PS04-03 ASSOCIATION DOCUMENTS ARTICLES OF INCORPORATION
OF
FIFTH STREET TOWNHOMES ASSOCIATION
KNOW ALL BY THESE PRESENTS, That I, the undersigned, being a natural
person eighteen years of age or older, for the purpose of forming a corporate entity under
and pursuant to the provisions of Minnesota Statutes, Chapter 317A, do hereby adopt the
following Articles of Incorporation:
I.
NAME
The name of this Corporation shall be:
FIFTH STREET TOWNHOMES ASSOCIATION
II.
REGISTERED OFFICE
The location of the registered office of the Corporation shall be:
[NEED ADDRESS]
III.
NO PECUNIARY GAIN
This Association shall not afford pecuniary gain, incidental or otherwise, to its
members.
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IV.
PURPOSE
The purpose of the Association shall be to provide for the maintenance,
preservation and architectural control of the Lots and Common Elements of Fifth Street
Townhomes subdivision, located in Anoka County, Minnesota, and to provide for and
promote the safety and welfare of the residents of said Fifth Street Townhomes; and in
furtherance of the foregoing to have all powers afforded such Associations under
Minnesota law.
V.
INCORPORATOR
The name and address of the incorporator of this Corporation is:
Name Address
G. Scott Hoke 12201 Champlin Drive
Champlin MN 553116
V.
MEMBERSHIP
The members of the Association shall be the owners of lots in the plat of Fifth Street
Townhomes, Anoka County, as more fully described in the Declaration of Covenants,
Conditions and Restrictions and the By-Laws of the Association, as the same may be from
time to time amended.
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IN TESTIMONY WHEREOF, I have hereunder set my hand this day of
September, 2004.
G. Scott Hoke
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On the day of September, 2004, before me, a Notary Public within and for said
County, personally appeared G. Scott Hoke, to me known to be the person described in
and who executed the foregoing Articles of Incorporation and acknowledged that he
executed the same as his free act and deed.
Notary Public
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COMMON INTEREST COMMUNITY NUMBER
A Planned Community
FIFTH STREET TOWNHOMES
DECLARATION OF COVENANTS,EASEMENTS AND RESTRICTIONS
THIS DECLARATION, made on this_day of September, 2004, by Tradition Homes,Inc.,
a Minnesota corporation, hereinafter referred to as "Declarant", pursuant to the provisions of the
Minnesota Common Interest Ownership Act,Minnesota Statutes Sections 51513.1 -101 to 51 513.4-
118, (hereinafter referred to as the"Act"), as amended.
WHEREAS, Declarant is the owner of certain property in the City of Fridley, County of
Anoka,State of Minnesota,which is more particularly described as:
Lots 1 through 4, Block 1,Fifth Street Townhomes,Anoka County,Minnesota
(the"Property" or"Properties"), which Declarant intends to develop for residential uses;and
WHEREAS, Declarant desires that all of the Property shall be subject to certain uniform
covenants, conditions and restrictions; and
NOW, THEREFORE, Declarant hereby declares that all of the Properties described above
shall be held, sold, and conveyed subject to the Act and the following easements, restrictions,
covenants and conditions, which are for the purpose of protecting the value and desirability of, and
which shall run with,the real property and be binding on all parties having any right,title or interest
in the described Properties or any part thereof, their heirs, successors and assigns, and shall inure to
the benefit of each owner thereof. This common interest community is a Planned Community and is
not subject to a master association.
ARTICLE I
DEFINITIONS
Section 1. "Association' shall mean and refer to Fifth Street Townhomes Association, a
corporation formed under Chapter 317A,Minnesota Statutes, its successors and assigns.
Section 2. "Owner"shall mean and refer to the record owner,whether one or more persons
or entities,of a fee simple title to any Lot which is a part of the Properties,including contract sellers,
but excluding those having such interest merely as security for the performance of an obligation.
Where any such Lot is being sold by the fee owner to a contract vendee who is entitled to possession
of the Lot, the contract vendee shall be considered to be the owner of the
Lot if a)the rights of the contract vendor hereunder are delegated to the vendee under such contract
for deed; and b)the vendee shall furnish proof of such delegation to the Association.
Section 3. "Properties" shall mean and refer to that certain real property hereinbefore
described, and such additions thereto as may hereafter be brought within the jurisdiction of the
Association.
Section 4."Lot"shall mean and refer to any separately identified plot of land shown upon any
recorded subdivision map or plat of the Properties which is intended to be sold to the ultimate buyer
as a separate property.Where appropriate,reference to"Lot"shall include all structures located upon
a Lot. The boundaries of each Lot and the unit identifier of each Lot shall be as shown on the Plat.
Section 5. "Declarant" shall mean and refer to Tradition Homes, Inc., a Minnesota
corporation, its successors and assigns.
Section 6. "Common Elements" shall mean and refer to that portion of the Lots lying within
the plat of Fifth Street Townhomes,anoka County,Minnesota,but outside the physical exterior walls
of the dwelling(s) on the Properties.
Section 7."Eligible Mortgagee"shall mean any person owning a mortgage on any Lot,which
mortgage is first in priority to any other mortgages that encumber such Lot,and which has requested
the Association, in writing, to notify it regarding any proposed action which requires approval by a
specified percentage of Eligible Mortgagees.
Section 8."Act"shall mean the Minnesota Common Interest Ownership Act,Minn Stat. Sec.
51513.1-101, et seq.
Section 9. "Plat" shall mean the plat of Fifth Street Townhomes, recorded in the office of
the County Recorder, Anoka County, Minnesota.
Section 10. Definitions Incorporated. Except as otherwise specified in this Declaration, the
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terms used in this Declaration which are defined in the Act shall have the same meaning as they have
in the Act.
Section 11. Statutory Requirements.In accordance with the requirements of Section 515B.2-
105 of the Act, the Declarant hereby states the following:
a. The number of the Common Interest Community created hereby is the number set
forth on the first page of this Declaration.
b. The name of the Association is Fifth Street Townhomes Association. The Association
has been incorporated pursuant to the provisions ofMinnesota Statutes Chapter 31 7A.
C. The common interest community created hereby is a Planned Community. It is not
subject to a master association.
d. The legal description ofthe Property included within the common interest community
created hereby(including all appurtenant easements) is as follows:
Lots 1 through 4, Block 1,Fifth Street Townhomes,Anoka County,Minnesota
e. The description of the boundaries of each Lot created by this Declaration is set forth
on the Plat, which plat has been filed for record with the office of the Anoka County
Recorder and is hereby incorporated herein by reference.
f. The allocated interests are assigned equally to each Lot, subject to the provisions
of this Declaration. Each Lot shall have one vote in the affairs of the Association.
Except as provided in Article III, Section 6 (relating to the Alternative
Assessment Program) or as permitted in the Act, each Lot shall share the
Common Expenses equally.
g. The common interest community created hereby shall consist of 4 Lots,all of which
shall be restricted to residential use.
h. No additional units may be created by the subdivision or conversion of Lots.
1. The use restrictions to which the Lots are subject are located in Articles VI and VII
hereof. There is no restriction on the sale price of a unit. The amount to be received
upon the condemnation, casualty loss or termination of the common interest
community is set forth in Article XIV, Section 10; Article X, Section 5;and Article
XIV, Section 11, respectively.
J. Time shares are not permitted.
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k. Matters relating to Special Declarant Rights are contained in Article XII hereof.
Matters relating to the use of the Common Elements are contained in Article VII
hereof. Matters relating to the care and maintenance of the Common Elements are
contained in Article IV hereof. Matters relating to assessments for Common Expenses
are contained in Article III hereof. Matters relating to Limited Common Elements are
contained in Article XIV, Section 9.
ARTICLE H
MEMBERSHIP AND VOTING RIGHTS
Section 1. Every Owner shall be a member of the Association. Membership shall be
appurtenant to and may not be separated from ownership of any Lot. When more than one person is
an Owner of a Lot, all such persons shall be members of the Association,but multiple ownership of
a Lot shall not increase the voting rights allocated to such Lot nor authorize the division of the voting
rights.
Section 2. There shall be one vote per Lot. Voting rights and Common Expense obligations
are allocated equally among the Lots; except that special allocations of Common Expenses shall be
permitted as provided in this Declaration and except for the alternative assessment program as
provided in this Declaration.
Section 3. The ownership of a Lot shall include the voting rights and Common Expense
obligations described in Article H, Section 2. Said rights, obligations and interest,and the title to the
Lots, shall not be separated or conveyed separately. The allocation of the rights, obligations and
interests described in this Section may not be changed except in accordance with this Declaration,the
Bylaws and the Act.
Section 4. The Owner, or some natural person designated as proxy on behalf of the
Owner, and who need not be an owner, may cast the vote allocated to such Lot at meetings of the
Association; provided,that if there are multiple Owners of a Lot, only the Owner or other person
designated pursuant to the provisions of the Bylaws may cast such vote. The voting rights of
Owners are more specifically described in the Bylaws.
ARTICLE III
COVENANT FOR COMMON EXPENSE
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AND INSURANCE PREMIUM ASSESSMENTS
Section 1. Creation of the Lien and Personal Obligation of Assessments. The Declarant, for
each Lot owned within the Properties,hereby covenants, and each Owner of any Lot by acceptance
of a deed or contract for deed therefor,whether or not it shall be so expressed in such deed or contract,
is deemed to covenant and agree to pay to the Association:
a. general annual assessments or charges;
1. a common expense or portion thereof benefitting fewer than all of the Lots
may be assessed exclusively against the Lots benefitted, on basis of (A)
equality,(B)square footage of the area being maintained,repaired or replaced,
or(C)the actual cost incurred with respect to each Lot.
b. assessments for master insurance premiums, if any, which may be assessed in
proportion to value, risk or coverage.
C. special assessments for capital improvements,such assessments to be established and
collected as hereinafter provided.
d. assessments levied under Section 51513.3-116 of the Act to pay a judgment against the
Association, which assessments may be levied only against the Lots existing at the
time the judgment was entered, in proportion to their Common Expense liabilities.
e. assessments for fees, charges, late charges, fines and interest.
f If any damage to the Common Elements or another Lot is caused by the act or
omission of any Owner,the guests of an Owner or the occupant of any Lot,
assessments for the costs of repairing the damage may be assessed exclusively against
the Owner's Lot to the extent not covered by insurance.
The assessments,together with interest,costs and reasonable attorney's fees,shall be a charge on the
Lot and shall be a continuing lien upon the property against which each such assessment is made.
Each such assessment, together with interest, costs and reasonable attorney's fees, shall also be the
personal obligation ofthe person who was the Owner of such property at the time when the assessment
fell due and if more than one person was an Owner then such obligation shall be j oint and several.The
personal obligation for delinquent assessments shall not pass to the Owner's successors in title unless
expressly assumed by them.
Section 2. Purpose of Assessments. The assessments levied by the Association shall be used
exclusively to promote the purposes of the Association as set forth in Article N.
Section 3.Limitation on Assessments. Until January 1 of the year immediately following the
conveyance of the first Lot to an Owner, the maximum annual general assessment to an Owner and
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the Owner's Lot shall be$ per Lot.
a. From and after January 1 of the year immediately following the conveyance of the first
Lot to an Owner,the maximum annual general assessment may be increased each year
not more than ten percent(10%)above the maximum assessment for the previous year
without a vote of the membership of the Association.
b. From and after January 1 of the year immediately following the conveyance of the first
Lot to an Owner, the maximum annual general assessment may be increased by ten
percent(10%) or more by a vote of Owners representing sixty-seven percent(67%)
of the Lots who are voting in person or by proxy, at a meeting duly called for this
purpose.
C. The Board of Directors of the Association may fix the annual general assessment at
an amount not in excess of the maximum, and the Board of Directors of the
Association may modify the annual assessment upward or downward from time to
time,but in no event upward beyond the maximum permitted by this Section.Written
notice of any modification of the annual general assessment shall be sent to every
Owner subject hereto.
Section 4. Special Assessment for Capital Improvements. In addition to the annual general
assessments,the Association may levy,in any assessment year,a special assessment applicable to that
year only for the purpose of defraying,in whole or in part,the cost of any construction,reconstruction,
repair or replacement of a capital improvement upon the Common Elements, including fixtures and
personal property related thereto,provided that any such assessment shall have the assent of Owners
representing sixty-seven percent(67%)of the Lots who are voting in person or by proxy at a meeting
duly called for this purpose.
Section 5. Notice and Quorum for any Action Authorized Under Sections 3 and 4. Written
notice of any meeting called for the purpose of taking any action authorized under Sections 3 and 4
shall be sent to all Owners not less than twenty-one (21) days nor more than thirty (30) days in
advance of an annual meeting or not less than seven(7)days nor more than thirty(30)days in advance
of a special meeting. At the first such meeting called,the presence of members or of proxies entitled
to cast more than fifty percent(50%)of all the votes shall constitute a quorum.If the required quorum
is not present,another meeting may be called subject to the same notice requirement,and the required
quorum at the subsequent meeting shall be '/2 of the required quorum of the preceding meeting. No
such subsequent meeting shall be held more than sixty(60) days following the preceding meeting.
Section 6.Uniform Rate of Assessment:Alternative Assessment Program.Both general annual
and special assessments on all Lots must be fixed at a uniform rate, except vacant Lots owned by
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persons other than Declarant, and for which a Certificate of Occupancy has not been issued, which
shall be assessed at twenty-five percent(25%)of the established assessment rate, except:
a. no assessments shall be made against any Lot which is a parcel of real estate which is
not intended for separate ownership or occupancy, if any.
b. any Lot owned by Declarant and which is not exempt from assessment by Article III,
Section 6a. shall be assessed at twenty-five percent (25%) of the established
assessment rate.
C. This alternative assessment program shall have no effect on the level of services for
items set forth in the Association's budget.
Annual and/or special assessments may be collected on a monthly basis at the discretion of the
Association.
Section 7.Date of Commencement of Assessments:Due Dates.The general annual assessment
provided for herein shall commence as to all Lots on the first day of the month following the
conveyance by the Declarant of a Lot. Notwithstanding the foregoing to the contrary,any Lot owned
by Declarant shall be assessed pursuant to the alternative assessment program set forth in Article III,
Section 6.
The first general annual assessment shall be adjusted according to the number of months
remaining in the calendar year. The Board of Directors of the Association shall fix the amount of such
assessments against each Lot at least thirty(30) days in advance of each annual assessment period.
Written notice of such assessments shall be sent to every Owner subject thereto. The due dates shall
be established by the Board of Directors of the Association.The Association shall,upon demand,and
for a reasonable charge,furnish a certificate signed by an authorized representative of the Association
setting forth whether the assessments on a specified Lot have been paid. A properly executed
certificate of the Association as to the status of assessments on a Lot is binding upon the Association
as of the date of its issuance.
Section 8. Effect of Nonpayment of Assessments: Remedies of the Association. Any
assessment to any Member not paid within 30 days after the due date shall bear interest from the due
date at a rate of 8% per annum. The Association may bring an action at law against the Owner
personally obligated to pay the same or foreclose the Lien against the Property. Such Lien may be
foreclosed in the same manner as a mortgage pursuant to Minnesota Statutes, Chapters 580, 581 or
582,as amended,and the Association shall be entitled to recover interest at the rate of 8%per annum
and its costs, expenses and disbursements, including reasonable attorney's fees, incurred in such
foreclosure.No Owner may waive or otherwise escape liability for the assessments provided for herein
by non-use of the Common Elements or abandonment of the Owner's Lot. If the Association has
provided for monthly installment payments of assessments, the Association may accelerate and the
Owner shall pay the unpaid balance of an annual installment if the Owner has failed to pay any
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monthly installment within thirty(30)days after the due date of a monthly installment. To the extent
permissible, the Association may deny services to any Member who is more than thirty (30) days
delinquent in the payment of any assessment or installment of an assessment.
Section 9. Subordination of the Lien to Mortgage. The lien of the assessments provided for
herein shall be subordinate to the lien of any first mortgage,except as provided in Section 515B.3-116
of the Act. Sale or transfer of any Lot shall not affect the assessment lien. No sale or transfer shall
relieve such Lot from liability for any assessments thereafter becoming due or from the lien thereof
ARTICLE IV
DUTIES OF ASSOCIATION
Section 1. General Duties.In addition to maintenance upon the private streets and driveways,
including the maintenance of water and sewer services from any public mains,the Association shall
provide for maintenance upon the Lots and Common Elements as follows:exterior maintenance upon
each Lot which is subject to assessment hereunder, snow removal, paint,repair,replace and care for
decks,exterior stairs,roofs,gutters,downspouts,exterior building surfaces,trees,shrubs,grass,walks,
irrigation systems, monumentation, mail boxes, driveway repair and maintenance, light fixtures or
light standards along private roads and other exterior improvements. Exterior maintenance shall not
include glass,windows,front unit entrance doors,patio doors,or electricity for exterior garage lights.
Section 2. Other Duties.
a. The Association shall enforce the covenants, conditions and restrictions set forth
herein and any amendments hereto and any rules and regulations adopted by the
Association.
b. The Association may provide for trash removal services in accordance with the
provisions of Article IX hereof and shall provide a master or common policy of
property insurance for all Lots within the Association.
C. The Association shall undertake, at its discretion, such further duties as determined
by the Board of Directors.
Section 3. Miscellaneous. In the event that the need for maintenance or repair is caused
through the willful or negligent act of the Owner, his family, or guests, invitee,or lessees,the cost of
such maintenance or repairs shall be added to and become a part of the assessment to which such Lot
is subject.
ARTICLE V
PARTY WALLS
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Section 1. General Rules of Law to Apply. Each wall which is built as a part of the original
construction of the homes upon the Properties and placed on the dividing line between the Lots shall
constitute a parry wall, and, to the extent not inconsistent with the provisions of this Article, the
general rules oflaw regarding party walls and liability for property damage due to negligence or willful
acts or omissions shall apply thereto.
Section 2.Sharing of Repair and Maintenance.The cost of reasonable repair and maintenance
of a party wall shall be shared by the Owners who make use of the wall in proportion to such use.
Section 3. Destruction by Fire or Other Casualty. If a party wall is destroyed or damaged by
fire or other casualty, any Owner who has used the wall may restore it, and if the other Owners
thereafter make use of the wall, they shall contribute to the cost of restoration thereof in proportion
to such use without prejudice, however, to the right of any such Owners to call for a larger
contribution from the others under any rule of law regarding liability for negligent or willful acts of
omissions.
Section 4. Weatherproofing. Notwithstanding any other provision of this Article, an Owner
who by his negligent or willful act causes the party wall to be exposed to the elements shall bear the
whole cost of furnishing the necessary protection against such elements.
Section 5. Right to Contribution Runs With Land. The right of any Owner to contribution
from any other Owner under this Article shall be appurtenant to the Lot and shall pass to such Owner's
successors in title.
Section 6.Arbitration.In the event of any dispute arising concerning a party wall,or under the
provisions of this Article,each party shall choose one arbitrator,and such arbitrators shall choose one
additional arbitrator,and the decision shall be by a majority of all the arbitrators.
ARTICLE VI
ARCHITECTURAL CONTROL
Section 1. Structures. No building,fence, wall, deck or other structure shall be commenced,
erected or maintained upon the Properties, nor shall any exterior addition to, or change or alteration
therein be made until the plans and specifications showing the nature,kind,shape,height,materials,
and location of the same shall have been submitted to and approved in writing as to harmony of
external design and location in relation to surrounding structures and topography by the Board of
Directors of the Association, or by an architectural committee composed of three (3) or more
representatives appointed by the Board.
Section 2. Approval. In the event said Board of Directors, or its designated architectural
committee,fails to approve or disapprove such design and location,or planting,within thirty(30)days
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after said plans and specifications have been submitted to it, approval will not be required and this
Article will be deemed to have been fully complied with.
ARTICLE VII
ADDITIONAL RESTRICTIONS RULES AND REGULATIONS
Section 1. Additional Restrictions.
a. No lot shall be used except for residential purposes, except that Declarant shall be
entitled to maintain model homes and other sales facilities upon the Lots.
b. No sign of any kind shall be displayed to the public view on any lot except one
professional sign of not more than one(1)square foot and one sign of not more than
five (5) square feet advertising the property for sale, except that Declarant shall be
permitted to erect and maintain upon the Property such signs as it deems appropriate
to advertising the Property until the Declarant conveys the last Lot.
C. The Association,through its Board of Directors,may in its discretion adopt rules and
regulations prohibiting or permitting the keeping of animals on the Lots.
d. No Lot shall be used or maintained as a dumping ground for rubbish,trash, garbage
or other waste,including pet or household waste.Garbage,rubbish and trash shall not
be kept on said premises except in covered sanitary containers. All incinerators or
other equipment used or kept for the storage or disposal of such material shall be kept
in a clean and sanitary condition.
e. No noxious or offensive activity shall be carried on upon any Lot nor shall anything
be done thereon which may be or may become an annoyance or nuisance to the
neighborhood.
f No structure of a temporary character, trailer, basement, tent, shack, garage, barn or
other building shall be used on any Lot at any time as a residence, either temporarily
or permanently.
g. No trailers, boats, buses, motor homes, campers, snowmobiles or other types of
recreational vehicles shall be parked on any Lot for more than forty-eight (48)
consecutive hours unless such vehicle is parked within a garage; provided that the
Board of Directors of the Association may grant permits to park such vehicles on Lots
for limited periods of time not to exceed fourteen(14)days in any twelve-month(12)
period. No such vehicles shall be parked on any Common Element.
h. No aerial, antenna or satellite dish which is (i) over four feet in height, as measured
from the point on any structure to which the aerial,antenna or satellite dish is affixed;
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(ii)more than one meter in diameter; (iii)not attached to a dwelling unit, or(iv)of a
color not approved by the Association, shall be permitted on any Lot.
1. No abandoned motor vehicle as defined in Minnesota Statutes Section 16813.02,
subdivision 2, as amended from time to time, shall be permitted to remain upon the
streets or driveways or on any Lot or parking area. The Association shall have
the right to remove any such vehicle at any time,and assess the costs of such removal
against the Lot which is owned or occupied by the person in control or possession of
such vehicle.
j. No fences shall be erected on any Lot.
k. Except as herein permitted for Declarant,no business,trade,occupation or profession
of any kind,whether carried on for profit or otherwise,shall be conducted,maintained
or permitted on any Lot,except: (I)an Owner or occupant residing in a Lot may keep
and maintain his or her business or professional records in such Lot and handle
matters relating thereto by telephone or correspondence therefrom,provided that such
uses are incidental to the residential use of the Lot; and (ii) the Association may
maintain offices on the Property for management and related purposes.
1. No Lot may be leased for transient or hotel purposes. Any lease of any lot shall be in
writing which shall be expressly subject to the Act,this Declaration and any Rules and
Regulations adopted by the Association and which provide that any violation of the
Act,this Declaration and any Rules and Regulations shall be a default under the lease.
No time shares shall be created with respect to any Lot.
in. No parking shall be permitted on private streets located within the Property in
accordance with any"No Parking"signs posted by the Association as requested by the
City of Fridley, Minnesota.
Section 2. Rules and Regulations. The Association may adopt, amend and revoke rules and
regulations not inconsistent with the Articles of Incorporation,this Declaration or the Bylaws of the
Association, as follows:
a. regulating the use of the Common Elements;
b. regulating the use of Lots and the conduct of living unit occupants which may
jeopardize the health,safety and welfare of other occupants, which involves noise or
other disturbing activity,or which may damage the Common Elements or other living
units;
C. regulating or prohibiting animals;
d. regulating changes in the appearance of the Common Elements and conduct which
may damage the common interest community;
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e. regulating the exterior appearance of the common interest community, including, by
way of illustration and not limitation, balconies and patios, window treatments, and
signs and other displays, regardless of whether inside a living unit;
f. implementing the Articles of Incorporation, this Declaration or the Bylaws of the
Association; and
g. other rules facilitating the operation of the common interest community.
After notice and an opportunity to be heard, the Association may impose reasonable sanctions,
including the levying of reasonable fines and reasonable restrictions on services and use of Common
Elements, for violations of this Declaration, the Bylaws and the Rules and Regulations of the
Association.
ARTICLE VIII
EASEMENTS
Section 1.General.In addition to the easements,covenants,restrictions and conditions herein,
all Lots shall be subject to easements and covenants hereinafter specifically described for the benefit
of the Properties or for the limited benefit of specified adjoining Lots, all as more fully set forth
hereinafter in this Article. Within such easements, no structure, planting or other material shall be
placed or permitted to remain which may damage or interfere with the installation and maintenance
of any storm water ponds,utilities or trails or which may change the flow or drainage channels within
the easements or which may obstruct,retard or change the flow of water through drainage easements.
The easement area of each Lot and all improvements therein shall be maintained continuously by the
Owner of the Lot, except for improvements which are the responsibility of the Association, a public
authority or utility company.
Section 2. Utility Easements. All Lots and Common Elements are hereby subjected to
easements in favor of the Association and the Owners of the Lots for the installation and maintenance
of utilities, including gas, telephone, electric and cable TV. The Association or its proper
representatives shall have the right of free access to any Lot or living unit for the purpose of
maintaining any utility service to any Lot on the Properties.In addition,each Lot over which a utility
is in fact installed or constructed as part of the original utility system shall be subject to an easement
for utility purposes over the portion of the Lot upon which such utility service is constructed.
Section 3. Easements for Encroachment. In the event that any buildings or other structures
originally constructed by the Declarant or constructed or erected thereafter on any Lot in accordance
with the this document encroaches upon any other Lot, or, if any such encroachment shall hereafter
arise because of settling or shifting of the building or other cause,an exclusive easement appurtenant
to said encroaching Lot for such encroachment and the maintenance thereof shall exist.
Section 4. Easement for Maintenance. Declarant hereby grants an easement in favor of the
Association over and across each Lot for the purposes of the Association performing its duties.
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Section S.Emergency Vehicles.Declarant hereby grants a perpetual,non-exclusive easement
in favor of the City of Fridley, Minnesota, a municipal corporation under the laws of the State of
Minnesota,on,over and across the Common Elements for the purpose of ingress and egress for police,
fire, rescue and other emergency calls, animal control, health and prospective inspection and to
provide to the Owners other public services deemed necessary by the City of Fridley,Minnesota and
for the purposes set forth herein.
ARTICLE IX
TRASH REMOVAL
Section 1. Master Contract. The Association may contract with a single provider for the
removal and disposal of garbage, trash and other solid waste from all Lots in accordance with this
Declaration. Each Owner shall be obligated to purchase such services from the provider designated
by the Association upon the terms, conditions and rates negotiated by the Association.
Section 2. Charges.Any charges imposed by the provider designated by the Association shall
be paid by the Association and shall be included in the general assessments to Owners. In the event
that any Owner requests any services not included within the basic/general charges of the provider,
the Owner,upon written demand by the Association,shall reimburse the Association for any charges
for such services,plus all related costs,including interest,attorney fees and administrative charges of
the Association, and if not paid by Owner, such charges shall be a lien against the Lot. Any charge,
lien or claim pursuant to this Article shall not be subject to any maximum increase in general
assessments.
ARTICLE X
INSURANCE AND RECONSTRUCTION
Section 1.Liability Insurance:Fidelity Bonds. The Board of Directors of the Association,or
its duly authorized agent, shall obtain a broad form of public liability insurance insuring the
Association,with such limits of liabilities as the Association shall determine to be necessary,against
all acts, omissions to act and negligence of the Association, its employees and agents.
Section 2. Property Insurance. Each Owner, by acceptance of a deed or contract for deed on
a Lot, covenants to cooperate with the Association to maintain and timely pay the Owner's share of
premiums on a master insurance policy, including fire, extended coverage,vandalism and malicious
mischief,with all risk endorsements insurance,and such additional insurance as may be required by
the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, if
applicable.The Association,through its Board of Directors,may obtain and continue in effect master
property insurance in form and amounts satisfactory to cover a minimum ofthe entire replacement cost
for all of the living units located on each Lot of the Properties, but without prejudice to the right of
the Owner of said Lot to obtain additional individual living unit insurance. Each Owner shall join in
said master policy and pay a share of the premiums thereon in such manner as determined by the
Association. Any such master policies and coverage shall be purchased and carried by the Association
on the Properties,and the proceeds thereof shall be used exclusively for the repairs,replacement and
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reconstruction of the Properties. Any insurance shall cover a minimum of the entire replacement cost
of any improvements located on the Property. Said master policy shall be issued in the name of the
Association as insurance trustee for the Owners,and shall provide that losses shall be payable to the
trustee and first mortgagee of record,if any.Any such master insurance shall cover loss by damage and
fire and such hazards as are covered under standard extended coverage provisions and may include
such other and additional overages as the Association,through its Board ofDirectors,deems necessary
or desirable. All policies, whether obtained by an Owner or the Association, shall prohibit
cancellation or substantial modification without at least thirty (30) days prior written notice to all
insureds,the Association,all first mortgagees of record and the FHA or FNMA,if applicable. All said
insurance policies shall contain a cost of replacement endorsement. All Owners must obtain a policy
of insurance covering their personal property inside their Unit.
Section 3. Insurance Premiums. If so determined by the Board of Directors, insurance
premiums for any master insurance coverage and other insurance overages shall be a common expense
paid by monthly assessments levied by the Association; such payments shall be held in a separate
escrow account of the Association and used solely for the payment of master property insurance
premiums and other insurance premiums as such premiums become due. An Owner by acceptance of
a deed or contract for deed thereof, conveys, covenants, constitutes and appoints the Association or
its Board of Directors as the Owner's true and lawful Attorney-In-Fact to act in connection with all
matters concerning the purchase and maintenance of all types of property and liability insurance
pertaining to the properties, the ownership of any respective Lot and living unit thereto with any
insurance company or group of insurance companies. Without limitation on the generality of the
foregoing,the Association,as insurance trustee,has full power and authority to purchase and maintain
such insurance,to collect proceeds and to distribute the same.
Section 4. Lien For Premiums. The Association may, but shall not be required to, make
payment of insurance premiums on behalf of any Owner who becomes delinquent in such payment
or the first mortgagees of any Lot may,but shall not be required to,make such payments.In the event
that the Association or the first mortgagee does make such payment,then such payment and the cost
hereof shall be treated as if it is part of the common expense assessment and shall be a charge and a
continuing lien on the Lot for whose benefit such premium payment is made, and the personal
obligation of the Owner of such Lot, from the time when such premium payment is made.
Section 5. Use of Proceeds. In the event of destruction or damage by causes covered by
insurance referred to in this Article X,all proceeds of said insurance coverage shall be payable to the
Association as insurance trustee for the Owner or Owners of the damaged Lots. Said insurance
proceeds shall be applied and administered as follows:
a. In the event of an insured loss to a Lot,all insurance proceeds paid to the trustee and
the first mortgagee of record of the damaged Lot shall be deposited with a title
insurance company acceptable to them to be held in escrow for restoration.
b. In the event of an insured loss to a Lot, the Owner of such Lot with respect to which
the insurance loss occurs shall,within thirty(3 0)days after the insurance proceeds are
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deposited with a title insurance company in accordance with paragraph a.above,enter
into a firm contract with a qualified builder providing for the reconstruction of the
improvement,in substantially the same condition as existed immediately prior to the
insured loss;provided,however,that no contract shall be entered into by such Owner
for an amount in excess of the insurance proceeds then held by the title insurance
company until additional funds are deposited in escrow as above provided by such
Owner sufficient to cover all construction as determined by the title insurance
company. Said reconstruction shall be commenced and completed with due diligence
and in no event shall said work be completed later than one-hundred-eighty(180)days
after said insurance proceeds are deposited in escrow as aforesaid. The Association
and first mortgagee of record of the Lot affected shall have the right, but not the
obligation,to deposit said additional funds in excess of the insurance proceeds as may
be required to permit construction as herein provided;provided that if such additional
funds are deposited by the Association, the Association shall reimburse itself by a
special general assessment against all Lot owners in such annual installments as the
Association may determine.
C. In the event such Owner fails to enter into a contract as provided in paragraph b.above
for the reconstruction of the improvement as provided above or, in the event that
reconstruction is not commenced or completed as provided above, then the
Association as trustee, with the consent of the first mortgagee of record, or the first
mortgagee of record with the consent of the trustee, shall have the right, but not the
obligation to enter into those contracts which it deems necessary to complete said
reconstruction of the improvement on the Lot; and the Association as trustee or first
mortgagee shall have the right to have said insurance proceeds applied in satisfaction
of any obligations incurred pursuant to said contract, without liability of any kind to
the Owner. The Association or the first mortgagee may employ any bonded party or
parties as its agent exercising those functions given to it in this Article. The
Association or the first mortgagee shall be empowered to pay said agent a reasonable
fee for the services rendered by said agent and collect said charge from the Owner,and
in the manner as that which is provided in Article X, Section 3, for the collection of
an insurance premium paid by the Association.
d. Disbursement of funds on deposit pursuant to Article X, Section 5 b. and c. shall be
made by the title insurance company selected as hereinabove provided,subject to the
following:
i. Receipt by the title insurance company of a written consent of any party
holding a lien or encumbrance on said Lot.
ii. Receipt by the title insurance company of such construction statements, lists
of subcontractors, lien waivers and receipts as it shall determine to be
appropriate. Disbursements may be periodic or progress payments, and the
15
title insurance company may make such inspections and withhold such
payments as it deems necessary to insure completion with the plans and
specifications.The title insurance company shall be entitled to charge and the
trustee shall be empowered to pay a reasonable fee for the services rendered
by the title insurance company, and the Association as trustee may collect
such charge from the Owner, and in the same manner as that which is
provided for in Article X, Section 3 for the collection of insurance premiums
paid by the Association.
iii. In the event a contract is entered into pursuant to Article X, Section 5 b.,the
written consent of such Owner to said payment must be obtained.
e. Nothing contained in this Article shall be construed to make the Association or the
first mortgagee of record responsible for collection or noncollection of any insurance
proceeds; said Association or first mortgagee being responsible solely for the
insurance proceeds which come into their hands. Such Owner of a Lot damaged or
destroyed by causes referred to above shall collect or cause to be collected from the
insurance carrier involved the proceeds of the policy covering his Lot for the use of
the trustee and the first mortgagee as herein provided.
f. In the event that a reconstruction contract is for any reason not entered into pursuant
to the provisions of Article X, Section 5 b. and c. within one hundred-eighty(180)
days after the deposit of insurance proceeds with the title insurance company as herein
provided,said title insurance company shall disburse said proceeds to all mortgagees
of record of the affected Lots as its interest appears to retire the indebtedness secured
under said mortgage,and disburse the remaining deposits,if any,to such Lot Owner,
as the interests may appear.
Section 6. Waiver of Subrogation. All policies of physical damage insurance shall contain
waivers of subrogation and waivers of any defense based on coinsurance or of the invalidity arising
from acts of the insured and it shall provide that such policies may not be canceled or substantially
modified without at least thirty(30)days prior written notice to all insureds,the Association,and all
of the mortgagees of record of the Lots, and to the FHA or FNMA, if applicable.
Section 7. Insufficient Proceeds. If the proceeds of the insurance are not sufficient to defray
the estimated cost of reconstruction or repair of damaged properties and/or the Common Elements by
the Association or if at any time during the reconstruction or repair or upon completion of such
reconstruction or repairs,the funds for the payment of costs thereof are insufficient,assessments shall
be made against the Owners who own the damaged properties or who have assigned their rights in
sufficient amounts to provide funds to pay the estimated costs of repairs. The Association shall have
a lien on any funds advanced on behalf of such Owners.
Section 8. Other Insurance. The Association shall procure and maintain the following
additional insurance coverage:
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a. Fidelity coverage against dishonest acts on the part of Directors,Managers,trustees,
employees or volunteers responsible for handling funds collected and held for the
benefit of the Owners. The fidelity bond or insurance shall name the Association as
the named insured and shall be written in an amount sufficient to provide protection
which is in no event less than the amount required by the Act or the estimated
maximum amount of funds,(including reserves),in the custody of the Association or
management agent at any given time. An appropriate endorsement to the policy to
cover any persons who serve without compensation shall be added if said policy
would not otherwise cover volunteers.
b. A comprehensive policy of public liability insurance covering the Common Elements
in an amount not less than one million dollars. Such insurance shall contain a
"severability of insurance" endorsement which shall preclude the insurer from
denying the claim of the Owner because of negligent acts of the Association
or other owners.The policy shall include such additional coverages,endorsements or
limits as may be required by regulations of the Federal Housing Administration,
("FHA"),or the Federal National Mortgage Association,("FNMA"),as a precondition
to their insuring, purchasing or financing a mortgage on a Lot,
C. Workers Compensation insurance as required by law.
d. Directors and officers liability insurance with such reasonable limits and overages as
the Board of Directors may determine from time to time.
e. Such other insurance as the Board of Directors may determine from time to time to be
in the best interests of the Association and the Owners or as may be required by the
Act.
Section 9. Deductibles. As to any deductibles under any insurance overages obtained by the
Association,the Board of Directors may:
a. pay the deductible as a general common expense;
b. assess the deductible amount against any Lots affected in a reasonable manner; or
C. assess the deductible against any Owner and the Owner's Lot if the loss was caused
by the act or omission of the Owner, or the Owner's agents, employees, invitees,
guests or any one occupying the Lot with the expressed or implied permission of the
Owner.
ARTICLE XI
RIGHTS OF ELIGIBLE MORTGAGEES
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Section 1. Consent to Certain Amendments. The written consent of eligible mortgagees
representing at least fifty-one percent (51%) of the Lots that are subject to first mortgages held by
Eligible Mortgagees, (based upon one vote per first mortgage owned), shall be required for any
amendment to this Declaration,Articles of Incorporation or Bylaws of the Association which causes
any change in the following:
a. voting rights;
b. increases in assessments that raise the previously assessed amount by more than
twenty-five percent(25%), assessment liens or priority of assessment liens;
C. reductions in reserves for maintenance,repair and replacement ofCommon Elements;
d. responsibility for maintenance and repairs;
e. reallocation of interests in the Common Elements or right to their use;
f. redefinition of any Lot boundaries;
g. convertibility of Lots into Common Elements or vice versa;
h. expansion of the Property or the addition or withdrawal of property to or from the
Property;
1. hazard or fidelity insurance requirements;
J. leasing of Lots;
k, imposition of any restrictions on the leasing of Lots;
1. restoration or repair of the Property, (after hazard damages or partial
condemnation) in a manner other than that specified in this Declaration;
in. any action to terminate the legal status of the common interest community after
substantial destruction or condemnation occurs; or
n. any provisions that expressly benefit mortgage holders, or insurers or guarantors of
mortgages.
Notwithstanding the foregoing, implied approval of a proposed amendment shall be assumed
when an Eligible Mortgagee fails to submit a response to any written proposal for an amendment
within thirty (30) days after it receives proper notice of the proposal, provided that the notice was
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delivered by certified mail with a return receipt.
Section 2. Consent to Certain Actions. The written consent of Eligible Mortgagees
representing at least sixty-seven percent(6 7%)of the Lots that are subject to first mortgages,(based
upon one vote per first mortgage owned) shall be required to abandon or terminate the common
interest community, subject to any greater requirements contained in the Act.
Section 3.Consent to Subdivision.No Lot may be partitioned or subdivided without the prior
written approval of the Owner,Eligible Mortgagee thereof, and the Association.
Section 4. No Ri hg t of First Refusal. The right of an Owner to sell, transfer or otherwise
convey his Lot shall not be subject to any right of first refusal or similar restrictions.
Section 5. Priority of Lien. Any holder of a first mortgage on a Lot or any purchaser of a first
mortgage at a foreclosure sale,that comes into possession of a Lot by foreclosure of the first mortgage
or by deed or assignment in lieu of foreclosure,takes the Lot free of any claims for
unpaid assessments or other charges or liens imposed against the Lot by the Association which have
accrued against such Lot prior to acquisition of possession of the Lot by said first mortgage holder or
purchaser;
a. except as provided in Article III, Section 9 and in Section 515B.3-1 16 of the Act;and
b. except that any unpaid assessments or charges with respect to the Lot may be
reallocated among all Lots in accordance with their interests in Common Elements.
Section 6.Priority of Taxes and Other Charges.All taxes,assessments and charges which may
become liens prior to the first mortgage under state law shall relate only to the individual Lots and not
the Property as a whole.
Section 7.Priority for Condemnation Awards.No provisions ofthis Declaration or the Articles
of Incorporation or Bylaws of the Association shall give an owner,or any other party,priority over any
rights of the Eligible Mortgagee of the Lot pursuant to its mortgage in the case of a distribution to such
Owner of insurance proceeds or condemnation awards for losses to or a taking of the Lot and/or the
Common Elements. The Association shall give written notice to all Eligible Mortgagees of any
condemnation or eminent domain proceeding affecting the Property promptly upon receipt of notice
from the condemning authority.
Section 8.Management Agreements.The term of any agreement for professional management
of the Property may not exceed one (1) year. Any such agreement must provide at a minimum for
termination without penalty or termination fee by either party
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a. with cause upon thirty(30) days prior written notice; and
b. without cause, upon ninety(90) days prior written notice.
Section 9. Access to Books and Records.Eligible Mortgagees shall have the right to examine
the books and records of the Association upon reasonable notice during normal business hours, and
to receive free of charge, upon written request, copies of the Association's annual reports and other
financial statements.Financial statements,including those which are audited,shall be available within
one hundred twenty (120) days of the end of the Association's fiscal year. If a request is made by
FNMA or any institutional guarantor or insurer of a mortgage loan against a Lot for an audit of the
Association's financial statements,the Association shall cause an audit to be made and shall deliver
a copy to the requesting party, subject to the Bylaws of the Association.
Section 10. Notice Requirements. Upon written request to the Association, identifying the
names and address of the holder, insurer or guarantor of a mortgage on a Lot, and the Lot number or
address,the holder, insurer or guarantor shall be entitled to timely written notice of
a. a condemnation loss or any casualty loss which affects a material portion of the Lot
securing the mortgage.
b. a sixty(60)day delinquency in payment of assessments or charges owed by the Owner
of a Lot on which it holds a mortgage.
C. a lapse, cancellation or material modification of any insurance policy maintained by
the Association.
d. a proposed action which requires the consent of a specified percentage of Eligible
Mortgagees.
ARTICLE XII
SPECIAL DECLARANT RIGHTS
Section 1. Period of Declarant Control. Notwithstanding anything in this Declaration or the
Association Bylaws to the contrary,the Declarant shall have the right to control the management and
affairs of the Association until the earlier of the following events:
a. sixty(60)days after the conveyance of seventy-five percent(75%)of the Lots to Lot
Owners other than the Declarant, or
b. three years from the date of the recording of this Declaration.
During this period of Declarant Control,the Declarant,subject to the Bylaws,shall have the sole right
to appoint, remove and replace the officers and directors of the Association. Notwithstanding the
foregoing,the Owners other than the Declarant shall have the right to nominate and elect not less than
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thirty-three and one-third percent(33 1/3%)of the directors at a meeting of the Owners which shall
be held within sixty(60)days following the conveyance by Declarant of fifty percent(50%) of the
Lots authorized to be included in the Common Interest Community.
Section 2.Maintenance of Sales Offices.Notwithstanding anything herein to the contrary,so
long as the Declarant owns an interest in a Lot,the Declarant may maintain advertising signs on any
part of the Common Elements and sales offices,management offices and model units in any Lots or
in or on any part of the Common Elements and such sales offices and model units may be relocated
by Declarant from time to time. There shall be no limit on the number or location of such offices or
model units.
Section 3.Easements in Favor ofDeclarant.Notwithstanding any provisions contained herein
to the contrary,so long as construction and initial sale of Lots shall continue,Declarant shall have an
easement over and across the Common Elements for the purpose of carrying out its sales activities and
for the purpose of completing the construction on any Lots,including without limitation the right of
vehicular ingress and egress, vehicular parking, material storage, and the maintenance of business
offices, signs,model units,and sales offices,and Declarant shall have an easement for access to such
facilities; provided, however, that Declarant shall promptly restore any damage to the Common
Elements by reason of any construction incident to the foregoing. This Section may not be amended
without the express written consent of the Declarant.
ARTICLE XIII
GENERAL PROVISIONS
Section 1.Enforcement.The Association,or any Owner shall have the right to enforce,by any
proceeding at law or in equity,all restrictions,conditions,covenants,reservations, liens and charges
now or hereafter imposed by the provisions of this Declaration. Failure by the Association or by any
Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver
of the right to do so thereafter.
Section 2. Severabilitv.Invalidation of anyone of these covenants or restrictions by judgment
or court order shall in no way affect any other provisions which shall remain in full force and effect.
Section 3.Amendment. The covenants and restrictions of this Declaration shall run with and
bind the land and shall be perpetual. This Declaration may be amended by an instrument signed by
the Owners representing Lots to which not less than sixty-seven percent(67%)of the total votes have
been allocated. Any amendment must be recorded.
Section 4.Annexation.Additional residential or commercial property and Common Elements
may be annexed to the property with the consent of the Declarant or Owners who represent seventy-
21
five percent(75%) of the Lots.
Section 5. FHA/VA. If the Common Interest Community has received approval from the
Federal Housing Administration or the Department of Veterans Affairs, the following actions will
require the prior approval of the Federal Housing Administration or the Department of Veterans
Affairs, during any period of Declarant control: annexation of additional properties, dedication of
Common Elements and amendment of this Declaration, the Articles of Incorporation of the
Association or the Bylaws of the Association.
Section 6.Tender of Claims.In the event that any incident occurs which could reasonably give
rise to a demand by the Association against the Declarant for indemnification pursuant to the Act,the
Association shall promptly tender the defense of the action to its insurance carrier,and give Declarant
written notice of such tender,the specific nature of the action and an opportunity to defend against
the action.
Section 7. Conflicts Among Documents. In the event of any conflict among the provisions of
the Act,this Declaration,the Bylaws of the Association or any Rules and Regulations adopted by the
Association, the documents shall control in the following order of priority:
a. the Act;
b. this Declaration;
C. the Bylaws; and
d. the Rules and Regulations.
Section 8.Interpretation.As appropriate,each reference to a masculine pronoun shall include
the feminine and neutral pronoun and each reference to a singular pronoun shall include the multiple
pronoun and vice versa.
Section 9. Limited Common Elements. All portions of the Property other than the Lots are
Common Elements. Certain portions of the Common Elements designed to serve a single Lot are,by
operation of Section 515B.2-102(d)and(f)of the Act,Limited Common Elements allocated for the
exclusive use by the respective Lots served thereby to the exclusion of other Lots. In addition, the
driveways adjacent to and serving each Lot are Limited Common Elements allocated for the exclusive
use of the respective Lots to the exclusion of the other Lots. Additionally, the entry area and air
conditioning equipment serving each Lot and the stairs and/or the patio/deck area, if any, which are
accessible from each Lot are Limited Common Elements allocated for the exclusive use of such Lot
to the exclusion of the other Lots. The air conditioning equipment which is a Limited Common
Element allocated to each Lot shall be maintained, repaired and replaced by the Owner of each such
Lot at such Owner's sole cost and expense.All other portions of the Limited Common Elements shall
22
be maintained as Common Elements under and pursuant to the provisions of Article IV hereof. The
expense of any such maintenance and repair shall be charged to the Lot as a Common Expense under
and pursuant to the provisions of Article III hereof
Section 10. Condemnation. In the event of the taking of any of the Common Elements by
eminent domain or any action or proceeding in lieu of eminent domain(hereinafter,"condemnation"),
the Association shall represent the Owners in any such condemnation,or in negotiations,settlements
and agreements with the condemning authority,and each Owner hereby appoints the Association as
his attorney-in-fact, irrevocably, for such purposes. If deemed necessary by the Association, it may
obtain the services of a trustee to act on behalf of the Owners in carrying out any functions under this
Section.In the event of a condemnation of part or all of the Common Elements,the award of proceeds
of settlement shall be payable to the Association. All proceeds payable with respect to any
condemnation of Common Elements shall be applied to the restoration or repair of such Common
Elements remaining after such condemnation or to such other purposes as may be in accordance with
the functions and powers of the Association and the welfare of the Owners.
If all of a Lot is taken through condemnation,or if so much of a Lot is taken that the remaining
property cannot reasonably be used for a purpose allowed by this Declaration,then the entire Lot shall
be considered condemned and the Owner's interest in the Common Elements and Association shall
be deemed to cease on the date such condemnation is completed.
If part of a Lot is taken through condemnation, but the Lot can still be used for a purpose
allowed by this Declaration,then there shall be no effect on the Lot Owner's interest in the Common
Elements or the Association.
Any proceeds of any condemnation with respect to a Lot shall belong and be paid to the
Owner thereof and his mortgagee,as their interests may appear.
Section 11. Dissolution. The common interest community created by this Declaration may
only be terminated with the assent given in writing and signed by not less than the Owners
holding eighty percent(80%)of the votes of the Association and eighty percent(80%)of the Eligible
Mortgagees (each mortgagee having one vote for each Lot financed).
Upon termination of the common interest community, after payment of all the debts and
23
obligations of the Association, all Lots, Common Elements, and Association property shall be
administered in accordance with the provisions of the Act.
IN WITNESS WHEREOF,Declarant has caused this Declaration to be executed the date and
year first above written.
TRADITION HOMES, INC..
By:
Gerald G. Winschitl, President
STATE OF MINNESOTA)
)ss.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this_day of September, 2004, by
Gerald G. Winschitl, the President of Tradition Homes, Inc., a Minnesota corporation, on behalf of
said corporation.
Notary Public
THIS INSTRUMENT DRAFTED BY:
G. SCOTT HOKE,P.A.
12201 CHAMPLIN DRIVE
CHAMPLIN MN 55316
763-712-3777
24
BYLAWS
OF
FIFTH STREET TOWNHOMES ASSOCIATION
A MINNESOTA NON-PROFIT CORPORATION
ARTICLE I
Section 1. Name. The name of the corporation is Fifth Street Townhomes Association,
("Association"). The Association is formed pursuant to Chapter 317A and Sections 515B.1-101 et
sec.., Minnesota Statutes, known respectively as the Minnesota Non-Profit Corporation Act and
Minnesota Common Interest Ownership Act, (the latter being referred to herein as the"Act"), and
laws amendatory thereof and supplemental thereto. The terms used in these Bylaws shall have the
same meaning as they have in the Act, except as otherwise specified herein.
Section 2. Date of Incorporation. The Articles of Incorporation ofthe Association were filed
in the office of the Secretary of State of the State of Minnesota on 2004.
Section 3. Membership, and Voting. The membership of the Association shall consist of the
Lot Owners of the Lots within Common Interest Community Number , a Planned Community,
Fifth Street Townhomes, Anoka County, Minnesota (hereinafter referred to as the "Planned
Community"), which was created by the filing of the Declaration of the Common Interest
Community in the Office of the County Recorder, Anoka County, Minnesota, (the"Declaration").
Membership in the Association shall be appurtenant to, and shall not be separated from, Lot
ownership in the Planned Community. A person shall cease to be a member of the Association at
such time as that person ceases to be a Lot Owner of a Lot. Each Lot shall have one vote. Where
there is more than one Lot Owner of a Lot, all of such Lot Owners shall be members of the
Association and the vote allocated to that Lot in accordance with the Declaration and these Bylaws
shall be cast as the Lot Owners among themselves may determine and signify in writing to the
Association, but in no event shall more than one vote be cast with respect to any Lot nor shall the
vote allocated to a Lot be split or otherwise cast separately by the Lot Owners. Where there is more
than one Lot Owner of a Lot, the Lot Owners thereof shall notify the Secretary of the Association
in writing of the name of the Lot Owner who has been designated to cast the vote attributable to that
Lot, on behalf of all the Lot Owners of that Lot. If the Owners of a Lot cannot agree on the Lot
Owner who is to be designated to cast the vote attributable to the Lot owned by such Owners, or on
the manner in which such vote is to be cast, the Lot Owners shall submit such dispute to the Board
of Directors of the Association. The Board of Directors shall resolve such dispute in the manner
determined by the Board of Directors to be fair and equitable and such determination shall be
binding on said Lot Owners. Membership in the Association shall automatically pass when the
ownership of a Lot is transferred in any manner.
1
Section 4. Registration of Owner. It shall be the duty of each Lot Owner to register with the
Secretary of the Association in writing:
(a) the name and address of such Lot Owner;
(b) the nature and satisfactory evidence of such Lot Owner's interest or estate in
a Lot; and
(c) the addresses at which such Lot Owner desires to receive notice of any duly
called meeting of the Members.
If a Lot Owner does not register as provided in this paragraph,the Association shall be under no duty
to recognize the rights of such person hereunder, and shall not recognize such person's right to vote
as provided herein, but such failure to register shall not relieve a Lot Owner of any obligation,
covenant or restriction under the Declaration or these Bylaws. If there is more than one Lot Owner
of a Lot, each must execute the registration as provided in this paragraph.
ARTICLE II
MEMBERS
Section 1. Place of Meeting. Meetings of members and directors of the Association may be
held at such places within the State of Minnesota, County of Anoka, as may be designated by the
Board of Directors.
Section 2. Annual Meetings. The first annual meeting of the members shall be held within
one year after the recording of the Declaration on a date established by the first Board of Directors.
Each subsequent regular annual meeting of the members shall be held at least once each year on the
same day of the same month of each year thereafter (unless the Board of Directors designates a
different date for annual meetings), at such hour as may be designated by the Secretary in the notice
of said meeting, as hereinafter provided. At each annual meeting, the members shall, subject to the
provisions of Section 2 of Article III hereof, elect members to the Board of Directors from among
themselves and shall transact such other business as may properly come before the meeting.
Section 3. Special Meetings. Special meetings of the members may be called for any purpose
at any time by the President or by the Board of Directors, on their own initiative or upon the delivery
of a written request signed by Lot Owners of Lots to which are assigned twenty-five percent(25%)
or more of the votes in the Association to either the President or the Secretary, stating the purpose
or purposes of the special meeting. No business shall be transacted in a special meeting of the
members except as stated in the notice of the meeting, as hereinafter provided.
2
Section 4. Notice of Meetings. At least twenty-one (21) days in advance of any annual or
regularly scheduled meeting, and at least seven(7) days in advance of any other meeting, the
Secretary of the Association shall send to each Lot Owner a written notice of the time, place and
complete agenda of the meeting which is the subject of such notice. Such notice shall be hand
delivered or sent by United States mail to all Lot Owners of record at the address of their respective
Lots and to such other addresses as any Lot Owner may have designated in writing to the Secretary.
Lot Owners of record shall be those Lot Owners who are registered with the Secretary as provided
in Article I Section 4 on a date specified by the Board of Directors (the"Record Date"). Such Lot
Owners of record shall be entitled to notice of any duly called meeting of the Members;provided that
the Board of Directors may not specify a Record Date which is more than thirty-five(3 5)days prior
to the date of an annual meeting or more than twenty(20)days prior to the date of a special meeting.
A Lot Owner may at any time waive notice of any meeting by a signed writing or by attendance at
the meeting.
Section S. Quorum and Adjournment. The presence of members in person or represented by
proxy who have the authority to cast ten percent(10%)of the total of the votes of all members of the
Association shall be requisite for and shall constitute a quorum at all meetings of the Association
for the transaction of business except that of adjourning the meeting to reconvene at a subsequent
time and except as otherwise provided by law. If, however, such percentage shall not be present or
represented at any such meeting,the members entitled to vote thereat,present in person or by proxy,
shall have power to adjourn the meeting from time to time without notice other than announcement
at the meeting until a quorum shall be present, at which time any business may be transacted which
might have been transacted at the meeting as initially called had a quorum then been present. The
quorum, having once been established at a meeting, shall continue to exist for that meeting,
notwithstanding the departure of any member previously in attendance in person or by proxy.
Section 6. Voting_Re ister. At the beginning of each meeting of the members, the Secretary
shall deliver to the chairman for the meeting a written list of the Lot numbers, the respective name
or names of the Lot Owners entitled to notice of such meeting,and the respective name of the person
(in the case of multiple Lot Owners) authorized to vote.
Section 7. Order of Business. The order of business at annual meetings of the members, and
at such other membership meetings of the members as may be practical, shall be as follows:
(a) Presenting of Voting Register, proxy certification and establishment of a
quorum.
(b) Reading or distribution of minutes of the preceding meeting of the
Members.
(c) Reports of officers.
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(d) Reports of committees.
(e) Appointment by the Chairman of inspectors of election as determined by
the Chairman or when requested by a member of the Board of Directors.
(f) Election of members of the Board of Directors.
(g) Unfinished business.
(h) New business.
(i) Adjournment.
Section 8. Manner of Voting. Proxies shall be in writing, signed by the member giving the
Proxy, and filed with the Secretary of the Association prior to the meeting. All elections and all
questions shall be decided by the concurring vote of the members who are entitled to cast a majority
of the votes represented by all members present in person or by proxy at a meeting, except as
otherwise specifically provided in the Declaration, these Bylaws or the Act. Cumulative voting shall
not be permitted. Every proxy shall be revocable and shall automatically cease upon the expiration
of eleven(11)months from the date of its execution,upon the conveyance by the member of his Lot
or upon the member's personal attendance at the meeting.
No vote in the Association shall be deemed to inure to any Lot during the time when the Lot
Owner thereof is the Association.
Section 9. Action Taken Without A Meeting. Any action which might be taken at a meeting
of the Lot Owners may be taken without a meeting if authorized in a writing or writings signed by
all of the Lot Owners.
ARTICLE III
BOARD OF DIRECTORS
Section 1.Number and Qualification. The first Board of Directors shall consist ofthe persons
designated as directors in the Articles of Incorporation of the Association, who need not be Lot
Owners. Upon the ending of the terms of the first Board of Directors, the Board of Directors shall
be composed of at least two and no more than four Directors, all of whom shall be Members; or, in
the case of ownership of a Lot by a fiduciary, partnership or corporation shall be officers, partners
or employees of such fiduciary, partnership or corporation.
Section 2. Term of Office. Notwithstanding the right to remove a director under Section 9
of this Article III, and notwithstanding anything else herein contained, Declarant may elect the
members of the Board of Directors of Association during the period from the date of the first
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conveyance of a Lot to a Lot Owner other than Declarant until that date which is five years later; or
until that date which is sixty(60)days after the conveyance of seventy-five percent(75%)of the Lots
to Lot Owners other than Declarant; or a recording of a written surrender of control of the
Association by the Declarant, whichever first occurs. Upon the happening of the earliest of said
events, all Directors elected by the Declarant shall resign from the Board of Directors
Notwithstanding the foregoing, however, not later than sixty (60) days after conveyance of fifty
percent(50%) of the Lots to Lot Owners other than Declarant, one-third of all of the members of the
Board of Directors shall be elected by Lot Owners other than the Declarant. Upon the resignation
from the Board of Directors of all Directors elected by the Declarant, five directors shall be elected,
two for a one-year term, and three for a two-year term. At each annual meeting thereafter, two or
three(as the case may be)directors shall be elected, to a two-year term, as successors to the one or
two(as the case may be)directors whose terms are then ending. The term of a member of the Board
of Directors shall expire upon the election of a successor at an annual meeting of the Members. A
director shall hold office until he shall resign and his resignation shall have become effective, or until
a qualified successor has been elected and shall have accepted the office, or until the director has
been removed in accordance with the provisions of these Bylaws. The Board of Directors elected by
the Declarant shall have the power to adopt the Bylaws of the Association, to elect officers, to
establish a schedule of assessments and shall have generally the powers and duties of the Board of
Directors as set forth herein and in the Declaration.
Section 3. Election. The three directors being elected upon the resignation from the Board
of Directors of all Directors elected by the Declarant shall be elected in one voting. Each Unit shall
be entitled to cast up to three(3)votes. Such votes may not be used cumulatively and, if cast, must
be cast for separate candidates. At the initial election of directors, the two candidates receiving the
highest number of votes shall be elected to a two-year term and the candidate receiving the third
highest number of votes shall be elected to a one-year term. Thereafter, the directors being elected
at any annual meeting shall be elected in one voting. Each Unit shall be entitled to cast one vote per
open position. Such votes may not be used cumulatively and such votes, if cast, must be cast for
separate candidates. After the initial election of directors, all directors elected at any annual meeting
shall be elected to two-year terms.
Section 4. General Powers. The Board of Directors shall manage the property, affairs and
business of the Association. Specifically, and without limiting the generality of the foregoing, the
Board of Directors shall have the power to:
(a) Adopt and publish administrative rules and regulations governing the
operation and the use of the Common Elements, the use and occupancy of the Lots and the
personal conduct of the members and their tenants and guests thereon and therein, parking,
matters of aesthetics affecting the Planned Community or any part thereof and such other
matters as are necessary or desirable to the harmonious use and enjoyment of the Planned
Community by the Lot Owners, copies of all of which rules and regulations shall be made
available to all Lot Owners;
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(b) Supervise the operation,maintenance,repair and replacement ofthe Common
Elements and the making of any additions or improvements thereto;
(c)Exercise for the Association all powers, duties and authority vested in or delegated
to the Association and not reserved to the membership by law or by other provisions of
these Bylaws, the Articles of Incorporation or the Declaration;
(d) Authorize the making of any contracts, leases, management contracts, employment
contracts or leases of recreational areas or facilities on behalf of the Association, engage the services
of and discharge a manager, managing agent, independent contractor or other employees as they
deem necessary, and determine the duties and compensation of such persons. No such lease or
contract shall be entered into on behalf of the Association whose term exceeds two (2) year;
provided, that any contract for professional management of the Property, or any other contract
providing for services by the Declarant, shall not exceed one(1)year and any such agreement must
provide at a minimum for termination without penalty or termination fee by either party: (i)with
cause upon thirty(30) days prior written notice; and (ii)without cause,upon ninety(90) days prior
written notice.
(e)Lease or purchase and mortgage a Lot,Lots or other residential quarters for management
and maintenance personnel. All rental or debt service paid by the Association pursuant to such lease
agreement or mortgage shall be a general Common Expense;
(f) Exercise the irrevocable right to have access to each Lot from time to time during
reasonable hours as may be necessary for the maintenance, repair or replacement of any of the
Common Elements therein or accessible therefrom, or at any time for making emergency repairs
therein necessary to prevent damage to the Common Elements or to another Lot or Lots and,without
limiting the generality of the foregoing, to exercise the irrevocable right to have access, by means
of entering any area of each Lot or the garage allocated to each Lot containing any metering devices
which relate to utility services provided to any Common Elements or to any other Lot for the purpose
of reading, repairing, maintaining and replacing the meter and heating equipment, if any, located
therein;
(g) Determine what shall constitute Common Expenses required for the affairs of the
Association, which shall include all ordinary or extraordinary and necessary expenses for the
operation and the repair, replacement and maintenance of the Real Estate, and the establishment of
a reserve for future repair, replacement and maintenance of those portions of the Common Elements
which must be repaired, replaced or maintained on a periodic basis;
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(h)Levy and collect the Common Expenses from the Lot Owners,
(i) Open bank accounts on behalf of the Association and designate signatories required
therefor;
0) Obtain insurance for the Planned Community pursuant to the provisions of
the Declaration; and
(k) Dedicate or transfer easements for public utilities or other public purposes
consistent with the intended use of the Common Elements over any part of the Common
Elements to any governmental subdivision or public agency or public utility.
Section 5. General Duties. In addition to and without limitation of the powers and duties
assigned to the Board of Directors elsewhere herein,by the Declaration or by the Act, it shall be the
duty of the Board of Directors to:
(a) Contract for labor and materials needed to maintain, repair and replace the
Common Elements, pay for insurance,utilities and other expenses of operating the Common
Elements and of performing the other duties of the Association as provided by law, the
Declaration or herein, and assess the costs thereof against the members of the Association
in the manner provided for by the Act,herein and in the Declaration. The Board shall include
in the monthly assessments such amount as is necessary to accumulate an adequate reserve
for the maintenance, repair and replacement of those Common Elements that must be
replaced, repaired or maintained on a periodic basis, and may accumulate an additional
reserve from time to time in anticipation of extraordinary Common Expenses.
(b) Cause to be kept detailed, accurate records in chronological order, of the
receipts and expenditures affecting the Common Elements, specifying and itemizing the
maintenance repair and replacement expenses of the Common Elements and any other
expenses incurred. Such records and the vouchers authorizing the payments shall be
available for examination by the Lot Owners during normal business hours.
(c) Prepare or cause to be prepared an annual report, a copy of which shall be
provided to each Lot Owner with the notice of each annual meeting and shall be available
to each Lot Owner at the annual meeting, showing the financial affairs of the Association,
and containing at a minimum the following:
(i) A statement of any capital expenditures in excess of two percent(2%)
ofthe current budget or$5,000.00,whichever is greater,approved by the Association
for the current fiscal year or succeeding two (2) fiscal years;
(ii) A statement of the balance of any reserve or replacement fund and any
portion of the fund designated by the Board for any specified project,
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(iii)A copy of the statement of revenues and expenses for the
Association's last fiscal year and a balance sheet as of the end of said fiscal year;
(iv) A statement of the status of any pending litigation or judgments in
which the Association is a parry;
(v) A statement of the insurance coverage provided by the Association,
and
(vi) A statement of the total past due assessments on all individual Units,
current as of not more than 60 days prior to the date of the meeting.
(d) Furnish or cause to be furnished a certificate in accordance with Section
515B.4-107(b) of the Act. The Board of Directors shall have the power to establish and
collect a fee for such certificates, which fee shall be in an amount reasonably related to
the costs incurred by the Association in furnishing such certificate_
Any member of the Association shall have the right, upon reasonable notice to the Treasurer, to
review the accounts and financial records of the Association. If the Association does not elect to
include an audit as a part of the Common Expenses, one or more members may call for an audit of
the affairs of the Association by written notice to the President. If the audit shall disclose errors of
three percent (3%) or greater in any figures contained in the most recent statements issued by the
Board, the Association shall bear the expense of the audit. If no such error of three percent(3%)or
greater shall be established by the audit, the member or members requesting the audit shall bear the
entire expense thereof, which shall be a lien upon their individual Lots until paid.
Section 6. Limitation of Authoritv. Anything herein or in the Declaration to the contrary
notwithstanding, unless specifically authorized herein or in the Declaration, the Board of Directors
shall have no authority, except as may specifically be granted by the majority(or such higher number
as may otherwise be required hereunder, by the Act or by the Declaration) of the members present
in person or by proxy at a meeting thereof, to do any of the following:
(a) Purchase any Lot except that the Board of Directors may accept any Lot
surrendered to it for unpaid assessments and may purchase a Lot at any sale held pursuant
to foreclosure for unpaid assessments provided that the Board of Directors shall not,unless
authorized by the members, bid, at any such foreclosure sale, any amount in excess of the
total of the delinquent assessment on account of which the foreclosure sale is being held, any
interest thereon and other costs related thereto which are,pursuant to the Declaration,the Act
and hereunder, collectible from the Lot Owner of such Lot.
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(b) Levy or assess as a Common Expense the cost of any capital improvement
or acquisition, other than the repair or replacement of an existing portion of the Real Estate
unless specifically authorized by not less than sixty-seven percent (67%) of the total voting
power of the Association.
Section 7. Resignation. A Director of the Association may resign at any time by giving
written notice to the Board of Directors, such resignation to take effect at the time of receipt of such
notice or at any later date or time specified therein. Unless otherwise specified therein, acceptance
of a resignation shall not be necessary to make it effective.
Section 8. Vacancy. A vacancy in the Board of Directors caused by resignation, death,
disqualification, removal or any inability to act shall be filled by the Board of Directors and such
action shall be valid notwithstanding the fact that the number of Directors then in office is less than
the number specified herein.
Section 9. Removal. Any Director or all Directors, except the members of the first Board of
Directors, may be removed at any time with or without cause by a majority vote of a quorum of the
Owners at any annual or special meeting of the Association. A Director shall be automatically
removed without a meeting or other action of the Owners on the date of closing of any sale or
transfer of his Lot or on the date of transfer of possession thereof in connection with any such sale
or transfer, whichever occurs earlier.
Section 10. Regular Meeting. The regular annual meeting of the Board of Directors shall be
held without notice at the place, and immediately following the adjournment of the annual meeting
of the members of the Association,to transact such business as may properly come before the Board.
Section 11. Special Meetings of the Board of Directors. Special meetings of the Board of
Directors shall be held upon written request of the President or of any Director, stating the purpose
or purposes thereof. Notice of such meeting shall be given by mail or telegraph to each Director,
addressed to him at his residence or usual place of business at least three(3) days before the day on
which such meeting is to be held. Every such notice shall state the time, place and purpose of the
meeting.No business other than that stated in the notice shall be transacted at said meeting without
the unanimous consent of the Directors.
Section 12. Quorum and Manner of Acting. Except as otherwise provided by statute, the
Declaration or these Bylaws, a majority of the Directors in office at the time of any meeting of the
Board of Directors shall constitute a quorum for transaction of business at such meeting and the act
of a majority of the Directors present at any such meeting at which a quorum is present shall be the
act of the Board of Directors. In the absence of a quorum, a majority of the Directors present may
adjourn the meeting from time to time without notice other than announcement at the meeting until
a quorum be had.
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Section 13. Waiver of Notice. Notice of a special meeting may be waived by any member
of the Board of Directors in writing and shall be waived by attendance at such meeting in person or
by attorney.
Section 14. Action Taken Without A Meeting. Any action which might be taken at a meeting
of the Board of Directors may be taken without a meeting if authorized in a writing or writings
signed by all of the Directors.
Section 15. Fidelity Bonds. The Board of Directors shall require that all officers, directors,
employees and representatives of the Association, and all officers, employees and agents of any
management agent employed by the Association, handling or responsible for the Association funds
shall furnish adequate fidelity bonds. Such fidelity bonds shall be in such amount as the Board of
Directors deems appropriate but not less than required by the Act or the Declaration. Such bonds
shall name the Association as an obligee, shall contain waivers of defenses based on exclusion of
persons serving without compensation and shall provide that they may not be canceled or
substantially modified(including cancellation for nonpayment of premium)without at least 10 days'
prior written notice to the Association and each holder of a first mortgage on any Lot. The premiums
on such bonds shall be a Common Expense.
Section 16. Compensation. No Director shall receive compensation for any service he may
render in his capacity as a member of the Board of Directors unless such compensation is approved
at a meeting of the members. However, any Director may be reimbursed,by resolution of the Board
of Directors, for his actual expenses incurred in the performance of his duties as a Director.
ARTICLE IV
OFFICERS AND THEIR DUTIES
Section 1. Officers. The officers of the Association shall be a President, a Secretary and a
Treasurer and such assistant or other officers as the Board of Directors may designate. Each officer
shall be selected by a majority vote of the Board of Directors. One person may hold the office and
perform the duties of any two of said officers; provided, however, that the same person shall not at
the same time hold the offices of President and Secretary. The President shall be selected from
among the Board of Directors. Each officer shall continue in office until:
(a) The next annual meeting of the Board and thereafter until a successor is
elected; or
(b) He shall resign and his resignation shall have become effective; or
(c) He shall no longer be a member of the Association (provided that officers
selected by the first Board of Directors need not be members of the Association); or
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(d) He shall be removed as hereinafter provided.
Vacant offices shall be filled by the Board.
Section 2. Removal of Officers. Upon an affirmative vote of a majority of the members of
the Board, any officer may be removed, with or without cause, and his successor elected at any
regular meeting of the Board of Directors, or at any special meeting of the Board of Directors called
for that purpose.
Section 3. Duties of Officers. The officers shall have the duties and responsibilities normally
pertaining to their respective offices together with such specific duties as may be specified by the
Articles of Incorporation, these Bylaws or the Board of Directors. The President shall preside over
the meetings of the Board of Directors and of the Association of Lot Owners, shall have all of the
general powers and duties which are normally vested in the office of President of a corporation and
shall have the power to execute contracts and similar documents on behalf of the Association. The
Secretary shall keep the minute book of the Association wherein minutes of all meetings and all
resolutions and proceedings of the members and of the Board of Directors shall be recorded, and
shall keep a record of the name and mailing address of each Lot Owner, and the Lot or Lots in which
he has an interest and shall give all notices required by the Articles of Incorporation of the
Association,these Bylaws,the Declaration or the Act. The Treasurer shall keep the financial records
and books of account of the Association. The Treasurer shall have custody of all intangible property
of the Association, including funds, securities and evidences of indebtedness. The Treasurer shall
deposit all moneys and other valuable effects in the name of or to the credit of the Association in
such depositories as may be designated by the Board of Directors and shall disburse the funds of the
Association as ordered by the Board of Directors and shall perform all other duties incident to the
office of Treasurer. He shall furnish upon request of any Lot Owner a statement as to the current
account of the Lot Owner upon the assessment rolls of the Association. Officers shall serve without
compensation except for reimbursement for out-of-pocket expenses incurred in the performance of
their duties. If desired by the Board, administrative tasks of the officers may be performed by a
managing agent selected by the Board.
ARTICLE V
OPERATION OF THE PROPERTY
Section 1. Budget:t: Levi. The Board of Directors shall from time to time, and at least annually
in advance of the beginning of the Association's fiscal year, prepare a budget of Common Expenses
for the Association and shall allocate, assess and levy such Common Expenses among the Lot
Owners in accordance with the Act and the Declaration. Upon the vote of the Board of Directors
adopting a resolution which sets forth the budget of Common Expenses and the allocation thereof
to the Lot Owners, the amount so allocated to the Lot Owners of each Lot shall, without further
11
resolution by the Board of Directors, be levied as the annual assessment against such Lot, payable
in equal monthly installments due on the first day of each month during the period covered by the
Budget, without further resolution by the Board of Directors. The Common Expenses shall include
those Common Expenses set forth in the Declaration and these Bylaws and may include such other
amounts as the Board of Directors may deem proper for the operation and maintenance of the
Property and as permitted by the Act and all laws amendatory thereof and supplementary thereto,
provided, however, that the assessment for Common Expenses shall include an adequate reserve
fund for maintenance, repair and replacement of those Common Elements that must be replaced on
a periodic basis, and shall, when practicable, be payable in regular installments. Contributions to any
reserve funds established by the Association may not be withdrawn by any Lot Owner. The Board
of Directors shall advise all Lot Owners in writing prior to the beginning of the period covered by
the budget as to the amount of the monthly assessment payable by each of them, and shall, upon
request by the Lot Owner, furnish copies of each budget on which such Common Expenses and the
assessment are based to such Lot Owner and to his First Mortgagee. The total of any budget shall
be in the amount of the estimated Common Expenses for the period covered thereby, including a
reasonable allowance for contingencies and reserves, less the amounts of any unneeded Common
Expense account balances existing from the previous period's budget, and less any estimated
payments to be received by the Association from rental, licensing or other payments for the purpose
of defraying the costs of the use of the Common Elements. If a budget is not made by the Board of
Directors as required, a monthly assessment in the amount required by the last prior budget shall be
due upon each monthly assessment payment date until changed by a new budget. In the event an
annual or other budget proves to be insufficient, or in the event of extraordinary or unforeseen
Common Expenses, the budget and monthly assessments based thereon may be amended, or a
special assessment levied, at any time by the Board of Directors. Any special assessment shall be
assessed against the Lot Owners, shall be a lien on the Lots and shall be enforceable in the same
manner as the monthly assessments. Special assessments shall be payable in installments or lump
sum, all as designated by the Board of Directors.
Section 2.Payment of Common Expenses. All Owners shall be obligated to pay the Common
Expenses assessed and levied by the Board of Directors pursuant to Section 1 of this Article V. An
Owner may not avoid assessment for Common Expenses by failing or waiving the right to use or
enjoyment of the Common Elements. Monthly assessments shall be due as provided in Section 1 of
this Article V and special assessments shall be due when designated by the Board of Directors. Any
mortgagee acquiring a first mortgage interest from any Owner of a Lot and its appurtenant undivided
interest in Common Elements may, as a condition of the loan, include in the mortgage note or deed
a requirement that the mortgagor,upon execution ofthe mortgage deed,make a monthly deposit with
the mortgagee of an amount each month sufficient to pay when due and payable all Common
Expenses attributable to that Lot. The mortgage note or deed may further provide that a default in
making such deposit shall be a default under the terms of the mortgage deed. In the event that
mortgagee collects the monthly installments, such mortgagee shall remit the installments monthly
on a current basis to the Association.
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Section 3. Assessment Roll. The assessments against all Owners shall be set forth upon a roll
of the Lots which shall be available in the office of the Association or of any managing agent
retained by the Association for inspection at all reasonable times by Owners or their duly authorized
representatives. Such roll shall indicate for each Lot the name and address of the Owner or Owners,
the assessments for all purposes, and the amounts of all assessments paid and unpaid.
Section 4.Default in Payment of Common Expenses. In the event any Owner does not make
payment of a Common Expense assessment on or before the date when due, such Owner shall be
obligated to pay interest on such assessment from the date due at the rate specified from time to time
by the Board of Directors which shall not exceed the highest rate of interest which may be charged
thereon pursuant to either the Act or the laws of the State of Minnesota relative to usury. In addition,
such Owner shall be obligated to pay all expenses, including reasonable attorneys' fees incurred by
the Board in any proceeding brought to collect any such unpaid assessment,whether or not an action
has been commenced with respect thereto. The right of a Lot Owner to pay the annual assessment
in monthly installments is hereby made conditional on the prompt payment when due of such
monthly installments. In the event of a default in the prompt payment of the monthly installments,
the Board of Directors may, by written notice given to the defaulting Owner, accelerate the entire
unpaid portion of the annual assessment, whereupon the same shall become immediately due and
payable. Additionally, the Board of Directors shall have the right to withhold services from any
defaulting Owner. The Board of Directors shall have the right and duty to attempt to recover all
assessments for Common Expenses, together with interest thereon and the expenses of the
proceeding, including reasonable attorneys' fees, in an action to recover the same brought against
an Owner, by foreclosure of the lien on a Lot pursuant to the Act, any statute amendatory thereof or
supplementary thereto, or by another remedy available under the Act or hereunder.
Section S. Records. The Board of Directors shall cause to be kept at the registered office of
the Association or at such other place as the Board ofDirectors may determine,records ofthe actions
of the Board of Directors,minutes ofthe meetings of the Board of Directors,minutes ofthe meetings
of the Members of the Association, names of the Lot Owners and names of any First Mortgagees
who have requested the notice of default described in the Declaration and the Lot on which such
First Mortgagee holds a mortgage, and detailed and accurate records,in chronological order, of the
receipts and expenditures affecting the Common Elements. Such records shall be available for
examination by the Owners or Mortgagees at convenient hours of weekdays. Separate accounts shall
be maintained for each Lot setting forth the amount of the assessments against the Lot,the date when
due, the amount paid thereon and the balance remaining unpaid.
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ARTICLE VI
AMENDMENT TO BYLAWS
Section 1. These Bylaws may be amended only in the same manner and to the same
extent as the Declaration.
ARTICLE VII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. The Association shall indemnify and hold harmless every Director and officer, his
heirs, executors and administrators,against all loss, cost,judgment and expense,including attorneys'
fees, which may be imposed upon or reasonably incurred by him in connection with or arising out
of the defense or settlement of any claim,action, suit or proceeding to which he may be made a party
by reason of his being or having been a director or officer of the Association whether or not he is an
officer or director at the time of incurring such loss, cost,judgment or expense, except as to matters
as to which he shall be finally adjudged in such action, suit or proceeding to have been guilty of
willful or fraudulent conduct detrimental to the best interests of the Association. In the event of a
settlement, indemnification shall be provided only in connection with such matters covered by the
settlement as to which the Board of Directors has agreed on behalf of the Association that the person
to be indemnified has not been guilty of willful or fraudulent conduct detrimental to the best interests
of the Association in the performance of his duty as such director or officer in relation to the matter
involved. The foregoing rights shall not be exclusive of other rights to which such director or officer
may be entitled. All liability, loss, damage, costs and expenses incurred or suffered by the
Association by reason or arising out of or in connection with the foregoing indemnification
provisions shall be treated and handled by the Association as a Common Expense. Nothing in this
Section shall be deemed to obligate the Association to indemnify any Owner who is or has been a
director or officer of the Association, with respect to any duties or obligations assumed or damage
or liabilities incurred by him solely in his capacity as an Owner.
ARTICLE VIII
MISCELLANEOUS
Section 1.Notices. All notices required hereunder to be given to the Association or the Board
of Directors shall be sent by U.S. mail to the Board of Directors at the office of the Association or
to such other address as the Board ofDirectors may hereafter designate from time to time by written
notice given in the manner hereinafter prescribed. All notices to any Lot Owner Member, or
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Occupant entitled to any notice, shall be sent by U.S. mail to his Lot address or to such other address
as may be designated by him in writing from time to time to the Association. All notices to First
Mortgagees of Lots shall be sent by U.S. mail to their respective addresses as designated by them
from time to time in writing to the Association. All notices shall be deemed to have been given when
deposited in the U.S. mail postage prepaid, except notices of change of address, which shall be
deemed to have been given when received.
Section 2. Invalidity. The invalidity of any part of these Bylaws shall not impair or affect in
any manner the validity, enforceability or effect of the balance of these Bylaws.
Section 3. Captions. The captions herein are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of these Bylaws or the intent of any
provision hereof.
Section 4. Waiver. No restriction, condition, obligation or provision contained in these
Bylaws shall be deemed to have been abrogated or waived by reason of any failure to enforce the
same, irrespective of the number of violations or breaches thereof which may occur.
Section S. No Corporate Seal. The Association shall have no corporate seal.
Section 6.Election Under Internal Revenue Code. The Board shall make and file all elections
and documents required pursuant to the Internal Revenue Code, and any other applicable statute or
regulation, in order to exempt from taxation, insofar as possible, the income of the Association
consisting of assessments paid by Lot Owners.
Section 7.Fiscal Year. The fiscal year of the Association shall be as determined by the Board
of Directors.
Section 8. Conflicts Among Documents. In the event of any conflict among the provisions
of the Act, the Declaration, these Bylaws of the Association or any Rules and Regulations adopted
by the Association, the documents shall control in the following order of priority:
a. the Act;
b. the Declaration;
c. these Bylaws; and
d. the Rules and Regulations.
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Section 9.Interpretation.As appropriate,each reference to a masculine pronoun shall include
the feminine and neutral pronoun and each reference to a singular pronoun shall include the multiple
pronoun and vice versa. Except as otherwise specified in these Bylaws, the terms used in these
Bylaws which are defined in the Declaration or the Act shall have the same meaning as they have
in the Declaration or the Act.
The undersigned hereby certify that the foregoing Bylaws were adopted as the Bylaws of
Fifth Street Townhomes Association, a non-profit corporation under the laws of the State of
Minnesota, by action of the Board of Directors at the first meeting thereof, effective this_day of
September, 2004.
Gerald G. Winschitl, President
THIS INSTRUMENT WAS DRAFTED BY:
G. SCOTT HOKE, P.A.
12201 CHAMPLIN DRIVE
CHAMPLIN MN 55316
763-712-3777
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