Article XIII — Protection of Mortgagees

Section 13.01 — Assessment Lien Subordinated

Any lien created or claimed under the provisions of Article IV, above, shall be subject and subordinate to the lien of any first Mortgage given in good faith and for value. No such Mortgagee who acquires title to any Lot by judicial foreclosure or by exercise of power of sale contained in the Mortgage shall be obligated to cure any breach of this Master Declaration by a former Owner of such Lot or shall be liable for any unpaid Assessments made against the Lot which accrued prior to the date the Mortgagee acquired such title. No lien created or claimed under the provisions of Article IV, above, shall in any way defeat, invalidate or impair the rights of any Mortgagee under any such recorded Mortgage.

Section 13.02 — Amendment of This Master Declaration

No amendment of this Master Declaration shall affect any of the rights of the holder of any Mortgage described in Section 13.01, above, which is made in good faith and for value, if such Mortgage is recorded and notice of the delivery and recording thereof is given to the Master Association prior to the recording of such amendment.

Section 13.03 — Default by Owner; Mortgagee’s Right to Vote

In the event of a default by any Owner under a Mortgage encumbering such Owner’s Lot, the Mortgagee under such Mortgage shall, upon: (a) giving written notice to the defaulting Owner; (b) recording a Notice of Default in accordance with California Civil Code section 2924; and (c) delivering a copy of such recorded Notice of Default to the Master Association, have the right to exercise the vote of the Owner at any regular or special meeting of the Master Association held only during such period as such default continues.

Section 13.04 — Breach; Obligation After Foreclosure

No breach of any provision of this Master Declaration by Declarant, the Master Association or any Owner shall impair or invalidate the lien of any recorded Mortgage made in good faith and for value and encumbering any Lot. The Declarant, the Master Association or their successor and assigns shall be obligated to abide by all of the covenants, conditions, restrictions, limitations, reservations, grants of easements, rights, rights-of-way, liens, charges and equitable servitudes provided for in this Master Declaration as it may be amended from time to time with respect to any person who acquires title to or any beneficial interest in any Lot through foreclosure, trustee’s sale or otherwise.

Section 13.05 — Superiority of Mortgage to Condemnation Proceeds

If any Lot or Separate Interest, or portion thereof, is made the subject of any condemnation or eminent domain proceeding, the lien of any first Mortgage shall be prior and superior to the claims of the Owners of Lots or Separate Interests with respect to any distribution of the proceeds of any condemnation award or settlement.

Section 13.06 — Quality of Future Improvements

All intended Improvements in any future phase of the Development shall be consistent with the Improvements in the first phase in terms of quality of construction. The requirements of this section are solely for the benefit of, and may be enforced only by, the Federal National Mortgage Association.