declarant provided for in Section 11 of Article XVII hereof.

Section 23. (Revised by Amendment to CC&Rs August 20, 1979) No structural alterations to the interior of any Unit shall be made, nor shall any plumbing or electrical alteration within any bearing wall be made by any individual Owner without the prior written consent of the Architectural Committee.

Section 24. Each Owner shall, subject to the terms and provisions of this Declaration, including, but not limited to, those provisions pertaining to maintenance and repair by the Association and the Article hereof entitled "Architectural and Landscaping Control," and subject also to the terms and provisions of any Supplementary Declaration recorded in accordance with the terms and provisions of Article II hereof:

(a) Be responsible for the maintenance and repair of the glass doors, if any, and windows (including cleaning the interior and exterior thereof) enclosing his Unit;

(b) Be responsible for the maintenance and repair of the plumbing, electrical, air conditioning (if any), cable television, utilities and heating systems servicing his Unit and located within or underneath the outside perimeter of the exterior bearing wall of said Unit, and all appliances and equipment located in said Unit;

(c) Repair, maintain or replace Garage doors, including, without limitation, hinges, springs and other parts of the door mechanism;

(d) Maintain, repair, replace and restore all portions of his Unit, including, without limitation, the interior walls, ceilings, floors and doors in a clean, sanitary and attractive condition; and

(e) Maintain all plants and other growing things placed or located within the nonresidential elements of his Unit, and such plants or other growing things shall be permitted to encroach into or onto the Common Area.

In the event such repair and maintenance are not so accomplished by any such Owner, the Association or its delegates shall have the right to enter, at reasonable times, the Unit to effect such repair, and the cost thereof shall be charged to the Owner of the Unit, and, if not paid in a timely manner, shall be a Special Assessment.

ARTICLE IX

Duties and Powers of the Association

Section 1. General. In addition to the duties and powers enumerated in its Articles and By-Laws, or elsewhere provided for herein, and without limiting the generalities thereof, the Association shall:

(a) Own, lease, maintain, control and otherwise manage, or cause to be managed, in a neat, safe, attractive, sanitary and orderly condition, the Recreation Area (including, without limitation, any tennis courts, clubhouse, pools, playground equipment and cabanas), the Common Area (and any recreational areas tot lots, private streets and driveways, and all improvements, and facilities therein not otherwise specifically provided for in the Declaration) of each project within Rancho Dominguez Townhomes, with respect to the Recreation Area, all facilities, improvements, walls, fencing, buildings, fire hydrants, utility facilities, parking areas, drainage courses and facilities and landscaping thereon and thereunder, including (subject to the provisions of the Article hereof entitled "Destruction of Improvements") the reconstruction, repair or replacement thereof when necessary or appropriate, the exterior of all Condominium Buildings as further provided in subsection (i) hereinbelow and all other real or personal property acquired by the Association.

(b) Subject to the provisions of the Article hereof entitled "Insurance", maintain such policy or policies of insurance as the Board deems necessary or desirable in furthering the purposes of and protecting the interests of the Association and its Members.

(c) Establish and maintain a working capital and contingency fund in an amount to be determined by the Board.

(d) Enforce the provisions of this Declaration by appropriate means, including, without limitation, the expenditure of funds of the Association, the employment of legal counsel, the commencement of actions, and the promulgation of the Association Rules by the Association.

(e) Maintain, or cause to be maintained, such Maintenance Areas as may be established from time to time by any Supplementary Declaration of Covenants, Conditions and Restrictions recorded in accordance with Article II hereof or by contract between the Association and the Declarant or any public entity.

(f) Pay any real and personal property taxes and other charges assessed against the Recreation Area unless separately assessed to the Owners.

(g) Obtain, for the benefit of all of the Recreation Area, all telephone, water, gas and electric services and refuse collections.

(h) Subject to the limitations of Section 3(d) of Article IV hereof, grant easements where necessary for utilities and sewer facilities over the Recreation Area to serve Rancho Dominguez Townhomes.

(i) Maintain, or cause to be maintained, the exteriors of all Condominium Buildings as originally improved by the Declarant, or as may be further improved or modified with the consent of the Association and the Board, in good condition and repair and in such a manner as to enhance their appearance and place such exteriors in an attractive, neat and orderly condition, which maintenance shall include, but shall not be limited to, painting, and repair and replacement of roofs, gutters, downspouts, and exterior building surfaces.

(j) Maintain, or cause to be maintained, the trash receptacle areas in each project, which areas shall be enclosed by a six foot high masonry wall with gates, the location of which shall be subject to approval by the City Planning Director.

Section 2. Use of Agent and Duration of Contracts. The Board may employ a manager or other persons and may contract with independent contractors or managing agents to perform all or any part of the duties and responsibilities of the Association. Any contract with a person or firm appointed as a manager or managing agent shall be terminable by the Association for cause upon thirty (30) days' written notice thereof. Any such contract, and any other contract (except prepaid casualty and/or liability insurance policies of not to exceed three (3) years duration where the policy permits short term cancellation by the insured) with a third person wherein the third person is to furnish goods or services for the Recreation Area, Common Area or the Association, shall be limited to a duration of one (1) year; provided, however, that such contracts may be renewable for successive one-year periods with the approval for each such period, by vote or written consent of Members entitled to exercise not less than a majority of the voting power of each class of membership of the Association.

Section 3. Association Rules. The Association shall have the power, as provided in its By-Laws, to adopt, amend and repeal Association Rules. The Association Rules shall govern such matters in furtherance of the purposes of the Association as the Board shall deem appropriate, including, without limitation, the use and enjoyment of the Recreation Area and facilities thereon, if any; provided, however, that the Association Rules may not discriminate among Members and shall not be inconsistent with this Declaration, the Articles or By-Laws. A copy of the Association Rules, as they may from time to time be adopted, amended or repealed shall be mailed or otherwise delivered to each Owner and a copy shall be posted in a conspicuous place within the Recreation Area. Upon such mailing or delivery and posting, the Association Rules shall have the same force and effect as if they were set forth in and were part of this Declaration. In the event of any conflict between any such Association Rules and any provisions of this Declaration, the Articles or the By-Laws, the provisions of the Association Rules shall be deemed to be superseded by such other provisions to the extent of any such inconsistency.

Section 4. Entry and Emergency Powers. The Association or any person authorized by the Association may enter any Condominium in the event of any emergency involving illness or potential danger to life or property, or in non-emergency situations, after reasonable notice and at reasonable hours, for the purpose of performing its duties and exercising its powers as set forth in this Declaration (including entry when necessary in connection with construction, maintenance, or repair for the benefit of the Recreation Area or Common Area or the Owners in common). Any damage caused by said entry shall be repaired at the cost of the Association.

Section 5. Sales of Association Property. No property of the Association shall, during any fiscal year, be sold which has an aggregate fair market value greater than five percent (5%) of the budgeted Common Expenses for such fiscal year without the vote or written consent of a majority of each class of Members.

Section 6. Enforcement of Bonded Obligations. In the event any Recreation Area improvements included within any portion of Rancho Dominguez Townhomes have not been completed prior to the issuance under the California Real Estate Law of the final subdivision public report covering such portion and the Association is the obligee under a bond or other arrangement ("Bond") to secure the performance of the commitment of the Declarant to complete such improvements, the following actions shall be taken:

(a) The Board shall consider and vote on the question of action by the Association to enforce the obligations under the Bond with respect to any improvement within the Recreation Area for which a Notice of Completion has not been filed within sixty (60) days after the completion date specified for that improvement in the Planned Construction Statement appended to the Bond. If the Association has given an extension in writing for the completion of any Recreation Area improvement, the Board shall consider and vote on the aforesaid question if a Notice of Completion has not been filed within thirty (30) days after the expiration of the extension.

(b) A special meeting of the Members may be held for the purpose of voting to override a decision by the Board not to initiate action to enforce the obligations under the Bond or on the failure of the Board to consider and vote on the question. Declarant shall not vote at any such meeting. Such meeting shall be held not less than fifteen (15) days nor more than thirty (30) days after receipt by the Board of a petition for such a meeting signed by Members representing a percentage, to be prescribed by the Board, of not less than five percent (5%) nor more than ten percent (10%) of the total voting power of the Association.

(c) A vote of a majority of the voting power of the Association residing in Members other than Declarant to take action to enforce the obligations under the Bond shall be deemed to be the decision of the Association and the Board shall thereafter implement the decision by initiating and pursuing appropriate action in the name of the Association.

ARTICLE X

Easements

Section 1. Encroachments. Declarant shall grant to each Owner an easement over all adjoining property (including Units, Common Area and Recreation Area) for the purpose of:

(a) Accommodating trellises, eaves, overhangs, balconies and other similar projections created during the original construction of Rancho Dominguez Town-homes or the reconstruction or repair of a Condominium Building in accordance with plans and specifications approved by the Architectural Committee;

(b) Accommodating minor encroachments due to original engineering or surveying errors, errors in original construction, errors in reconstruction or repair in accordance with the plans and specifications approved by the Architectural Committee, or settlement or shifting or movement of a building or other structure; and

(c) Maintaining, repairing and reconstructing such trellises, eaves, overhangs, projections and encroachments.

Each Owner agrees, for himself and his heirs, successors, executors, administrators and assigns, and the Association agrees, for itself and its successors and assigns, that each will permit free access, at reasonable times and upon reasonable notice, by each Owner for whose benefit an easement shall be granted hereunder for the purpose of exercising his rights with respect to such maintenance, repair and/or construction.

Section 2. Maintenance Area, Recreation Area and Common Area. The Association is hereby declared to have a license in favor of the Association, its agents and representatives, to traverse upon such property contiguous to Recreation Area, Common Area or any Maintenance Area as shall be necessary to gain access to such areas. Each Owner agrees, for himself and his heirs, successors, executors, administrators and assigns, that he will permit free access by the Association and its authorized agents and representatives for the purpose of exercising its rights and duties with respect to Recreation Area, Common Area and any Maintenance Areas.

ARTICLE XII

Insurance

Section 1. Types. The Association, to the extent available, shall obtain and continue in effect in its own name the following types of insurance:

(a) Comprehensive public liability insurance insuring the Association, its agents and employees and the Owners against any liability incident to the ownership or use of the Common Area and Recreation Area and including, if obtainable, a cross-liability endorsement insuring each insured against liability to each other insured. The limits of such insurance shall not be less than One Million Dollars ($l,000,000) for death of or injury to any one person in any one occurrence, One Million Dollars ($1,000,000) for death or injury to more than one person in any one occurrence, and One Hundred Thousand Dollars ($100,000) for property damage in any one occurrence.

(b) A policy of fire and casualty insurance with extended coverage endorsement for the full replacement value of the Common Area and Recreation Area and all improvements thereto (including all building service equipment and the like), and the landscaping, facilities and improvements upon any Maintenance Area required to be maintained by the Association, without deduction for depreciation, with an "agreed amount endorsement" or its equivalent and clauses waiving subrogation against Members and the Association and persons upon Rancho Dominguez Townhomes with the permission of a Member. Such insurance shall afford protection against at least loss or damage by fire and other hazards covered by the standard extended coverage endorsement, including, without limitation, loss or damage caused by sprinkler leakage, vandalism, malicious mischief, windstorm, water damage, and covering the cost of demolition and debris removal and such other risks as shall customarily be covered with respect to similar condominium developments in the area of Rancho Dominguez Townhomes.

(c) Fidelity coverage against dishonest acts on the part of directors, officers, employees or volunteers who handle the funds of the Association. Such fidelity bonds shall name the Association as obligee, shall be written in an amount equal to one hundred fifty percent (150%) of the estimated annual operating expenses of the Association, including reserves, and shall contain waivers of any defense based on the exclusion of persons who serve without compensation or from any definition of "employee" or similar expression.

Section 2. Waiver By Members. As to each of said policies, which will not be voided or impaired thereby, the Members hereby waive and release all claims against the Association, the Board, the Declarant and agents and employees of each of the foregoing, with respect to any loss covered by such insurance, whether or not caused by negligence of, or breach of any agreement by, said persons, but only to the extent of insurance proceeds received in compensation for such loss.

Section 3. Other Insurance Annual Review. The Association may purchase such other insurance as it may deem necessary, including, but not limited to, plate-glass, workmen's compensation, officers' and directors' liability, and errors and omissions insurance. The Board shall annually determine whether the amounts and types of insurance it has obtained provide adequate coverage for the Common Area and Recreation Area and other areas referenced herein in light of increased construction costs, inflation, practice in the area in which Rancho Dominguez Townhomes is located, or any other factor which tends to indicate that either additional insurance policies or increased coverage under existing policies are necessary or desirable to protect the interests of the Association. If the Board determines that increased coverage or additional insurance is appropriate, it shall obtain the same.

Section 4. Premiums, Proceeds and Settlement. Insurance premiums for any insurance coverage obtained by the Association pursuant to this Article shall be a Common Expense to be included in the Regular Assessments levied by the Association. Insurance proceeds shall be used by the Association for the repair or replacement of the property for which the insurance was carried, or otherwise disposed of as provided in the Article entitled "Destruction of Improvements" in this Declaration. The Association is hereby granted the authority to negotiate loss settlements with the appropriate insurance carriers. Any two directors of the Association may sign a loss claim form and release form in connection with the settlement of a loss claim, and such signatures shall be binding on the Association and the Members.

Section 5. Abandonment of Replacement Cost Insurance. Unless at least seventy-five percent (75%) of the First Beneficiaries based on one (1) vote for each deed of trust have given their prior written approval, the Association shall not be entitled to fail to maintain the extended coverage fire and casualty insurance required by this Article on less than a one hundred percent (100%) current replacement cost basis.

Section 6. Requirements of FNMA, GNMA and FHLNC. Notwithstanding the foregoing provisions of this Article, the Association shall continuously maintain in effect such casualty, flood and liability insurance and a fidelity bond meeting the insurance and fidelity bond requirements for condominium projects established by the Federal National Mortgage Association, the Government National Mortgage Association and the Federal Home Loan Mortgage Corporation, so long as any of the foregoing is a First Beneficiary or Owner within Rancho Dominguez Townhomes, except to the extent such coverage is not available or has been waived in writing by the foregoing entities.

ARTICLE XVII

General Provisions

Section 1. Duration. The covenants, conditions, restrictions, easements, reservations, liens and charges of this Declaration shall run with and bind the property within Rancho Dominguez Townhomes and shall inure to the benefit of and be enforceable as provided herein by the Association, or the Owner, including Declarant, of any Condominium subject to this Declaration, their respective legal representatives, heirs, successors and assigns, and are imposed upon the real property within Rancho Dominguez Townhomes as a servitude in favor of each and every parcel of land therein as a dominant tenement, for a term of sixty (60) years from the date this Declaration is recorded, after which time said covenants, conditions, restrictions, easements, reservations, liens and charges shall be automatically extended for successive periods of ten (10) years, unless an instrument in writing, signed by a majority of the then Owners of Condominiums, has been recorded with the Orange County Recorder, agreeing to change said covenants, conditions and restrictions in whole or in part. In the event a Condominium is owned by more than one Owner, any one of the Co-Owners may sign such instrument in writing on the behalf of all Co-Owners.

Section 2. Amendment. Subject to the other provisions of this Declaration, including, without limitation, the rights of First Beneficiaries and/or beneficiaries pursuant to the Article hereof entitled "Rights of Lenders," this Declaration may be amended only by an instrument in writing signed by not less than seventy-five percent (75%) of each class of Members. When the Class B membership becomes converted to Class A membership in accordance with the provisions of Section 3 of Article III hereinabove, this Declaration may be amended, subject to the other provisions of this Declaration, including, without limitation, the rights of First Beneficiaries and/or beneficiaries pursuant to the Article hereof entitled "Rights of Lenders," only by an instrument in writing signed by not less than (i) seventy-five percent (75%) of the Members and (ii) a majority of the Members other than the Declarant. Any amendment must be properly recorded. In the event a Condominium is owned by more than one Owner, any one of the Co-Owners may sign such instrument in writing on behalf of all Co-Owners.

Section 3. Notices. Any notice required to be sent to any Member, Owner or First Beneficiary under the provisions of this Declaration shall be in writing and shall be deemed to have been properly sent when delivered personally or mailed, postage prepaid, if to an Owner or Member, to the last known address of the person who appears as such a Member or Owner on the records of the Association at the time of such mailing, and, if to a First Beneficiary, to the address furnished to the Association by such beneficiary for the purposes of notice or, if no such address is furnished, to any office of the First Beneficiary in the County of Orange, or if no such office is located in said County, to any office of the First Beneficiary. In the case of Co-Owners, any such notice may be delivered or sent to any one of the Co-Owners.

Section 4. Enforcement.

(a) The Association or the Owner of any Condominium, including the Declarant (so long as this Declarant is the owner of any real property subject to the Declaration), shall have the right to enforce by proceedings at law or in equity all covenants, conditions, restrictions, easements, reservations, liens and charges now or hereafter imposed by this Declaration, as amended and supplemented, the Articles and By-Laws, including, without limitation, the right to prosecute a proceeding at law or in equity against the person or persons who have violated or are attempting to violate any of these covenants, conditions, restrictions, easements, reservations, liens or charges to enjoin or prevent them from doing so, to cause said violation to be remedied and/or to recover damages for said violation.

(b) Should the Association fail to perform its- duties of repair and maintenance of the Common Area or Recreation Area or any Maintenance Area as specified herein or should any Owner fail to comply with the provisions of Article VIII hereof and should any such failure of the Association or an Owner continue for a period of thirty (30) days following written notice of such failure from the Declarant to the Association or from the Declarant and/or the Association to the Owner, Declarant and/or the Association, as the case may be, shall have the right, but not the duty, to perform all or a portion of such repair and maintenance and the Declarant and/or the Association shall have the right, but not the duty, to correct any such noncompliance, and the cost thereof shall be borne by the Association or any such Owner, respectively; provided, however, that in the event such costs are not paid to the Declarant or the Association, as the case may be, within thirty (30) days after the Declarant or the Association has furnished a statement therefor, the Declarant in the case of a failure by the Association, and Declarant and/or the Association in the case of a failure by an Owner, shall have the right, but not the duty, to levy a Special Assessment against each Owner on a pro rata basis to cover such costs of maintenance and repair or against any such Owner to cover the costs of correction, if any, of such noncompliance, as the case may be. The Declarant shall have the same remedies as the Association has pursuant to Article VI hereinabove to collect delinquent Special Assessments. No one or more failures or refusals by the Declarant to accomplish such repair and maintenance work or by the Declarant and/or the Association to accomplish such compliance which the Association or an Owner shall have failed to perform shall be deemed a waiver of the right in the Declarant or the Association, as the case may be, to perform such work at a later time as to the same or different work or compliance.

(c) The result of every action or omission whereby any covenant, condition, restriction, easement, reservation, lien or charge herein contained is violated in whole or in part is hereby declared to be and to constitute a nuisance, and every remedy allowed by law or equity against an Owner, either public or private, shall be applicable against every such result and may be exercised by the Association or any Owner, including the Declarant, subject to these restrictions.

(d) In any legal or equitable proceeding for the enforcement or to restrain the violation of these covenants, conditions, restrictions, easements, reservations, liens or charges or any provisions hereof, the losing party or parties shall pay the attorneys' fees of the prevailing party or parties in such amount as may be fixed by the court in such proceedings. All remedies provided herein or at law or in equity shall be cumulative and not exclusive.

(e) Failure by the Declarant, the Association, or by any Owner to enforce any covenant, condition, restriction, easement, reservation, lien or charge herein contained shall in no event be deemed a waiver of any breach or violation or a waiver of the right to do so thereafter.

(f) Nothing contained herein shall be deemed to require the Declarant to enforce any covenant, condition, restriction, easement, reservation, lien, charge or provision hereof.

Section 5. Severability. Invalidation of any one or more of these covenants, conditions, restrictions, easements, reservations, liens or charges by judgment or court order shall not in any way affect any other provisions, which shall remain in full force and effect. The Declarant makes no warranties or representations, express or implied, as to the binding effect or enforceability of all or any portion of this Declaration.

Section 6. Breach of Restrictions, Easements, Conditions, Covenants and Reservations. A breach of any of the restrictions, easements, conditions, covenants, reservations, liens or charges herein contained shall not defeat or render invalid the lien of any deed of trust made in good faith and for value as to any Condominium in Rancho Dominguez Townhomes but said restrictions, easements, conditions. covenants, reservations, liens and charges shall be binding upon and effective against any Owner thereof whose title thereto is acquired by foreclosure, trustee's sale or otherwise.

Section 7. Headings. Section headings are inserted for convenience only and are not intended to be a part of this Declaration or in any way to define, limit or describe the scope or intent of the particular section to which they refer.

Section 8. Singular Includes Plural. Whenever the context of this Declaration requires same, the singular shall include the plural and the masculine shall include the feminine.

Section 9. Construction. The provisions of this Declaration shall be liberally construed to effectuate this Declaration's purpose of creating a uniform plan for the development of a residential community with private social and recreational areas and for the maintenance of such areas.

Section 10. Phased Development. It is the intention of the Declarant to develop Rancho Dominguez Townhomes into a single interrelated and interdependent residential community in which the rights of all residents will be determined in substantially the same manner. The Declarant contemplates that it will construct Rancho Dominguez Townhomes and/or cause it to be constructed in several phases and annex each phase to Project No. 1 in accordance with Article II of this Declaration. Although the Declarant contemplates the construction of such additional phases, it shall in no way be obligated to do so.

Section 11. Construction by Declarant. Nothing in this Declaration shall limit the right of the Declarant to commence and complete construction of improvements to Rancho Dominguez Townhomes or to alter the foregoing or the Condominiums, Recreation Area or Common Area or to construct such additional improvements as the Declarant deems advisable prior to the completion and sale of the entire Rancho Dominguez Townhomes development. The Declarant may use any of the property within Rancho Dominguez Townhomes owned by it for model home sites and incidental parking and for any other purpose for which the Declarant may use the Condominiums, Common Area or Recreation Area as provided in this Section 11. The Declarant shall have the right and an easement to enter upon, use and enjoy and designate and permit others (including, without limitation, Declarant's agents, employees, representatives, contractors and prospective purchasers) to enter upon, use and enjoy the Common Area or Recreation Area for any purpose in connection with or incidental to (a) the construction, development, sale, lease or other transfer of property within or adjacent to Rancho Dominguez Townhomes (including, without limitation, the erection, construction and maintenance of displays, sales offices and incidental parking, exhibits, signs and other structures), (b) the management, operation or maintenance of Rancho Dominguez Townhomes and/or (c) the exercise of any rights or powers granted hereunder to the Declarant; provided, however, that the exercise of such right and easement shall not unreasonably interfere with the reasonable use and enjoyment of the Common Area or Recreation Area by the Members. The Declarant reserves the right to alter its construction and development plans and designs as it deems appropriate. This Declaration shall not limit the right of the Declarant at any time prior to acquisition of title by a purchaser from the Declarant to establish on any Common Area or Condominium additional licenses, reservations and rights-of-way to itself, to utility companies, or to others as may from time to time be reasonably necessary to the proper development and disposal of Rancho Dominguez Townhomes.

Section 12. Nonliability of Officials. To the fullest extent permitted by law, neither the Board, any committees of the Association nor any member shall be liable to any Member or Owner or the Association for any damage, loss or prejudice suffered or claimed on account of any decision, approval or disapproval of plans or specifications (whether or not defective), course of action, act, omission, error, negligence or the like made in good faith within which such Board, committee, or persons reasonably believed to be the scope of their duties.

Section 13. Obligation of Owners and Members. The terms and provisions set forth in this Declaration are binding upon all Owners of all Condominiums, the Association and all Members. In addition, both the Member and the Condominium owned shall be subject to the terms and provisions of the Articles and By-Laws as the same may be amended from time to time. Each Member shall cause the Association to exercise all of the powers and privileges and perform all of the duties and obligations of the Association as set forth in this Declaration, the Articles and By-Laws.

Section 14. Leases of Condominiums. Any Owner who shall lease his Condominium to any person or entity shall be responsible for assuring compliance by any such person or entity with all of the covenants, conditions, restrictions, easements, reservations, liens and charges of this Declaration, as amended and supplemented. Any lease agreement between an Owner and a lessee must provide that the terms of the lease shall be subject in all respects to the provisions of this Declaration, the Articles and By-Laws, and that any failure by the lessee to comply with the terms of such documents shall be a default under the lease. All such leases shall be in writing. No Unit shall be leased for transient or hotel purposes, which shall be defined as rental for any period less than thirty (30) days or any rental whatsoever, if the occupants of the Unit are provided customary hotel services, such as room service for food and beverage, maid service, laundry, linen or bellboy service.

Section 15. Mergers and Consolidations. Upon a merger or consolidation of the Association with another association as provided in the Articles, its properties, rights and obligations may be transferred to the surviving or consolidated association or, alternatively, the properties, rights and obligations of another association may be added to the properties, rights and obligations of the Association as a surviving corporation pursuant to a merger. The surviving or consolidated association may, subject to the terms and provisions of this Declaration, administer the covenants, conditions, restrictions, easements, reservations, liens and charges established by this Declaration, as supplemented and amended, with respect to Rancho Dominguez Townhomes, together with the covenants, conditions, restrictions, easements, reservations, liens and charges established upon any other property, as one general plan and scheme or in such other plan of administration as the surviving or consolidated corporation deems reasonable.

Section 16. Assignment of Rights and/or Duties. Any or all of the rights and/or duties, if any, of the Declarant herein may be assigned or delegated, respectively, to any other person or entity and upon any such assignment or delegation any such person or entity shall, to the extent of such assignment or delegation, have the same rights and/or duties as are given to and/or assumed by the Declarant herein, and, thereupon, the Declarant shall be relieved of the performance of any further duty, if any, hereunder.

RDTA CC&R Amendments