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HomeMy WebLinkAbout2004-10-18 CA Ltr to OPHGentlemen: MTV/sdb Enclosure LAW OFFICES OF Eckberg, Lammers, Briggs, Wolff & Vier>, P. 1835 Northwestern Avenue Stillwater, Minnesota 55082 (651) 439-2878 FAX (651) 439-2923 James F. Lammers Robert G. Briggs * Mark j. Vierling • + Thomas J. Weidner • Susan D. Olson + David K. Snyder Sean P. Stokes Baiers C Heeren Laura L. Dornagala Joshua D. Christensen Mr. Eric A. Johnson City Administrator City of Oak Park Heights 14168 Oak Park Boulevard North P. O. Box 2007 Oak Park Heights, Minnesota 55082 Mr. Scott Richards Northwest Associated Consultants, Inc. 4800 Olson Memorial Highway Suite 202 Golden Valley, Minnesota 55422 Re: Fox Hollow East, LLC Writer's Direct Dial: (651) 351-2118 October 18, 2004 4 )(14 •Qualified Neutral Arbitrator *Certified Real Estate Specialist +Qualified Neutral Mediator Mr. Dennis M. Postier Bonestroo, Rosene, Anderlik & Associates 2335 West Highway 36 St. Paul, Minnesota 55113 ours very truly, ark J. Vierling Lyle J. Eckberg (1916-2003) Paul A. Wolff (1944-1996) Enclosed herewith please find a copy of a revised drawing and memo from Bob Turrentine, serving as "informal" legal counsel for Jeffrey Hause, and copy of the Cornerstone Land Surveying statement and memo of October 14, 2004. 1 am sending you by separate correspondence a copy of comments on the master declarations back to Mr. Turrentine, but thought you might have a comment or two relative to this revised drawing of the plat which shows the width of a five foot wide sidewalk on the property, as well as some other amenities which perhaps haven't been shown previously. Please fe- o let me ',row by way of e-mail or other written correspondence your comments, if , to these document James F. Lammers Robert G. Briggs * Mark j. Vierling • Thomas J. Weidner Susan D. Olson David K. Snyder Sean P. Stokes Baiers C Heeren Laura L. Domagala Joshua D. Christensen LAW OFFICES OF Eckberg, Lammers, Briggs, Wolff & Vierling, P.L.L.P. 1835 Northwestern Avenue Stillwater, Minnesota 55082 (651) 439-2878 FAX (651) 439-2923 Writer's direct dial number: (651) 351-2118 Mr. Bob Turrentine 720 South Owens Street Stillwater, Minnesota 55082 Dear Bob: October 18, 2004 Re: City of Oak Park Heights/River City Rentals, LLP Relative to the Master Declaration draft that you provided to my office, my comments to you are as follows: Lyle j. Eckberg (1916-2003) Paul A. Wolff (1944-1996) •Qualified Neutral Arbitrator *Certified Real Estate Specialist -..Qualified Neutral Mediator Thank you for dropping off the materials at my office on Friday the 15 In reviewing your memo, as well as the Master Ceclaration, 1 would have the following comments and/or suggestions for you: 1. Title Issues — Fox Hollow East, LLC. If the title to the property is going to be transferred from River Valley Rentals, LLP to Fox Hollow East, LLC, the City will need a copy of the verification and transfer of title and/or an ownership lien and encumbrance report relative to the status of title at the time of execution of the Development Contract. The City's normal process is also then to require that both entities would be signatories on the Development Contract with the City, both thus being liable the performance obligations thereunder. If that is a problem or you want to sever that responsibility, there would have to be an assignment of the application and the rights thereunder approved by the City from the River Valley Rental, LLP to Fox Hollow East, LLC, as well as verification of the organization of the LLC from the Secretary of State's office and some detail relative to the capitalization of that entity. 1. Development Agreement. 1 see in Paragraph 1.06 on Page 2 you have defined or at least identified the Development Agreement, but I have not determined the particular paragraph within the draft Master Declaration that purports to bind the signatories of the draft Master Declaration to the performance obligations of the terrns and provisions of the Development Contract with the City. The City would be interested in having either/and/or the Master Developer as well as the entity Fox Hollow East Master Association commit to the performance obligations of the Development Contract with the City, particularly those that will Mr. Bob Turrentine October 18, 2004 Page 2 survive the construction of the improvements identified within the Plan A and Plan B Improvement sections of the Development Contract. follows: 2. Paragraph 1.11. I would suggest the last sentence be modified to read as "For purposes of real estate taxes and future development, the master common elements shall be combined into one tax parcel. 3. Paragraph 1.12. I would suggest this be modified to read as follows: "'Master common expenses' means all expenditures made and liabilities incurred by or on behalf of the Master Association and incident to its operation, including without limitation any real estate taxes, storm water drainage and utility easement maintenance as provided on Outlot A, . . ." 4. PArfi_grap112..a, Since this document will be executed and recorded presumably after the platting has occurred, I would suggest that the appropriate legal description would be all lots and blocks and outlots within Fox Hollow PUD as the appropriate legal description as opposed to referencing Outlot A of East Oaks PUD. 5. There is a blank at the end of the paragraph affecting Item 2.06. Perhaps you could advise me as to what you intended to place in that location. 6. I would suggest that Paragraph 4.04 be added dealing with the continuing obligation to meet the requirements of the Development Contract executed between the organizational entities and the City of Oak Park Heights. 7. Paragraph 5.01. I would suggest that the sentence which now reads "However, the owner's unit is subject to the Master Association's lien as contemplated in the CIC Act" may be better served by providing some greater detail as opposed to merely the reference to the CIC Act. 8. Under Topic 6, Architectural Control, I would suggest an inclusion of a Paragraph 6.04 referencing Outlot A, indicating that no improvements or structural changes shall be made to Outlot A, specifically as it affects storm water drainage and/or retention of treatment without the express written approval and consent of the City of Oak Park Heights. Mr. Bob Turrentine October 18, 2004 Page 3 9. Under Paragraph 7.01, I would suggest an addition to a Subparagraph (i) indicating that relative to site improvements, there shall be no improvements that alter any of the storm drainage patterns on the property as have already been approved by the City of Oak Park Heights without the express written consent and approval of the City Engineer. 10. Relative to Paragraph 8.01, I suggest that language be added to indicate that although the Master Developer is granting the City a perpetual easement for the sidewalk purposes, that the sidewalk itself relative to its maintenance shall be maintained and cared for by the Fox Hollow East Master Association and/or the Master Developer. The same notation should also be made under Paragraph 8.04. 11. Under Paragraph 12.04, a sentence should be added indicating that no amendment to the covenants or restrictions of the Master Declaration shall be allowed to the extent they conflict with the Development Contract executed between the Developer and the City of Oak Park Heights or to the extent that they impair or otherwise affect any easement granted to the City of Oak Park Heights. I will forward a copy of the Master Declaration, as well as the drawing over to the City Administrator's office for staff review. Their comments will co u e by way of separate communication. MJV/sdb You : very t ark J. Vierling a7 0 u u.i Q w 0 a z j z� W a z • ❑ w u$��. 0 ti z z r z _ CI- I/ O W rt z y � #B100 1. East Chestnut Street iliwat r, MN 55082 one: `651 -275 -8959 1- 275 -8975 t - 1s rnpleodusa.net Fox Hollow East, LLC C/O Jeff Hause Thursday, October 14, 2004 Re: Proposed Legal Description for the Sidewalk Easement over the proposed Lot 1, Block 1, FOX HOLLOW P.U.D. The following proposed legal description is based on the unrecorded plat of FOX HOLLOW P.U.D. it is to be recorded after the Plat. The purpose of this description is to create a sidewalkeasement to cross over Lot 1 for the benefit of Lots 2 and 3, Block 1. The proposed easement description is as follows: SIDEWALK EASEMENT An Easement for Pedestrian crossing and sidewalk purposes over and across the easterly 5.00 feet of the westerly 23.50 feet of Lot 1, Block 1, FOX HOLLOW P.U.D., on file and of record in the Office of the County Recorder, Washington County, Minnesota. If you have any questions please feel free to call me at 651-275-8969 Thanks, Daniel L. Thurmes, Minnesota Licensed Land Surveyor Bob Turrentine (A,Alwe 10/15/2004 Mark, Here is our final first draft of the Fox Hollow East Master Declaration. You will note that the Master Developer will be Fox Hollow East LLC. This will be the operating entity for Jeff and Missy Hause who are the principals in River Valley Rentals LLP. Since Fox . Hollow East LLC was not the applicant for the PUD, please let me know what evidence of title you nee d.4 As far as the relationship between the Master Declaration and the Development Contract is concerned we have referenced the Development Contract in the declaration so both the` city and the lot owners can enforce those conditions. Since the sidewalk easement was required by the city council after the plat received City and County preliminary approval, the sidewalk easement will be addressed in a separate! easement, which will be recorded at the time the plat is recorded. It is shown on the small format preliminary plat to the west of the proposed office on lot 1 block 1- You will note that at section 8.04 e do reference that easement. In order to assure that Outlot A cannot go tax forfeit, we will be applying to the county to have Outlots A, B and C issued one tax identification number. As I told you over the phone, since Outlots B and C are the private roads accessing the development, there is no way those taxes will not be paid. The definition of Master Common Elements makes it clear that all common elements be taxed as one tax parcel. I have talked to the Auditor /Treasures office and they assured me this would not be a problem once the plat is recorded. You will also note at Section 8 viwe have given the city an easement over the common elements. After you have had the opportunity to review this declaration I would like to meet with you to discuss any additions or corrections that need to be made. I will call you early next week or you can call me at 439 -8431 after you have reviewed the declaration. FOX HOLLOW EAST MASTER ASSOCIATION MASTER DECLARATION Fox Hollow East, LLC, a Minnesota limited liability company ( "Master Developer ") is executing this Fox Hollow East Master Association, Master Declaration ( "Master Declaration'} pursuant to the provisions of Minnesota Statutes Section 515B.2 -121. This Master Declaration is effective as of October , 2004. WHEREAS, Master Developer owns the real property in the City of Oak Park Heights ( "City "), County of Washington, State of Minnesota which is legally described as follows: Outlot A, East Oaks P.U.D ( "Property "). WHEREAS, Master Developer intends to develop the Property for residential and commercial uses; and WHEREAS, Master Developer desires that all of the Property be subject to certain uniform covenants, restrictions and easements; and WHEREAS, this Master Declaration is intended to be a master declaration as defined in Section 515B.1- 103(22) of the CIC Act, as that term is hereinafter defined; and WHEREAS, pursuant to Section 515 B .1 -103 (10) of the CIC Act, as hereinafter defined, the Property subject to this Master Declaration does not constitute a separate common interest community pursuant to the provisions of the CIC Act. NOW, THEREFORE, Master Developer hereby declares that all of the Property is and shall be held, sold, and conveyed subject to Section 51513.2 -121 of the CIC Act and the covenants, restrictions and easements set forth in this Master Declaration which shall (i0 protect the value and desirability of the Property, (ii) run with title to the Property, (iii) be binding on all parties having any right, title or interest in the Property or any part thereof, and their heirs, successors and assigns, and (iv) inure to the benefit of the Master Association and each Member, as those terms are defined herein. 1 1. DEFINITIONS 1.01 "Board" means the Fox Hollow East Master Association's board of directors. 1.02 "Bylaws" means the bylaws of the Fox Hollow East Master Association, as that term is hereinafter defined. 1.03 "CIC Act" means the Minnesota Common Interest Ownership Act, Minnesota Statutes Chapter 515B, as the same may be amended from time to time. 1.04 "Commercial Components)" means Lot 1, Block 1, Fox Hollow P.U.D., and Lot 1, Block 2, Fox Hollow P.U.D., both of Washington County, Minnesota which shall be used for commercial purposes. 1.05 "Constituent Common I-nterest Community" means a common interest community, as defined in Section 515B.1-103(10) of the CIC Act, created by a Subordinate Declaration. 1.06 "Development Agreement" means that certain development agreement entered into the day of , 2004, by and between the City and Master Developer. 1.07 "Eligible Mortgagee(s)" means any person who holds a mortgage on any Lot that is first in priority to any other mortgages that encumber such Lot, and who has asked the Master Association, in writing, that it be notified regarding any proposed action which under the terms of this Master Declaration requires approval by a specified percentage of Eligible Mortgagees. 1.05 "First Mortgagee(s)" means any person who holds a mortgage on any Lot that is first in priority to any other mortgages that encumber such Lot 1.09 "Lot(s)" means any or all of the following lots located in Washington County Minnesota: (a) Lot 1, Block 1, Fox Hollow P.U.D.; (b) Lot 2, Block 1, Fox Hollow P.U.D.; or (c) Lot 1, Block 2, all of Fox Hollow P.U.D. 1.10 "Master Association" means Fox Hollow East Master Association, a non profit corporation formed under the Non Profit Act, as that term is hereinafter defined. 1.11 "Master Common Elements" means Outlots A, B and C; Fox Hollow, P.U.D., Washington County, Minnesota. outlots A and B serve and benefit all of the Loth and the Owners thereof: However, Outlot C is used as access for the owners of Lot 1, Block 1 and Lot 2, Block 1.' The "Master Common Elements" also include the easements in gross granted by this � g y Master Declaration, as may be subsequent amended, all improvements and fixtures located on the Master Common Elements, all proceeds paid or payable to the Master Association as a result of any damage to or condemnation of the Master Common Elements and all personal property shall be combined into on tax parcel, 3 the Master Association owns taxes, .,, ,...; u 05es f,rea estate : . the Master :Cornmort cr e 1.12 "Master Common Expenses" means all expenditures made and liabilities incurred by or on behalf of the Master Association and incident to its operation, including without limitation any real estate taxes, insurance and maintenance costs relating to the Master Common Elements, if any, and aniourits necessary to fund scheduled deposits in reserve accounts established to provide funds to pay for the repair and replacement of Master Common Elements. .:f 1.13 "Master Declaration" means this Fox Hollow East Master Association, Master Declaration. .`5 1.14 "Master Developer Control Period" means the period during which the Master Developer is entitled to appoint the Master Association's Board as described in the Section 11.02 of this Master Declaration. 1.15 "Member(s)" means a member(s) of the Master Association, as established pursuant to Section 2.04 of this Master Declaration. 1.16 "Non - Profit Act" means the Minnesota Non -Profit Corporation Act, Minnesota Statutes Chapter 317A, as the same may be amended from time to time. 1.17 "Owner" means the record owner, whether one or more persons, of a fee simple title to all or any part of any Lot. Where a Lot is being sold by the fee owner to a contract vendee who is entitled to possession of the Lot, the contract vendee and not the contract vendor shall 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 Master Association. Where a Lot is subject to a Subordinate Declaration, as hereinafter defined, the Sub - Association, as hereinafter defined, is the Owner for purposes of this Master Declaration. 1.18 "Person" has the meaning set forth in Section 515B.1-103(24) of the CIC Act. 1.20 "Residential Component" means Lot 2, Block 1, Fox Hollow P.U.D., Washington County, Minnesota which shall be used for residential purposes. 1.21 "Share of Master Common Expenses" means the percentage of the Master Common Expenses attributable to each Lot, as set forth in Section 2.06 of this Master Declaration. 1.22 "Sub- Association" means (i) any "association ", as defined in Section 515B.1- 1 . 03 (4) of the CIC Act, organized under Section 5158.3-101 of the CIC Act with respect to a Constituent Common Interest Community or (ii) any owner's association organized to exercise 1.19 "Plat" means the plat of Fox Hollow recorded in the offices of the Washington County Recorder. powers and perform obligations set forth in a Subordinate Declaration creating a Constituent Common Interest Community to which CIC Act does not apply. 1.23 "Subordinate Declaration" means a declaration, as defined in Section 5158.1- 103(16) of the Act, that is recorded against title to any portion of the Property after this Master Declaration is filed. 1.24 "Vote(s)" means the vote allocated to each Lot, as designated in Section 3.01 of this Master Declaration, assigned for the purpose of voting in Master Association matters. 2. STATUTORY REQUIREMENTS. In accordance with the requirements of Sections 515B.2- 1210(1) of the CIC Act, the Master Developer hereby state the following: 2.01 The name of the Master Association is Fox Hollow East Master Association. The Master Association has been incorporated pursuant to the provisions of the Non- Profit Act. The Master Association is a "Master Association" as defined in Section 5158.1 -1 03 (21) of the CIC Act. 2.02 A legally sufficient description of the real estate that is subject to this Master Declaration is as follows: Outlot A, East Oaks P.U.D. The Master Developer is not reserving the right to add additional real estate. .y 2.03 The Property subject to this Master Declaration does not constitute a separate common interest community. 2.04 The Master Association has three (3) Members. The Owner(s) of Lot 1, Block 1, constitute a single Member. The Owner(s) of Lot 2, Block 1 constitute a single Member. The Owner(s) of Lot 1, Block 2, constitute a single Member. If any of the Lots become subject to a Subordinate Declaration, the Sub - Association created to manage the Constituent Common Interest Community replaces the Owner(s) thereof as a Member in the Master Association. Persons who own units subject to a Subordinate Declaration are not Members of the Master Association. 2.05 The Master Association may exercise the powers described in this Master Declaration and the Bylaws on behalf of the Members and its Members' members. The Master Association's powers include the powers set forth in Section 4.01 of this Master Declaration. 2.06 The Share of Master Common Expenses attributable to Lot 1, Block 1, shall be sixteen percent (16 %) of the Master Common Expenses. The Share of Master Common Expenses attributable to Lot 2, Block 1, shall be fifty eight percent (58 %) of the Master Common Expenses. The Share of Master Common Expenses attributable to Lot 1, Block 2, shall be ; twenty six percent (26 %) of the Master Common Expenses. The formula for determining each Lot's Share of Master Common Expenses is based upon the approximate square footage of each Lot and 4 2.07 The requirements for amendment of this Master Declaration, other than amendments to reflect an adjustment to each Lot's Share of Master Common Expenses pursuant to Section 12.06(b) following a condemnation, are set forth in Section 12.03 of this Master Declaration. 3. VOTING RIGHTS 3.01 Membership Voting Rights. As set forth in the Bylaws and the CIC Act, Members are entitled to vote on various matters. The total number of membership votes in the Master Association is four (4). Lot 1, Block 1, is hereby assigned one (1) Vote in all Master Association matters. Lot 2, Block 1, is hereby assigned two (2) Votes in all Master Association matters. Lot 1, Block 2, is hereby assigned one (1) Vote in all Master Association matters. Except as otherwise set forth in this Master Declaration or the Bylaws, any action requiring a vote of the Members shall pass upon receiving 3 or more affirmative Votes in favor of the action. 3.02 Multiple Owners. If a Lot has two or more Owners, the Owners must select one Owner to cast the Vote allocated to their Lot. If they do not select one Owner to cast their membership Vote, the Owners who own the Lot must abstain from voting and the Board may disregard any attempt by one or more of such Owners to cast the membership Vote without the agreement of the other Owner(s). The Board is not responsible for determining if all Owners who constitute a single Member agree on how to cast the membership Vote assigned to their Lot. Unless the Board has actual knowledge of a disagreement among the Owners who constitute a single Member regarding the manner in which the membership Vote allocated to their Lot are to be cast, the Board may accept the Vote of anyone of the Owners as the Vote of the Member. 3.03 No Cumulative Voting. Except in cases where one Member owns more than one Lot, each Member must cast their membership Vote in a single block. If one Member is a Member with respect to more than one Lot owned, the Member may cast the membership Vote attributable to each Lot separately. Cumulative voting is not permitted. 3.04 Binding Arbitration. On any matter specifically set forth below and where there is two (2) membership Votes for and two (2) membership Votes against ( "Tie Vote "), resolution thereof shall be determined as follows: Within ten (10) days of the Tie Vote, any Member seeking resolution shall provide written notice to the other Members requesting binding arbitration. Within ten (10) days of receipt of notice requesting binding arbitration, the Member(s) voting in favor on the Tie Vote shall select a single arbitrator and the Member(s) voting in opposition on the Tie Vote shall select a single arbitrator. Within five (5) days of the selection of the arbitrators by the Members, the two arbitrators selected by the Members shall then select a third arbitrator. Any Member may be represented by counsel at any arbitration proceeding. The dispute shall be settled in accordance with the Uniform Arbitration Act and governed by the Rules of the American Arbitration Association. The decision of a majority of the arbitrators, signed and acknowledged, shall be final and binding on all of the Members. The costs and expenses of arbitration and the arbitrators shall be paid by the Members in accordance with each Member's Share of Master Common Expenses. If any arbitrator is not selected within the time provided herein, any Member may make written request for the selection of the 5 unselected arbitrator by the judge then sitting at special term in the District Court of Washington County, upon notice to all Members. (b) Voting required to amend this Master Declaration under Section 12.04 hereof; and (c) Voting pursuant to Section 4.03 hereof. 4. POWERS AND DUTIES 4.01 General Powers and Duties of Master Association. Together with any powers set forth in the CIC Act and the Bylaws, the Master Association has the following duties: duties: The following matters are subject to this Section 3.04: (a) Voting for any capital expenditure in excess of Fifty Thousand Dollars ($50,000.00); (a) to operate, maintain, repair and replace the Master Common Elements including any retaining wall, lighting, sidewalks or pathways and all other improvements and landscaping located thereon consistent with the Development Agreement and applicable zoning regulations; (b) to maintain any storm water drainage ponds located on the Master Common Elements; (c) to maintain, repair and replace any signage or utilities located on the Master Common Elements; (d) to establish a budget for the Master Association and levy and collect any assessment on behalf of the Master Association; to ensure all Members comply with the Development Agreement, the CIC Act, this Master Declaration, the Bylaws and any rules and regulations of the Master Assocation; and (0 procure insurance consistent with Article 9 of this Master Declaration. 4.02 Duties of Members. Except as provided herein, each Member has the following (a) to maintain, in first class condition and repair, the Member's Lot in a manner consistent with the Plat, the Development Agreement and this Master Declaration. If a Lot is subject to a Subordinate Declaration, the Sub - Association for that Lot is responsible for compliance with this Section 4.02. (b) the Owner of Lot 1, Block 1, may use the Lot 1, Block 2, trash facilities by 6 payment to the Owner of Lot 1, Block 2, an amount equal to twenty -five percent (25 %) of the total trash expense. (c) to act in a manner consistent with this Master Declaration, the Bylaws and the Development Agreement. 4.03 Repairs to and Replacement of Damaged Master Common Elements. If Master Common Elements are damaged or destroyed, the Master Association must either repair or replace the damaged Master Common Elements in a manner consistent with the Development Agreement. Notwithstanding any other provision in this Master Declaration or the Bylaws, the Board is authorized to determine whether it is in the best interest of the Master Association to repair damaged Master Common Elements or to replace damaged Master Common Elements. Repairs to or replacements of the Master Common Elements must restore the Master Common Elements to substantially the same condition that existed immediately prior to the damage or Toss unless the Board proposes and Members holding a majority of the membership votes in the Master Association, voting in person or by proxy at an annual, quarterly or special meeting of the Members duly called for this purpose or by mailed ballot pursuant the Non -Profit Act and the CIC Act, approve repairs to a reconstruction of damaged Master Common Elements in a manner or to a degree that does not restore the damaged Master Common Elements to substantially the same condition that existed immediately prior to the damage. The Master Association must use the proceeds, if any, from insurance the Master Association maintains pursuant to Article 9 of this Master Declaration or otherwise to finance the repair or reconstruction of damaged Master Common Elements. If insurance proceeds are insufficient to finance the repair or replacement of damaged Master Common Elements, the Board may levy annual or special assessments pursuant to Article 5 of this Master Declaration to finance costs not covered by insurance proceeds. 5. COMMON EXPENSE ASSESSMENTS 5.01 Assessment Levy. Except as otherwise provided in Section 5.02 and 5.04 of this Master Declaration, the Board must - levy annual assessments and may levy special assessments for Master Common Expenses against each Lot in proportion to the Lot's Share of Master Common Expenses. The Bylaws describe the procedures which the Board must follow in levying annual or special assessments. The owner of a unit in a Constituent Common Interest Community is not personally liable to the Master Association for assessments of Master Common Expenses. However, the owner's unit is subject to the Master Association's lien as contemplated in the CIC Act. If a Lot is not subject to a Subordinate Declaration, each Owner is personally liable to the Master Association for Master Common Expenses the Board assesses against the Lot and the Lot is subject to the lien in favor of the Master Association as set forth in this Article 5. To the extent is not subject to a Subordinate Declaration and there are multiple Owners, the liability of the Owners is joint and several. 5.02 Special Allocations of Assessments. (a) The Board may assess against a Lot any Master Common Expenses, including attorney's fees and court costs, incurred in connection with the collection of assessments due and payable with respect to that Lot or in connection with the 7 enforcement of the provisions of this Master Declaration, the Bylaws or rules and regulations against the Owner or any other occupant of that Lot; (b) The Board may assess a Lot for fees, charges, late charges, fines and interest provided for in the Bylaws, this Master Declaration or rules and regulations the Board adopts; and (c) The Board may assess Master Common Expenses incurred to repair damage to the Master Common Elements which is caused by the act or omission of a Member, a member of a Constituent Common Interest Community or any other occupant of a Lot and which is not covered by the Master Association's insurance. 5.03 Special Assessments. In addition to the annual assessments, the Board may levy special assessments 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 Master Common Elements, including fixtures and personal property related thereto; provided, however, the Board may not levy a special assessment for the purpose of constructing new improvements or expanding existing improvements that constitute Master Common Elements unless Members holding a majority of the membership votes in the Master Association voting in person or by proxy, at an annual, quarterly or special meeting of the Members duly called for this purpose, or voting by mailed ballot pursuant to the Non - Profit Act and the CIC Act, approve the special assessment. 5.04 Date of Commencement of Assessments. The Board may levy the first annual assessment at any time. Until the Board levies the first annual assessment, the Master Developer must pay any Master Common Expenses. 5.05 Effect of Nonpayment of Assessments; Remedies of the Master Association. Any assessment not paid within thirty (30) days after the date due is delinquent and bears interest from the date due until paid at a rate of eight percent (8 %) per annum or at such other rate the Board specifies from time to time, which rate may not exceed the maximum rate allowable by law. The Master Association may bring an action at law against any Person who is liable for payment of the assessment pursuant to Section 5.01 of this Master Declaration to collect delinquent assessments. The Master Association also has a lien against each Lot for the amount of any annual or special assessment the Board levies against the Lot. Such lien against the Lot includes a power of sale and may be foreclosed in the same manner as a mortgage pursuant to Minnesota Statutes Chapters 580, 581 or 582, as may be subsequently amended. If the Master Association commences proceedings to foreclose its lien, either by action or advertisement, the Master Association is entitled to recover its costs, expenses and disbursements, including reasonable attorney's fees, incurred in such foreclosure, without regard to any limitation under Minnesota Statutes Section 582.01. Except as provided herein, no Member may waive or otherwise escape personal liability for assessments by non -use of the Master Common Elements or abandonment of the Owner's Lot. If the Board has provided for the payment of an assessment in installments, the Board may accelerate and the Member must pay the entire unpaid balance of all installments if the Member has failed to pay an installment within thirty (30) days after the due date of the installment. 8 5.06 Priority of Lien. The sale or transfer of any Lot does not affect the assessment lien for any assessments levied before such sale or transfer. The Master Association's lien for the assessments provided for herein is subordinate to the lien of any First Mortgage, except as provided in the CIC Act. A purchaser of an Lot at a sheriffs sale conducted in connection with the foreclosure of a First Mortgage takes title to the Lot free of any claims for unpaid assessments or other charges or liens the Master Association has levied against the Lot which were levied and were due and payable prior to the purchaser's acquisition of title to and possession of the Lot except as provided in the CIC Act. 6.01 Architectural Control. Until plans and specifications showing the nature, kind, shape, height, materials, and location of the following have been submitted to the Board and the Board has approved the same in writing, (i} no building, fence, wall, deck or other structure may be constructed or maintained upon any Lot, (ii) no change or alteration (including, but not limited to additions to or removal of) to the exterior of any such structure (including changes in the exterior color) may be made, and (iii) no landscaping may be planted or maintained on any Lot. The purpose of this Section 6.01 is to allow the Board to protect and maintain the harmony of location, design and external appearance of improvements and landscaping on the Property. 6.02 Architectural Control Committee. The Board may delegate its powers under Section 6.01 to an architectural control committee composed of three (3) or more Person the Board appoints. 6.03 Approval. If the Board, or its designated architectural committee, does not approve or disapprove of a proposal plans and specification submitted pursuant to Section 6.01, within sixty (60) days after the date such plans and specifications are submitted, the Board is deemed to have approved the request. 7. ADDITIONAL RESTRICTIONS ° RULES AND REGULATIONS 7.01 Additional Restrictions. 9 6. ARCHITECTURAL CONTROL (a) Except for the Commercial Components to the extent permitted pursuant to Section 7.01(0 below, ,n portion of any Lot may be used for nonresidential purposes. Notwithstanding the foregoing, the Master Developer is entitled to maintain model units and other sales facilities upon any Lot or any portion thereof owned by the Master Developer. (b) With respect to the Residential Component, no sign of any kind shall be displayed to the public view on any Lot except: (i) one sign of not more than five (5) square feet advertising the property for sale may be placed on a Lot and (ii) Master Developer is permitted to erect and maintain upon any portion of the Residential Component the Master Developer owns such signs as the Master Developer deems appropriate for advertising such portion(s) of the Residential Component (c) until the Master Developer conveys the last dwelling within the Residential Component the Master Developer owns. With respect to the Commercial Component, such signage shall be allowed as permitted by the Board. In any event, no sign or monument shall exceed the maximum height of eight (8) feet. 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 any Owner or occupant of the Property. (d) The Board, at its discretion and in accordance with applicable FCC Regulations may adopt rules and regulations governing the type and installation of aerial, antenna or satellite dishes over four feet in height, as measured from the point on any structure to which the aerial, antenna or satellite dish is affixed or are more than one (1) meter in diameter size. (e) No abandoned or inoperable motor vehicle may be placed or remain upon any Lot. The Master Association may remove any such vehicle at any time, and assess the costs of such removal against the Lot and the Owner(s) thereof. �f No business, trade, occupation or profession of any kind, whether carried on for profit or otherwise, may be conducted, maintained or permitted on any Lot, except (i} the Master Developer may exercise the rights described in Article 11 and (ii) the Commercial Component may be used for the following commercial purposes: governmental, libraries, business or professional offices or optical laboratories. Additionally, the Commercial Component, or a portion thereof, may be used as bank or other financial institution, as long as said bank or other financial institution does not maintain a drive through facility. The Board's authority to adopt rules and regulations as described in Section 7.02 includes the authority to regulate, restrict and if necessary, prohibit home office and home business activities that create excessive traffic flow to the area or that result in excessive use of parking spaces located on the Master Common Elements. (g) No portion of any Lot may be leased for transient or hotel purposes. Any lease of any dwelling located on a Lot shall be in writing which shall be expressly subject to the CIC Act, this Master Declaration and any rules and regulations adopted by the Master Association and which provides that any violation of the CIC Act, this Master Declaration and any rules and regulations shall be a default under the lease. No time shares shall be created with respect to any Lot or portion thereof. (h) No owner, tenant, or occupant of a Lot or unit located thereon may place or store anything on the Master Common Elements or obstruct, in any way, the Master Common Elements without the Board's prior written consent, which consent the Board may grant or withhold in its sole and absolute discretion. 7.02 Rules and Regulations. The Master Association's Bylaws grant the Board the authority to adopt, amend and revoke rules and regulations: (i) regarding the use of the Master Common Elements; (ii) regulating any use of any Lot and any conduct of occupants thereof that may jeopardize the health, safety or welfare of the occupants of any other Lot that are not subject to the same Subordinate Declaration, that involves noise or other activities that may disturb occupants of any Lot that is not subject to the same Subordinate Declaration, or that may damage the Master Common Elements or Lot that is not subject to the same Subordinate Declaration; (iii) regulating construction activities on any Lot and the exterior appearance of any buildings or other structures constructed on any Lot including, but not limited to, the construction, alteration, addition to or reconstruction of buildings or other structures on any Lot, the exterior color of buildings or other structures located on any Lot, the height of buildings or other structures constructed on any Lot, landscaping and exterior storage; and (iv) implementing the Articles of Incorporation, these Bylaws and the Declaration. Rules and regulations must be consistent with the terms of the Articles of Incorporation, the Bylaws and this Master Declaration. 8, EASEMENTS 8.01 Easement for Access and Maintenance. The Master Developer hereby grants the Master Association a perpetual easement in gross over and across the Property to permit the Master Association to exercise the powers and perform the duties granted and assigned to the Master Association in this Master Declaration, the Bylaws and the CIC Act, and to provide access thereto. Additionally, Master Developer hereby grants the City a perpetual easement in gross over and across the Property to permit the City to exercise the powers and perform the duties granted and assigned to the City in the Development Agreement or by law, and to provide access thereto. 8.02 Master Common Elements. Master Developer hereby grants and declares a perpetual, appurtenant easement over and across the Master Common Elements and the improvements located thereon in favor of Lot 1, Block 1 and Lot 2, Block 1, to permit the Owners thereof to use the Master Common Elements and the improvements located thereon subject to all of the covenants, conditions and restrictions set forth in this Master Declaration and subject any rules and regulations regulating the use of the Master Common Elements the Master Association adopts pursuant to the authority set forth in this Master Declaration and the Bylaws. Master Developer hereby grants and declares a perpetual, appurtenant easement over and across outlots A and B of the Master Common Elements, as shown on the Plat, and the improvements located thereon in favor of Lot 1, Block 2, to permit the Owner thereof to use said outlots and the improvements located thereon subject to all of the covenants, conditions and restrictions set forth in this Master Declaration and subject any rules and regulations regulating the use of the Master Common Elements the Master Association adopts pursuant to the authority set forth in this Master Declaration and the Bylaws. 8.03 Temporary Construction Easements. Master Developer hereby declares an appurtenant easement over and across the Master Common Elements in favor of the each Lot to permit the Owner thereof to construct improvements thereon, including, without limitation, the right of vehicular ingress and egress and vehicular parking and material storage in areas the Board designates; provided, however, that Owner of a Lot must promptly repair and restore any damage to the Master Common Elements by reason of such Owner's use of such easement rights. In addition, Master Developer hereby reserves an easement in gross over the Master 11 Common Elements to permit the Master Developer to construct improvements on the Master Common Elements which improvements, when constructed, will constitute a part of the Master Common Elements. 8.04 Sidewalk Easement. Master Developer shall prepare and record with the Washington County Registrar of Titles or Washington County Recorder's Office, as applicable, Tan, easement for pedestrian crossing an sidewalk 'pu over and across the Easterly five (5) Meet and the Westerly twenty three and one half (23.5) feet of Lot 1, Block 1'. . y 9. INSURANCE (b) Workers Compensation insurance as required by law. (c) Directors and officers liability insurance with such reasonable limits and 12 9.01 Liability Insurance, The Master Association must obtain and maintain a broad form of commercial general liability insurance policy insuring the Master Association with such limits of liability as the Board determines to be necessary, against all acts, omissions to act and negligence of the Master Association, its employees and agents. The policy must name the Owners and Members as additional insureds with respect to the ownership, existence, use or management of the Master Common Elements, Such policy shall not provide coverage for claims arising out of the ownership or use of a Lot other than Master Common Elements. Such insurance shall contain a "severability of insurance" endorsement which shall preclude the insurer from denying the claim of a Member or Owner because of negligent acts of the Master Association or another Member. or Owner. 9.02 Property Insurance. The Master Association must obtain and maintain broad form property insurance for any improvements constructed on the Master Common Elements. Such insurance shall cover all risks of physical loss, for the full insurable replacement value of any insurable improvements located on the Master Common Elements. Such insurance policy shall include such other coverages, limits and deductibles as the Board deems reasonable. Each Member must obtain and maintain property insurance relating to the improvements located on the Member's Lot for the full insurable replacement value of any insurable improvements located on the Member's Lot. Each Sub - Association must obtain and maintain insurance as required under Minnesota Statute Chapter 515B. 9.03 Other Insurance. The Master Association may procure and maintain the following additional insurance coverage as the Board deems appropriate: (a) Fidelity coverage against dishonest acts on the part of the Master Association's officers, directors, agent, employees or volunteers responsible for handling funds collected and held for the benefit of the Members. The fidelity bond or insurance shall name the Master Association as the named insured and shall be written in an amount as the Board deems appropriate. 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. coverages as the Board may determine from time to tine. (d) Such other insurance as the Board may determine from time to time to be in the best interests of the Master Association. 9.04 Deductibles. As to any deductibles under any insurance coverages obtained by the Master Association, the Board may: (a) pay the deductible as one of the Master Common Expenses; (b) assess the deductible amount against any Lot affected in a reasonable manner; or (c) assess the deductible against any Lot if the loss was caused by the act or omission of the Owner of the Lot, or the Owner's agents, employees, invitees, guests or anyone occupying the Lot with the expressed or implied permission of the Owner. 10. RIGHTS OF ELIGIBLE MORTGAGEES 10.01 Consent to Certain Amendments. The written consent of Eligible Mortgagees representing at least fifty -one (51%) percent of the Lots that are subject to a First Mortgage held by Eligible Mortgagees, (based upon one vote per First Mortgage owned), is required for any amendment to this Master Declaration, the Articles of Incorporation or the Bylaws of the Master Association which causes any change in the following: (a) the Share of Master Common Expenses or number or weight of membership votes assigned to each Lot; (b) the existence or priority of assessment liens for Master Common Expenses; (c) the Master Association's duty to operate, maintain, repair and replace Master Common Elements including, but not limited to, the Master Association's obligation to repair or reconstruct damaged Master Common Elements; (d) the easements set forth in Article 8; (e) the conversion of a Lot into Master Common Elements or vice versa; (f) The insurance requirements set forth in Article 9; (g) imposition of any restrictions on the leasing of any Lot; and (h) any provisions that expressly benefit mortgage holders, or insurers or guarantors of mortgages. 13 With respect to any Lot that is subject to a Subordinate Declaration, the Lot shall have one vote for or against consenting to an amendment, as determined by a majority vote of the holders of first mortgages on the units subject to the Subordinate Declaration. Notwithstanding the foregoing, implied approval of a proposed amendment shall be assumed when any mortgage holder 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 delivered by certified mail with a return receipt. 1 0.02 Access to Books and Records. Eligible Mortgagees shall have the right to examine the books and records of the Master Association upon reasonable notice during normal business hours, and to receive free of charge, upon written request, copies of the Master 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 Master Association's fiscal year. 11. MASTER DEVELOPER RIGHTS 11.01 Maintenance of Management and Sales Offices. Notwithstanding anything herein to the contrary, so long as a Master Developer owns any Lot, the Master Developer may maintain advertising signs on the Property and may maintain sales offices and management offices on any Lot the Master Developer owns and the Master Developer may relocate such sales and management offices from time to time. There shall be no limit on the number or location of such sales and management offices. 11.02 Master Developer Control Period. The Master Developer is entitled to appoint the Master Associations Board during the Master Developer Control Period and may remove directors and appoint successor directors, as it determines in its sole discretion. The Master Developer Control Period shall start on even date herewith and expire on the earliest of the following: (a) there is recorded with the Washington County Registrar of Titles or Washington County Recorder's Office, as the case may be, an instrument, executed by Master Developer or its successors or assigns, stating that the Master Developer voluntarily surrenders its right to appoint the Master Association's Board; (b) the date upon which Master Developer has transferred Lot 1, Block 2, and at least sixty -six percent (66 %) of the units comprising the Residential Component; or (c) the date ten (10) years after the date this Master Declaration is recorded in the Washington County Registrar of Titles or Washington County Recorder's Office, as the case may be. 11.03 Assignment of Master Developer Rights. The Master Developer may assign some or all of its rights under this Master Declaration and the Bylaws to a successor in title to some or all of the Property. 14 12. GENERAL PROVISIONS 12.01 Right to Establish Constituent Common Interest Community. Without amendment of or modification to this Master Declaration, the Owner(s) of any Lot are hereby given the right and power to establish such Constituent Common Interest Community(ies) with respect to their Lot(s) in a manner consistent with this Master Declaration, the Development Agreement and the Bylaws. This right does not require further amendment to this Master Declaration or approval from any other Member. 12.02 Enforcement. The Master Association or any Member may enforce, by any proceeding at law or in equity, all covenants, restrictions, easements, liens and charges now or hereafter imposed by the provisions of this Master Declaration. The failure of the Master Association or any Member to enforce any covenant, restriction, easement, lien or charge does not constitute a waiver of the right to do so thereafter. 12.03 Severability. 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. 12.04 Amendment. The covenants and restrictions of this Master Declaration shall run with and bind the land and shall be perpetual. Except as set forth in Section 12.06(b), this Master Declaration may only be amended by the affirmative vote of the Members holding a majority of the membership votes in the Master Association at an annual, quarterly or special meeting called for that purpose or by (i) mailed ballot, as evidenced by a certificate of the Master Association's secretary or (ii) by an installment signed and acknowledged by Members holding a majority of, the total membership votes in the Master Association. I 12.05 Conflicts Among Documents. In the event of any conflict among the provisions of the Act, this Master Declaration, the Bylaws or any rules and regulations the Board adopts, the documents shall control in the following order of priority: 15 (a) the CIC Act; (b) this Master Declaration; (c) The Articles of Incorporation of the Master Association; (d) the Bylaws; and (e) the rules and regulations. 12.06 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. 12.07 Condemnation. (a) In the event of the taking of any of the Master Common Elements by eminent domain or any action, proceeding or conveyance in lieu of eminent domain (hereinafter, "Condemnation"), the award or proceeds from settlement or conveyance shall be payable to the Master Association. If the Condemnation affects all or any portion of the improvements, fixtures or landscaping located on the Master Common Elements, the Board must determine what actions, if any, are necessary, feasible and in the best interest of the Members to preserve the value and utility of the remaining Master Common Elements and what actions, if any, are necessary, feasible and in the best interest of the Members to replace Master Common Element improvements, fixtures or landscaping taken in the Condemnation either on portions of the Master Common Elements the Condemnation did not affect or other property within in the vicinity of the Property which the Master Association may acquire. The Board may elect to use all or a portion of awards or proceeds from a Condemnation to undertake activities described in the preceding sentence or other activities in response to such Condemnation as the Board deems appropriate or the Board may determine repairs to or replacement of Master Common Element improvements, fixtures or landscaping is not necessary, feasible or in the best interest of the Members in which case the Board may elect to use all or a portion of the award or proceeds from the Condemnation to offset future Master Common Expenses or may remit all or a portion of the proceeds to the Members based on the Member's respective Share of Master Common Expenses. (b) If all of a Lot is taken through Condemnation, or if so much of a Lot is taken that the remaining portion of the Lot cannot reasonably be used for its intended purpose, then the entire Lot is released from this Master Declaration, the Lot's Share of Master Common Expenses shall be automatically reallocated among the remaining Lots on the date the Lot is released from this Master Declaration and the Lot's Vote shall be terminated. If part of a Lot is taken through Condemnation, but the Lot can still be used for its intended purpose, the Share of Common Expenses shall be adjusted pursuant to the formulas described in Section 2.06 and the Lot's Vote shall remain to the same extent it existed prior to the Condemnation. The Board must execute and record an amendment reflecting any such adjustments, 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. 12.08 Dissolution. The Master Association created by this Master Declaration may only be dissolved with the assent given in writing and signed by Members holding no less than seventy-five percent (75 %) of the membership votes of the Master Association and by fifty -one y p ercent (51%) of the Eligible Mortgagees (each Eligible Mortgagee having one vote for each Lot Eligible financed). respect with ect to any Lot that is subject to a Subordinate Declaration, that Lot shall have one vote for or against dissolution as determined by a majority vote of the first mortgage holders on the units subject to the Subordinate Declaration. 16 12.09 Notice Requirements. Upon written request to the Master Association, identifying the names and address of the holder, insurer or guarantor of a first 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 Master Association. (d) a proposed action which requires the consent of a specified percentage of Eligible Mortgagees. IN WITNESS WHEREOF, Master Developer has caused this Master Declaration to be executed the date and year first above written. STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing was acknowledged before me this day of October, 2004, by Jeff G. Hause, the Chief Manager of Fox Hollow East, LLC, a limited liability company under the law of the State of Minnesota, on behalf of the company. THIS INSTRUMENT WAS DRAFTED BY: Anastasi c Associates, P.A. 6120 Oren Avenue North Stillwater, MN 55082 TJE Fox Hollow East, LLC (a Minnesota limited liability company) By: Jeff G. Hause Its: Chief Manager 17 Notary Public