Loading...
HomeMy WebLinkAbout15_Lmbyd CovenantsAfter recording, return to: Crowley Fleck PLLP Attn: Lucas H, Forcella P.O. Box 2529 Billings, MT 59103 DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR LUMBERYARD FLATS This Declaration of Covenants, Conditions, and Restrictions for Lumberyard Flats (as amended, supplemented, or restated from time to time, this “Declaration”) is made by Virga Venture I LLC, a Delaware limited liability company (as further defined in Article I below, “Declarant”). RECITALS Declarant owns the real property described on Exhibit A attached hereto and incorporated herein by reference (together with any additional real property subjected to this Declaration by amendment of this Declaration from time to time, and as further defined in Article I below, the “Property”). Declarant intends by this Declaration to impose upon the Property mutually beneficial covenants, conditions, and restrictions under a general plan of improvement for the benefit of all Owners and Occupants. AGREEMENT NOW, THEREFORE, Declarant hereby declares that the Property shall be held, sold, leased, mortgaged, encumbered, used, occupied, improved and conveyed subject to the following declarations, limitations, restrictions, covenants, and conditions which are imposed for the purpose of enhancing and protecting the value, desirability and attractiveness of the Property. ARTICLE I DEFINITIONS The terms in this Declaration and the exhibits to this Declaration shall generally be given their natural, commonly accepted definitions except as otherwise specified. The capitalized terms defined below and elsewhere in this Declaration shall be given the meanings set forth in such definitions. 2 1.1. “Articles” shall mean and refer to the Articles of Incorporation of the Association, as amended or restated from time to time. 1.2. “Assessment” shall mean that portion of the cost of maintaining, improving, repairing, operating and managing the Property, or a portion thereof, which is to be paid by the Owners as determined by the Board and in accordance with this Declaration and any applicable Supplemental Declaration, and shall include regular, special and supplemental assessments, and such other assessments as may be determined by the Board from time to time which are consistent with the terms of this Declaration, which assessments shall include, without limitation, each Owner’s share of Common Expenses. 1.3. “Association” shall mean the Lumberyard Flats Property Owners’ Association, a Montana nonprofit mutual benefit corporation, its successors and assigns, the Members of which shall be the Owners of the Property. 1.4. “Board” or “Board of Directors” shall mean and refer to the board of directors or similar governing body of the Association. 1.5. “Bylaws” shall mean and refer to the Bylaws of the Association, as amended or restated from time to time. 1.6. “Clubhouse” shall mean and refer to the multi-use fitness, activity, and office space located on the Property, and the Clubhouse is hereby designated as a Common Area. 1.7. “Common Areas” shall mean and refer to any portions of the Property or improvements thereon designated as Common Areas by this Declaration, any Supplemental Declaration, or by the Board from time to time with consent of the Owner of the Lot where any such additional Common Area is located, for the common use and enjoyment of the Owners and Occupants, or a subset of the Owners and Occupants as set forth in the applicable designation, and may, but shall not be required to, include from time to time, without limitation, the Clubhouse, Shared Roads, parking areas, sidewalks, trash receptacle areas, community barbecue areas, bus or other transportation stops, and common grounds of the applicable portion of the Property. 1.8. “Common Expenses” means and includes costs incurred by the Association in connection with maintaining, managing, and operating the Property as set forth in this Declaration, including, without limitation, operation, maintenance and repair of the Shared Roads, the Clubhouse, and, to the extent designated for the benefit of all Owners and Occupants, the other Common Areas, pursuing, implementing, and executing the intent, purposes, obligations, business and affairs of the Association, any reasonable reserve for such purposes as found and determined appropriate by the Board, and all sums designated Common Expenses by or pursuant to this Declaration or the other Property Documents. 1.9. “Declarant” means Virga Venture I, LLC, a Delaware limited liability company, and its successors and assigns. 1.10. “Lot” shall mean any legally subdivided parcel of real property within the Property, 3 including any Common Areas located thereon. 1.11. “Member” shall mean any Person that is the Owner of a Lot. Each Lot Owner will be a member of the Association and agrees to abide by and be bound by this Declaration and the other Property Documents. 1.12. “Occupant” shall mean a lessee or licensee, or sublessee or sublicensee, of an Owner legally occupying any residential apartment unit or commercial space located within a building on a Lot, or any other Person other than an Owner in lawful possession of any residential apartment unit or commercial space located within a building on a Lot with the permission of the Owner of such Lot. 1.13. “Owner” shall mean the legal title holders, or contract purchasers, whether one or more Persons, owning or purchasing fee simple title to any Lot but excluding those having an interest merely as security for the performance of an obligation. 1.14. “Owner Percentage” means the percentage calculated for each Lot and the Owner thereof from time to time in accordance with Exhibit B. 1.15. “Parking Lot” shall mean the designated area for parking motor vehicles located on the Lot. 1.16. “Person” means a natural person, a corporation, a limited liability company, a partnership, a trust, or other legal entity. 1.17. “Property” shall mean the Property and all improvements from time to time constructed thereon, as modified from time to time. 1.18. “Property Documents” shall mean, collectively, this Declaration, any Supplemental Declarations, the Articles, the Bylaws, any Rules and Regulations, and the decisions and resolutions of the Board, each as amended, supplemented, or restated from time to time. 1.19. “Rules and Regulations” shall mean rules and regulations adopted by resolution of the Board from time to time, as amended, supplemented, or revoked from time to time, and described in Section 5.5. 1.20. “Shared Roads” shall mean the roads located or to be located within the Property. For the avoidance of doubt, Shared Roads do not include parking areas, or driveways. 1.21. “Special Assessment” shall mean and refer to Assessments levied in accordance with Section 6.3(b). 1.22. “Supplemental Declaration” shall have the meaning given in Section 7.2. ARTICLE II AUTHORITY 4 2.1 Declarant is the sole owner of the Property. This Declaration is made by Declarant and will be recorded at the office of the Clerk and Recorder of Gallatin County, Montana. 2.2 The Association is established under the authority of this Declaration, Articles, and Bylaws. ARTICLE III EASEMENTS; NO FURTHER SUBDIVISION 3.1 Easement for Clubhouse. There is hereby reserved a nonexclusive easement and right-of-way for the benefit of the Association, Owners and Occupants, and their respective permitted family members, guests, and invitees, for use of the Clubhouse located on the Property from time to time for its intended purposes, together with an easement and right-of-way for ingress and egress to and from such Clubhouse over and across the any parking areas, and sidewalks, located on the Property as reasonably necessary to access the Clubhouse and in locations that will cause the least disruption to the use of the relevant portion of the Property by the Owners and Occupants thereof, all in accordance with and subject to this Declaration and the Rules and Regulations. The Board may from time to time establish and modify Rules and Regulations relating to the use of the Clubhouse. The Clubhouse may be closed from time to time as determined by the Board in connection with maintenance, improvements, or other activities. For the avoidance of doubt, nothing herein grants any easement, access or use right to the public with respect to the Clubhouse or other portions of the Property. 3.2 No Subdivision. There shall be no further subdivision of any Lot or any portion thereof, including, without limitation, subjecting any Lot or portion thereof to the Montana Unit Ownership Act and thereby creating condominium units, without written approval of the Board and the Owners (by a majority of the Owner Percentage), which approval may be withheld or conditioned in their discretion, and which approval would be subject to the laws of the State of Montana and Gallatin County. ARTICLE IV MAINTENANCE AND UPKEEP 4.1 Buildings, Landscaping and Grounds. Each Owner shall maintain or cause to be maintained in a reasonably safe and sightly condition and in accordance with applicable legal requirements the buildings, grounds, landscaping, and other improvements and vegetation located on the Owner’s Lot; provided, however, that the Association may be responsible for maintaining certain Common Areas to the extent set forth in a Supplemental Declaration. 4.2 Snow Removal. The Association will be responsible for snow removal from all Shared Roads and Common Areas. Each Owner shall be responsible for snow removal from all other areas on the Owner’s Lot, including all Parking Lots, the Clubhouse, driveways, sidewalks, entryways, patios, decks, or other appurtenances to buildings on such Owner’s Lot. The costs of snow removal incurred by the Association with respect to Shared Roads shall be Common Expenses. 5 4.3 Shared Roads and Parking Lot. Subject to Section 4.6, the Association shall operate, maintain, and repair Shared Roads, the Parking Lot, and the Clubhouse in a reasonably safe and sightly condition and in compliance with applicable legal requirements. The cost for such operation, maintenance, and repair shall be a Common Expense. For the avoidance of doubt, the Association’s obligations with respect to Shared Roads, the Parking Lot, and the Clubhouse shall not commence until construction or installation of such Shared Roads, the Parking Lot, or the Clubhouse, as applicable, is substantially complete as determined by the Board. 4.4 Common Areas. Any Supplemental Declaration may require the Association to operate, maintain, repair, and periodically replace the Common Areas on the Lots subject to such Supplemental Declaration and to keep such Common Areas in a reasonably safe and sightly condition and in compliance with applicable legal requirements. The cost for such operation, maintenance, repair, and replacement shall be assessed against the Lots which are subject to such Supplenetal Declaration as a supplemental Assessment in accordance wih the respective Owner Percentages of such Lots or in such other manner as may be set forth in the Supplemental Declaration. For the avoidance of doubt, the Association’s obligations with respect to Common Areas for which the Association is responsible pursuant to any Supplemental Declaration shall not commence until construction or installation of such Common Areas is substantially complete as determined by the Board. 4.5 Damage or Destruction. The responsibility for the cost to the Association for maintenance and repair under Section 4.3 or 4.4 shall not extend to repairs or replacements arising out of or caused by the willful or negligent act or omission of any Owner, any Occupant, or any family member, guest, invitee or pet of the foregoing, any of which shall be the responsibility of the individual(s) causing such damage (with each Owner being responsible for such damage caused by Occupants of such Owner’s Lot and each Owner and Occupant being responsible for damage caused by any of their respective family members, invitees, guests, or pets). To the extent any improvements comprising the Shared Roads, the Parking Lot, and the Clubhouse are damaged or destroyed, such damage or destruction shall be repaired or reconstructed, as the case may be, by the Association and the cost of such repair or reconstruction shall be a Common Expense. 4.6 No Liability. In no event shall the Association or Declarant be liable to any Owner, Occupant, family member, guest, invitee or any person using any of the Shared Roads, the Parking Lot, the Clubhouse, or any other Common Areas for any injury (including death) or damage arising out of the construction, maintenance, or state of repair of the Shared Roads, the Parking Lot, the Clubhouse or any other Common Area. ARTICLE V ASSOCIATION ADMINISTRATION, MEMBERSHIP AND VOTING RIGHTS 5.1 Membership. Any Owner of a Lot shall automatically, upon becoming the Owner of a Lot, be a Member of the Association and shall remain a Member for the period of the Owner’s ownership of the Lot. 6 5.2 Appointment of the Board. The Board shall be comprised of three (3) directors Each Member of the Association shall have a right to elect one member of the Board for each Lot owned by such Member and such directors shall serve at the pleasure of the Member electing such director. The third director shall be elected by mutual agreement of each Member of the Association and shall serve as a representative of the Owner(s). 5.3 Function of Board. It shall be the function of the Board to: (a) Adopt Bylaws for the governance of the Association; (b) Make provisions for the general management, repairs and maintenance of the Shared Roads and any Common Areas or other property or improvements for which the Association is responsible under this Declaration or other Property Documents; (c) Levy assessments as provided for in this Declaration and the Bylaws; (d) Enter into contracts to hire personnel for the management of the affairs of the Association and the maintenance and repair of the Shared Roads and the other obligations of the Association under this Declaration or other Property Documents; (e) Adopt Rules and Regulations pursuant to Section 5.5; (f) Enter into contracts and negotiate and accept easements for the benefit of the Association; and (g) Acquire, operate, and maintain equipment for the benefit of the Association. 5.4 Association Decisions and Actions; Votes. Except for matters where the vote, approval, or consent of the Members is specifically required by this Declaration, the Bylaws, or applicable law which is not modified by this Declaration or the Bylaws, the Board shall make all decisions for and take all actions on behalf of the Association and the vote of the Members shall not be required. On all matters, if any, to be decided by the Members, each Member shall have, with respect to the Lot(s) owned by such Member, a number of votes equal to the Owner Percentage with respect to such Lot(s). The entire Owner Percentage with respect to a Lot must be voted in the same manner. In a multiple interest owner situation, if more than one Person seeks to exercise the vote with respect to a Lot, the voting privilege with respect to such Lot shall be suspended. None of the Association, Board or Declarant shall have any obligation to confirm, as among such multiple interest owners, which of the Persons has the right to exercise a vote. In the case where an Owner is not a natural person, or where there are multiple owners of one Lot, written notice shall be provided to the Board stating which individual has authority to act on behalf of the Owner(s) and include that person’s name, mailing and physical address, telephone number and email address. The Association and Board shall rely on such notice until such notice is updated by an Owner. Unless otherwise required by statute, this Declaration, or the Bylaws, a majority of the aggregate Owner Percentage entitled to vote shall be sufficient for approval of any matter to be voted on by the Members. 7 5.5 Adoption of Rules and Regulations. The Board shall have the right to adopt, promulgate and enforce reasonable Rules and Regulations relating to the Property, including, without limitation, the operation, maintenance, use and enjoyment of the Shared Roads and any Common Areas for which the Association is responsible. In addition, any Supplemental Declaration may grant the Board the right to adopt, promulgate and enforce reasonable Rules and Regulations relating to the portion of the Property subject to such Supplemental Declaration, including, without limitation, the operation, maintenance, use and enjoyment of such portion of the Property and Common Areas located thereon. It is the intent of this Section 5.5 that the Board have broad discretion with respect to the Rules and Regulations and that the Board’s authority in this regard be construed liberally in order to effectuate the objectives of the Board with respect to the Rules and Regulations. In general, the objectives of the Board should be to promote and enhance the Property, its attractiveness and economic viability, and provide for the orderly operation, maintenance, repair and upkeep of the portions of the Property for which the Association is responsible. The Rules and Regulations may be enforced in any manner determined by the Board from time to time, which may include, among other things, fines. Written copies of such Rules and Regulations and any schedule of fines and penalties adopted by the Board shall be furnished to Owners and Occupants upon request. Notwithstanding anything to the contrary, until Declarant no longer owns any Lot(s) in the Property, the adoption or amendment of any Rules and Regulations shall require the consent of Declarant. 5.6 Enforcement. The Board, on behalf of the Association, shall be responsible for the enforcement of this Declaration, the Articles, Bylaws and Rules and Regulations. The foregoing notwithstanding, the Board shall have discretion regarding enforcement, including, without limitation, determining that enforcement in some cases may not be in the best interests of the Association based on the cost of enforcement or likelihood of success, the nature of the violation, or otherwise. No failure of the Board to take enforcement action in any one instance shall be deemed a waiver of the violation or any subsequent or different violation. Each Owner and Occupant shall comply strictly with the provisions of this Declaration and the other Property Documents. ARTICLE VI ASSESSMENTS 6.1 Creation of the Lien; Personal Obligation for Assessments. Each Owner, by acceptance of a deed or conveyance with respect to any Lot, whether or not it shall be so expressed in such deed or conveyance, covenants and agrees: (a) to pay to the Association regular, special and supplemental Assessments, and any other Assessments established and made in accordance herewith, to be established and collected as hereinafter provided; and (b) to allow the Association to enforce any Assessment lien established hereunder by non-judicial proceedings under a power of sale or by any other means authorized by law. Assessments, together with interest, late charges, collection costs, and reasonable attorneys’ fees and costs, shall be a charge on the land and shall be a continuing lien upon the property against 8 which each such Assessment is made, the lien to become effective upon recordation of a notice of delinquent Assessment or other amounts owed hereunder. Each such Assessment, together with interest, late charges, collection costs, and reasonable attorneys’ fees and costs, shall also be the personal obligation (joint and several) of each Person who was the Owner of such property at the time when the Assessment fell due. No Owner of a Lot may exempt himself, herself or itself from liability for such Owner’s contribution towards the Common Expenses or Assessments by waiver of the use or enjoyment of any of the Shared Roads or other Common Areas which such Owner may be entitled to use or by the abandonment of such Owner’s Lot. Any lien hereunder shall be subordinate in all respects to any first position mortgage or trust indenture of record securing financing provided by an established lending institution. 6.2 Purpose of Assessments. The regular Assessments levied by the Association shall be used to pay Common Expenses. Any Supplemental Declaration may include additional purposes for which Assessments may be levied against the Lots which are subject to such Supplemental Declaration. 6.3 Assessments. (a) Regular Assessments. The Board shall annually, a reasonable time prior to the end of each calendar year, establish and levy regular Assessments in an amount that the Board estimates will be sufficient to raise the funds needed to pay Common Expenses, to operate the Association, and to perform the duties of the Association during each fiscal year. The Board shall then, prior to the end of each calendar year, send written notification to each Owner of the estimated amount of Common Expenses and regular Assessments for that fiscal year. The regular Assessments shall include a portion for reserves in such amounts as the Board in its discretion considers appropriate to meet the costs of the future repair, replacement or additions to the major improvements and fixtures that the Association is obligated to maintain and repair, along with any other amounts as may be deemed reasonable by the Board to establish a reserve. Reserve funds shall be deposited in a separate account and the signatures of at least two (2) persons, who shall either be members of the Board or one officer of the Association who is not a member of the Board and one member of the Board, shall be required to withdraw monies from the reserve account. Except to the limited extent otherwise provided herein, reserve funds may not be expended for any purpose other than repairing, restoring, maintaining or replacing the Shared Roads and any other Common Areas for which the Association is responsible, or payment of insurance deductibles. (b) Special Assessments. The Board may at any time and from time to time levy one or more Special Assessments in order to raise funds for unexpected operating or other costs, insufficient operating or reserve funds, or such other purposes as the Board in its discretion considers appropriate. Special Assessments shall be allocated among the Lots in the same manner as regular Assessments, except in the case of a Special Assessment levied by the Board against a Member to reimburse the Association for costs resulting from an act or omission of such Member. 9 (c) Supplemental Assessments. The Board may levy supplemental Assessments as set forth in any Supplemental Declaration against the Lots which are subject to such Supplemental Declaration. Such supplemental Assessments may be used for such purposes as are set forth in the Supplemental Declaration, which may include operation, maintenance, repair and periodic replacement of Common Areas benefitting the property subject to such Supplemental Declaration for which the Association is responsible and other operation, maintenance, repair, reconstruction or replacement obligations of the Association set forth in the Supplemental Declaration. (d) Owner Assessment Contest. An Owner desiring to contest the amount or calculation of an Assessment shall do so by sending a written contest notice to the Board within ten (10) days following the Owner’s notice of the amount of the applicable Assessment. Such notice shall set forth in reasonable detail the reason for the contest and the requested change to the Assessment. The Owner shall continue to pay all Assessments as and when due pending resolution of the contest notice. If an Owner does not send a written contest notice with respect to an Assessment within the time specified above or does not pay all Assessments as and when due, then that Owner will be deemed to have waived the right to contest the previously noticed Assessment. The Board or its designee will send acknowledgement of receipt of any timely contest notice to the Owner within thirty (30) days of receipt by the Board and the contest notice will be reviewed by the Board at the next regularly scheduled Board meeting at which there is quorum. The Owner or a representative of the Owner may be present in person at such Board meeting while the contest is discussed and may comment at the Board meeting. The Board shall issue a decision regarding the Owner’s contest in writing to the Owner within thirty (30) days following the Board meeting at which the contest is discussed, and the decision of the Board shall be final and binding unless otherwise determined by the Board. If the Board determines an adjustment to the Assessment is require or that the Owner is entitled to a refund of a portion of a previously paid Assessment, the Association shall make such adjustment or refund, without interest or penalty, to the Owner within a reasonable period of time following the Board’s decision. This paragraph sets forth the sole and exclusive remedy of an Owner with respect to any disagreement, dispute or contest regarding the amount or calculation of any Assessment. 6.4 Restrictions on Increases in Regular and Special Assessments. The Board may not impose a regular Assessment on any Lot which is more than twenty percent (20%) greater than the regular Assessment for the immediately preceding fiscal year, or levy a Special Assessment to defray the cost of any action or undertaking on behalf of the Association which in the aggregate exceeds five percent (5%) of the budgeted gross expenses of the Association for that fiscal year, without the vote or written assent of Members entitled to vote a majority of the Owner Percentages at a meeting of the Association at which a quorum is present or by written ballot. The Board may increase regular Assessments by more than twenty percent (20%) over the regular Assessment for the immediately preceding fiscal year only if the Board has complied with the provisions set forth 10 in this Declaration. These limitations will not apply in the first fiscal year in which Assessments are made against any Lot. 6.5 Division of Assessments. Regular and special Assessments shall be levied among the Lots based on the Owner Percentages allocated to the Lots. Notwithstanding the foregoing, if the Members by a majority of the Owner Percentages determine that any portion of a regular or special Assessment should equitably be allocated disproportionately to one or more Members or Lots due to the cause or nature of the cost or expense to be covered by such Assessment, the Board may allocate such Assessment disproportionately to the Owner Percentages as necessary to ensure the costs are borne equitably by the Members who should bear responsibility for such costs. Regular Assessments shall be collected on a quarterly basis unless the Board directs otherwise. Special Assessments may be collected in one payment or periodically as the Board shall direct. Any supplemental Assessments shall be levied at the same time as regular Assessments or as otherwise set forth in the Supplemental Declaration establishing such supplemental Assessments. 6.6 Date of Commencement of Regular Assessment; Due Dates. Assessments against each Lot shall commence following recording of this Declaration with the office of the Clerk and Recorder of Gallatin County, Montana on the first day of the first month in which a building on such Lot is substantially complete, as determined by the Board. Until a building is substantially complete on a Lot, as determined by the Board, no Assessments will be assessed against such Lot. The due dates for Assessments shall be established by the Board. The Association shall, upon demand, and for a reasonable charge, furnish a certificate signed by an officer of the Association stating whether the Assessments on a specified Lot have been paid. Such a certificate shall be conclusive evidence of such payment. 6.7 Effect of Nonpayment of Assessments. If any part of any Assessment is not paid within thirty (30) days of the due date, an automatic late charge equal to five percent (5%) of the Assessment, but not less than ten dollars ($10), shall be added to and collected with the Assessment. This late charge is a penalty and shall not be deemed to be payment of interest. Additionally, if any part of the Assessment is not paid and received by the Association or its designated agent within thirty (30) days after the due date, the total unpaid Assessment, including the late charge, shall thereafter until paid bear interest at the rate of the lower of: (a) fifteen percent (15%) per annum; or (b) the highest amount of interest permissible without implicating Montana’s usury laws 6.8 Transfer of Lot, by Sale or Foreclosure. The sale of any Lot pursuant to foreclosure of a mortgage or trust indenture shall extinguish a junior lien for Assessments on such Lot, including attorneys fees, late charges and interest levied in connection therewith, as to payments which became due prior to such sale by foreclosure. Except in the case of sale by foreclosure where a junior lien for Assessments is extinguished, if a Lot is transferred, the grantor shall remain personally liable to the Association for all unpaid Assessments against the Lot through and including the date of the transfer and such transfer shall not affect the Assessment lien on the Lot. 6.9 Priorities; Enforcement; Remedies. (a) If an Owner fails to pay an Assessment when due, the Association has the right, 11 and option, to bring legal action against the Owner to enforce collection of the unpaid and past-due Assessment, or may impose a lien on the Lot owned by the Owner, or both. Suit to recover a money judgment for unpaid Assessments and attorneys’ fees and costs may be maintainable without foreclosing or waiving the lien securing the same. Before the Association may record a lien upon a Lot, the Association shall notify the Owner in writing by certified mail to the address for such Owner in the records of the Association of the fee and penalty procedures of the Association, provide an itemized statement of the charges owed by the Owner, including the principal owed, any late charges and interest, and the method of collection, any attorneys’ fees and costs, and the collection practices used by the Association, including the right of the Association to the reasonable costs of collection. The Association may record a notice of delinquent Assessment and establish a lien against the Lot of the delinquent Owner prior and superior to all other liens except (1) all taxes, bonds, assessments and other levies which, by law, would be superior thereto, and (2) the lien or charge of any first mortgage or trust indenture of record (meaning any recorded mortgage or trust indenture with first priority over other mortgages or trust indentures) made in good faith and for value. The notice of delinquent Assessment shall state the amount of the Assessment, collection costs, attorneys’ fees and costs, late charges and interest, a description of the Lot against which the Assessment and other sums are levied, the name of the record owner, and the name and address of the trustee authorized by the Association to enforce the lien by sale. The notice shall be signed by any director or officer of the Association or any management agent retained by the Association and shall be mailed in the manner required under Montana law to all record owners of the Lot no later than ten (10) days after recordation. (b) After the expiration of thirty (30) days following the recordation of the lien, an Assessment lien may be enforced in any manner permitted by law, including sale by the court or sale by the trustee designated in the notice of delinquent Assessment. Any sale by the trustee shall be conducted in accordance with the provisions of Montana law applicable to the exercise of powers of sale in mortgages and trust indentures, or in any other manner permitted by law. Nothing herein shall preclude the Association from bringing an action directly against an Owner for breach of the personal obligation to pay Assessments. (c) Each Owner waives, to the maximum extent permitted by law, the benefit of any Montana homestead or exemption laws in effect when any Assessment or installment becomes delinquent or a lien is imposed. ARTICLE VII USE 7.1 Restrictions. No unlawful activity shall be carried on or upon the real property subject to this Declaration. No unreasonably noisy activity shall occur on a Lot outside of what is required for normal maintenance or for the normal and customary use of multifamily housing. No activities shall be undertaken which are contrary to this Declaration or the Rules and Regulations 12 in effect from time to time. In addition to the foregoing, all Lots shall be used and enjoyed subject to the following limitations and restrictions: (a) Parking. No person may park so as to block any roadways or driveways. All parking signs (including accessible parking, fire lane, no parking, etc.) shall be obeyed. No cars may be stored anywhere on the Property other than in parking lots in which the Person has a right to park and then only in compliance with all applicable Rules and Regulations. (b) Wildlife. The feeding of wildlife is prohibited. Any activities that may harm or threaten wildlife are also prohibited. (c) Animals. No animals other than a reasonable number of dogs, cats, or other customary household pets (with the determination of what is customary to be made by the Board from time to time) may be brought or kept on a Lot, and all animals shall be subject to applicable Rules and Regulations and to any additional restrictions, rules and requirements established by the Owner of the Lot from time to time. No animals shall be kept, bred or maintained for any commercial purpose, nor in unreasonable quantities, nor in violation of any other provision of this Declaration. No pet shall be permitted to harass any wildlife or any individual. Pets shall be controlled by each owner, and not allowed to roam within the Property. (d) Refuse. All refuse shall be stored in animal-proof containers or made unavailable to all domestic and wild animals. 7.2 Supplemental Declarations. To further the intent that the Property be developed, operated, and occupied in accordance with desires of the Owners, it is expected that the Owners will record with the office of the Clerk and Recorder of Gallatin County, Montana supplemental declarations (each, a “Supplemental Declaration”) imposing additional restrictions and requirements on the Lots (or individual buildings on the Lots) which are subject to such Supplemental Declarations, which may include, without limitation, rent limitations, income limitations for Occupants, and other restrictions or requirements and, if applicable, comply with financing requirements for development of the Lot(s). In addition, Supplemental Declarations may, among other things, establish easements or other rights for the benefit of the applicable Lots, Owners, and Occupants, designate Common Areas for the benefits of such Lots, Owners or Occupants, establish supplemental Assessments with respect to the applicable Lots or buildings, and include other provisions related to the operation, maintenance, and repair of the Property subject to the Supplemental Declaration and the improvements thereon. Each Supplemental Declaration is intended to supplement this Declaration and shall be incorporated herein and become a part hereof with respect to the Lots (or building(s)) subject to such Supplemental Declaration. In the event of any conflict between this Declaration and any Supplemental Declaration, the terms of the Supplemental Declaration shall control with respect to the Lots (or building(s)) subject to such Supplemental Declaration; provided, however, that a Supplemental Declaration may not remove restrictions or requirements imposed by this Declaration or eliminate 13 rights specifically granted by this Declaration. No Supplemental Declaration may be adopted, recorded, terminated, or amended without the written consent of the Owner(s) of the Lot(s) subject to such Supplemental Declaration and approval of the Board and, so long as Declarant owns any Lot, of Declarant. Each Supplemental Declaration shall (i) identify the Lot(s) (and, if applicable, individual building(s)) to which it applies, (ii) set forth in reasonable detail additional covenants, restrictions and requirements applicable to such Lot(s) or building(s) and describe in reasonable detail any easements, Common Areas or supplemental Assessments established thereby, (iii) subject the Lot(s) or building(s) to such additional restrictions as the Owner(s) of the Lot(s), with approval of the Board, shall determine and which are not inconsistent with this Declaration, and (iv) be signed by the Owner(s) of the applicable Lot(s) and be recorded with the office of the Clerk and Recorder of Gallatin County, Montana. 7.3 City Required Covenants. Covenants required by the City of Bozeman are included in Lumberyard Flat’s Master Site Plan described in Exhibit C. Notwithstanding anything to the contrary herein, the covenants in Exhibit C cannot be amended or revoked without amendment of this Declaration as set forth herein and with the approval of the City of Bozeman 7.4 Permitted Future Development. In the event the Property (or any portion thereof) is sold, all future development, operation, and occupation shall be in accordance with the guidelines of Phase 1 of the Lumberyard Flats Developments, including the architectural style and design standards established in Phase 1 of the development, as hereafter duly amended. ARTICLE VIII INSURANCE; DAMAGE OR DESTRUCTION; CONDEMNATION 8.1 Association Insurance. The Association shall obtain and maintain the following insurance: (a) a hazard policy insuring all improvements, equipment, and fixtures owned by the Association and any improvements which are part of the Common Areas and for which the Association is responsible pursuant to this Declaration or any Supplemental Declaration at full replacement value, unless the Board determines, in its sole discretion, that such insurance is not necessary; (b) a comprehensive general liability policy insuring the Association against liability incident to the ownership or use of any other Association owned or maintained real or personal property (in occurrence version form if obtainable); (c) officers and directors liability insurance in the minimum amounts required by Montana law or as otherwise determined by the Board from time to time; and (d) such other insurance as the Board in its discretion considers necessary or advisable. 8.2 Appointment by Owner. Each Owner appoints the Association or any insurance trustee designated by the Association to act on behalf of the Owners in connection with all insurance matters arising from any insurance policy maintained by the Association, including, without limitation, representing the Owners in any proceeding, negotiation, settlement or 14 agreement. Any insurance maintained by the Association shall contain “waiver of subrogation” as to the Association and its officers, directors and Members, the Owners and Occupants of the Lots, and mortgagees, and cross-liability and severability of interest coverage insuring each insured against liability to each other insured. The Association shall periodically (and not less than once every three years) review all insurance policies maintained by the Association to determine the adequacy of the coverage and to adjust the policies accordingly. The premiums and deductibles for all insurance maintained by the Association shall be Common Expenses, provided that the Board may determine that any deductible or increase in premium caused by an Owner or Occupant, or family members, guests or invitees thereof, be allocated entirely or disproportionately to one or more Lots and premiums and deductibles for hazard insurance covering Common Areas for the benefit of less than all Lots shall be assessed as supplemental Assessments against the benefitted Lots, as determined by the Board. 8.3 Policies Available. The Association shall make available to Members upon request copies of the Association’s policies to enable Members to insure their Lots without duplicating insurance carried by the Association. Each Member shall be listed as an additional insured under the general liability insurance policy maintained by the Association. 8.4 No Liability. The Association, and its directors and officers, shall have no liability to any Owner or mortgagee if, after a good faith effort, it is unable to obtain the insurance required hereunder, because the insurance is no longer available or, if available, can be obtained only at a cost that the Board in its sole discretion determines is unreasonable under the circumstances, or the Members fail to approve any Assessment increase needed to fund the insurance premiums or reserves for deductibles. In such event, the Board promptly shall notify each Member and any mortgagee entitled to notice that the insurance will not be obtained or renewed. 8.5 Owner Insurance. Each Owner shall be responsible for obtaining, maintaining, and paying for such insurance as required of such Owner by this Declaration and such other insurance as the Owner may deem reasonably necessary with respect to fire, casualty and liability involving such Owner’s Lot and all buildings, improvements and property thereon. The buildings and other improvements for which the Owner is responsible shall be insured at full replacement value, as reasonably determined by the Owner. Each Owner shall, upon request, provide evidence of such insurance to the Board, though the Board shall have no obligation to monitor or ensure that Owners are maintaining the required insurance. 8.6 Damage or Destruction. If any buildings or improvements on any Lot are damaged or destroyed by fire or other casualty, the Owner of such Lot or the Association, as contemplated by this Declaration or any Supplemental Declaration (with the Owner being responsible for repair or replacement of buildings or other improvements on such Owner’s Lot which are not the responsibility of the Association under the terms of this Declaration or a Supplemental Declaration), may rebuild the improvements with reasonable promptness. In the event that such an Owner or the Association elects not to rebuild any structures or improvements with reasonable promptness, said Owner or the Association, as applicable, shall be responsible for promptly removing from the Lot any and all debris, including any portion of a structure or improvements which may remain standing after partial damage or destruction, and the Owner or Association, as applicable, shall cause the area to be landscaped in accordance with plans approved by the Board. If an Owner or the Association, whichever is responsible for repair or replacement as set forth in 15 this Declaration, elects to rebuild the damaged or destroyed building or improvements, the Owner or Association, as applicable, is responsible for the cost of all such reconstruction that is not covered by insurance or is within the deductible amount; provided that any costs incurred by the Association may be assessed against the Owners as determined by the Board. ARTICLE IX GENERAL PROVISIONS 9.1 Enforcement. The Association and each 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, the Articles and the Bylaws, and in such action shall be entitled to recover reasonable attorneys’ fees as are ordered by the applicable court. Absent a final, non-appealable determination of a court to the contrary, the interpretation and determination of the Board of all matters relating to this Declaration or the other Property Documents will be final and binding on the Association, all Owners, and all third parties. The Association shall have the sole right to enforce Rules and Regulations and to impose fines and penalties. The Association, in accordance with Section 9.7, has the right to record a Notice of Violation against the Lot of an Owner that is not in compliance with the provisions of this Declaration or other Property Documents. Failure by the Board or by any Owner to enforce any covenant, condition, restriction or requirement herein contained shall in no event be deemed a waiver of the right to do so thereafter. 9.2 Invalidity of Any Provision. Should any provision or portion thereof of this Declaration be declared invalid, unenforceable, or in conflict with any law, rule, regulation, ordinance or other legal requirement, the validity of all other provisions and portions hereof shall remain unaffected and in full force and effect. 9.3 Run With the Land. All of the Property described in Exhibit A of this Declaration, any additional property subjected to this Declaration by amendment to this Declaration in accordance with the terms hereof, and all improvements existing, placed or constructed thereon, shall be held, sold, used, leased and conveyed subject to this Declaration, all other applicable Property Documents and all restrictions, covenants, and conditions set forth herein and therein, which are for the purpose of protecting the value and desirability of, and which shall run with title to, the real property subjected to this Declaration. This Declaration shall be binding on all Persons having any right, title, or interest in or to the Property or any part thereof, and their respective heirs, successors, successors-in-title, and assigns, and shall inure to the benefit of each owner thereof. 9.4 Amendments. This Declaration may be amended as follows: (a) For so long as Declarant owns any real property in the Property, Declarant may amend this Declaration without prior written consent of any Owner unless such amendment adversely affects such Owner in a manner that is different than the affect on the other Owners in any material respect. For purposes of example and not limitation, and subject to the other provisions of this Section 9.4(a), such amendments may include amendments which are (i) necessary to bring any 16 provision in compliance with any applicable governmental statutes, necessary governmental registrations, rule, regulation, or judicial determination; (ii) necessary to enable any reputable title insurance company to issue title insurance coverage on the Lots; (iii) required by a Federal Mortgage Underwriter to enable such Federal Mortgage Underwriter to make or purchase mortgage loans on the Lots; (iv) necessary to enable any governmental agency or reputable private insurance company to insure mortgage loans on the Lots; or (v) necessary to enable any governmental agency or reputable private insurance company to insure the Property or any portion thereof. (b) This Declaration may be amended for any reason with consent of Owners of Lots with at least seventy-five percent (75%) of the Owner Percentages. 9.5 Limitation of Restrictions on Declarant. Declarant is expected to undertake the work of construction of certain improvements on Lots owned and retained by Declarant. In order that said work may be completed and said development be established as rapidly as practicable, nothing in this Declaration shall be understood or construed, in connection with Declarant’s initial construction and development, to: (a) prevent Declarant or its contractors or subcontractors from doing on any Lot owned by Declarant whatever is reasonably necessary or advisable in connection with the completion of said work; or (b) prevent Declarant or its representatives from erecting, constructing and maintaining on Lots owned by Declarant such structures as may be reasonable and necessary for developing said Lots, including, without limitation, a leasing office and related signs or markers. Declarant’s rights and powers under this Declaration and the other Property Documents belong exclusively to Declarant, and Declarant will exercise such rights and power in its capacity as Declarant, not for, through, or on behalf of the Association or the Owners. 9.6 Declarant Rights and Responsibilities. Declarant may assign, in a written document recorded with the office of the Clerk and Recorder of Gallatin County, Montana, some or all of its rights and obligations as Declarant under this Declaration or the other Property Documents. 9.7 Owners’ Compliance. (a) Each Owner and Occupant shall comply with the provisions of this Declaration and the other Property Documents applicable to the relevant Lot(s). Failure to comply with any such provisions, decisions, or resolutions shall be grounds for an action (1) to recover sums due, (2) for damages, (3) for injunctive relief, (4) for costs and attorneys’ fees, or (5) any combination of the foregoing. (b) In the event of a violation of any of this Declaration or any other applicable Property Documents, the Association may record a “Notice of Violation” against the Lot(s) of the non-complying Owner. Upon recording a Notice of Violation, the Association shall have complete discretion in deciding whether, when and how to proceed with enforcement, and any delay after recording a Notice of Violation shall not give rise to a defense of waiver or estoppel in favor of a noncomplying Owner. The Association may take action to enforce compliance against a subsequent Owner who acquires a Lot with a recorded Notice of Violation. The right of the Association 17 to record a Notice of Violation shall be in addition to all other rights and remedies the Association may have at law or under this Declaration or any other applicable Project Document. (c) All agreements and determinations lawfully made by the Association, by the Board or in accordance with the voting percentages established in this Declaration, or in the Articles or the Bylaws, shall be deemed to be binding on the Association and the Owners and Occupants shall not do anything in violation or breach of such agreements. 9.8 Notice. Any notice permitted or required by this Declaration, the Articles or the Bylaws may be delivered either personally or by electronic or US mail addressed to the Person to be notified at the current e-mail or postal address given by such Person to the Secretary of the Board or addressed to the Lot of such Person if no address has been given to the Secretary. 9.9 No Discrimination. No Owner shall, either directly or indirectly, forbid or restrict the conveyance, encumbrance, leasing, or mortgaging, or occupancy of their Lot to any person of a specified race, sex, adulthood, marital status, color, religion, ancestry, physical handicap, national origin, or any other legally protected status. 9.10 Number; Gender. The singular and plural number and the masculine, feminine and neuter gender shall each include the other where the context requires. 9.11 Captions. The captions and headings herein are for convenience only and shall not be used to limit or expand the terms or provisions hereof. 9.12 Exhibits. All Exhibits are deemed incorporated herein by reference as though set forth in full. [Signature page follows] 18 IN WITNESS WHEREOF, Declarant has executed this Declaration this ____ day of ________________, 20___. DECLARANT: VIRGA Venture I, LLC, a Delaware limited liability company By: , its STATE OF ) :ss COUNTY OF ) This instrument was acknowledged before me on ______________, 2023, by ____________________, as the ____________________of Virga Venture I, LLC, a Delaware limited liability company. IN WITNESS WHEREOF, I have hereunto set my hand and seal the date first above written. [signature] Notary Public for the State of ______________ ( S E A L ) ______________________________________ [printed name] Residing at:________________, ___________ [city] [state] My commission expires:____________, 20___ [Month Day, Year] 19 Exhibit A Property LOT 1A, BLOCK 3 OF THE PT LAND PHASE 2 SUBDIVISION (PLAT J- 498B), LOCATED WITHIN THE NORTHWEST ONE QUARTER OF SECTION 7, TOWNSHIP 2 SOUTH, RANGE 6 EAST, CITY OF BOZEMAN, GALLATIN COUNTY, MONTANA, ACCORDING TO THE OFFICIAL PLAT THEREOF ON FILE AND OF RECORD IN THE OFFICE OF THE COUNTY CLERK AND RECORDER OF GALLATIN COUNTY, MONTANA. and LOT 2A, BLOCK 3 OF THE PT LAND PHASE 2 SUBDIVISION (PLAT J- 498B), LOCATED WITHIN THE NORTHWEST ONE QUARTER OF SECTION 7, TOWNSHIP 2 SOUTH, RANGE 6 EAST, CITY OF BOZEMAN, GALLATIN COUNTY, MONTANA, ACCORDING TO THE OFFICIAL PLAT THEREOF ON FILE AND OF RECORD IN THE OFFICE OF THE COUNTY CLERK AND RECORDER OF GALLATIN COUNTY, MONTANA. 20 Exhibit B Owner Percentage The Owner Percentage for each Lot shall be a percentage calculated by the Board or its advisors as follows: (i) the total square footage of the residential and commercial space in buildings located on the Lot (not including Common Areas), divided by the total square footage of the residential and commercial space in buildings located on all Lots (not including Common Areas), (ii) multiplied by one hundred (100). The method of determining residential and commercial square footage shall be determined by the Board in a manner deemed reasonable by the Board and may be modified by the Board from time to time. Such method may include, without limitation, reference to information used by the Montana Department of Revenue for property tax assessment purposes. Each Owner will reasonably cooperate with the Board in the Board’s determination of residential and commercial square footage of buildings on the Lots. Upon request from any Owner, but not more than once annually with respect to any Owner, the Board shall provide a reasonably detailed description of the determination of residential and commercial square footage in the buildings located on each Lot and the resulting Owner Percentages with respect to each Lot. The decision of the Board with respect to residential and commercial square footage in buildings located on any Lot and calculation of the Owner Percentages of the Lots shall be final and binding on all other parties, including the Owners. 21 Exhibit C Lumberyard Flats Master Plan See attached.