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ARTICLE I
Definitions
The terms set forth hereinbelow in this Article I are defined, for purposes of this Declaration, as follows:
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, workmenÕs 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 purch~I5~ 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 s 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.
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.
- 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) daysÕ 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.
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.
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