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6 BML
Covenants 6. BEECH MOUNTAIN LAKES ASSOCIATION
6.1 Association of all Owners. The Beech Mountain Lakes Association is or will be the
association of all Owners of Interests in the Beach Mountain Lake Development
(previously designated as Lake of the Four Seasons development.) The Lake of
the Four Seasons Property Owners Association was incorporated by the prior
developer as a Pennsylvania Non-Profit Corporation but was never operational.
Declarant, in its sole discretion, may re-activate the Association under the
name of Beech Mountain Lakes Association at some time in the future, but not
later than the Turnover Date, by filing amended Articles of Incorporation to
reflect the renamed corporation and by promulgating By-Laws for the
Association. Only the Declarant shall be authorized to reactivate the
Association. All references to "Association" in this Declaration
shall mean the Beech Mountain Lakes Association. UNTIL SUCH TIME AS THE ASSOCIATION IS
REACTIVATED, ALL RIGHTS AND OBLIGATIONS OR THE ASSOCIATION SHALL BE ASSUMED AND
CARRIED OUT BY THE DECLARANT. 6.2 Multi-Tiered Association
structure. The Development is the subject of a
multi-tiered association format, of which the Association is a part. It is
anticipated that all Owners in the Development say become members of two (2)
associations: (i) the Beech Mountain
Lakes Association which is empowered with the rights, powers and duties set
forth herein and in its Articles of Incorporation and its By-Laws, as the same
may be amended from time to time, which Association is responsible for
enforcing this Declaration and collecting and disbursing the Assessments and
other Charges of the Association and (ii) a Community Association which is or
will be responsible for the operation and maintenance of the condominium,
campground, subdivision or planned development in which the Owner holds an
Interest. By taking title to an Interest, each purchaser of an Interest agrees
to become a member of two (2) associations, whether or not a community
Association for his Community has been formed at that time. On the primary
level, the Association has the power to levy Assessments and other Charges upon
Owners in accordance with the Association Documents. On the second and
subordinate level, the Community Associations are responsible for administering
those affairs related to the individual condominiums, campgrounds, subdivisions
or planned developments and may levy Assessments and other Charges against
their individual members in accordance with the provisions of their Community
Declarations. ć 6.3 Association Superior to
Community Associations. The Association is the organization with
the primary responsibility to make and collect Assessments and other Charges
from the Owners in accordance with the provisions of the Association Documents,
which Assessments and Charges will be used for the purposes as more
particularly set forth in the Association Documents. A Community Association
for a particular Community may be established pursuant to the terms of the
community Declaration for that Community. The Community Associations shall be
subordinate in all respects to the Association, but shall retain all the rights
and privileges as more particularly described herein and in their respective
Community Declarations including, without limitation, the right to levy
Assessments and other Charges. In the event of any
conflict between the provisions of a Community Declaration and the provisions
in the Declaration, the provisions of this Declaration shall control. ć 6.4 Membership in Association. By recording a Warranty Deed to an Interest in the name of the
Owner or transferring a Membership Certificate in the name of an Owner, each
Owner, including the Declarant, so long as the Declarant owns any Interest in
the Development, becomes a member of the Association until he ceases to be an
Owner. If any person or entity other than the Declarant owns more than one
Interest, such person or entity shall have one membership in the Association
for each Interest owned. In the event of a dispute between the Owners of any
Unit as to who holds membership or voting rights, the Association Board shall
make the final decision. The Association shall be given written notice of the
change of ownership of a Unit within ten (10) days after such change, and the
purchaser shall pay the Association's fee for changing its records. ć 6.5 Transfer of Membership. The membership of each
Owner In the Association is appurtenant to and inseparable from his ownership
of his Interest and shall automatically be transferred upon any valid transfer
or conveyance of his Interest to any transferee or grantee. Membership in the
Association is transferable only in connection with the conveyance or transfer
of the Interest giving rise to such membership, and any other transfer or
assignment of membership shall be null and void. The transfer of any
Interest shall operate to transfer to the new Owner the interest of the prior
Owner, if any, in all funds held by the Association, even though not expressly
mentioned or described in the instrument of transfer and without further
instrument of transfer. ć 6.6 Delegates. Subject to rights retained by the Declarant in Section 11.3
herein, voting rights of the members of the Association shall be Vested
exclusively in delegates ("Delegates"). Each Community shall be represented
by three (3) Delegates. The Delegates shall be designated officers of a
Community Association, appointed by the Board of Directors for such Community
Association. If no Community Association has been formed, the initial Delegates
shall be appointed by the Declarant; thereafter, the Delegates shall be elected
by the Owners in each such Community. The procedures for election or
designation of Delegates and the removal thereof shall be as set forth in the
Community Declaration. With the exception of the initial Delegates, each
Delegate shall be both an Owner and Resident of his Unit within the Community
he represents; provided, however, that in no event shall an Owner and his or
her spouse both serve as Delegates from the same Community concurrently. If a
Delegate ceases to be either an Owner or a Resident of his Unit within the
Community he represents, he shall be deemed to have resigned as a Delegate. ć 6.7 Voting Rights. Prior to the Turnover Date, all of the voting rights at
each meeting of the Association shall be vested exclusively in the Declarant
and the Owners shall have no voting rights. From and after the Turnover Date,
all of the voting rights at any meeting of the Association shall be vested in
the Delegates and each Delegate shall have one vote. 6.8 Advisory Board. An Advisory Board composed of the
Delegates from each Community shall be formed to meet, prior to the Turnover
Date, from time to time to resolve issues arising between the Declarant or any
committee formed by the Declarant and any Community Association or the Owners
in a Community which has no Community Association. Meetings of the Advisory
Board may be called by either Declarant or the Advisory Board. The Advisory
Board shall act in an advisory capacity only and any recommendations it may
make shall be entirely non-binding. ć 6.9 Association Board. Subject to the rights retained by the Declarant under
Section 11.3 the Association Board shall consist of five (5) members, each of
whom shall be an Owner or Delegate. As provided in Section 11.3, until the
Turnover Date, the Declarant shall have the tight to appoint or remove any
director or directors of the Association. After the Turnover Date, the
Delegates shall elect the members of the Board of Directors. UNTIL SUCH TIME
AS THE ASSOCIATION HAS BEEN REACTIVATED, ALL RIGHTS AND OBLIGATIONS OFTHE BOARD
OF DIRECTORS SHALL BE ASSUMED AND CARRIED OUT BY THE DECLARANT. ć 6.10 Powers of the Association. Without limiting the generality of the foregoing, the Association
shall have the right: (a) to levy and collect
fees, duties and Assessments and other Charges from its members as contemplated
by Section 7 of this Declaration; (b) to establish and
maintain one (1) or more reserve funds to provide monies to the Association to
pay any expenses incurred by the Association in the exercise of its powers or
the performance of its duties; (c) to pay taxes and assessments, if
any, levied by any governmental authority on any real or personal property
owned by the Association, or on any transactions entered into by the
Association which are subject to tax in the normal course of business including
the right to reimburse the Declarant for any taxes, or portions thereof, paid
by Declarant on behalf of the Association or any member thereof; (d) to enforce the provisions of this Declaration, the Articles of Incorporation and By-Laws of the Association, any general policies and guidelines from time to time promulgated by the Association, and any other decisions of the Association, and to pay all expenses incidental to such enforcement, including reasonable attorneys' fees, including, without limiting the foregoing, the right to reimburse Declarant for all costs and expenses incurred or paid by it in connection with the enforcement of any of the conditions, covenants, restrictions, Charges or Assessments or terms contained herein; (e) to obtain and maintain in force all policies of Insurance required
to be maintained by the Association by Section 9 of this Declaration; (f) to expend monies collected by the Association from
Assessments or other Charges and other sums received by the Association for the
payment of all proper costs, expenses and obligations incurred by the
Association in carrying out any or all of the purposes for which the
Association is formed; (g) after the Turnover Date and upon the affirmative vote of
a majority of the Board, to borrow money and to mortgage, pledge, convey by
deed to secure debt or deed of trust, to hypothecate any or all of its property
as security for money borrowed or debts incurred; provided, however, that
during such time as Declarant owns one (1) or more Interest in the Development,
any such decision to borrow money or to mortgage, pledge, convey by deed to
secure debt or deed of trust, or hypothecate any or all of the Association's
property as security for money borrowed or debts incurred shall require a
majority vote of the Board and the affirmative vote of the Declarant; (h) to acquire by gift, purchase or otherwise and to hold,
enjoy and operate real or personal property in connection with the business of
the Association; provided, however, that after the Turnover Date the
Association shall not acquire real property by purchase, lease, or otherwise
unless such acquisition is approved by a majority vote of the Board and the
affirmative vote of the Declarant; and (i) to do and perform any and all other acts which may be
either necessary for, or proper or incidental to, the exercise of any of the
foregoing powers. ć 6.11 Liability and Indemnification. No director, officer, employee, or
agent of the Association, and no heir, executor, or administrator of any such
person, shall be liable to the Association for any loss or damage suffered by
it on account of any action or omission by him as a director, officer,
employee, or agent if he acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Association,
unless with respect to an action or suit by or in the right of the Association
to procure a judgment in its favor such person shall have been adjudged to be
liable for gross negligence or willful misconduct in the performance of his
duty to the Association. The Association shall indemnify each 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, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the Association) because he is or
was a director, officer, employee, or agent of the Association, against
expenses (including reasonable attorneys' fees), judgments, fines, and amounts
paid in settlement, actually and reasonably incurred by him in connection with
such action, suit, or proceeding if he acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
Association, and, with respect; to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the Association, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. The Association shall indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action
or suit by or in the right of the Association to procure a judgment in its
favor because he is or was a director, officer, employee, or agent of the
Association against expenses (including reasonable attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Association,
except that no indemnification shall be made with respect to any claim, issue,
or matter as to which such person shall have been adjudged to be liable for
gross negligence or willful misconduct in the performance of his duty to the
Association, unless and only to the extent that the court in which such action
or suit was brought shall determine, upon application, that despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnification for such
expenses which such court shall deem proper. To the extent that a director, officer, employee, or agent of the
Association has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in this Section, or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
(including reasonable attorneys' fees) actually and reasonably incurred by him
in connection therewith, Any indemnification under this Section (unless ordered by a court) shall
be made by the Association only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee, or agent
is proper under the circumstances because he has met the applicable standard of
conduct set forth in this Section. Such determination may be made (1) by the
Board upon a majority vote of a quorum consisting of directors who were not
parties to such action, suit, or proceeding, or (2) by independent legal
counsel in a written opinion to the Association, if such a quorum is not
obtainable, or even if obtainable, if a quorum of disinterested directors so
directs. Expenses incurred in defending a civil or criminal action, suit, or
proceeding may be paid by the Association in advance of the final disposition
of such action, suit, or proceeding as authorized by the Board of Directors in
a particular case, upon receipt of an undertaking by or on behalf of the
director, officer, employee, or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
Association as authorized in this Section. The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which those indemnified may be entitled,
shall continue as to a person who has ceased to be a director, officer,
employee, or agent, and shall inure to the benefit of the heirs, executors,
administrators, and personal representatives of such person. The Association shall purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the Association against any liability asserted against or incurred by him in
any such capacity or arising out of his status as such, whether or not the
Association would have the power to indemnify him against such liability under
the provisions of this Section. Any such insurance shall be procured from such
insurance company as is designated by the Board, and the premiums therefor
shall constitute a Common Expense. ć 6.12 Management Agreement and Other Contracts. The Declarant, or an entity
controlled by the Declarant, may be engaged by the Association to act as the
Manager for the Association and as Manager shall be paid a reasonable fee for
its services under a written Management Agreement. Prior to the Turnover Date,
the Declarant may enter into a Management Agreement; however, any such
Management Agreement shall not directly or indirectly bind the Association
unless the Management Agreement includes a right of termination, with or
without cause, and without payment of a termination fee, on sixty (60) days
written notice, which the Association can exercise after the Turnover Date.
After the Turnover Date, any Management Agreement entered into by the
Association shall have a term of not more than one year and shall be terminable
by either party, with or without cause, and without payment of a termination
fee, on sixty (60) days written notice. Developer, or an entity controlled by the Developer, may also enter into
contracts with the Association to perform or furnish any lawful service or
materials if the contract is in writing and is terminable at the will of either
party and if the price being charged for such service or materials is no more
than that charged for similar services and materials in the local community. ć 6.13 Delegation of Authority. The Association Board may from time
to time, by a resolution adopted by a majority of the Association Board,
delegate to any Community Association Board of Directors, the power of the
Association Board to take any action with respect to the Community or its
Community Common Area which the Association is required or permitted to take
hereunder. The Association Board may attach conditions to any such delegation,
including, without limitation, the right to veto any proposed action, and the
Association Board may revoke any such delegation by action of the Association
Board at any time. ć 6.14 Representation. The Association shall have the
power and right to represent the interests of all of the Owners in connection
with claims and disputes affecting the Common Areas or any Community Common
Area for which it has the responsibility for maintenance and operation. Without
limiting the foregoing, the Association shall have the power to settle warranty
disputes or other disputes between the Association, the Owners, and Declarant
affecting the construction, use or enjoyment of the Common Areas and Community
Common Area for which it has the responsibility for maintenance and operation,
and any such settlement shall be final and shall bind all of the Owners. ć | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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