Article III — Rio Del Oro Master Association

Section 3.01 — Formation of the Master Association

The Rio Del Oro Master Association is a California nonprofit mutual benefit corporation. The Master Association shall be charged with the duties and invested with the powers set forth in the Governing Documents including, but not limited to, the power to administer the design review and approval process set forth in Article V, below, once that responsibility has been delegated to the Master Association by the Declarant, and to fairly and uniformly enforce and administer the other covenants, conditions, restrictions and equitable servitudes set forth in the Declaration and the other Governing Documents of the Master Association and any duly adopted amendments thereto.

Section 3.02 — Association Action; Board of Directors and Officers

With the exception of those matters requiring approval of Members under the Governing Documents or California law, the affairs of the Master Association shall be conducted and all corporate powers shall be exercised by the Board of Directors and such officers as the Board may elect or appoint. Except as otherwise provided in the Governing Documents or California law, all matters requiring the approval of Members shall be deemed approved upon the affirmative vote of a Majority of a Quorum of the Members.

Section 3.03 — Membership in the Master Association

(a) Qualifications for being a Member. Each Owner of a Lot or Separate Interest, including the Declarant(s), shall be a Member of the Master Association. An Owner shall hold one membership in the Master Association for each Lot or Separate Interest that the Member owns (with Member voting rights as set forth in section 3.04, below). Sole or joint ownership of a Lot or Separate Interest shall be the sole qualification for membership in the Master Association. Each Owner shall remain a Member of the Master Association until his or her ownership of, or ownership interest in, all Lots or Separate Interests within the Development ceases, at which time the Owner’s membership in the Master Association shall automatically cease. Persons or entities who hold an interest in a Lot or Separate Interest merely as security for performance of an obligation are not Members of the Master Association and shall have no voting or other rights of membership.

(b) Members’ Rights and Duties. Membership in the Master Association shall give rise to the rights, duties, and obligations set forth in the Governing Documents and any amendments thereto.

Section 3.04 — Membership Voting

(a) Commencement of Voting Rights. Voting rights attributable to the ownership of Lots or Separate Interests shall not vest until Assessments against those Lots or Separate Interests have been levied by the Master Association.

(b) Classes of Membership. The Master Association shall have two (2) classes of voting membership, namely Class A Members, initially comprised of all Owners of Lots or Separate Interests except the Declarant, and Class B Membership, which shall be held by the Declarant. The voting rights and other privileges of the two (2) classes of membership and the conversion of the Declarant’s Class B membership into Class A membership shall be as set forth in Article IV of the Bylaws.

(c) Suspension of Voting Rights. Voting rights of Members may be temporarily suspended under those circumstances described in Sections 4.10 and 12.06, below.

Section 3.05 — Assessments

The Master Association shall have the power to establish, fix and levy Assessments against the Owners of Lots or Separate Interests within the Development and to enforce payment of such Assessments, as more particularly provided in Article IV, below. Any Assessments levied by the Master Association against its Members shall be levied in accordance with, and pursuant to, the provisions of this Master Declaration.

Section 3.06 — Transfer of Memberships

Membership in the Master Association shall not be transferred, encumbered, pledged or alienated in any way, except upon the sale of the Lot or Separate Interest to which it is appurtenant, and then, only to the purchaser. In the case of a sale, the membership appurtenant to the transferred Lot or Separate Interest shall pass automatically to the purchaser upon the Recordation of a deed evidencing the transfer of title. In the case of an encumbrance recorded with respect to any Lot or Separate Interest, the Mortgagee shall not possess any membership rights until the Mortgagee becomes an Owner by foreclosure or acceptance of a deed in lieu thereof. Tenants who are delegated rights of use pursuant to the rental or lease of a Residence (see Section 2.02, above) do not thereby become Members, although the tenant and his or her family and guests shall at all times be subject to the property use restrictions and enforcement/disciplinary provisions of the Governing Documents. If any Owner fails or refuses to transfer the membership registered in his or her name to the purchaser of his or her Lot or Separate Interest, the Master Association shall have the right to record the transfer upon its books and thereupon any other membership outstanding in the name of the seller shall be null and void.

Section 3.07 — Powers and Authority of the Master Association

(a) Powers, Generally. The Master Association shall have the responsibility of discharging the duties and responsibilities imposed on the Master Association by the Governing Documents. In the discharge of such responsibilities and duties, the Master Association shall have all of the powers of a nonprofit mutual benefit corporation organized under the laws of the State of California in the ownership and management of its properties and the discharge of its responsibilities hereunder for the benefit of its Members, subject only to such limitations upon the exercise of such powers as are expressly set forth in the Governing Documents. The Master Association shall have the power to do any and all lawful things which may be authorized, required or permitted to be done under and by virtue of the Governing Documents, and to do and perform any and all acts which may be necessary or proper for, or incidental to, the exercise of any of the express powers of the Master Association for the peace, health, comfort, safety or general welfare of the Owners. The specific powers of the Master Association and the limitations thereon are set forth in Article IX of the Bylaws.

(b) The Master Association’s Limited Right of Entry.

(i) Right of Entry, Generally. Without limiting the foregoing description of powers, but in addition thereto, the Master Association and its agents shall have the right and power to enter any Lot or Separate Interest to perform the Master Association’s obligations under this Master Declaration, including: (A) obligations to enforce the Design Review and approval requirements, the minimum improvement standards, or land use restrictions of Articles V, VI and VIII, below; (B) any obligations with respect to construction, maintenance and repair of adjacent lot; or (C) to make necessary repairs that an Owner has failed to perform which, if left undone, will pose a threat to, or cause an unreasonable interference with, any portion of the Development or the Owners in common.

(ii) Limitations on the Exercise of the Master Association’s Right of Entry. The Master Association’s right of entry pursuant to this subparagraph (b) shall be subject to the following:

(A) The right of entry may be exercised immediately and without prior notice to the Owner or resident in case of an emergency originating in or threatening the Lot or Separate Interest where entry is required or any adjoining Lots or Separate Interests. The Master Association’s work may be performed under such circumstances whether or not the Owner or his or her lessee is present.

(B) In all non-emergency situations involving routine repair and/or maintenance activities, the Master Association or its agents shall furnish the Owner or his or her lessee with at least twenty-four (24) hours’ prior written notice of its intent to enter the Lot, specifying the purpose and scheduled time of such entry, and shall make every reasonable effort to perform its work and schedule its entry in a manner that respects the privacy of the persons residing on the Lot.

(C) In all non-emergency situations involving access by the Master Association for purposes of enforcing the Governing Documents against an Owner in default, the Master Association’s entry shall be subject to observance of the notice and hearing requirements imposed by Section 12.06, below.

(D) In no event shall the Master Association’s right of entry hereunder be construed to permit the Master Association or its agents to enter any Residence without the express permission of the Owner or tenant.

Section 3.08 — Association Rules

(a) Rule Making Power. The Board may, from time to time and subject to the provisions of this Master Declaration, propose, enact and amend rules and regulations of general application to the Owners (“Association Rules”). The Master Association Rules may concern, but need not be limited to: (i) architectural control and the rules of the Architectural Committee under Article V, below; (ii) regulation of pet ownership, parking, signs, collection and disposal of refuse and other matters subject to regulation and restriction under Article VIII, below; (iii) collection of delinquent Assessments; (iv) minimum standards of maintenance of landscaping or other Improvements on any Lot; (v) the conduct of disciplinary proceedings in accordance with Section 12.06, below; and (vi) any other subject or matter within the jurisdiction of the Master Association as provided in the Governing Documents.

Notwithstanding the foregoing grant of authority, the Master Association Rules shall not be inconsistent with or materially alter any provision of the Governing Documents or the rights, preferences and privileges of the Owners thereunder. In the event of any material conflict between any Association Rule and the provisions of any other Governing Document, the conflicting provisions contained in the other Governing Document shall prevail.

(b) Distribution of Rules. A copy of the Master Association Rules, as they may from time to time be adopted, amended or repealed, shall be mailed or otherwise delivered to each Owner. A copy of the Master Association Rules shall also be available and open for inspection by any Owner during normal business hours at the principal office of the Master Association.

(c) Adoption and Amendment of Rules. Association Rules may be adopted or amended from time to time by majority vote of the Board; provided, however, that no Association Rule or amendment thereto shall be adopted by the Board until at least thirty (30) days after the proposed rule or rule amendment has been: (i) published in the Master Association newsletter, if any, or otherwise communicated to the Owners in writing; and (ii) posted in the Master Association’s principal office. The notice describing the proposed rule or amendment shall also set forth the date, time and location of the Board meeting at which action on the proposal is scheduled to be taken.

Any duly adopted rule or amendment to the Master Association Rules shall become effective immediately following the date of adoption thereof by the Board, or at such later date as the Board may deem appropriate. Any duly adopted rule or rule amendment shall be distributed to the Owners by mail.

Section 3.09 — Breach of Rules or Restrictions

Any breach of the Master Association Rules or any other Governing Document provision shall give rise to the rights and remedies set forth in Article XII, below.

Section 3.10 — Limitation on Liability of the Master Association’s Directors and Officers

No director or officer of the Master Association (collectively and individually referred to as the “Released Party”) shall be personally liable to any of the Members, or to any other person, for any error or omission in the discharge of his or her duties and responsibilities or for his or her failure to provide any service required under the Governing Documents; provided that such Released Party has, upon the basis of such information as he or she possessed, acted in good faith, in a manner that such person believes to be in the best interests of the Master Association and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances (Corporations Code section 7231(a)).

Without limiting the generality of the foregoing, this standard of care and limitation of liability shall extend to such matters as the establishment of the Master Association’s annual financial budget, the funding of Association capital replacement and Reserve Accounts, and enforcement of the Governing Documents.