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TABLE OF CONTENTS
1. IDENTIFICATION OF THE COMMUNITY AND THE CLUB
2. DEFINITIONS
3. PURPOSE OF AMENDMENT; APPLICABILITY
OF BYLAWS
4. THE CLUB
4.1. Form of Organization
4.2. Law Governing the Club
4.3.
Registered Offi ce and Registered Agent
4.4. Powers Of Club
4.5.
Membership
4.5.1.
Qualifi cations
4.5.2. Rights and Privileges — Good Standing
4.5.3. Evidence of Membership
4.6. Transfer of Membership
4.7. Meetings
4.7.1.
Place of Meetings
4.7.2. Annual Meetings
4.7.3. Special Meetings
4.7.4. Notices of Meetings
4.7.5. Waiver of Notice
4.8. Voting
4.8.1.
Voting Rights
4.8.2. Joint Owner Disputes
4.8.3. Proxies and Voting by Written Ballot
4.8.4. Quorums
4.8.5. Order of Business
4.8.6. Conduct of Meeting
5. BOARD OF DIRECTORS
5.1. Declarant Control Period
5.2. Management by Owners’ Board, Qualifications
5.2.1. Number of Directors
5.2.2. Qualifications
5.2.3. Term
5.3. Meetings
5.3.1.
Annual Meeting
5.3.2. Regular Meetings
5.3.3. Special Meetings
5.3.4. Notice and Waiver of Notice
5.3.5. Quorum
5.3.6. Conduct of Meeting
5.3.7. Open Meetings
5.3.8. Action by Directors Without a Meeting
5.4. Vacancies
5.5. Removal of Directors
5.6.
Compensation
5.7. Annual Report
of die Board of Directors
5.8.
Fidelity Insurance
5.9. Duty of
Care
5.10. Duty of Loyalty —
Conflict of Interest
5.11. Right
to Indemnification
5.12. Board
of Directors as Attorney-in-Fact
5.13.
Change in Size of Board
5.14.
Committees of the Board — General Authority
5.15. Standing Committees
5.15.1. Budget and Finance Committee
5.15.2. Grounds and Maintenance Committee
5.15.3. Building and Covenants Committee
5.15.4. Recreation and Social Committee
5.16. Other Advisory Committees
5.17. Executive Committee
6. OFFICERS
6.1. Principal Officers
6.2. Election of Officers
6.3.
Removal of Officers; Vacancies
6.4.
President
6.5. Vice President
6.6. Secretary
6.7. Treasurer
6.8. Compensation of Officers
6.9. Liability of Offi cers and Indemnification
7. ENFORCEMENT OF COVENANTS
7.1. Authority of the Board
7.2. Abatement of Violations
7.3.
Legal Proceedings
7.4. Costs and
Attorney’s Fees
7.5. Late
Charges and Interest
7.6. Fines
7.7. Liability for Conduct Causing
Common Expense
7.8. No Waiver of
Rights
7.9. Remedies Cumulative
7.10. Pre-Sanction Hearings
7.10.1. Notice of Hearing
7.10.2. Hearing Procedures
7.10.3. Default
7.10.4. Continuances
7.10.5. Decision
7.10.6. Assurance of Voluntary Compliance in Lieu of Hearing
7.11. Alternative Forms of Dispute Resolution Authorized
8. MANAGEMENT OF THE RECREATIONAL COMMUNITY
8.1. Management by Board of Directors
8.2. Professional Management
8.2.1. Managing Agent
8.3. Bank Accounts for Operations and Reserves
8.3.1. Insured Accounts
8.3.2 Commingling Prohibited
8.3.3. Reserve Accounts
8.4. Club Records
8.4.1. Financial Records
8.4.2. Other Records
8.4.3. Ownership of Records, Inspection
8.5. Audit of Records Required
8.6. Budget for Common Expenses
8.7. Meeting of Club to Approve Budget
8.8. Reserves for Capital Improvements, Replacements, Major Repairs &
Insurance Deductibles
8.8.1.
Establishment of Reserves
8.8.2. Restrictions on Reserve Funds
8.9. Assessments for Common Expenses
8.9.1. Liability of Lots
8.9.2. Payable in Installments
8.9.3. Exemption for Lots Owned by Declarant
8.10. Special Assessments
8.10.1. General Authority
8.10.2. Assessments Against Fewer Than All Lots
8.10.3. Special Assessment for Expense Caused by Negligence or Misconduct
8.11. Owners Personally Liable for Common Expenses
8.12. Liability Following Conveyance of Lot
8.13. Statement of Unpaid Assessments
8.14. Lien for Assessments
8.15. Enforcement of Lien
8.16.
Limitation on Lien Enforcement
8.17.
Interest on Past Due Assessments
8.18.
Fees for Use of Common Areas and Amenities
9. AMENDMENT OF BYLAWS
9.1. Amendment of Bylaws
9.2. Consent of Mortgagees
9.3.
Consent of Declarant or Successor Declarant
10. NOTICE
10.1. Manner of Notice
10.2.
Waiver of Notice
11.
MISCELLANEOUS
11.1.
Compliance with Law
11.2. Conflict
11.3. Severability
11.4. Captions
11.5.
Gender, Number
12.
EFFECTIVE DATE
AMENDED
AND RESTATED BYLAWS
OF LAKE TYEE 1. IDENTIFICATION OF THE COMMUNITY AND THE CLUB. The
name of the Recreational Community is: Lake Tyee. The name of the Club is: Lake Tyee, which will hereinafter
be referred to as the “Club.” 2. DEFINITIONS. Except as provided herein, all terms used in these Bylaws shall have the same meaning ascribed
to them in the Washington Homeowners’ Association Act, Chapter 64.38 RCW (“the Act”),
and/or in the recorded Covenants for the Lake Tyee recreational community (hereinafter
“the Covenants”) recorded in the office of the Skagit County Auditor, and/or the Articles
of Incorporation for the Club. The Lake Tyee recreational community shall be hereinafter referred to
as the “Community”. The term “Club” shall be deemed the equivalent of the term
“association”, as used in the Act. The term “Owner”, as used herein, shall mean an owner of a Lot
in the Community. The term “Governing Documents”, as used herein, shall mean the Covenants,
the Articles of Incorporation, the Subdivision Plat(s) for the Community recorded in the offi ce of
the Auditor of Skagit County, Washington, these Bylaws, any Rules and Regulations adopted by the Board
of Directors, and any lawful amendments to any and all such documents. 3. PURPOSE OF AMENDMENT: APPLICABILITY
OF BYLAWS. This document is intended to entirely replace the existing Bylaws for the Club dated September 27, 1996. It has been amended in compliance with the provisions of Article XV of the existing Bylaws.
These Amended and Restated Bylaws are promulgated to provide for the self-government of the Community
and to promote the safety, health, well-being and enjoyment of its members. The administration and management
of the Community, and the actions of the Owners, the Club and its Board of Directors and Offi cers shall
be governed by these Bylaws. All present and future Owners and their family members, tenants, licensees,
invitees, servants, agents, employees and any other persons who are permitted to use the Subdivision
property shall be subject to these Bylaws and to the other Governing Documents. Acquisition, rental
or occupancy of a Lot shall be deemed conclusive evidence of the Owner’s, tenant’s or occupant’s
acceptance and ratifi cation of; and agreement to comply with the Governing Documents. 4. THE CLUB. 4.1. Form of Organization.
The Club has
been as a non-profi t corporation under the laws of the State of Washington under the provisions of
Chapter 24.03 RCW (the “Corporation Act”). The rights and duties of the members and of said corporation shall be governed by the provisions of the Act and of the Covenants. The Club shall remain organized as a nonprofi t corporation.
4.2. Law Governing the Club.
In case of any confl ict between the Corporation Act and the Homeowners’
Association Act, Chapter 64.38 RCW, the Homeowners’ Association Act shall control.
4.3.
Registered Office and Registered Agent.
The Registered Office of the Club shall be located
in the State of Washington at such place as maybe fixed from time to time by the board of Directors
upon filling of such notices with the Secretary of State and elsewhere as may be required by the Corporation
law. The Club shall maintain a Registered Agent to receive legal process and offi cial notices on behalf
of the Club, as required by the Corporation Act. The Registered Agent shall have a business office identical
with such Registered Office.
4.4. Powers Of Club.
Subject to the provisions of the Covenants, the
Club may, through its Board of Directors:
(a) Adopt and
amend bylaws, subject to the provisions of Section 9.1 hereof; and adopt and amend Rules and Regulations;
(b) Adopt and amend budgets for revenues, expenditures, and reserves, and impose and collect
Assessments for Common Expenses from Owners;
(c) Hire and discharge or contract with Managing Agents and other employees, agents, and independent
contractors;
(d) Institute, defend, or intervene in litigation
or administrative proceedings in its own name on behalf of itself or two or more Owners on matters affecting
the Community;
(e) Make contracts and incur liabilities;
(f) Regulate the use, maintenance, repair, replacement, and modifi cation of Common Areas;
(g) Cause additional improvements to be made as a part of the Common Areas;
(h) Acquire, hold, encumber, and convey in its own name any right, title, or interest to real
or personal property;
(i) Grant
easements, licenses, and concessions through or over the Common Areas and petition for or consent to
the vacation of streets and alleys;
(j) Impose and collect
any payments, fees, or charges for the use, rental, or operation of the Common Areas, other than Limited
Common Areas, and for services provided to Owners;
(k)
Impose and collect charges for late payment of Assessments and, after notice and an opportunity to be
heard by the Board of Directors or by such representative designated by the Board of Directors and in
accordance with such procedures as provided in the Governing Documents, levy reasonable fi nes in accordance
with a previously established scheduled thereof adopted by the Board of Directors and furnished to the
Owners for violations of the Governing Documents;
(l) Impose and collect reasonable charges for the preparation and recording of amendments to the
Governing Documents, or statements of unpaid Assessments;
(m)
Provide for the indemnifi cation of its Offi cers and Board of Directors and maintain Directors’ and
Officers’ liability insurance;
(n) Assign its right
to future income, including the right to receive Common Expense Assessments;
(o) Exercise any other powers conferred by the
Covenants or Bylaws;
(p) Exercise all other powers that
may be exercised in this state by the same type of corporation as the Club; and
(q) Exercise any other powers necessary and proper for the governance and operation of the
Club.
4.5. Membership.
4.5.1. Qualifications.
Each
fee owner or real estate contract vendee of a Lot in the Community, shall be a Member of the Club; the
term “Member”, as used herein, shall be synonymous with the term “Owner”, as used elsewhere herein
and in the Act, unless the context clearly prohibits such construction. Ownership of a Lot shall be
the sole qualification for membership in the Club, and the membership of the Club at all times shall
consist exclusively of all the Owners. The ownership of an interest in a Lot solely as security for
the performance of an obligation does not entitle the owner of such interest to membership in the Club.
A Member shall be considered a “Member in Good Standing” when such Member has paid all required
dues, charges and assessments owing by such Member, and has not been found to have violated other provisions
of the Governing Documents.
4.5.2.
Rights and Privileges - Good Standing.
Rights
and privileges of membership are set forth in the Governing Documents, and are available to all Members
in Good Standing. Such rights and privileges are subject to the payment of all dues, charges or assessments as
may be lawfully levied against the Lot to which such membership is appurtenant. Rights and privileges
of membership, including the right to use the roads and other Common Areas of the Community and/or other
facilities or amenities owned or maintained by the Club, or to vote, or to receive water, electric power
or other utilities or services provided by the Club, may be suspended during any period in which dues, charges
or assessments owing to the Club remain unpaid, or when the Member has been found to have violated provisions
of the Governing Documents. With respect to violations of the Governing Documents other than a failure
to pay dues, charges and assessments, a suspension may be authorized only upon the affirmative vote
of not less than two thirds (2/3) of the Directors present any duly constituted meeting of the Board, and
only after the Owner has been afforded an opportunity for a hearing under Section 7.10 of these Bylaws. A Member
who has failed to pay any lawfully levied dues, charges or assessments, or whose membership rights and
privileges have been suspended ceases to be a Member in Good Standing for the duration of the period that
dues, charges or assessments remain delinquent, or for the period of time specified in the Club’s decision authorizing such suspension, as appropriate.
4.5.3. Evidence of
Membership.
Evidence of membership in the Club
may be issued to the membership of the Club in such form as the Board shall from time to time designate.
Each Member shall provide the Secretary of the Club with the name and address of each owner. No membership
nor evidence of membership may be transferred or loaned to another by any individual, except as provided
in these Bylaws. All such evidence of membership shall remain the property of the Club and must be surrendered
to the Club upon termination of membership or upon request of the Club.
4.6. Transfer of Membership.
The Club membership
of each Owner shall be appurtenant to the Lot giving rise to such membership, and shall not be assigned,
transferred, pledged, hypothecated, conveyed or alienated in any way except upon the transfer of title
to said Lot and then only to the transferee of title to such Lot. Any attempt to make a prohibited transfer
shall be void. Any transfer of title to a Lot shall operate automatically to transfer the membership in
the Club appurtenant thereto to the new Owner thereof.
4.7. Meetings.
4.7.1. Place of Meetings. Meetings of the Club
shall be held at such place within Skagit County, Washington or within sixty miles thereof as may be designated by the Board of Directors and stated in the notice of the meeting. 4.7.2. Annual Meetings. There shall be an annual meeting of the Club in the second quarter of each year. The
annual meeting of the Club shall be held for the election of Directors and the conduct of such other
business as may be properly brought before the meeting. At the annual meeting, there shall be presented
a report containing the following information: (a) A balance sheet and a revenue and expense statement of the Club prepared on an accrual basis,
which shall be current to sixty days; (b) The
annual financial statement of the Club, including the audit report required by Section 8.5 hereof, if
it has been prepared, for the year immediately preceding the current year. (c) A statement of the amount of any reserves for repair or replacement and of
any portions of those reserves currently designated by the Club for any specified projects;(d) A statement of any anticipated repair or replacement cost in excess of five percent of the
annual budget of the Club that has been approved by the Board of Directors; and (e) A statement of any unsatisfi ed judgments against the Club and the status
of any pending Suits to which the Club is a party.
4.7.3. Special Meetings. Special meetings of the Owners may be called at any time
for the purpose of considering matters which by the terms of the Governing Documents require the
approval of all or some of the Owners, or for any other reasonable purpose. Such meetings shall be called
by written notice of the President of the Club upon the decision of the President, or after request
signed by a majority of the Board, or by written request by Owners having at least 100/0 of the total
votes in the Club. 4.7.4. Notices of Meetings. Not less than fourteen (14) nor more than sixty (60) days
in advance of any meeting, the Secretary shall cause notice to be hand-delivered or sent prepaid by first
class United States mail to the mailing address of each Lot or to any other mailing address designated
in writing by the Owner. The notice of any meeting shall state the place, day and hour of the meeting
and the items on the agenda to be voted on by the members, including a list of the candidates seeking
to be elected as Directors of the Club, the general nature of any proposed amendment to the Articles
of Incorporation, the Covenants or Bylaws, any proposal to remove a Director, or any budget or changes
in the previously approved budget that result in a change in assessment obligation. 4.7.5. Waiver
of Notice. Whenever
any notice to an Owner is required to be given by the Club, a Waiver thereof in writing signed by the Owner, whether made before or given after
the time stated therein, shall be equivalent to the giving of such notice.
4.8. Voting.
4.8.1. Voting Rights. Each Member in Good Standing has a right to vote at meetings of the Club on such matters as may lawfully come
before the meeting, and except as provided in Section 8.9.3 hereof each Member shall have one vote per
Lot owned by such Member. In the event that a Lot is owned by the Club, no votes allocated to such Lot
may be cast, and in determining the percentage of votes required to act on any matter, the votes allocated
to such Lot shall be disregarded. 4.8.2. Joint Owner Disputes. The vote for a Lot must be cast as a single
vote, and fractional votes shall not be allowed. Where a Lot is owned by more than one person, if only one of such
persons is present at a meeting of the Club, in person, by proxy or written ballot, such person is entitled
to cast all the votes allocated to that Lot. If more than one of themultiple persons comprising an Owner
are so present, such Owner’s vote may be cast only in accordance with the agreement of a majority
in interest of such multiple persons. There is majority agreement if any one of the multiple persons
casts a vote for such Owner without protest being made promptly to the person presiding over the meeting
by any of the other persons comprising the Owner. In the absence of majority agreement, the conflicting
votes shall be deemed an abstention of the vote for such Lot 4.8.3.
Proxies and Voting by
Written Ballot. Votes allocated to a Lot may be cast by a
written ballot or pursuant to a proxy duly executed by the Owner. An Owner may not revoke a
proxy given pursuant to this Section except by actual notice of revocation to the person presiding over
a meeting of the Club. Any proxy is void if it is not dated or purports to be revocable without notice.
Unless stated otherwise in the proxy, a proxy terminates eleven months after its date of issuance. A
written ballot shall not be valid unless it is signed by the Owner and received by the Club on or before
the date and time of the meeting at which it is to be counted. A written ballot may be in the form of
a directed proxy which designates an individual either by name or by general description (e.g., “any
Offi cer of the Club”) and therein instructs such person how to vote on the matters to be decided
at the meeting for which the ballot is prepared, or may be on a form prepared by the Club for obtaining
votes on the matters constituting the business of the meeting. In the event that the Club desires to prepare a written ballot for use at a meeting; copies thereof shall be served with the Notices
of such meeting. 4.8.4.
Quorums. A quorum is present throughout any meeting of the Club if the Owners of Lots to which at least ten percent (10%)
of the votes of the Club are allocated are present in person or by proxy at the beginning of the meeting.
4.8.5. Order of Business. The order of business at a general or annual meeting of the Club shall be as follows: (i) proof of notice of meeting;
(ii) determination of the presence of a quorum; (iii) approval of Agenda; (iv) approval of minutes of the previous
meeting of the Club; (v) election of Directors, if applicable; (vi) reports of the Board of Directors, Officers and committees;
(vii)
unfinished business; and (viii) new business. Items (iv), (vii) and (viii) shall be omitted from the order of business of a special meeting held
for the sole purpose of electing a Director. Only matters described in the notice of a special meeting
may be considered at such a meeting; and the order of business at a special meeting shall generally
conform to the order specifi ed in the notice of such meeting.
4.8.6. Conduct of Meeting. The President shall preside at meetings of
the Club and the Secretary
shall keep the minutes of meetings, for inclusion in the Club’s permanent Minute Book. Roberts
Rules of Order shall govern the conduct of all meetings of the Club when not in conflict with the Corporation
Law, the Covenants or these Bylaws.
5. BOARD OF DIRECTORS. 5.1. Declarant
Control Period.
The Declarant, LANDS-WEST, INC. and Robert S. Rogers and Gloria D. Rogers dba Lake Tyee Company, reserved
the right to appoint and/or remove the Officers and members of the Board of Directors of the Club for a
period of time. This period
of time has now expired. 5.2. Management by Owners’ Board Qualifications. 5.2.1. Number of Directors. The Board of Directors of the Club shall
consist of at least five members, who shall be elected to numbered positions, numbered from 1 through 5. 5.2.2.
Qualifi cations. All of the members of the Board of Directors
must be Owners who are and remain Members in Good Standing. The term “Owner” in such context shall be deemed to
include any director, officer, partner in, or trustee of any person, who is, either alone or in conjunction
with another person or persons, an Owner. Any Officer or Director of the Club who would not be eligible
to serve as such if he or she were not a director, offi cer, partner in, or trustee of the entity constituting
such Owner shall be disqualified from continuing in office if he or she ceases to have any such affiliation
with that Owner. Further, no person shall be qualified to serve as a Director until such person has
owned a Lot in the Community for at least two (2) years. To remain qualified to serve as a Member of
the Board of Directors, a Directors must additionally satisfy any minimum attendance requirements established
elsewhere in these Bylaws or by resolution of the Board. 5.2.3.
Term. Except as provided immediately below, a Director
shall serve for a term of two years, and until his or her successor is elected. To provide continuity of management, the terms
of the Directors shall be staggered under the following procedures: Directors occupying even-numbered
positions (2 and 4, etc) shall be elected in even-numbered years. Directors occupying odd-numbered
positions (1, 3 and 5, etc.) shall be elected in odd-numbered years. At the first meeting of the Association
following the adoption of these Amended Bylaws, existing Directors with unexpired terms and any vacant
positions shall be deemed to hold odd-numbered positions. Newly-elected Directors shall be deemed to
be occupying even-numbered positions.
5.3.
Meetings.
5.3.1. Annual Meeting. An annual organizational meeting of the Board of Directors shall be held as soon as may be practicable, but not more than 14 days after each annual
meeting of the Club, for the purpose of electing the Offi cers of the Club and for the transaction of
such other business as may be then appropriate. No notice shall be necessary to the newly elected Directors in order legally to constitute such meeting, providing a majority of the entire
Board is present at the meeting. 5.3.2. Regular Meetings. Regular meetings of the Board of Directors shall be held at such time and place as may be determined from
time to time by the Board of Directors, but at least one meeting shall be held in each quarter
of each fiscal year. 5.3.3. Special Meetings. Special meetings of the Board of Directors may be called by the President and shall be called by the President or Secretary on the written request
of at least two Directors. 5.3.4. Notice and Waiver of Notice. Notice of regular or special meetings of the Board of Directors shall be given to each Director,
by mail, FAX, e-mail or hand-delivery at least 72 hours prior to the time of the meeting, and shall
state the date and place and hour of the meeting. Notice of regular meetings may also be given by providing
each Board member with a written schedule of regular meetings adopted for the ensuing year at any time
after the annual meeting and at least seven days prior to the next succeeding regular meeting.
Notice of a special meeting shall state the purposes of the meeting. Notice of a meeting of the Board of Directors may be waived in writing by a Director either before or after the meeting.
Attendance at a meeting constitutes waiver of notice of that meeting; except where a Director attends
a meeting for the express purpose of objecting to the transaction of business because the meeting is
not lawfully called or convened. If all of the members are present at any meeting of the Board of Directors,
no notice shall be required and any business may be transacted at such meeting. 5.3.5.
Quorum and Voting. A quorum is deemed present throughout any
meeting of the Board
of Directors if persons entitled to cast a majority of the votes on the Board of Directors are present
at the beginning of the meeting. Each Director shall have one vote, and proxy shall not be permitted.
The votes of a majority of the members present at a meeting at which
a quorum is present shall constitute the decision or act of the Board of Directors. If less than
a quorum is present at a meeting, the majority of those present may recess the meeting to a designated
time and place. A recessed meeting may be held as designated upon such further notice as may be necessary
to assure attendance and to satisfy the “open meetings” requirements of Section 5.2.7 hereof;
when a quorum is present any business may be transacted which might have been transacted at the meeting
as originally called.
5.3.6.
Conduct of Meeting. The President shall preside at meetings of the Board of
Directors and the Secretary
shall keep the minutes of the proceedings. Following proof of notice and determination of the presence
of a quorum, any lawful business may be transacted. 5.3.7. Open Meetings. Except as hereinafter provided, all meetings
of the Board of Directors shall be open for observation by all Owners of record and their authorized agents. Upon the affirmative
vote in open meeting to assemble in closed session, the Board may convene in closed executive session
to consider personnel matters, to consult with legal counsel or consider communications with legal counsel,
or to discuss likely or pending litigation, matters involving possible violations of the Governing Documents,
or matters involving the possible liability of an Owner to the Club. The motion shall state specifi
cally the purpose for the closed session. Reference to the motion and the stated purpose for the closed
session shall be included in the minutes. The Board shall restrict its consideration of matters during
the closed portions of the meeting to only those purposes specifi cally exempted and stated in the motion. No motion, or other action adopted, passed, or agreed to in closed session may become
effective unless the Board, following the closed session, reconvenes in open meeting, reasonably identifi
es the motion or other action considered in executive session, and votes again in the open meeting on
such motion or other action. The requirements of this Section shall not require the disclosure of information
in violation of law or which is otherwise exempt from disclosure. 5.3.8.
Action by Directors Without
a Meeting. In a bona
fi de emergency, or to accomplish
purely ministerial
objectives (such as the signing of banking resolutions) any action required or permitted to be taken
may be taken without a meeting if all of the members of the Board of Directors consent in writing to
such action. Such written consent or consents shall be filed with the minutes of the proceedings of
the Board of Directors.
5.4. Vacancies. Except as provided in Section 5.1, a vacancy on the Board of Directors caused by any reason, other than removal of a Director by a vote of the Club, shall be filled by a vote of the majority of the remaining Directors,
even though they may constitute less than a quorum; and each person so elected shall serve until the
next annual meeting of the Club and until his or her successor is elected. A vacancy occurring on the
Board of Directors by reason of an increase in the number of Directors constituting the entire Board
of Directors or by reason of the removal of a Director by a vote of the Club shall be fi lled by the
Club at an annual meeting or at a special meeting called for that purpose. 5.5. Removal of Directors.
The Owners,
by majority vote of the voting power in the Club present and entitled to vote at any duly constituted
meeting of the Owners at which a quorum is present, may remove any member of the Board of Directors
with or without cause.
5.6. Compensation.
A Director shall not receive compensation from
the Club for serving on the Board of Directors, but a Director may be reimbursed for reasonable out-of-pocket
expenses incurred by him or her in the proper performance of his or her duties.
5.7. Annual Report
of the Board of Directors.
The Board of Directors shall present at each annual meeting of the Club, and when called for
by vote of the Club at any special meeting of the Club, a complete statement of the operative and fi
nancial condition of the Club, containing at minimum the information required in Section 4.7.2 of these
Bylaws.
5.8. Fidelity Insurance.
The Board of Directors shall obtain for any Director,
Offi cer, trustee, volunteer, agent (excluding a Managing Agent, which shall acquire its own fi delity
coverage), or employee of the Club handling or responsible for Club funds, adequate fi delity insurance.
The fi delity bond or insurance shall designate the Club as a named insured and shall be written in
an amount suffi cient to provide adequate protection for the moneys under such person 5 control.
5.9. Duty of Care.
A Director
shall perform the duties of a Director, including duties as a member of any Committee of the Board upon
which the Director may serve, in good faith, in a manner such Director believes to be in the best interests
of the Club, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like
position would use under similar circumstances. In performing the duties of a Director, a Director shall be
entitled to rely on information, opinions, reports, or statements, including fi nancial statements and other financial data, in each case prepared or presented by (a)
one or more officers or employees of the Club whom the Director reasonably believes to be reliable and
competent in the matter presented; (b) legal counsel, public accountants,
or other persons as to matters which the director reasonably believes to be within such person’s professional
or expert competence; or (c) a Committee of the Board upon which the Director
does not serve, duly designated in accordance with a provision in the Bylaws, as to matters within its
designated authority, which Committee the director believes to merit confi dence; so long as, in any
such case, the Director acts in good faith, after reasonable inquiry when the need therefor is indicated
by the circumstances, and without knowledge that would cause such reliance to be unwarranted.
5.10. Duty of Loyalty
- Conflict of Interest.
The Directors shall exercise their powers and duties in good faith and with a view to the interests
of the Club and consistent with the purposes set forth in these Bylaws. No contract or other transaction
between the Club and one or
more of its Directors, or between the Club and any corporation, fi rm entity or Club in which one or
more of the Directors are Directors or Officers or are pecuniarily or otherwise interested, shall be either void
or voidable because such Director or Directors are present at the meeting of the Board of Directors or
any committee thereof which authorizes or approves the contract or transaction, if the fact of the common directorate
or interest is disclosed or known to the Board of Directors or a majority thereof and noted in the minutes,
and the Board of Directors authorizes, approves or ratifi es such contract or transaction in good faith by
a vote sufficient for the purpose. Common or interested Directors may be counted in determining the presence of a quorum at any meeting of the Board of Directors or committee thereof which authorizes, approves or ratifies any contract or transaction, but the interested Director(s) must abstain from voting on the contract or
transaction. If disclosures are not made as required by this subsection, or if the interested Director(s)
do not abstain from voting, the contract or transaction may be voidable at the instance of the Club,
and the interested Director(s) may not be insulated from liability for any harm suffered by the Club
as a result of the contract or transaction.
Club and one or more of its Directors, or
between the Club and any corporation, fi rm entity or Club in which one or more of the Directors are
Directors or Officers or are pecuniarily or otherwise interested, shall be either void or voidable because
such Director or Directors are present at the meeting of the Board of Directors or any committee thereof
which authorizes or approves the contract or transaction, if the fact of the common directorate or interest
is disclosed or known to the Board of Directors or a majority thereof and noted in the minutes, and
the Board of Directors authorizes, approves or ratifi es such contract or transaction in good faith by
a vote sufficient for the purpose. Common or interested Directors may be counted in determining the presence of a quorum at any meeting of the Board of Directors or committee thereof which authorizes, approves or ratifies any contract or transaction, but the interested Director(s) must abstain from voting on the contract or
transaction. If disclosures are not made as required by this subsection, or if the interested Director(s)
do not abstain from voting, the contract or transaction may be voidable at the instance of the Club,
and the interested Director(s) may not be insulated from liability for any harm suffered by the Club
as a result of the contract or transaction. 5.11. Right to Indemnification.
The Club shall
indemnify and hold harmless each of the Directors and Offi cers from and against all contractual liability
to others arising out of contracts made by the Board of Directors or Offi cers on behalf of the Club
or the Owners unless such contract was made in bad faith or contrary to the provisions of the Governing Documents.
The Directors and Offi cers shall not be personally liable for contracts made by them on behalf of the
Club. The Club shall indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by reason of the fact that (s)he is or was a Director or
Officer of the Club against amounts paid in settlement incurred by him or her in connection with such action, suit or proceeding if (s)he acted in good faith and in a manner (s)he reasonably believed to be in, or not opposed to, the best interests of the Club, to the fullest extent authorized by RCW 23B.08.320, and 23B.08.500 through 23B.08.600, and any amendments thereto, irrespective of the fact that the Club is not incorporated under RCW 23B. See RCW 23B.17.030.
5.12. Board of Directors as Attorney-In-Fact.
The Board of Directors shall constitute the attorney-in-fact for the Owners of all of the Lots and for each of them, to manage, control and &al with the interests of such Owners in the Common Areas of the Community so as to permit the Board of Directors to fulfi ll all of its powers, functions and duties under the provisions of the Act, the Covenants and these Bylaws, and to exercise all of its powers thereunder and to deal with the property upon its destruction or condemnation and with the proceeds of any insurance indemnity.
This power shall include, but shall not be limited to, the power to grant easements and licenses
from time to time affecting the Common Areas, telephone cables, gas lines, storm drains, underground
conduits, or such other purposes related to the provision of public utilities or as may be considered
necessary or appropriate by the Board of Directors for the preservation of the health, safety, convenience,
or welfare of the Owners, or any of them. The foregoing shall be deemed to be a power coupled with an
interest, and the acceptance by any person or entity of any interest in any Lot shall constitute an
appointment of the Board of Directors as such attorney-in-fact. This power shall be in addition to any
authority to grant easements or licenses given to the Board of Directors by the Act, the Covenants or
these Bylaws.
5.13. Change in Size of Board.
The number of Directors may at any time be increased
or decreased by amendment of these Bylaws. If the Owners at any time elect a greater or lesser number
of Directors than the number previously constituting the whole Board, then election of the new number
shall automatically amend these Bylaws to increase or decrease the size of the Board to the number actually
elected, but no decrease shall have the effect of shortening the term of any incumbent Director, nor
shall the number of Directors ever be less than three (3) persons.
5.14. Committees of the Board – General Authority.
The Board of Directors, by resolution
duly adopted, may designate and appoint one or more Committees each of which shall consist of two or more Directors and, if desired, one or more Owners who are not members of the Board, which committees, to the extent provided in such resolution, in the Articles of Incorporation, or in the Bylaws of the Club, shall have and exercise the authority of the Board of Directors in the management of the Club: Provided
that no such committee shall
have the authority of the Board of Directors in reference to: (a)
Amending, altering or repealing the Bylaws;
(b) Electing, appointing, or removing any member of any such committee or any Director or Officer
of the Club;
(c) Amending the
Articles of Incorporation;
(d)
Authorizing the sale, lease, exchange or mortgage, of all or substantially all of the property and assets
of the Club.
(e) Authorizing
the voluntary dissolution of the Club or revolting proceedings there for; or
(f) Amending, altering or repealing any resolution of the Board of Directors which by its terms
provides that it shall not be amended, altered or repealed by such committee.
The designation and appointment of any such committee and the delegation thereto of authority
shall not operate to relieve the Board of Directors or any individual Director of any responsibility
imposed upon it, him or her by law.
5.15. Standing Committees.
The Board
shall have the authority to designate the functions and members of four standing committees:
A Budget and Finance Committee, a Grounds and Maintenance Committee, a Building and Covenants
Committee, and a Recreation and Social Committee. Each Committee shall have one member whose role shall be that of liaison to the Board, who shall periodically provide reports to the Board of the activities of the
Committee at such times or with such frequency as may be established by resolution of the Board.
5.15.1. Budget
and Finance Committee.
The Budget and Finance Committee shall
consist of persons designated by the Board, at least one of whom shall be a Director, each to serve
for a term of one year. The charter and purpose of the Committee shall be to assist the Board in developing
the Club’s annual budget, to work with the Grounds and Maintenance Committee to help the Board
develop reasonable reserves for repairs, replacements and capital improvements, and to monitor trends
in income and expenditures to ensure the integrity of the Club’s fi nancial status. The Budget
and Finance Committee will work with the Club’s Treasurer and Manager to ensure that the Board receives
timely information regarding the financial status of the Club. The Board may by resolution prescribe additional
duties for this Committee.
5.15.2.
Grounds and Maintenance Committee.
The
Grounds and Maintenance Committee shall consist of persons designated by the Board, at least one of
whom shall be a Director, each to serve for a term of one year. The charter and purpose of the Committee shall
be to monitor the condition and appearance of the Common Areas of the Community, to help the Board determine
routine maintenance and work schedules for any of the Common Areas that require periodic attention, to
work with the Budget and Finance Committee to help the Board to develop reasonable reserves for repairs,
replacements and capital improvements. The Board may by resolution prescribe additional duties for this
Committee.
5.15.3. Building and
Covenants Committee.
The
Building and Covenants Committee shall consist of at least three persons designated by the Board
at least two of whom shall be Directors, each to serve for a term of one year. The charter and purpose of the Committee shall be to assure that the Community shall always be maintained in a manner:
(a) providing for visual harmony and soundness of repair; (b) avoiding activities
deleterious to the aesthetic or property values of the Community; (c)
furthering the comfort of the Owners, their guests and tenants; and (d) promoting
the general welfare and safety of the Community. Proceedings of the Covenants Committee shall be governed
by the same notice, quorum and voting requirements applicable to the Board of Directors under these
Bylaws. Upon resolution of the Board, the Covenants Committee may be delegated responsibility
for conducting any Pre-Sanction Hearings pursuant to Section 7.10 hereof. If such a resolution is adopted,
the Committee shall, following any such heating render a written decision containing fi ndings of fact
and conclusions of law; any party (including the Club) aggrieved by a decision of the Committee, may
appeal the decision of the Committee to the Board, in which case the Board shall review the record of
the Committee’s heating and render its decision in writing within thirty (30) days, in the manner
prescribed by Section 7.10.5 hereof.
5.15.4. Recreation and Social Committee.
The Recreation and Social Committee shall
consist of persons designated by the Board, at least one of whom shall be a Director, each to serve
for a term of one year. The charter and purpose of the Committee shall be to promote social and recreational
activities occurring on the Common Areas of the Community, and to work with the Grounds and Maintenance
Committee to monitor the condition and use of the Community’s Recreational Facilities. This Committee
is expected to remain generally economically self-suffi cient by producing income from user fees. The
Board may by resolution prescribe additional duties for this Committee.
5.16. Other Advisory
Committees.
The Board of Directors may by resolution establish and appoint the members of one or more additional
committees intended to obtain information for and provide advice to the Board, but not to exercise any
of the powers of the Board, with respect to such matters as from time to time may be deemed useful by
the Board. The members of any such committee may be Board members, Owners, or other persons whose
participation is deemed useful by the Board, in its sole discretion.
5.17. Executive
Committee.
The Board may, by appropriate resolution, designate two (2) or more of its members to constitute
an Executive Committee, who, to the extent provided in said resolution, shall have powers of general
supervision of the Club between Board meetings.
6. OFFICERS. 6.1. Principal Officers.
The principal
Officers of the Club are a President, a Vice President, a Secretary and a Treasurer. All the principal
Offi cers of the Club must be members of the Board of Directors. Two or more offi ces may be held by
the same person, except the offi ces of President and Secretary. The Board of Directors may, in its discretion, also elect or appoint such other Officers and assistant Officers as may be deemed necessary. Officers are charged, in general, with responsibility for implementing policy decisions formulated or adopted by the Board of Directors.
6.2. Selection of Officers.
The Officers of the Club shall be selected annually
by the Board of Directors at its annual organizational meeting.
6.3. Removal of Officers Vacancies.
An Officer may
be removed by the Board of Directors with or without cause by the affi rmative vote of a majority of
the entire Board of Directors. A successor may be elected at any regular meeting of the Board of Directors
or at any special meeting called for that purpose.
6.4. President.
The President
is the chief executive Officer of the Club; (5) he shall preside at meetings of the Club and the Board
of Directors; (s)he shall have general and active management of the business of the Club, subject to the
control of the Board of Directors, and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall be the Offi cer authorized and empowered to prepare, execute, certify, and record amendments to the Covenants and Subdivision Plat on behalf of the Club.
6.5. Vice President.
The Vice President
shall perform the duties and exercise the powers of the President in the absence or disability of the
President and shall perform such other duties as the Board of Directors may prescribe.
6.6. Secretary.
The Secretary
shall attend all meetings of the Board of Directors and of the Members, and shall record the voting
and the minutes of all proceedings in a minute book to be kept for that purpose. (S)he shall give notice
of meetings of the Members and the Board of Directors, and shall perform such other duties as may be prescribed
by the Board of Directors or the President. The Secretary, with the assistance of the Treasurer, shall
compile and keep current at the principal offi ce of the Club all records required by Section 8.4 hereof The Secretary shall keep current and retain custody of the minute books of the proceedings of the Members and the Board of Directors, and may maintain a separate Book of Resolutions containing copies of resolutions of the Board intended to have ongoing or permanent effect. An Assistant Secretary may perform the duties and exercise the powers of the Secretary in the absence or disability of the Secretary and shall perform such other duties as the Board of Directors may prescribe.
6.7. Treasurer.
The Treasurer
shall exercise control over all funds and securities of the Club except those which are placed under
the control of a Manager. The Treasurer shall deposit all funds of the Club in such federally insured
financial institution(s) as may be designated by the Board of Directors. (S)he shall disburse funds in
accordance with the Club’s Budget and as ordered by the Board of Directors. With the assistance of any accountant or Manager employed by the Club, the Treasurer shall keep the books of the Club on an accrual basis, with detailed accounts of the receipts and expenditures affecting the Club, in at least the detail required
by Section 8.4 hereof The books and supporting vouchers and records shall be available for examination
by the Owners, Mortgagees and their duly authorized agents or accountants or attorneys, during regular
business hours in the manner set by the Board of Directors. All books and records shall be kept in accordance
with generally accepted accounting principles, in a manner consistent with homeowners association auditing
guidelines. The Treasurer shall be responsible for preparation of the Club’s annual fi nancial
statement required by Section 8.5 hereof
6.8. Compensation of Officers.
No Officer shall
receive any compensation from the Club for acting as such unless such compensation is approved by a
vote of Owners entitled to cast at least 75% of the votes in the Club. An Offi cer shall be reimbursed for
reasonable out-of-pocket expenses incurred by him or her in the performance of his or her duties.
6.9. Liability
of Officers and Indemnification.
See Section 5.9, 5.11 of these Bylaws.
7.
ENFORCEMENT OF COVENANTS. 7.1. Authority of the Board.
The Board of
Directors shall have primary responsibility for maintaining and enforcing compliance with the covenants,
conditions and restrictions contained in the Covenants. Without limiting the authority and powers conferred
upon the Board by the Act, the Board shall have the power and authority specifi ed in this Section of
these Bylaws.
7.2 Abatement of Violations.
The breach of any provision of the Governing Documents
shall give the Board of Directors the right, in addition to any other rights set forth in the Covenants
or these Bylaws, to enter the Lot or any Limited Common Area in which, or as to which, such violation
or breach exists and to summarily abate and remove, at the expense of the defaulting Lot Owner, any
thing or condition that constitutes such a violation, and the Board of Directors shall not thereby be
deemed guilty in any manner of trespass. PROVIDED, that this remedy shall not be utilized when a breach
of the peace is likely to occur or if any items of construction within the Lot or any of the Common
Areas will be altered or demolished.
7.3. Legal Proceedings.
Failure to comply
with any of the terms of the Governing Documents shall be grounds for legal relief, including without
limitation, actions to recover any sums due for money damages, injunctive relief, foreclosure of the
lien for payment of Assessments, any other relief provided for in these Bylaws or any combination thereof
and any other relief afforded by a court of competent jurisdiction, all of which relief may be sought by the
Club, the Board of Directors, the Managing Agent or, if appropriate, by any aggrieved Owner, and shall not
constitute an election of remedies.
7.4. Costs and Attorney’s Fees.
The Club shall
be entitled to recover any costs and reasonable attorneys’ fees incurred in connection with the
collection of delinquent Assessments, whether or not such collection activities result in suit being commenced
or prosecuted to judgment. In addition, the Club shall be entitled to recover costs and reasonable attorneys’
fees if it prevails on appeal and in the enforcement of a judgment. In any other proceeding arising out
of an alleged default by an Owner, the prevailing party shall be entitled to recover the costs of the proceeding, and such reasonable attorney’s fees as may be determined by the court. In the event that the prevailing party is the Club, the costs and attorney’s fees so awarded shall constitute a Special Assessment against the
Owner’s Lot.
7.5. Late Charges and Interest.
The Board may
impose and collect reasonable late charges to encourage prompt payment of Assessments. Until changed
by resolution of the Board with advice of counsel, the Board may collect a late charge: (a) when any Assessment or installment thereof is received by the Club more than ten (10) days
beyond the due date of such Assessment or installment; (b)
in an amount not to exceed the greater of $25.00 or ten percent (10%) of the amount of said Assessment
or installment. Delinquent Assessments shall bear interest from the date of delinquency at the rate
of 12% per annum, or the maximum rate permitted under RCW 19.52.020 on the date on which the Assessments
became delinquent.
7.6. Fines.
The Board may impose and collect reasonable fi nes
against Owners for violations of the Act, or the Governing Documents. PROVIDED, however, that no fi
ne may be levied unless (1) the Board has by resolution established a schedule of fi nes which has been
furnished to all Owners prior to the alleged violation, and (2) the allegedly offending Owner has been
provided with notice of and an opportunity to be heard at a hearing to be conducted pursuant to Section 7.10 of these Bylaws. A fi ne shall be treated as a Special Assessment against such Owner’s Lot.
7.7. Liability for Conduct Causing Common Expense.
Each Owner shall
be liable for the cost of all maintenance, repair or replacement rendered necessary by his or her act,
neglect or carelessness, or the act, neglect or carelessness of any member of his or her family or his
or her employees, agents, tenants or licensees, but only to the extent that such cost is not covered by the
proceeds of insurance carried by the Board of Directors. Such liability shall include any increase in fire insurance
rates occasioned by use, misuse, occupancy or abandonment of any Lot or its appurtenances. To the extent
that any Common Expense is caused by the misconduct of any Owner, the Club may specially assess that
expense against the Owner’s Lot, PROVIDED that no such Special Assessment may be levied unless the allegedly
offending Owner has been provided with notice of and an opportunity to be heard at a hearing to be conducted
pursuant to Section 7.10 of these Bylaws.
7.8. No Waiver of Rights.
The failure of
the Club, the Board of Directors or of an Owner to enforce any right, provision, covenant or condition
which may be granted by the Governing Documents or the Corporation Law, shall not constitute a waiver
of the right of the Club, the Board or the Owner to enforce such right, provision, covenant or condition n
the future.
7.9. Remedies Cumulative.
A suit to recover a money judgment for unpaid Assessments
may be maintained without foreclosing or waiving the lien securing the same, and a foreclosure may be
maintained notwithstanding the pendency of any suit to recover a money judgment. All rights, remedies
and privileges granted to the Club, the Board of Directors or any Owner pursuant to any term, provision,
covenant or condition of the Governing Documents or the Corporation Law shall be deemed to cumulative
and the exercise of any one or more thereof shall not be deemed to constitute an election of remedies,
nor shall it preclude the party exercising the same from exercising such other privileges as may be
granted to such party by the Governing Documents or the Corporation Law or at law or in equity.
7.10. Pre-Sanction
Hearings.
In any cases under Section 7.6 or 7.7 of these Bylaws, where a fi ne or Special Assessment for
misconduct is proposed, or under Section 4.5.2, where a Member’s “good standing” status
is proposed to be suspended, or in any other case where the Board, in its discretion, deems necessary
or advisable, an allegedly offending Owner shall be afforded the opportunity for a hearing by the Board
or the Building and Covenants Committee to determine the appropriateness of the action proposed to be
taken. A hearing will be governed by the procedures set forth below:
7.10.1. Notice of Hearing.
Written notice of such hearing shall
be hand-delivered or mailed by registered or certifi ed mail, return receipt requested, to such Owner
at his or her or her last known mailing address, at least fourteen (14) days in advance of the date
set for the Hearing. The notice shall include:
(a) The place, day and hour of the hearing;
(b) A statement, in reasonable detail, of the factual nature of any alleged violations, along
with the section number of any portion of the Act or the Governing Documents allegedly violated; and (c)
The nature of the action proposed to be taken against such Owner.
7.10.2. Hearing Procedures.
The President, or his
or her designee, shall preside at the hearing, which shall be conducted generally in
accordance with the requirements for Meetings of the Board as provided
in Section 5.3 of these Bylaws. Any Director who feels that it would be impossible to be fair, objective and unbiased
in the proceedings shall disqualify himself or herself prior to the commencement of the hearing. Both the Owner who is the
subject of the hearing and the Club may be represented by counsel. Minutes shall be taken and, if requested by either the
Club or the Owner, the hearing may be recorded either stenographically, or by audio or video tape or equivalent means. After
receiving proof of the giving of the notice required by Section 7.10.1 of these Bylaws, factual evidence in support of the
allegation that a violation has occurred will be received. Live testimony from witnesses with personal knowledge shall be
received where practicable. Affidavits or declarations in the form required by RCW 9A.72.085 may, however, be received in
lieu of live testimony as the interests of justice may require, and formal adherence to legal rules of evidence shall not
be required. Thereafter, evidence from the Owner, in defense or toward mitigation, shall be received. Any rebutting evidence
may then be received.
Legible copies of all documentary evidence received shall be attached to the minutes of the hearing.
At the close of the evidence, both sides shall have the opportunity for legal argument.
7.10.3. Default.
In the event that the Owner fails to appear at the hearing, (s)he may be deemed to be in default, and upon receipt of proof
that the Owner received proper notice of the hearing, and upon receipt of any satisfactory evidence that establishes the existence
of a violation, the Board may render its decision forthwith.
7.10.4. Continuances.
In the interests
of justice, the Board may in its discretion continue the hearing at the request of either the Owner or the Club, for such
reasonable period not generally to exceed thirty (30) days.
7.10.5. Decision.
The Board may issue
its decision at the close of the hearing, or may adjourn and render its decision at a later date, not to exceed thirty(30)
days following the date of the hearing or any continuation thereof. The decision shall be in writing, but need not contain
detailed findings of fact or conclusions of law, and shall be delivered
or mailed to the Owner and his or her attorney
on the date of issuance. The original copy of the decision shall be dated and signed by the presiding Offi cer, and fi led
among the minutes of the Board of Directors.
7.10.6. Assurance of Voluntary Compliance in Lieu of Hearing.
The Board may, with or without holding a hearing and at any time prior to rendering its Decision, accept from the Owner
an Assurance of Voluntary Compliance in lieu of further proceedings, subject to such terms and conditions as may appear reasonable.
7.11. Alternative Forms of Dispute Resolution Authorized.
In addition
to the rights, remedies and procedures described above, the Club may, with the consent of an affected Owner and/or any other
interested party, agree to resolve any dispute through mediation, binding or nonbinding arbitration, or such other alternative
dispute resolution mechanism as may be deemed appropriate, at the discretion of the Board.
8. MANAGEMENT OF THE RECREATIONAL COMMUNITY 8.1.
Management by Board of Directors.
The Board of Directors shall have all of the powers and duties necessary for
the administration of the affairs of the Club and may do all such acts and things as are not by the Homeowners’ Clubs
Act or the Governing Documents required to be exercised and done by the Club through a vote of the Owners. The Board of Directors
is charged with the responsibility for formulating and adopting all policy decisions affecting the Community, and may be regarded
as the functional equivalent of the town council of a small municipality.
8.2.
Professional Management.
8.2.1. Managing Agent.
The Board of Directors may employ for the Community a “Managing Agent” or “Manager” (which terms
shall be synonymous herein) at a compensation to be established by the Board.
(a) Requirements. The Managing Agent shall be a qualified person or bona fi de business enterprise, which
manages common interest residential communities. Such person or firm or its principals shall have a reasonable level of experience
in real estate community management and shall employ persons possessing a high level of competence in the technical skills
necessary to proper management of the Community The Managing Agent must be able to advise the Board of Directors regarding
the administrative operation of the Community and shall employ or retain personnel knowledgeable in the areas of community
association insurance, accounting, contract negotiation, and labor relations.
(b) Duties. The Managing Agent shall perform
such duties and services as the Board of Directors shall direct. The Managing Agent shall perform the obligations, duties
and services relating to the management of the property, the rights of Mortgagees and the maintenance of reserve funds in
compliance with the provisions of the Covenants and these Bylaws.
(c) Standards. The Board of Directors shall impose
appropriate standards of performance upon the Managing Agent. Unless the Managing Agent is instructed otherwise by the Board
of Directors:
(1) the accrual method of accounting shall be
employed and expenses required by these Bylaws to be charged to more than one but less than all Owners shall be accounted
for separately;
(2) two or more persons shall be responsible for handling cash to maintain adequate financial control
procedures;
(3) cash accounts of the Club shall be maintained in insured accounts and shall not be commingled with any
other accounts;
(4) no remuneration shall be accepted by the Managing Agent from vendors, independent contractors or
others providing goods or services to the Club whether in the form of commissions, finders fees, service fees or otherwise;
any discounts received shall benefit the Club;
(5) any financial or other interest which the Managing Agent may have
in any firm providing goods or services to the Club shall be disclosed promptly to the Board of Directors; and
(6) a
quarterly financial report shall be prepared for the Club containing the information required under Section 8.4.1 of these
Bylaws.
(7) the Managing Agent shall maintain separate records and bank accounts for each common interest community owners’
association that uses its services, and shall not have the authority to draw checks on or to transfer funds from this Club’s
reserve accounts, except as provided in Section 8.3.3 hereof
(8) the Managing Agent shall assist the Board in preparation
of its Annual Budget for operating expenses and reserves, and shall periodically advise the Board on the adequacy of the Club’s
reserves for repair, renovation and replacement of the Common Areas and other capital expenditures.
8.3. Bank Accounts for Operations and Reserves.
8.3.1. Insured Accounts.
The Board of Directors shall promptly
deposit all sums collected for operating expenses or reserves in insured accounts with reputable financial institutions.
8.3.2. Commingling Prohibited.
Amounts collected by the Board of Directors as Assessments against
the Lots for operating expenses or Reserves shall not be commingled with funds of any other common interest community owner’s
association, nor with the funds of any Managing Agent or any other person responsible for the custody of such funds.
8.3.3.
Reserve Accounts.
Any reserve funds shall be kept in one or more segregated, interest bearing accounts, and
any transaction affecting such funds, including the issuance of checks, shall require the signature of at least two persons
who are Officers or Directors of the Club.
8.4. Club
Records.
8.4.1. Financial Records.
The Treasurer, with the assistance of the Club’s Manager and accountant, shall keep detailed records of the financial
activities and status of the Club, to enable the Club to fully declare to each Owner the true statement of its financial status.
The accrual method of accounting shall be employed and any expenses required by the Covenants to be charged to more than one
but fewer than all Owners shall be accounted for separately. At minimum, such records shall include:
(a) an “income and expense statement” reflecting all income and expense activity
for the preceding quarter on an accrual basis;
(b) an “account activity statement” refl ecting all receipt
and disbursement activity for the preceding quarter on a cash basis;
(c) an “account status report” reflecting
the status of all accounts in an “actual” versus “projected” (budget) format;
(d) a “balance
sheet” refl ecting the financial condition of the Club on an unaudited basis;
(e) a “budget report”
refl ecting any actual or pending obligations which are in excess of budgeted amounts by an amount exceeding the operating
reserves or ten percent of a major budget categor (as distinct from a specific line item in an expanded chart of accounts);
(f) a “delinquency report” listing all Owners who are delinquent in paying their assessments and describing
the status of any actions to collect such assessments;
(g) all canceled checks, bank statements, receipts and vouchers
for expenses and other source documents for income and expenses, for up to seven years; and
(h) the annual fi nancial
statement described in Section 8.5 hereof.
8.4.2. Other Records.
The Secretary, with the assistance of the Club’s Manager, shall compile and maintain the following records, documents
and things:
(a) The original or a photocopy of the recorded
Covenants and each amendment to the Covenants;
(b) The certificate of incorporation and a copy or duplicate original
of the articles of incorporation of the Club as filed with the secretary of state;
(c) The Bylaws of the Club, and all
amendments thereto;
(d) The minute books, including all minutes, and the separate Book of Resolutions required by Section
6.6 hereof;
(e) Any rules and regulations that have been adopted;
(f) An inventory of all tangible personal property
of the Club;
(g) A copy of the Declarant’s plans and specifications utilized in the construction of the Community,
if available;
(h) Insurance policies or copies thereof for the Community and Club;
(i) Copies of any certificates
of occupancy that may have been issued for the Common Areas of the Community;
(j) Any other permits issued by governmental
bodies applicable to the Community in force;
(k) All written warranties that are still in effect for the Common Areas,
or any other areas or facilities which the Club has the responsibility to maintain and repair, from the contractor, subcontractors,
suppliers, and manufacturers and all owners’ manuals or instructions furnished with respect to installed equipment or
building systems;
(l) A roster of Owners and Eligible Mortgagees and their addresses and listed teleLake phone numbers,
if known.
(m) Any leases of the Common Areas or areas and other leases to which the Club is a patty;
(n) Any employment contracts or service contracts in which the Club is one of the contracting
parties or service contracts in which the Club or the Owners have an obligation or a responsibility,
directly or indirectly, to pay some or all of the lee or charge of the person performing the service;
and
(o)
All other contracts to which the Club is a party.
8.4.3. Ownership of Records. Inspection.
All
financial records and other books, records and documents of the Club are and shall remain the property
of the Club, but shall be made reasonably available for examination and copying by the Club’s
Manager, any Mortgagee, any Owner, or the authorized agent of any such party on reasonable advance notice
during normal working hours at the offi ces of the Club or its Manager. The Club shall not release the
unlisted telephone number of any Owner without the written consent of such Owner. The Club may
impose and collect a reasonable charge for copies and any reasonable costs incurred by the Club in providing
access to records.
8.5. Audit of Records Required.
At least annually, the Club shall prepare, or
cause to be prepared, a fi nancial statement of the Club in accordance with generally accepted accounting
principles. The annual fi nancial statements of a homeowners’ association or club such as Lake
Tyee, with annual assessments of fi fty thousand dollars or more, are required by law to be audited
at least annually by a certifi ed public accountant. However, if Owners with at least sixtyseven percent
of the votes present at a duly constituted meeting of the Club in person, by written ballot or by proxy
vote to waive the audit for that year.
8.6. Budget for Common Expenses. In sufficient time to meet the requirements of Section 8.7 hereof, or at such
other time as may be deemed necessary or desirable by the Club’s accountant, the Board shall prepare
an Annual Budget which shall estimate the Common Expenses, described generally in the Covenants, to
be paid during such year. The Budget shall also contain provisions for creating, funding and maintaining
reasonable reserves for major repairs and replacements of the Common Areas, any capital improvements
deemed reasonably necessary or desirable by the Board, and the amount(s) of any deductible from insurance
policies obtained by the Club, and shall further take into account any expected income and any surplus
available from the prior year’s operating fund.
8.7. Meeting of Club to Approve Budget.
Within thirty
days after adoption of any proposed budget for the Club, the Board of Directors shall provide a summary
of the budget to all the Owners and shall set a date for a meeting of the Owners to consider ratification
of the budget not less than fourteen nor more than sixty days after mailing of the summary. Unless at
such meeting the Owners to which a majority of the votes in the Club are allocated reject the budget, pursuant to RCW 64.38.025 the budget is ratifi ed, whether or not a quorum is present. In the event the proposed budget is rejected or the required notice is not given, the periodic budget last ratifi ed by the Owners shall be
continued until such time as the Owners ratify a subsequent budget proposed by the Board of Directors.
8.8.
Reserves for Capital Improvements. Replacements Major Repairs & Insurance Deductibles.
8.8.1. Establishment of Reserves.
The
Board of Directors shall establish and maintain reasonable reserves for capital improvements, replacements, major
repairs and the amount(s) of any deductible from insurance policies obtained by the Club, by providing
for such reserves in the Annual Budget, segregating such reserves on the books of the Club, and promptly
allocating and paying into such reserve accounts the total amount budgeted for such reserves for the current
fiscal year. The portion of the Lots’ Assessments paid into such reserves shall be conclusively deemed to be nonrefundable contributions to the capital of the Club by the Owners. Such reserves may be expended only for the purposes for which they were established, unless the Board by resolution so authorizes. The Board may also establish and maintain reserve funds for such other purposes as may in its discretion appear advisable.
8.8.2. Restrictions on Reserve Funds.
The
Board shall have no authority to acquire and pay from the reserve funds any capital additions or improvements
to the Common Areas having a total cost in excess of Eight Thousand Dollars ($8,000), without first
obtaining the affirmative vote of Owners holding not less then 51% of the voting power in the Club. This Section
shall not apply to and the Board need not seek the approval of the Members for expenditures from the reserve
funds to pay for necessary repairs and/or replacements to the Common Areas.
8.9. Assessments
for Common Expenses.
8.9.1. Liability of Lots.
The total amount of the estimated
funds required to pay the Common Expenses of the Club set forth in the Annual Budget adopted by the
Board of Directors for the fi scal year shall be assessed against the Lots equally, except as provided
in Sections 8.10.2 or 8.10.3 hereof.
8.9.2. Payable in Installments.
Unless otherwise determined by the
Board of Directors, the annual Assessment against each Lot for its proportionate share of the Common
Expenses shall be payable on January 1 of each year and, unless installment payments are authorized
by resolution of the Board, shall be paid in full no later than February 15th. If an Assessment
is made payable on a monthly or other installment basis, notice shall be mailed or delivered upon the
initial levy of the Assessment; but additional notices need not be sent as the individual installments thereof
fall due.
8.9.3.
Exemption for Lots Owned
by Declarant.
Pursuant to Article I, Section 3 of
the Amendment to Declaration of Charges, Assessments and Liens Dated December 4, 1995 and recorded among
the land records of Skagit County, Washington at Auditor’s File No.903060005, all Lots owned by
the Declarant Robert S. Rogers and Gloria D. Rogers dba Lake Tyee Company or Lands-West, Inc.), or by
any party who becomes a “Successor Declarant” (either by becoming a successor in interest
to either such company or by taking title to all the Declarant’s remaining inventory of Lots at
Lake Tyee) shall be exempt from charges and assessments by the Club, of any kind or nature and regardless of
how characterized or designated, whether such Lots constitute original inventory, or Lots which may have
been repossessed, forfeited or foreclosed upon by the Declarant, or Lots as to which the Declarant may be
a real estate contract vendee. During the period in which this exemption remains in effect; the Declarant and
any Successor Declarant shall have a total of only one vote in the Club, irrespective of the number of Lots owned
by any or all of such parties.
8.10. Special Assessments.
8.10.1.
General Authority. The Board of Directors may levy a Special
Assessment for the purpose of defraying the cost of any unexpected repair or other nonrecurring contingency,
or to meet any other defi ciencies in operations or reserves occurring from time to time. The Board
of Directors shall give notice to the Owners of any such Special Assessment by a notice in writing giving the amount and reasons therefor, and
setting a date for a special meeting of the Club not less than 14 nor more than 60 days after mailing
the notice. Unless at that meeting the Owners of Lots to which a majority of the votes in the Club are
allocated reject the Special Assessment, it shall be deemed ratifi ed, whether or not a quorum is present.
Such Special Assessments shall become due and payable, unless otherwise specifi ed in the notice, with
the next regularly scheduled Assessment payment which is due more than thirty (30) days after the date
of the Club meeting approving the Special Assessment. All Owners shall be obligated to pay the adjusted
regular installment amount or, if the Special Assessment is not payable in installments, the lull amount
of such Special Assessment.8.10.2. Assessments Against Fewer Than All Lots.
The
Board may by resolution require that any Common Expense or portion thereof benefi tting fewer than all
of the Lots shall be specially assessed exclusively against the Lots so benefitted.
8.10.3. Special Assessment for Expense Caused by Negligence or Misconduct.
To
the extent that any Common Expense is caused by the negligence or misconduct of any Owner, the Club
may, subject to the provisions of Section 7.10 hereof, levy a Special Assessment for that expense against the
Owner’s Lot. In addition and without limitation, the liability of an Owner to pay any payments, fees, charges
or fi nes, along with any costs and attorney’s fees incurred in foreclosing the lien for Assessments provided in Section 8.14 hereof, and interest on any delinquent account shall be deemed a Special Assessment.
8.11. Owners
Personally Liable for Common Expenses.
Each Assessment shall be the joint and several
obligation of the Owner(s) of the Lot to which the same are assessed as of the time the Assessment is
due. Suit to recover a personal judgment for any delinquent Assessment shall be maintainable in any
court of competent jurisdiction without foreclosing or waiving the lien securing such sums. No Owner
may exempt himself or herself from liability with respect to the Common Expenses by waiver of the enjoyment
of the right to use any of the Common Areas or by leasing, rental or abandonment of his or her Lot or
otherwise. The failure or delay of the Board of Directors to adopt the Annual Budget for any year shall
not constitute a waiver or release in any manner of an Owner’s obligation to pay his or her allocable
share of the Common Expenses as herein provided, and in the absence of an Annual Budget or adjusted
Annual Budget, each Owner shall continue to pay (with or without notice) a regular Assessment at the
rate established for the preceding fi scal year until an Assessment is made under a current Annual Budget or
adjusted Annual Budget and notice thereof has been sent to the Owner.
8.12. Liability Following Conveyance of Lot.
A selling
Owner shall not be liable for the payment of any part of the Common Expenses assessed against his or
her Lot subsequent to a sale, transfer or other conveyance by him of such Lot. The purchaser of a Lot shall
be jointly and severally liable with the selling Owner for all unpaid Assessments against the Lot up to the
time of the conveyance without prejudice to the purchaser’s right to recover from the selling Owner the amounts paid by the purchaser therefore. The holder of a mortgage or other purchaser of a Lot who obtains the right of possession of the Lot through foreclosure shall not be liable for Assessments that became due prior to such right of possession. Such unpaid Assessments shall be deemed to be Common Expenses collectible from all the Owners, including such mortgagee or other purchaser of the Lot. Foreclosure of a mortgage does not relieve the prior Owner of personal liability for Assessments accruing against the Lot prior to the date of such
sale as provided above.
8.13. Statement of Unpaid Assessments.
The Club,
upon written request, shall furnish to an Owner or a mortgagee a statement signed by an officer or authorized
agent of the Club setting forth the amount of unpaid Assessments against that Lot. The statement shall
be furnished within fi fteen days after receipt of the request and is binding on the Club, the Board
of Directors, and every Owner, unless and to the extent known by the recipient to be false.
8.14. Lien for Assessments.
The
Club shall have a lien on each Lot for any unpaid Assessments levied against a Lot from the time the Assessment is due. If
any Assessment is payable in installments, the Club has a lien for the full amount of the Assessment from the time the fi
rst installment thereof is due.
8.15. Enforcement of Lien.
The lien arising under this section
shall be enforced judicially by the Club or its authorized representative in the manner set forth in chapter 61.12 RCW or
in any other manner provided by law for the foreclosure
of real estate mortgages. The Club or its authorized representative
shall have the power, subject to the provisions of Section 8.82 hereof, to purchase the Lot at the foreclosure sale and to
acquire, hold, lease, mortgage, or convey the same. Upon an express waiver in the complaint of any right to a defi ciency
judgement in a judicial foreclosure action, the period of redemption shall be eight months. The Club may elect to take a deed
in lieu of foreclosure in any such proceeding. No proceedings for the foreclosure of any such lien or liens shall be commenced
except upon the expiration of one hundred and twenty (120) calendar days from and after the date upon which the charge or
assessment giving rise to such lien or liens became due and payable.
8.16. Limitation on Lien Enforcement.
A lien for unpaid Assessments and the personal
liability for payment thereof is extinguished unless proceedings to enforce the lien arc instituted within six years after
the amount of the Assessments sought to be recovered becomes due.
8.17. Interest on Past Due Assessments.
Interest shall accrue on unpaid Assessments at the highest rate of interest permitted by law or the Governing Documents.
8.18. Fees for Use of Common Areas and Amenities.
The Club may charge reasonable fees for the use
and enjoyment of the various common areas, facilities and amenities owned and/or maintained by the Club.
9. AMENDMENT OF BYLAWS.
9.1.
Amendment of Bylaws.
At a duly constituted meeting of the Club called for such purpose at which a quorum is
present, these Bylaws may be amended by the Owners. Amendments may be proposed by the Board of Directors or by petition signed
by Owners representing at least 20% of the votes in the Club.
9.2. Consent of Mortgagees.
No amendment
to these Bylaws, the object of which is to change any of the tights, obligations or duties of the Club or Owners as to any
matters for which the consent of any Mortgagee is required under Covenants,
shall be valid absent the consent of such
Mortgagees as may be required thereby.
9.3. Consent of Declarant or Successor Declarant,
Section
8.9.3 of these Bylaws may not be amended without the written consent of Robert S. Rogers, his immediate successors, personal
representatives and/or any trust he has established, for so long as he, his estate and/or any trust or a business entity under
his control, owns title to any Lots in the Community; in the event that a Successor Declarant becomes the owner of the Declarant’s
remaining Lots in the Community, the Successor Declarant’s consent must be obtained prior to any amendment to Section
8.9.3.
10. NOTICE.
10.1.
Manner of Notice.
Unless specifi ed otherwise in other sections of these Bylaws, whenever any notice is required
to be given under the provisions of the Corporation Law or of the Governing Documents to any Mortgagee or Owner, it shall
not be construed to require hand-delivered notice, but such notice may be given in writing, by fi rst class mall, addressed
to such Mortgagee or Owner at such address as appears on the books of the Club. Notice of Directors meetings shall be given
as prescribed in Section 5.3.4 hereof
10.2. Waiver of Notice.
Whenever any notice is required to
be given under the provisions of the Act, the Covenants or these Bylaws, a Waiver thereof, in writing, signed by the person
or persons entitled to such notice, whether signed before or after the time stated therein, shall be deemed equivalent thereto.
11. MISCELLANEOUS.
11.1. Compliance
with Law.
These Bylaws are set forth in compliance with the Homeowners’ Association Act, the Covenants,
and the Corporation Act.
11.2. Conflict.
These Bylaws are subordinate and subject to the Covenants,
the Homeowners’ Association Act, the Corporation Act and the Subdivision Plat. In the event of any confl ict between
these Bylaws and the foregoing the provisions of the foregoing shall control, in that order of priority.
11.3.
Severability.
If any provision of these Bylaws or the application thereof in any circumstances is held invalid,
the validity of the remainder of these Bylaws shall not be affected thereby, and to this end the provisions of these Bylaws
are declared to be severable.
11.4. Captions.
The captions (section headings) of these Bylaws are
for convenience only and are not a part of these Bylaws and are not intended in any way to limit or enlarge the terms and
provisions of these Bylaws.
11.5. Gender Number.
Whenever in these Bylaws the context so permits,
the use of the singular shall include the plural and the converse; and the use of any gender shall be deemed to include all
genders.
12. EFFECTIVE DATE.
These Amended
and Restated Bylaws shall take effect on the first day following their approval by the Membership of the Club.
IN WITNESS WHEREOF, Lake Tyee, a Washington Nonprofit Corporation, has caused this instrument to be adopted as its Bylaws,
by resolution adopted by its Members at a duly constituted meeting at which a quorum was present, held on June 17, 2000.
ATTEST: Wes Rosenbach, (Secretary)
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