Article II — Property Rights and Obligations of Owners

Section 2.01 — Declaration Regarding the Real Property Comprising the Rio Del Oro Development

(a) Real Property Subject to this Master Declaration. The Initial Covered Property and any portion of the Subsequent Phase Property that is subsequently annexed to the Rio Del Oro Development in accordance with Article XIV, below, shall be held, conveyed, divided, encumbered, hypothecated, leased, rented, used, occupied and improved only upon compliance with and subject to the provisions of this Master Declaration, which is hereby declared to: (i) be in furtherance of a plan for the subdivision of the real property comprising the Development and the sale of residential Lots or Separate Interests within the Rio Del Oro development; (ii) be for the benefit and protection of the real property and Improvements within the Development and to enhance the desirability, value and attractiveness of that real property and Improvements; (iii) be for the benefit of the Owners; (iv) run with the land and be binding upon all parties having or acquiring any right, title or interest in the Development or any portion thereof; (v) inure to the benefit of every portion of the Development and any interest therein; and (vi) inure to the benefit of and be binding upon each Owner, the Declarant and each successor in interest of the Declarant as long as the Declarant or any successor shall hold an interest in any portion of the Initial Covered Property or the Subsequent Phase Property.

(b) Binding Effect on Successors In Interest. Each conveyance, transfer, sale, assignment, lease or sublease made by the Declarant of any Lot or Separate Interest in the Development shall be deemed to incorporate by reference all of the provisions of this Master Declaration. All present and future Owners, tenants and occupants of Residences within the Development shall be subject to, and shall comply with, each and every provision of the Governing Documents, as the same shall be amended from time to time unless a particular provision of the Governing Documents is specifically restricted to one or more classes of persons (i.e., Owners, tenants, invitees, etc.). The acceptance of a deed to any Lot or Separate Interest, the execution of a lease, sublease or contract of sale with respect to any Lot or Separate Interest or the entering into occupancy of any Residence shall make the provisions of this Master Declaration binding upon said persons and they shall thereafter be obligated to observe and comply with all Governing Documents of the Master Association and the Development.

Section 2.02 — Delegation of Use of Residences and Separate Interests

(a) Delegation of Use and Leasing of Residences. Any Owner may delegate his or her rights to use and enjoy his or her Lot, Separate Interest, and Residence to his or her family members or tenants, lessees or contract purchasers who reside in the Owner’s Residence; provided, however, that any rental or lease may only be to a single family for Single Family Residential Use (as defined in Section 1.54 above) and for a term not less than ninety (90) days.

(b) Requirements That Must Be Observed In All Residential Leases. The following specific limitations shall apply to all leases or tenancies of a Residential Lot or Separate Interest within the Development: (i) no Residence or other residential Separate Interest may be leased or rented for a period of less than thirty (30) days; (ii) the rental shall apply to not less than an entire Residence or residential Separate Interest (other than JADUs that meet all applicable laws and local ordinances) including its appurtenant rights (except voting rights in the Master Association which may not be transferred to a tenant or lessee); and (iii) any rental shall be evidenced by a written lease or rental agreement which shall provide that the tenancy is subject to the terms of the Governing Documents and that any failure of the tenant to comply with the terms of any Governing Document relating to residential leases and property use restrictions shall constitute a default under the lease or rental agreement and shall entitle the Owner to terminate the tenancy upon thirty (30) days’ written notice. The Owner-lessor’s right to terminate a lease or rental agreement on account of the tenant’s violation of the Governing Documents shall in no way restrict the right of the Master Association, the Declarant, or any Owner to enforce the Governing Documents in accordance with Article XII, below, when the Owner’s tenant is violating the Governing Documents.

(c) Discipline of Lessees. Subject to subparagraph (d), below, in the event that any tenant or lessee fails to honor the provisions of any Governing Document, the Master Association shall be entitled to take such corrective action as it deems necessary or appropriate under the circumstances in order to preserve the quiet enjoyment of other Owners and residents within the Development. Without limiting the foregoing, the Master Association’s actions in response to a tenant’s violation of the Governing Documents may include the imposition of fines and penalties against the Owner-lessor of the leased Residence or other Separate Interest.

(d) Due Process Requirements for Disciplinary Action. Except for circumstances in which immediate corrective action is necessary to prevent damage or destruction to any Residence or other improvement within the Development or to preserve the rights of quiet enjoyment of other Owners, the Master Association shall have no right to initiate disciplinary action against an Owner-lessor (or the Owner’s lessee or tenant) on account of the misconduct of the Owner’s lessee or tenant unless and until the following conditions have been satisfied: (i) the Owner has received written notice from the Board, the Master Association’s property manager or an authorized committee of the Board detailing the nature of the lessee’s/tenant’s alleged infraction or misconduct and advising the Owner of his or her right to a hearing on the matter in the event the Owner believes that remedial or disciplinary action is unwarranted or unnecessary; (ii) the Owner has been given a reasonable opportunity to take corrective action on a voluntary basis or to appear at a hearing, if one is requested by the Owner; and (iii) the Owner has failed to prevent or correct the tenant’s objectionable actions or misconduct. Any hearing requested hereunder shall be conducted in accordance with Section 12.06, below.

Section 2.03 — Obligations of Owners

Owners of Lots or Separate Interests within the Development shall be subject to the following obligations:

(a) Notification to Owners of Their Obligation to Provide Certain Information to Prospective Purchasers Regarding the Development and the Master Association. As soon as practicable before transfer of title or the execution of a real property sales contract with respect to any Lot or Separate Interest, any Owner who is seeking to sell his or her Lot or Separate Interest must give any prospective purchaser:

(i) a copy of all the Governing Documents of the Master Association, including any Association Rules;

(ii) a copy of the most recent annual budget for the Master Association;;

(iii) a true statement (“delinquency statement”) in writing from an authorized representative of the Master Association as to: (1) the amount of the Master Association’s current Regular and Special assessments and fees; (2) the amount of any Assessments levied upon the Owner’s Lot or Separate Interest that remain unpaid as of the date of the delinquency statement and any monetary fines or penalties levied upon the Owner’s Lot and unpaid as of the date of the delinquency statement. The delinquency statement shall also include true information on late charges, interest, and costs of collection that, as of the date of the delinquency statement, are or may become a lien against the Owner’s Lot or Separate Interest in accordance with Section 4.10(b), below.

(iv) a statement disclosing any change in the Master Association’s current Regular and Special Assessments and fees which have been approved by the Board but have not become due and payable as of the date the information is provided to the prospective purchaser;

(v) if requested by the prospective purchaser, a copy of the minutes of the meetings of the Association’s Board of Directors (other than executive session minutes) that were conducted over the previous twelve (12) months and approved by the Board.

(b) The Association’s Obligations In Response to an Owner’s Request for Information or Documentation. In accordance with Civil Code section 4530, within ten (10) days of an Owner’s mailing or delivery of a request for the information described in subparagraph (a), above, the Association shall provide the Owner (or any other recipient authorized by the Owner) with copies of the requested items. The items required to be made available pursuant to this subparagraph (b) and subparagraph (a), above, may be maintained in electronic form and the requesting parties shall have the option of receiving them by electronic transmission or in machine readable storage media if the Association maintains the requested items in electronic form and may be posted on the Association’s Internet Website.

The Association may collect a reasonable fee from the selling Owner for this service based upon the Association’s actual cost to procure, prepare, and reproduce the requested items. No additional fees may be charged by the Association for the electronic delivery of requested documents.

The provisions of this subparagraph (b) and subparagraph (a), above, except for those provisions relating to the furnishing of a delinquency statement, shall not apply to any Owner who is subject to the requirements of California Business and Professions Code sections 11018.1 and 11018.6 (i.e., the obligation of subdividers to provide prospective purchasers with a California Department of Real Estate Public Report and certain enumerated documentation relating to the offering in connection with the sale of Lots and Separate Interests in the Development).

(c) Obligation to Provide Subsequent Purchasers with Information Relating to Declarant Repair Rights and Obligations and Residence Maintenance Standards. Civil Code section 912 requires home builders, such as the Declarant, to provide their initial home buyers with certain documents enumerated in that Code section, including (i) copies of all maintenance and preventative maintenance recommendations that pertain to the Owner’s Lot or Separate Interest; (ii) copies of all manufactured products maintenance, preventative maintenance, and limited warranty information relating to components of the Owner’s Residence or Unit; (iii) copies of the builder’s limited contractual warranties; (iv) a written copy of Civil Code sections 895 et seq.; and (iv) other documents provided by the builder to the initial buyer of a Lot or Separate Interest in the Development. Civil Code section 912(h) obligates the first purchaser of a Lot or Separate from the Declarant or a Merchant Builder to provide these documents to subsequent purchasers of the Lot or Separate Interest.

(d) Payment of Assessments and Compliance with Rules. Each Owner shall pay, when due, any Regular, Special and Special Individual Assessment levied against the Owner and his or her Lot or Separate Interest and shall observe, comply with and abide by any and all rules and regulations set forth in the Master Association’s Governing Documents for the purpose of protecting the interests of all Owners or protecting, maintaining and/or preserving the Development.

(e) Joint Ownership of Lots or Separate Interests. In the event of joint ownership of any Lot or Separate Interest, the obligations and liabilities of the multiple Owners under the Governing Documents shall be joint and several. Without limiting the foregoing, this subparagraph (e) shall apply to all obligations, duties and responsibilities of Owners as set forth in this Master Declaration including, without limitation, the obligation to pay Assessments.