Article V — Architectural Review and Approval of Improvement Projects

Section 5.01 — Architectural Review Committee Approval of Improvements

(a) Approval Generally. Prior to commencement of construction or installation of any Improvement within the Development (as defined in Section 1.28, above), other than the initial construction of Residences by any Declarant, the Owner planning such Improvement must submit to the Architectural Review Committee a written request for approval. The Owner’s request shall include structural plans, specifications and plot plans satisfying the minimum requirements set forth in the Architectural Rules adopted pursuant to Section 5.06, below. Unless the Committee’s approval of the proposal is first obtained, no work on the Improvement shall be undertaken. The Committee shall base its decision on the criteria described in Section 5.07, below.

(b) Modifications to Approved Plans Must Also Be Approved. Once a proposed work of Improvement has been duly approved by the Architectural Review Committee, no material modifications shall be made in the approved plans and specifications therefore and no subsequent alteration, relocation, addition or modification shall be made to the work of Improvement, as approved, without a separate submittal to, and review and approval by, the Committee. If the proposed modification will have, or is likely to have, a material effect on other aspects or components of the work, the Committee, in its discretion, may order the Owner and his or her contractors and agents to cease working not only on the modified component of the Improvement, but also on any other affected component.

In the event that it comes to the knowledge and attention of the Master Association, its Architectural Review Committee, or the agents or employees of either that a work of Improvement or any modification thereof is proceeding without proper approval, the Master Association shall be entitled to exercise the enforcement remedies specified in Section 5.15, below, including, without limitation, ordering an immediate cessation and abatement of all aspects of the work of Improvement by “red tagging” the project until such time as proper Architectural Review Committee review and approval is obtained.

Section 5.02 — Establishment of Architectural Review Committee

Initially, the Architectural Review Committee shall be comprised of a minimum of three (3) Members who shall be responsible for administering the architectural review and approval process consistent with this Article V and the Design Guidelines.

(a) The initial members of the Architectural Review Committee shall be appointed by the Declarant.

(b) The Declarant alone shall be entitled to remove and replace any member or members of the Architectural Review Committee and to fill all vacancies on the Architectural Review Committee, so long as the Declarant owns five percent (5%) or more of the Property comprising the Rio Del Oro development by acreage. Once the Declarant is no longer entitled to solely appoint and remove all members of the Architectural Review Committee, the Declarant shall remain entitled to solely appoint and remove one of the three members of the Architectural and Review Committee until the earlier of such time as (i) the Declarant no longer owns any portion of Rio Del Oro; or (ii) the Declarant records a Supplemental Declaration in which the Declarant voluntarily relinquishes its right to appoint any member of the Architectural Review Committee.

(c) Once the Declarant owns less than five percent (5%) of the Property comprising Rio Del Oro (computed by acreage) the Declarant may tender a notice to the Board of Directors of the Master Association transferring to the Board the authority to appoint the members of the Architectural Review Committee. Thereafter, the Board shall have the power to appoint all of the members of the Architectural Review Committee which can continue to include representatives of the Declarant for so long as the Declarant owns any Lots or Separate Interests in the Development.

With the exception of individuals appointed to the Architectural Review Committee by Declarant (who need not be Members of the Master Association), all members of the Committee shall be Members of the Master Association in good standing. With the exception of those individuals appointed by the Declarant, all members of the Architectural Review Committee shall serve for a one-year term, although many Members can be reappointed to successive terms as a Committee Member.

In the event of the death or resignation of any member of the Committee, the successor shall be appointed by the person, entity or group that appointed such member to the Committee, and thereafter the Board shall have full authority to designate such a successor. Neither the members of the Architectural Review Committee nor its designated representatives shall be entitled to any compensation for services performed pursuant hereto.

Section 5.03 — Duties of the Architectural Review Committee

It shall be the duty of the Architectural Review Committee to consider and act upon the proposals and plans for Improvements submitted to it pursuant to this Master Declaration, to adopt Architectural Rules pursuant to Section 5.06, below, to perform other duties delegated to it by the Board of Directors and to carry out all other duties imposed upon it by this Master Declaration.

Section 5.04 — Meetings of the Architectural Review Committee

The Architectural Review Committee shall meet from time to time as necessary to properly perform its duties hereunder. The vote or written consent of a majority of the Committee members shall constitute an act by the Committee and the Committee shall keep and maintain a written record of all actions taken.

The Owner-Applicant shall be entitled to appear at any meeting of the Architectural Review Committee, at which meeting the Owner’s proposal is scheduled for review and consideration. The Owner shall be entitled to be heard on the matter and may be accompanied by his or her architect, engineer and/or contractor. Reasonable notice of the time, place and proposed agenda for Architectural Review Committee meetings shall be communicated before the date of the meeting to any Owner Applicant whose application is scheduled to be heard.

Section 5.05 — Separate or Subordinate Committees

The Declarant or a Merchant Builder with the consent of the Declarant shall be entitled to establish, or approve the establishment of, one or more separate or subordinate architectural committees having jurisdiction over the review and approval of Improvement projects within the subordinate committee’s jurisdictional area, as defined in a Supplemental Declaration. For example, separate or subordinate committees may also be authorized with jurisdiction over Improvement projects within Planned Developments or Condominium Projects undertaken on Parcels within Rio Del Oro. When the phrase “architectural committee having jurisdiction” is used in this Master Declaration the reference is intended to suggest that a separate or subordinate committee may have been created pursuant to a Supplemental Declaration and that the separate or subordinate committee has either exclusive jurisdiction or initial jurisdiction to review and approve the Improvement project, rather than the Architectural Review Committee formed pursuant to this Article V.

If a separate architectural committee is established with sole jurisdiction over any area or Parcel within Rio Del Oro, Owners of Separate Interests or Lots and/or Separate Interests that are within the jurisdiction of that separate architectural committee shall have no right to vote in the election of members of the Architectural Review Committee in accordance with Section 5.02, above. Instead, such Owners shall have such rights to vote in the election of members of the separate architectural committee having jurisdiction over their Separate Interests or Lots as are set forth in the Supplemental Declaration creating the separate architectural committee.

Section 5.06 — Architectural Rules

The Architectural Review Committee may, from time to time and with approval of the Board of Directors of the Master Association, adopt, amend and repeal rules and regulations to be known as “Architectural Rules.” The Architectural Rules shall interpret and implement the provisions hereof by setting forth: (a) any standards and procedures for Architectural Review Committee review; (b) guidelines for architectural design, the placement of any work of Improvement on a Lot, or color schemes, exterior finishes and materials and similar features which are recommended or required for use in connection with particular Improvement projects within the Development; (c) the criteria and procedures for requesting variances from any property use restrictions that would otherwise apply to the proposed Improvement under the Governing Documents (see Section 5.16 (variances) below); and (d) the minimum requirements regarding the content of plans and specifications which must be submitted with respect to any request for Design Review and approval. Notwithstanding the foregoing, no Design Guideline shall be in derogation of the minimum standards required by this Master Declaration. In the event of any conflict between the Architectural Rules and this Master Declaration, the provisions of the Master Declaration shall prevail.

Section 5.07 — Basis for Approval of Improvements

When a proposed Improvement is submitted to the Architectural Review Committee for review, the Committee shall grant the requested approval only if the Committee, in its sole discretion, makes the following findings regarding the proposed project:

(a) The Owner’s plans and specifications conform to this Master Declaration including, without limitation, the Minimum Improvement Standards set forth in Article VI, below, and to the Architectural Rules in effect at the time such plans are submitted to the Committee;

(b) The Improvement will be in harmony with the external design of other structures and/or landscaping within the Development;

(c) The Improvement, as a result of its appearance, location or anticipated use, will not interfere with the reasonable enjoyment of any other Owner of his or her property; and

(d) The proposed Improvement(s), if approved, will otherwise be consistent with the architectural and aesthetic standards prevailing within the Development and with the overall plan and scheme of development within Rio Del Oro.

While it is recognized that the Architectural Review Committee’s determination will, of necessity, be subjective to some degree, the members of the Committee shall act reasonably and in good faith and shall consider such factors as the quality of workmanship and materials proposed for the Improvement project, the harmony of its exterior design, finished materials and color with that of other existing structures, and the proposed location of the Improvement in relation to the existing topography, finished grade elevations, roads, and other existing structures.

The approval by the Architectural Review Committee of any plans, drawings or specifications for any work of Improvement done or proposed, or for any other matter requiring the approval of the Architectural Review Committee under this Master Declaration, or any waiver thereof, shall not be deemed to constitute a waiver of any right to withhold approval of any similar plan, drawing, specification or matter subsequently submitted for approval by the same or some other Owner. Different locations for Improvements, the size of the structure, proximity to other Residences and other factors may be taken into consideration by the Committee in reviewing a particular submittal. Accordingly, the Committee shall be entitled to determine that a proposed Improvement or component thereof is unacceptable when proposed on a particular Lot, even if the same or a similar Improvement/component has previously been approved for use at another location if factors such as drainage, topography, noise or visibility from roads or other Lots or Separate Interests, or prior adverse experience with the product, the design or with similar Improvements mitigate against erection of the Improvement or use of a particular component thereof on the Lot involved in the Owner’s submittal.

In approving a request for construction of an Improvement, the Architectural Review Committee may condition approval upon the adoption of modifications in the plans and specifications or observance of restrictions as to location, noise abatement or similar mitigating conditions.

Section 5.08 — Planned Development and Condominium Projects

The Architectural and Review Committee shall also have jurisdiction over the review and approval of the plans and specifications for any Planned Development or Condominium Project. With respect to any Planned Development or Condominium Project owned or controlled by a Merchant Builder, the Merchant Builder shall submit to the Architectural Review Committee the following:

(a) Improvement Plans. The Merchant Builder shall submit to the Architectural Review Committee building elevation plans that depict the models or types of structures that the Merchant Builder intends to construct.

(b) Declaration of Covenants, Conditions and Restrictions. The Architectural Review Committee shall also have the right to review and approve any declaration of covenants, conditions and restrictions that any Merchant Builder intends to Record in the chain of title to Lots or other Separate Interests in a Planned Development or Condominium Project (“Project Declaration”). The purpose of that review and approval is to assure that the contents of any such Project Declaration are consistent with this Master Declaration and those portions of the Entitlement Documents that are applicable to the Merchant Builder’s project.

(c) Plan Changes. Material changes in approved Improvement Plans or Project Declaration must be similarly submitted to and approved by the Architectural Review Committee prior to the construction of any Improvement based thereon, which approval shall not be unreasonably withheld.

(d) Plan Review Fee. Each Merchant Builder shall pay the Architectural Review Committee, upon submission of the Improvement Plans and Project Declaration, the reasonable fee established by the Architectural Review Committee in a published fee schedule in order to compensate it for the review of the Preliminary and Final Building Plans described above. The Architectural Review Committee may increase such fees from time to time as needed to compensate it for the time and expense involved in such review.

Section 5.09 — Inspection Fee and Deposits

Once the Architectural Review Committee is under the control of the Master Association, the Architectural Rules may require that the submission of plans and specifications be accompanied by a reasonable fee that is limited to the actual costs incurred to review the submission. The Architectural Rules may also provide for a cash deposit procedure to help ensure proper and timely completion of works of Improvement in accordance with approved plans and specifications and to reimburse the Master Association for damage to roadways resulting from the Owner’s construction project.

Section 5.10 — Delivery of Plans and Specifications

Plans and specifications shall be submitted to the Architectural Review Committee by personal delivery or first-class mail addressed to the Secretary of the Master Association or the Chairman of the Architectural Review Committee at the Master Association’s principal office.

Section 5.11 — Time Limits for Approval or Rejection

Within thirty (30) days after submission of plans and specifications satisfying the requirements of the Architectural Rules, the Architectural Review Committee shall return one set of such plans to the applicant, with either written notice of approval or disapproval or with written suggestions of changes required for approval. If written suggestions of changes required for approval accompany the returned set of plans, the applicant may implement such changes to the plans and within thirty (30) days resubmit plans incorporating such changes for approval to the Committee, which shall not unreasonably withhold its approval so long as the Owner has complied in all material respects with the requested changes. If no written notice of approval or disapproval is received by the applicant within thirty (30) days after the Owner’s plans and specifications (or revisions thereto) are submitted to the Committee, the plans shall be deemed to have been approved as submitted.

Section 5.12 — Proceeding with Work

Upon receipt of approval from the Architectural Review Committee, the Owner shall, as soon as practicable, satisfy all conditions thereof and diligently proceed with the commencement of construction and erection of the Improvement pursuant to said approval, said commencement to be, in all cases, within eight (6) months from the date of such approval, and the project shall be diligently pursued to completion. If the Owner shall fail to comply with this Section, any approval given pursuant to this Article shall be deemed revoked unless the Architectural Review Committee, upon written request of the Owner made prior to the expiration of the initial eight (8) month period, extends the time for commencement or completion. No such extension shall be granted except upon a finding by the Architectural Review Committee that there has been no change in the circumstances upon which the original approval was granted and that the Owner has a bona fide intention and ability to complete the project within the time specified in the extension request.

Section 5.13 — Failure to Complete Work

Unless the Owner has been granted an extension of time to complete the project by the Architectural Review Committee, construction, reconstruction, refinishing or alteration of any such Improvement must be complete within six (6) months after construction has commenced, except and for so long as such completion is rendered impossible or would result in great hardship to the Owner because of strikes, fires, national emergencies, natural calamities or other supervening forces beyond the control of the Owner or his or her agents. In the case of building Improvements, the requirements of this section shall be deemed to have been met if, within the eight (8) month construction period, the Owner has completed construction of the building’s foundation and all exterior surfaces (including the roof, exterior walls, windows and doors).

If the Owner fails to comply with this section, the Architectural Review Committee shall notify the Board of such failure, and the Board shall proceed in accordance with the provisions of Sections 5.14(c) and (d), below, as though the failure to complete the Improvement was a noncompliance with approved plans.

Section 5.14 — Inspection of Work by Architectural Review Committee

Inspection of the work relating to any approved Improvement and correction of defects therein shall proceed as follows:

(a) During the course of construction, representatives of the Architectural Review Committee shall have the right to inspect the job site to confirm that the work of Improvement is proceeding in accordance with the approved plans and specifications.

(b) Upon the completion of any work of Improvement for which Architectural Review Committee approval is required under this Article, the Owner shall give the Architectural Review Committee a written notice of completion.

(c) Within thirty (30) days thereafter, the Architectural Review Committee, or its duly authorized representative, may inspect the Improvement to determine whether it was constructed, reconstructed, altered or refinished in substantial compliance with the approval plans. If the Architectural Review Committee finds that the Improvement was not erected, constructed or installed in substantial compliance with the Owner’s approved plans, then within the thirty (30) day inspection period the Committee shall give the Owner a written notice of noncompliance detailing those aspects of the project that must be modified, completed or corrected. If the violation or nonconforming work is not corrected, the Master Association and the Architectural Review Committee shall have the rights and remedies set forth in Section 5.15 (enforcement), below.

(d) If for any reason the Architectural Review Committee fails to notify the Owner of any noncompliance within thirty (30) days after receipt of the Owner’s notice of completion, the Improvement shall be deemed to have been constructed in accordance with the approved plans for the project, unless the Owner knows of the noncompliance and intentionally misleads the Committee with respect thereto.

Section 5.15 — Enforcement of Architectural Review and Approval Requirements

(a) In addition to other enforcement remedies set forth in this Master Declaration, the Architectural Review Committee shall have the authority to order an abatement (“red tag”) of any construction, alteration or other matter for which approval is required, to the extent that it has not been approved by the Committee or if it does not conform to the plans and specifications submitted to and approved by the Committee. If an Owner’s Improvement project is red tagged, the Owner and his or her contractor shall cease all construction activity until such time as the issue giving rise to the red tag order is resolved. The red tag notice shall clearly state the reasons why the abatement has been ordered.

(b) No work of Improvement for which approval is required shall be deemed to be approved simply because it has been completed without a complaint, notice of violation or commencement of a suit to enjoin such work. If any legal proceeding is initiated to enforce any of the provisions hereof, the prevailing party shall be entitled to recover reasonable attorneys’ fees in addition to the costs of such proceeding.

(c) If the Owner fails to remedy any noticed noncompliance within thirty (30) days from the date of such notification of the Owner, or if the Owner feels that the project has been red tagged without justification, the Committee shall notify the Board in writing of such failure. The Board shall then set a date on which a hearing before the Board shall be held regarding the alleged noncompliance. The hearing shall be conducted in accordance with Section 12.06, below.

Section 5.16 — Variances

The Architectural Review Committee, in its sole discretion, shall be entitled to allow reasonable variances in any procedures specified in this Article V, or in any land use restrictions specified in Article VII, below, to overcome practical difficulties, avoid unnecessary expense or prevent unnecessary hardships so long as the Architectural Review Committee must make a good faith written determination that the variance is consistent with one or more of the following criteria: (i) the requested variance will not constitute a material deviation from any restriction contained herein or that the variance proposal allows the objectives of the violated requirement(s) to be substantially achieved despite noncompliance; or (ii) that the variance relates to a required land use restriction or minimum construction standard otherwise applicable hereunder that is unnecessary or burdensome under the circumstances; or (iii) that the variance, if granted, will not result in a material detriment, or create an unreasonable nuisance, with respect to any other Lot or Separate Interest within the Development.

Section 5.17 — Compliance Certificate

Within thirty (30) days after written demand is delivered to the Architectural Review Committee by any Owner, the Architectural Review Committee shall provide the requesting Owner with a certificate, executed by any two of its members, certifying (with respect to any Lot or Separate Interest owned by the applicant Owner) that as of the date thereof, either: (a) all Improvements made and other work completed by said Owner comply with this Master Declaration; or (b) such Improvements or work do not so comply, in which event the certificate shall also identify the noncomplying Improvements or work and set forth with particularity the basis of such noncompliance. Any purchaser from the Owner, or from anyone deriving any interest in the Lot or Separate Interest through the Owner, shall be entitled to rely on the Committee’s compliance certificate with respect to the matters therein set forth, such matters being conclusive as among the Master Association, the Committee, the Declarant, all Owners and any persons deriving any interest through them.

Section 5.18 — Limitation on Liability

Neither the Declarant, the Master Association, the Architectural Review Committee nor any member thereof shall be liable to any Owner for any damage, loss or prejudice suffered or claimed on account of any mistakes in judgment, negligence or nonfeasance arising out of: (a) the approval or disapproval of any plans, drawings and specifications, whether or not defective; (b) the construction or performance of any Improvement project, whether or not pursuant to approved plans, drawings and specifications; (c) the Development of any Lot or Separate Interest within the Development; or (d) the execution and delivery to an Owner of a compliance certificate pursuant to Section 5.17, above, whether or not the facts therein are correct; provided, however, that such member has acted in good faith on the basis of such information as he or she possessed at the time the act or omission occurred.

Section 5.19 — Compliance with Governmental Regulations

Review and approval by the Architectural Review Committee of any proposals, plans or other submittals pertaining to Improvements shall in no way be deemed to constitute satisfaction of, or compliance with, any building permit process or any other governmental requirements, the responsibility for which shall lie solely with the Lot Owner who desires to construct, install, or modify the Improvement.

Section 5.20 — Appeals

Once the Architectural Review Committee is a committee appointed solely by the Board of Directors, appeals from decisions of the Architectural Review Committee may be made to the Board of Directors which may elect, in its discretion, to hear the appeal or, in the alternative, to affirm the decision of the Architectural Review Committee. The Master Association Rules or the Architectural Rules shall contain procedures to hear, process and decide appeals pursuant to this Section.