Plaza del Mar Club Section Bylaws and CC&Rs


To: Plaza del Mar, Club Section Homeowners Association Members
From: Jack Haeger, Vice President
Subject: Revised Bylaws and CC&Rs
Date: November 19, 2002

Fellow Associates:
I use the word, "Associates" above because that’s the term used in the documents I’m writing about here. "Homeowners" doesn’t work very well because many of us are not home, or house, owners; and "members" clashes with other uses of that word, such as "members" of committees or subcommittees or the Board of Directors. This shows you the almost lunatic frame of mind I’m in after a couple of months of revising work, but at last here they are for your inspection: the revised new Bylaws and Conditions, Covenants, and Restrictions (CC&Rs).
The Board of Directors has approved of distributing these documents to you in advance of the January 11 General Assembly meeting, when they will be presented for a vote of approval by the membership. At this point you may be thinking, "Wait a minute; these are in English: What about the Spanish version?" Good question–especially since the only legal language for such documents in Mexico is Spanish. The answer is that Ofelia Garcia, the attorney who worked with Bob Chantlos to create a parallel Spanish versions of the new Bylaws and CC&Rs originally, is working right now on incorporating the revisions into the Spanish versions. It too should be ready for the January 11 meeting and will be distributed in advance.
We wanted you to have the English version of the two documents as soon as it was ready in order to give the majority, who are either bilingual and read English or monolingual and can only read English, as much time as possible to digest their contents. Without denying the importance of other items, let me try to list sections you might want to look into particularly:

Bylaws

Definition of "Associate": Article Five.
Obligations of Associates: Article Seven.
Delinquent or "Not in Good Standing" Associate: Article Eight.
Late Fee Penalties: Article Eight.
Makeup and Terms of the Board of Directors: Article Thirteen.
Faculties/Duties of the Board of Directors: Article Sixteen, Article Seventeen.
Manager’s Duties: Article Fifteen.
Operating Committees Article Nineteen.
Election Process (Board of Directors ) Article Twenty.
General Assembly Meetings (kinds/conducting): Article Twenty-One, Article Twenty-two.


CC&Rs

Private Areas –Right of the Developer and/or the Association to enter: Section 3.02a.
Private Areas–Improvements, residents, and activity limits; maintenance: Section 3.02b-e.
Private Areas–Requirements for construction on: Section 3.03.
Common Areas–Use of: Section 3.05.
Common Areas–Construction on: Section 3.07.
Architectural Committee (Its approval needed for all external alterations): Article 4 (all).
Funds and Assessments (all the kinds of assessments and funds): Article 6 (all).
Recreational Facilities–use, development, fees: Article 7 (all).
BYLAWS OF THE HOMEOWNERS ASSOCIATION
CLUB SECTION, PLAZA DEL MAR

CHAPTER ONE: DENOMINATION, CORPORATE PURPOSES, DURATION AND DOMICILE

ARTICLE ONE A Civil Association named "Asociacion de Colonos, Seccion Club, Fraccionamiento Plaza del Mar" (RESIDENTS ASSOCIATION, CLUB SECTION OF PLAZA DEL MAR DEVELOPMENT) is incorporated, and its title shall be followed by the words Civil Association, or its initials, A. C.

ARTICLE TWO The corporate purpose of the Association shall not be exclusively economic, but shall also be to unite home, condominium, and lot owners of PLAZA DEL MAR CLUB SECTION Development in accordance with the Resolution of the Governor of the State of Baja California published in the Official Gazette on June 20, 1988 which authorized PLAZA DEL MAR CLUB SECTION Development to carry out all work pertaining to the maintenance of the public services and utilities (such as water supply provided by C.E.S.P.T., street surfaces, public lighting, and common area lawns and gardens) and to the improvement of the property units of the CLUB SECTION.

ARTICLE THREE The duration of the Association shall be ninety nine (99) years, starting to count from the date these Bylaws are authorized.

ARTICLE FOUR The domicile of the Association shall be Rosarito, Baja California, but the Association could have any other address for the convenience of celebrating an act or contract, without breaking any law.

CHAPTER TWO: ASSOCIATES

ARTICLE FIVE an "Associate" herein shall be defined as any owner or holder of trust rights over houses, condominiums, or lots in the Development of PLAZA DEL MAR, CLUB SECTION, exclusively from block 1, lots 24 to 49; block 3, lots 11 to 14 and 16 to 23; and blocks 4,5,6 and 7 of the property lotting authorized through the Baja, California State Decree dated May 24, 1988. In conformance with that decree these bylaws shall apply to any party, bank, agent, trustee, or executor who owns or controls any lots, houses, or condominiums within the perimeters of the Club Section identified herein. All such parties are "Associates" and may not claim immunity to the Association fees or these bylaws. The Directing Committee (Board of Directors) shall exempt from payment of fees any parties who hold and are actively developing multiple properties in the Club Section.

CHAPTER THREE: PRIVILEGES AND OBLIGATIONS OF THE ASSOCIATES

ARTICLE SIX The following are the privileges of Associates:
1. To be represented before any authority to satisfy their needs;
2. To be heard and have vote at General Assembly Meetings;
3. To review the accounts of the Association and the reports of the
Directing Committee (Board of Directors) and Special Committees and to object to them; and
4. To use–subject to regulations herein or in the Conditions, Covenants, and Restrictions (CC&Rs) hereto and appropriately posted on signs–the shared buildings, facilities, and common areas, with the following exception: the developer of those properties East of Marbella street to the public highway and North of Torremolinos street shall provide its residents with their own amenities, and therefore residents and lot owners in that section shall not have access to the above-mentioned buildings, facilities, and common areas.

ARTICLE SEVEN The following are the obligations of the Associates:
1. to contribute to (pay one’s share of) work done or other expenses incurred by the Association for the collective benefit.
The Directing Committee (Board of Directors) shall decide the monthly and the extraordinary fees that the Associates shall pay according to the needs of the development. Fees shall be either a one-time perpetual assessment or a permanent perpetual assessment. One-time perpetual assessments include the "water meter fee," the "legal expenses fee," the "North Gate fee" and any other fees as required, considered, approved, and mandated by the General Assembly or the Directing Committee. These fees are "one-time" in the sense that Associates pay them only once; they are "perpetual" in the sense that such fees shall be charged whenever property is purchased. Permanent perpetual assessments include Associates’ monthly dues and any other regularly repeated fees as required, considered, approved, and mandated by the General Assembly or the Directing Committee. They are "permanent" because they apply to all Associates as long as they own property in the Club Section. They are "perpetual" in the sense that they are a regularly repeated fee.
Note: Article VI of the Conditions, Covenants & Restrictions (CC&Rs) entitled "Funds and Assessments" and pertaining to Operating and Special Funds; Maintenance, Recreation, and Recreation Facility Development Assessments; the Development Fund, and the Default in Payment Regulations shall apply and be treated as incorporated in these bylaws.
2. To allow the fumigation of all grounds within the Club Section.
3. To maintain the interior and exterior appearance of houses and grounds in good condition.
4. To share the costs of maintaining and repairing common roofs, water
pumps, pila tanks, exterior paint, etc.
5. To keep the peace and serenity of the development, submitting
themselves to what is established by these Bylaws and the rules and regulations attached hereto. Therefore no loud noises, loud music, or other activities that would disturb the neighbors are allowed.
6. To comply with all other rules and regulations of the Association set forth in these Bylaws, the CC&Rs, and all related documents attached hereto.
7. To send written notice to the Association within 5 business days after an agreement has been reached for the sale or transferral of any lot, home or condominium unit so that the Association may calculate any pending debt regarding the Associate selling or transfering property, and request the payment of the same. Neither sale nor trust transferral may take place until such written notice has been received and it is clear that the Associate has no debts to the Association.
If an Associate repeatedly disregards his or her obligations contained in
the bylaws or other Association rules and regulations, the Board of Directors
may sue the Associate, holding him or her liable for costs or damages caused to the Association for an amount which shall be determined by a court of law; or, if the matter is settled out of court, the amount may be negotiated between the Associate and the Board of Directors. The Board of Directors shall notify the Associate of its intent to sue, but it shall not carry out that intent if the Associate takes corrective action within 30 days.

ARTICLE EIGHT A "delinquent Associate" is any Associate who has not paid three of his/her monthly Association fees or is more than three months overdue on any other fees determined by the Board of Directors or the General Assembly. The unpaid fees shall bear interest at a 5% (five percent) monthly rate, which interest shall be destined to the increasing of the reserve funds. Furthermore its is hereby established as penalty that after three months of default delinquent Associates shall incur an additional obligation of 50% (fifty percent) of a monthly fee for each three months of delay in payment of monthly fees and 50% of any other fee for each three months of delay in payment, which penalties shall also be destined to the reserve funds.
Associates in default shall be classified as "Not in Good Standing" and shall be automatically suspended in their privileges as Associates, including their privilege to attend meetings, to vote, to use shared facilities, and any other privilege that the Board of Directors or the General Assembly shall adopt policies to suspend, until such Associates pay their debts to the Association. This suspension shall extend to the relatives and guests of Associates in default. Continued failure to pay shall result in additional sanctions, including a lawsuit, or judgment, lien, foreclosure and auction, or corresponding legal action against the Associates’ property according to Mexican Law.
In the event that an Associate makes an offer-in-compromise to liquidate pending debts, interest, and penalty fees, the Board of Directors may accept or reject the offer. If the Board accepts the offer, such acceptance shall be construed as executive civil action if it is signed by the President of the Board of Directors and the Association Manager and accompanied by copies of the corresponding non-paid bills and any receipts, as well as a certified copy of the relevant section of these Bylaws, the CC&Rs, or the Minutes of the General Assembly or Board of Directors meeting in which the fees charged were established. All amounts received as payment of interest and penalties shall be destined to increase the reserve fund of the Association.
CHAPTER FOUR: CAPITAL (PATRIMONY)

ARTICLE NINE The Association shall not have capital stock; it shall be variable. Capital shall consist of the Monthly fees, ordinary and extraordinary fees that are legally established and collected, any official subsidy or donation received from third parties, and any other kind of contribution.

CHAPTER FIVE: GOVERNING BODY

ARTICLE TEN The governing body shall be the following:
1. The General Assembly of Associates.
2. The Board of Directors.

CHAPTER SIX: ADMISSION OF FOREIGNERS

ARTICLE ELEVEN The Associates (members) that the Association has or shall have agree with the Mexican government, before the Ministry of Foreign Affairs, that "Every foreigner that at the time of the constitution act or any time after, have an interest or social participation in the Association, shall be considered by that simple fact ‘Mexican,’ with the understanding that the foreigner will not request the protection of its [his/her] government, and under the penalty of losing their [his/her] interest or participation for the benefit of the Mexican Nation in case of non-compliance".

CHAPTER SEVEN: ADMINISTRATION

ARTICLE TWELVE The administration of the Association shall be carried out by the Board of Directors. Directors shall perform their duties gratuitously. Directors must be Associates. They shall be elected to serve for the number of years as stated in article thirteen herein, and they may be re-elected. If a Director resigns, the remaining Directors may appoint by majority vote a replacement to finish his or her term.

ARTICLE THIRTEEN The Board of Directors shall be formed by a President, a Vice-president, a Secretary, a Treasurer who shall also be the Budget Director, and three Directors at large who shall serve as First Director at large, Second Director at large, and Third Director at large, respectively.
The president, the Vice-president, the Treasurer, and the Secretary shall remain in duty for two years. The First Director at large shall remain in duty three years, the Second for two years, and the Third for one year.
Any Director may be recalled by a simple majority vote of the Associates.

ARTICLE FOURTEEN The Board of Directors shall meet quarterly or more often as required. Directors shall attend in person and only by proxy when a justified cause prevails for it. The President, or, in his/her absence, the Vice-president shall call the meetings and notify all Directors in writing or by other reliable means.
Once the first notice has been sent and the session is open, the quorum for that meeting shall be the majority of Directors. If a quorum is not present at the time and place set for the meeting, a second notice may be given for that same date half an hour after the time indicated in the first notice, and the meeting may then be convened with the Directors present. Meetings may also be held without notice if all Directors are present, considering always that any action requires a majority vote. If no majority vote is reached, any absent member(s) may be poled by telephone or e-mail; failing that, the subject may be deferred until the next Board meeting.
Minutes of each Board Meeting shall be reviewed by the President or the Vice President and distributed to all Associates within ten days either by mail, fax, e-mail, or posting on a website, the address of which has been made known.

ARTICLE FIFTEEN The Board of Directors may hire a person who is computer-literate in word processing and financial spreadsheets who serves the Association as Manager, fulfilling among others the following duties:
1. Act as agent and consultant of the Board of Directors and attend its meetings either in person or by representative, without a vote.
2. Obtain quotes and bids for projects authorized by the Board of Directors and present them for a decision by the Board. Obtain legal counsel as needed and approved by the Board of Directors.
3. Meet with Associates to resolve internal issues, referring all arrangements or decisions to the Board of Directors for final approval.
4. Maintain liaison with the Developer, referring all arrangements or decisions to the Board of Directors for final approval.
5. Make recommendations for changes to Bylaws, CC&Rs, Budgets, and other legal documents of the Association if requested by the Board of Directors and assist the Board in their enforcement and execution.
6. Keep track of Associates’ Bank trusts and executions of Purchaser’s agreements, and maintain same in a file.
8. Be responsible for collection and deposit of Association fees and assessments and for collection on any delinquent accounts. All collections are to be posted in a 12-month spread sheet listing date, check number, amount and/or accumulative amount, additionally maintaining a 12-month spread sheet listing the cash flow of each month for Associates paying in advance. Also maintain a spread sheet and a balance sheet for all other special assessments, listing income and expenses for each assessment and posting dates, check numbers, and amounts.
9. Maintain bank accounts with integrity and thus be liable for the wrongful use of funds. The Manager shall be limited in payment of budgeted expenditures to no more than 10% in excess of the amount budgeted. The Manager must obtain presidential approval for any non-budgeted expenditure in excess of $200.00 dollars and Board approval in for any non-budgeted
expenditure in excess of $400.00 dollars. For all such approvals sought, the Treasurer must be consulted before approval is given.
10. Present a Manager’s Report at each General Assembly meeting, and at Board meetings if requested, and issue a quarterly financial statement which may be sent to each Associate by mail, fax, e-mail or by posting on an Association website.
11. Hire/fire and be responsible for on-time payment of wages to, and for the job descriptions, training, direction, and workmanship of, the security officers, gardener, and other
employees at the instruction of the Board of Directors.
12. Do all work necessary to withhold payroll deductions; file receipts, expense documents, invoices, etc.; and prepare financial statements in accordance with Mexican Law.
13. Oversee the general appearance and maintenance of roads, common areas, swimming pool, jacuzzi, propane gas supply, fumigation, etc.
14. Maintain the operation files of the Association.
15. Maintain a file of each of the Associates that shall include copies of the Associate’s purchase contract, bank trust, and any other legal documents; a
copy of each check received from the Associate; copies of correspondence with
the Associate; and records of any other matters pertaining to the Associate.
16. Be responsible for proper and on-time issuance of public notices, meeting announcements, newsletters, and correspondence sent to the Associates.

CHAPTER EIGHT: FACULTIES OF THE BOARD OF DIRECTORS, DUTIES/ ATTRIBUTES OF THE DIRECTORS, COMMITTEES, ELECTION PROCESS

ARTICLE SIXTEEN. The Board of Directors has the faculty to organize, coordinate, and perform any acts necessary to carry out the aims and purposes of the Association. For this reason, the Board of Directors, shall have the following faculties:
1. To create, modify, delete, or change policies, rules, and procedures in accordance with the terms and conditions of the instrument herein.
2. To designate the officers, representatives, and employees of the Association and decide their remuneration, duties, and obligations.
3. To exercise or to grant, and revoke, General Power of Attorney for lawsuits and collections and any administrative acts with all the general and special faculties that require specific legal power or special clause according to law and the Administration Acts as set forth in the second paragraph of article two thousand four hundred twenty-eight of the Civil Code of the State of Baja California. The agents (parties who are empowered by the Board) shall practice their mandate according to what is provided by the before-mentioned paragraphs from the civil code before any and all kinds of judicial or administrative authorities, federal, local, or criminal, before the local or federal Arbitration Board, or before any labor authority.
4. To exercise General Power of Acts of Domain according to the third paragraph of the above-mentioned article of the Civil Code. In this case, the Board of Directors in a formal session shall take an expressed resolution and delegate to two of its members the execution of the necessary acts of domain. A minute and thorough report shall be made and given to the Associates.
5. To oversee the activities of subcommittees it appoints and to approve or deny the recommendations of those subcommittees.
The following are in an enunciative way and not limited to this list. The Board of Directors shall have the faculty:
6. To receive payments.
7. To do assignment of rights.
8. To settle.
9. To appoint arbitrators.
10. To file legal claims and complaints, and dismiss them, when the law allows.
11. To collect in judicial proceedings any fees in case of failure of payment.
12. To grant and endorse titles of credit within the terms of Article Nine of the General Law of Titles and Credit Operations.
13. To decide sanctions and apply them for any violation of the obligations of the Associates provided in Article Seven of these Bylaws and in accordance with the procedures established for such purposes herein.

ARTICLE SEVENTEEN The duties and attributes of the Directors (members of the Board of Directors) shall be as follows:

President The President shall
1. Preside over the General Assembly Meetings and the meetings of the
Board of Directors.
2. Be the executor of the decisions made by the General Assembly of Associates or the Board of Directors.
3. Represent the Association to the extent of the faculties assigned to him/her herein and/or by the Assembly or the Board, dealing with any matters related to the Association.
4. In the execution of these duties, and at his/her discretion, delegate other members of the Board of Directors or other Associates to act as his/her representative, provided that two other members of the Board approve the delegating of a Board member and that a majority of the Board members approve the delegating of an Associate. Such approval may be obtained informally, as long as the parties involved are prepared to attest to their actions should a question be raised by anyone.
5. At his/her discretion, issue an emergency executive order without Board approval but restricted to the Associates’ security and welfare within the boundaries of Plaza del Mar Club Section.
6. Report to the next General Assembly meeting any significant actions taken on behalf of the Association by the President or his/her delegate(s).

Vice President The Vice-President shall
1. Assume the duties of the President in his or her absence.
2. Execute assignments as given by the President.
3. Report to the next General Assembly meeting any significant actions taken on behalf of the Association by the Vice-President or his/her delegate(s).

Secretary The Secretary shall
1. Be responsible for the recording of Minutes of the meetings of both the General Assembly and the Board of Directors, which Minutes shall include all issues discussed and all motions with counts of votes.
2. Be responsible for the sending of a copy of the Minutes of meetings to all Associates by mail, fax, e-mail, or posting on the website within 10 days after each meeting, and for providing translations of Minutes into Spanish when necessary.
3. Be responsible for the maintaining of a log of motions made at meetings.
4. Be responsible for maintaining the Master Address List of Associates, insuring a current record of each Associate’s Plaza del Mar Club Section address(es) and each Associate’s principle address, with telephone number(s) and e-mail address(es).


Treasurer The Treasurer shall
1. Have access to all Association income, expenses, and bank records.
2. Issue an annual report of income and expenses and be responsible for having copies distributed to each Associate. This report shall include monthly cash flows; monthly income and expenses; and any additional information, such as plans, variances and actuals, in an appropriate form.
3. Prepare an Annual Budget in monthly increments to include such information as plans, variances, and actuals to be updated quarterly; this Annual Budget shall be approved by the Board of Directors each October for distribution to each Associate.
4. Authorize the normal payments of the Association, and also any payments agreed by the Board of Directors or the General Assembly.
5. Keep a record of all delinquent Associates, those who are sixty days or more in arrears in their payment of any Association fees, and request the Board of Directors to take action in such cases according to the remedies specified in these bylaws and any other policies of the Association.
6. Recommend expenditures for the improvement of the Association.
7. Recommend special assessments and increases or decreases in fees.
8. Have an open ear to Associates’ requests for expenditures, report such requests to the Board of Directors, and respond to them.

ARTICLE EIGHTEEN The absences of the President shall be replaced by the Vice president, and of Vice President by the Secretary, and in the event of absence of the President, Vice President, and the Secretary the rest of the members of the board shall appoint one of them as temporary President.
When the absence of a voting member of the Board is definitive, i.e., he/she has missed more than three Board or General Assembly meetings in a row and has provided no convincing rationale for these absences and cannot guarantee that they will not recur, the Board shall appoint a substitute, who shall serve the remainder of the replaced Board member’s term.

ARTICLE NINETEEN The Board of Directors within one month after the election shall appoint or re-appoint chairpersons of Operating Committees, including but not limited to an Architectural Committee, a Maintenance Committee, a Security Committee, and a Social Committee. These chairpersons shall a) consult with the Board of Directors to make and receive recommendations for Associates to be appointed as members of their respective committees; b) schedule meetings of their committees as necessary in order to render a report at the next General Assembly meeting if they should be called upon by the Board of Directors to do so.
The above-named committees shall operate as subcommittees of the Board of Directors and shall report to the Board. They shall have the following faculties:

The Architectural Committee shall
1. Make recommendations to the Board of Directors for establishing, improving, upgrading, and maintaining the aesthetic appearance of all structures and grounds within the total property boundaries of Plaza del Mar Club Section development.
2. Report periodically on planned constructions within the next six months.
3. Review written applications from Associates for any change in color to their dwellings or
any change in configuration or architecture, with attached plans, and issue a written approval or disapproval. No such changes may be made without prior approval of the Committee (See "Transitories" Article Three at the end of these bylaws). Any changes made without approval shall be reversed by the Associate at his or her expense, and, if applicable, a fine may be imposed by the Board of Directors at the request of the Architectural Committee in accordance with the CC&Rs and Article Eight herein. Application fees may be charged as appropriate and in accordance with applicable CC&Rs.
Note: This policy on architectural changes applies to the Association and its Associates only, not to the Developer. With regard to construction, the Developer is subject only to the State resolution of June 20,1988.
4. Be responsible for expenditures within its budget and seek Board approval for needed additional funds.

The Maintenance Committee shall
1. Work with the Board of Directors and, if needed, with the Developer to
determine financial responsibilities such as the following:
a. Improvements at the developer’s cost that benefit the Developer in
the future sale of residences.
b. Improvements at an Associate’s cost that benefit the Associate directly.
c. Improvements at shared cost with the developer that benefit all parties.
2. Investigate problem areas such as the sewer plant, pila tanks and water lines, etc.
3. Recommend actions such as sonic testing of water lines for leaks or pipeline damage.
4. Report to the Board recommended actions and costs.
5. Monitor electrical expenses and water expenses.
6. Recommend improvements in the appearance of the property and grounds of the entire Club Section development.
7. Determine cost-efficient actions that help improve the maintenance and
appearance of the development, such as paint of the homes, feasibility for a pool heater, additional facilities, etc.
8. Be responsible for expenditures within its budget and seek Board approval for needed additional funds.

The Security Committee shall
1. Monitor front gate security guards’ duties and attendance.
2. Be responsible for supervision of the security guards.
3. Recommend security improvements and implement when approved.
4. Recommend safety measures such as safe access to the beach and pool area and implement when approved.
5. Be responsible for expenditures within its budget and seek Board approval for needed additional funds.

The Social Committee shall
1. Plan social events throughout the year for relaxation and fun.
2. Plan and provide for food, beverages, and entertainment as appropriate to the informal, formal, and special events the Social Committee organizes.
3. Be responsible for expenditures within its budget and seek Board approval for needed additional funds.

ARTICLE TWENTY The election process for the membership of the Board of Directors shall be as follows:
1. Sixty Days prior to the Annual Meeting, the Secretary of the Board of Directors shall send a Nomination Sheet to all Associates. The Nomination Sheet shall indicate the term or terms of office on the Board that are to expire or shall be vacant for any other reason. Associates shall be able to nominate themselves or some other Associate, including the incumbent, for the indicated position(s). Associates shall be required to return the Nominating Sheet by a specified date thirty days prior to the date set forth for the elections, which requirement, including address and dates, shall be indicated on the Nominating Sheet. For all nominations, the Secretary, or designee, shall ascertain the nominees’ willingness to serve; no nominee who is unwilling to serve shall be listed on the ballot.
2. Those nominated according to the process above shall be the candidates for the election held at the Annual General Meeting. However a nomination may be made from the floor if, before the election is held, a motion to that effect is made and seconded and the vote is positive.
3. The election shall be by secret ballot, ballots to be issued by the Secretary to each
Associate. Ballots shall be issued, and received, one for each unit of property.
4. Ballots shall count as one vote per house or condominium and one third (1/3) vote for each undeveloped lot.
5. Balloting shall be either 1) in person at the Annual Meeting or 2) by absentee ballot. To effect 2), the Secretary, within ten days after the date by which nominations were due, shall have issued an absentee ballot to all voting Associates with a stamped return envelope, any returned envelopes to remain sealed until the counting of ballots at the Annual Meeting, at which time they shall be opened and included in the count. No Associate may send in an absentee ballot and also vote at the Annual Meeting; however, if an Associate chooses to vote at the Annual Meeting after having sent in an absentee ballot, the Associate may instruct the Secretary to invalidate his/her absentee ballot.
6. The Secretary shall receive the ballots and tally the totals, to be verified by someone
who is not an Associate.
7. In the event of a tie, a runoff election shall be held for only those candidates involved in
the tie.
8. The results of the election shall be announced immediately after the election process
has been completed. Normally, this shall take place at the Annual Meeting and be reflected in the Minutes of the meeting; in the event of runoff election(s), such shall be announced along with a timetable for completion and announcement of result(s).

CHAPTER NINE: GENERAL ASSEMBLY MEETINGS OF ASSOCIATES

ARTICLE TWENTY-ONE The General Assembly Meeting is the supreme body of the Association. General Assembly Meetings shall be ordinary or extraordinary. The ordinary meetings shall be held at least once within the first four months of each business year, and extraordinary meetings may be called at any time by the Board of Directors.
1. The Ordinary Meeting shall include
a. Reports by the Board of Directors, the Manager, and the chairpersons of Operating
Committees.
b. A report by the Treasurer on the budget, expenses, and any investments for the
following fiscal year.
c. Analysis, discussion, and approval or modification of the budget, expenses and investments for the following fiscal year.
d. Election or re-election of members of the Board of Directors to fill positions where the term of office has expired or there is a vacancy.
e. Discussion, and action taken as appropriate, regarding any other matter.
2. The Extraordinary Meeting shall have the faculty to make amendments, additions, and/or changes to the bylaws; to dissolve and/or liquidate the Association; and to take up and act upon any other matter.

ARTICLE TWENTY-TWO The system for conducting Ordinary and Extraordinary Meetings shall be the following:
1. Ordinary Meetings shall be called by the President of the Board of Directors or his/her designee, or by a petition signed by at least twenty-five per cent (25%) of Associates in good standing.
2. The President shall call both the Special and Ordinary meetings in writing signed by him/her or by his/her designee. Meetings shall be formal or informal. For Formal meetings, in which actions taken shall have immediate effect, all Associates shall be notified of the meeting by certified mail, Notary Public, or in front of two witnesses or by any other means that can be officially authenticated. Also, in accordance with MexicanLaw the meeting agenda must be published in a Mexican newspaper thirty days prior to the meeting.
For Informal meetings, wherein it is to be understood that actions taken shall take effect only after ratification at a subsequent Formal meeting, all Associates shall be notified of the meeting in person or by regular mail, e-mail, telephone, posting on a website, or other reliable means.
3. When meetings take place the quorum shall be a simple majority of the Associates, the count for which shall include Associates attending in person or by proxy. If a quorum is not present, a second notice may be issued and the meeting may take place with the those present. Both notices may be included in the same mailing or publication provided that after the Agenda or Order of the Day it is stated clearly that if the majority of Associates is not present on the date and time of the meeting referred to in the first notice, a second notice is understood as duly given for that same date half an hour after the time indicated in the first notice, whereupon the meeting shall be called and held with the attending Associates.
4. The President of the Board of Directors, or, in his/her absence the Vice-President, or, in their absence, the Secretary, then the Treasurer shall preside over the meeting.
5. The Secretary, or his/her designee, shall record the proceedings.
6. Associates shall attend the meetings personally or by proxy. An Associate shall not represent more than two other Associates by proxy in any meeting. Joint tenants and tenants in common or partners in a single dwelling shall count as a single vote unless their ownership represents more than one vote. Associates whose property represents 1/3 of a vote shall have their vote count as such.
7. Once the Meeting is declared open, the Associates being present are considered to be present even when they have to leave.
8. Decisions shall be taken by a simple majority of votes, with the following exception: A special majority of sixty-six percent (66%) shall be required to make amendments, additions and/or changes to the Bylaws or CC&Rs, or for the dissolution and/or liquidation of the Association.

ARTICLE TWENTY-THREE The Secretary of the Board of Directors shall be responsible for keeping a Minutes Book wherein all the motions and agreements voted upon by the General Assembly Meetings of Associates and meetings of the Board of Directors are registered, which records shall be signed by the President and the Secretary. All such approved motions and agreements, and any other official document of the Association, shall be registered in Spanish.

CHAPTER TEN: DISSOLUTION AND LIQUIDATION OF THE ASSOCIATION

ARTICLE TWENTY-FOUR The Association shall not be dissolved without the incorporation of a new one, and shall be dissolved only under the following:
1. A decision taken by a vote of at least sixty-percent (66%) at a General Assembly Meeting of Associates that the Association in its current organization and its current operations is failing to perform in a manner sufficient to meet the goals and carry out the purposes that the Associates deem necessary.
2. A resolution to the effect of 1. above issued by other competent authority.

ARTICLE TWENTY-FIVE If dissolution of the Association is determined, liquidation shall take place. Said liquidation shall be in the charge of a Committee of two liquidators, who shall follow the established legal rules or provisions for this matter, and shall have the faculties that the Association indicates.

ARTICLE TWENTY-SIX To perform the liquidation, the Committee of Liquidators shall proceed according to the following:
1. Shall collect debt, and shall pay all costs, expenses and debts that the Association might have, selling the necessary goods to cover the debts.
2. Shall divide the remaining assets of the Association among the Associates according to their contributions.

ARTICLE TWENTY-SEVEN All matters not provided by these Bylaws shall be resolved according to what is provided by the Civil Code of the State of Baja California; and for matters regarding the interpretation of, compliance with, and execution of these Bylaws, the CC&Rs, or any other document attached or referred to herein, the Associates expressly submit themselves to the jurisdiction and competency of the Courts of the domicile of the Association.


TRANSITORIES

ARTICLE ONE The founder Associates of the "ASOCIACION DE COLONOS SECCION CLUB", A.C., are the following persons: JOSE LUIS COLINAS HERNANDEZ, ENRIQUE COLINAS HERNANDEZ, JOSE GUTIERREZ, MARIA CLAUDIA COLINAS HERNANDEZ, DANIEL COLINAS HERNANDEZ, CARLOS COLINAS HERNANDEZ, EDUARDO COLINAS HERNANDEZ, CARLOS COLINAS VILLOSLADA, MARTINIANO NUNGARAY GARCIA, ROBERTO ORDORICA RUIZ.

ARTICLE TWO The Board of Directors shall consist of the following persons and shall be in office in the position and for the time stated herein.
OFFICE NAME TERM
PRESIDENT George Woolverton 2 YEARS
VICE PRESIDENT Jack Haeger 2 YEARS
TREASURER Gene Hartwick 2 YEARS
SECRETARY Enrique Colinas 2 YEARS
DIRECTOR Fernando Forno 3 YEARS
DIRECTOR Gary Anderson 2 YEARS
DIRECTOR Ralph Amey 1 YEAR

ARTICLE THREE In regard to any new constructions or modifications of constructions within the Club Section of the Plaza del Mar Development, the Associate owning the lot or building(s) on which construction is proposed must obtain written authorization from the Architectural Committee (see Chapter Eight, Article Nineteen of these bylaws), submitting to the Rules of Design and all applicable provisions of these bylaws and the CC&Rs. This shall be in addition to, but not in conflict with, the authorizations or licenses needed for the construction of new structures or additions to existing structures and issued by the proper authorities. Any construction in violation of this requirement shall be subject to sanctions according to the instrument herein, including removal of the same at the Associate’s cost.

ARTICLE FOUR The Board of Directors, under the faculties stated in Chapter Eight, Article Sixteen of this document, decide that the dues to be paid by the Associates owning Condominiums and houses within the Club Section shall be one hundred and twenty dollars ($120.00) U. S. currency or its equivalent in Mexican pesos at the time of making the payment. These fees shall be used for the aims and purposes described in Chapter one, Article Two, according to the needs of the Association. Furthermore, with authorization of the Board of Directors and/or the General Assembly fees may be changed from time to time. For such purposes the following rules shall apply:
1. An Associate shall pay a third of the total fee for an empty lot, or for a house or condominium not finished until the house or condominium is finished.
2. For purposes of this document, with the exception indicated in 5. below the definition of
a finished house or condominium shall be that the windows and doors of said unit are sealed,
and thus occupancy or non-occupancy by its owner shall not constitute a factor.
3. A finished home or condominium unit built on one lot shall pay the full Association fee.
4. A finished home or condominium unit built on two lots shall pay the full Association fee
plus one third for the extra occupied lot, and for each additional lot another one third of the
full Association fee.
5. Once construction of a house or condominium begins on a lot owned by an Associate, if the construction exceeds three hundred and sixty-five (365) days, the Associate shall pay the full Association fee from then on.
6. Each new Associate shall contribute an amount to be set forth by the Board of Directors to the legal fund, Northgate fund, Water Meter Fund or any other one-time permanent fee via the purchaser´s agreement (annex "D" of CC&Rs or Protections). He/she may choose to pay in full at the time of purchase or in installments over six months.

ANNEX A OF THE PLAZA DEL MAR, CLUB SECTION BYLAWS:
"PROTECTIONS" OR COVENANTS, CONDITIONS, AND RESTRICTIONS (CC & Rs)

These Covenants, Conditions, and Restrictions (to be known also herein as "CC& Rs" or "Protections") are issued according to the Minutes of the January 11, 2003 General Assembly meeting of the Plaza del Mar Club Section Civil Association (to be known also herein as "the Houseowners Association" or simply "the Association"), in which the Bylaws were re-formed and approved, as well as the documents attached thereto, including these "Protections."
It is intended that the ownership, use, enjoyment, possession, and improvement of the tourist development of Plaza del Mar, Club Section shall be at all times subject to the provisions of these Protections. Should there be any conflict between these Protections and the Bylaws of the Association, the provisions of the Bylaws shall take precedence.
Each member of the Association shall be known as an Associate and shall be bound to abide by the Association Bylaws, these Protections, the Rules of Conduct, the Design Rules, and the Purchaser´s Agreement and all documents referred to therein or attached thereto, such as his/her trust agreement. All Associates shall be subject to any laws applicable to the aforesaid documents, and they agree to bind to the same all their successors. In the event of an Associate’s failure to abide by the above or to so bind his/her successors, he/she agrees to be personally liable for all resulting damages to the other Associates and for the cost of any resulting legal action or relevant attorney fees.

Protections issued by the Association of Houseowners of Plaza del Mar, Club Section

These Protections are written to assure an orderly and attractive community, continuity of the natural environment, and effective Member management. The Association seeks to effect and perpetuate full enjoyment of the historical tradition and the natural and physical environment of the Plaza del Mar, Club Section Development and Community, to the enrichment of the spirits of its members. It is assumed that all Associates are themselves similarly motivated and will support these Protections.

Articule 1. Definitions

The "Property" refers to the development Plaza del Mar.

"Plaza del Mar, Club Section" shall mean that certain portion of the Property, a map of which is attached hereto as Exhibit A.

"Property Lots" shall mean and refer to those plots of land into which Plaza del Mar, Club Section is legally divided.

"Unit" shall mean any Lot, House, or Condominium other than a Common Area, together with any improvements placed thereon by an Associate holding the interest thereto. All dwelling structures are intended to be occupied by a single family, and each dwelling structure shall be considered to comprise a Unit for purposes of this definition.

"Private Areas" shall mean the areas within a Lot, House, or Condominium Unit other than a Common Area or Restricted Common Area, together with the improvements from time to time constructed thereon, except to the extent that they are designated as Restricted Private Areas. Examples: lawns, gardens, landscaping, walkways, and driveways maintained by an Associate.

"Restricted Private Area" shall mean that portion of any Lot as so defined by the Developer or the Architectural Committee in the "Design Rules." Example: water heater and propane tank concrete pads.

"Common Areas shall mean any land, improvements, and facilities of Plaza del Mar, Club Section administered by the Association for the common use and enjoyment of the Associates. These are shown and designated as Common Areas in Exhibit A.
For the purpose of maintenance assessments and for the observance of all other provisions of these Protections, the Common Areas shall also include all other areas and facilities which have been dedicated to any governmental entity or public utility company and which are located within the boundaries of Plaza del Mar, Club Section.
"Restricted Common Areas" shall mean those portions of multi-Unit structures, and the Lots on which such structures are located, which are constructed or operated in such a manner as to create certain indivisible elements in common among the Units comprising that structure and Lot. In such a multi-Unit structure those elements may include all entry lobbies, corridors, stairs, structural elements of floors and ceilings, bearing walls, columns, roofs, foundations, elevator equipment and shafts, central heating, central air conditioning equipment, tanks, pumps, and other central services, pipes, ducts, chutes, flues, conduits, wires, and other utility installations, wherever located, except the outlets thereof located within the interior living space of a dwelling, all together with the ground area of the Lot or Lots on which the structure is located. Those elements shall not include doors or windows, or interior finishing elements such as carpets, floor and wall tile, acoustical ceiling cover, plaster, paint, and all other elements of similar nature within individual Units, all of which shall be the sole responsibility of the individual Associate holding the right to use thereof.

"Recreational Facility" shall mean a facility developed pursuant to Section 7.02 below, or developed by the Developer at the Developer’s sole option and discretion.

"Participating Organization" Shall mean any organization that has entered into an agreement with the Association pursuant to Section 8.01 and 8.02 below.

"Project" shall mean a Lot divided or to be divided into more than one Unit.

"Project Area" shall mean any property within Plaza del Mar, Club Section, lying within the boundaries of any project and designated a "Project Area" by the Developer or the Architectural Committee.

"Project Committee" shall mean the governing body which may be appointed by the Association to carry out any special project entered into by the Association.

"Developer" shall mean primarily the owner/investor family of José Luis Colinas Hernandez, Enrique Colinas Hernandez, and Daniel Colinas Hernandez, though this term may apply also to any other holder of multiple Lots who undertakes to develop Units thereon for sale together with improvements and facilities serving all those Units.

"The Development’s State Decree" refers to the Baja California State Government resolution published on June 20, 1988 in the State Official Gazzette, by means of which the Developer was authorized to develop Plaza del Mar Club Section; the terms and conditions set forth therein regulated the formation of the Association.

"Associate" shall mean the holder of a beneficial trust interest or direct legal title to any property Lot, House, and/or Condominium Unit of Plaza del Mar Club Section. Any Associate may delegate use of his/her Unit and the Common Area to his/her family, guests, and tenants, subject to the requirements and limitations of the Association Bylaws, these Protections, the Rules of Conduct, and any other document related to the property referred hereto, including the purchase or trust agreement executed by said Associate.

"Guest" shall mean any invitee of an Associate or a Participating Organization using the accommodations of Plaza del Mar, Club Section.

"The Association" shall mean the Association described in Article 5 below.

"The Bylaws" shall mean the Association Bylaws re-formed as of January 11, 2003 and referred to at the beginning of this document .

"The Directing Committee" Shall mean the Directing Committee, also known as the Board of Directors, presiding the Association.

"The Architectural Committee" shall mean that certain committee of the Association described in Article 4 below formed in accordance with Chapter Eight, Article Nineteen of the Association Bylaws.

The Manager" shall mean the individual described in the Association Bylaws Chapter Seven, Article Fifteen and in Section 5.06e below.

"Protections" shall mean these Plaza del Mar, Club Section, Covenants, Conditions and Restrictions (CC&Rs) and all documents attached hereto.

"Rules of Conduct" shall mean the rules established by the Directing Committee from time to time pursuant to Section 5.07 below and attached hereto as Exhibit C.

"Design Rules" shall mean the rules established by the Architectural Committee from time to time pursuant to Section 4.04 below and attached hereto as Exhibit B.

"Purchaser´s Agreement" shall mean the agreement signed by the purchaser of a Lot, Condominium, or House Unit in Plaza del Mar, Club Section upon the conveyance, sale, assignment, or transfer of rights or title over the property by virtue of which the purchaser accepts his or her membership in the Association and thus becomes subject to the Association Bylaws and all its provisions including but not limited to prompt payment of all assessments set forth herein and attached hereto as Exhibit D.

"Fiscal Year" shall mean the year from January 1 through the last day of December.

Article 2. Property Subject to Protections

Section 2.01 These Protections shall apply to the entire property included now or in the future within Plaza del Mar, Club Section.

Section 2.02 The Developer and the Association may agree, subject to the provisions of this Article 2, to annex to the Club Section and place under these Protections other real estate property from time to time acquired or controlled by the Developer in an area not to exceed two kilometers from the outside boundaries of the Property.

Section 2.03 Annexation shall be subject to, and shall take effect upon satisfaction of, the following conditions:

a. Developer and Association shall declare that such property shall be subject to these Protections and such other regulations as Developer shall impose over such property.

b. Such annexation shall not substantially increase the assessments to be paid by the Associates of Plaza del Mar, Club Section, prior to such annexation; nor shall such annexation substantially increase the burden upon the Common Areas without adding a proportionate amount of land available for the purposes of Common Areas.

c. In any event, any annexation shall require the consent of two-thirds of the Associates other than the Developer.

Section 2.04 Any provision herein to the contrary not withstanding, the regulations referred to in Section 2.03a above may provide for or refer to one or more documents creating any or all of the following, provided such are not inconsistent with the purposes of the development as stated in the Developer’s Trust Permit and Subdivision Decree, the Association Bylaws, the Protections herein, or any other relevant document including, but not limited to, documents regulating residential and touristic recreational uses, private house sites, townhouse and condominium multi-unit buildings or complexes, hotels, sport and commercial shopping structures, and community and public facilities ancillary thereto:

a. Such new land classifications not then provided for in Article 3 below, and such limitations, covenants, conditions, and restrictions with respect to the use thereof as Developer may deem to be appropriate for the development of such property;
b. With respect to the land classification provided for in Article 3 below, such additional or different limitations, covenants, conditions, and restrictions with respect to the use thereof as Developer may deem to be appropriate for the development of such property, provided, however, that such additional or different limitations, covenants, conditions, and restrictions applicable to common areas lying within such property do not discriminate between Associates and Guests or between Associates as to such property and other Associates as to any other property within Plaza del Mar, Club Section; and or
c. Separate regulations applicable exclusively to a particular project.

Article 3. Land Classification and Use

Section 3.01 Land Classifications
All land within Plaza del Mar, Club Section has been classified as either a) Private Areas, b) Restricted Private Areas, c) Common Areas, d) Restricted Common Areas, or e) Project Areas.

Section 3.02 Private Areas
The Private Area of each Unit shall be for the exclusive use and benefit of the Associate relative to such Unit, Subject to all of the following limitations and restrictions:

a. The Association, the Developer, or their duly authorized agents shall have the right at any time, without any liability to the Associate, to enter any Private Area for the purpose 1) of maintaining such Private Area, as provided for in paragraph a. of Section 5.06; 2) of removing any improvement constructed, reconstructed, refinished, altered or maintained upon such Private Area in violation of Section 3.03; 3) of restoring or otherwise reinstating such Private Area as authorized by paragraph f. of Section 3.03; 4) of otherwise enforcing, without any limitation, all of the restrictions set forth in this Section and in Section 3.03; and 5) of crossing the property by excavation, trenching or otherwise for the purpose of installing or maintaining utility, community, or in-common type facilities or systems, such as, but not limited to, water, sewer, gas lines, electricity, drainage, drainage swales and troughs, telephone, cable television lines, etc., so long as this right does not interfere with existing building structures and further provided that after the work is completed the Association or the Developer, as the case may be, shall restore the area of each Unit in which said work is performed to its former condition with all due respect to aesthetic aspects and as fully as is practically and commercially possible.
Upon such installation in each case, the area involved shall become an easement in favor of the Developer or the Association or its corresponding assignee, as the case may be.

b. No improvement, excavation, or other work which in any way alters any Private Area (or disturbs the vegetation, surface, or objects of nature reposing thereon) from its natural or improved state existing on the date such Private Area was first designated for the benefit of, or acquired by, an Associate shall be made or done or caused to be made or done by an Associate except in strict compliance with the Rules of Conduct, Design Rules, Section 3.03 herein, or any other applicable provision of these Protections.

c. The Private Area of each Lot shall be used exclusively for residential purposes, and no more than one family (including its servants and transient visitors) shall occupy such private area, provided, however, that nothing in this paragraph shall be deemed to prevent:

1) Any person from pursuing his/her professional calling in a Private Area if such person also uses such Private Area for residential purposes, is self-employed and has no employees working in such Private Area, and does not advertise or offer any product or service for sale to the public in or from such Private Area.
2)The leasing of any Lot, House, or Condominium Unit from time to time by the Associate, according to his/her trust agreement, subject also to these Protections and the Rules of Conduct as well as the Bylaws of which they are a part, and all other provisions which could otherwise be applicable to Associates.
3) The use by the Developer of residential buildings or Private Areas for purposes of offices or activities of real estate brokers or real estate sales and leasing. This right of use may also be sub-licensed to others by the Developer under such terms and conditions as the Developer may deem reasonable and are consistent with local regulations and the Bylaws and related provisions of the Association.

d. Each Private Area, and any and all improvements from time to time located thereon, shall be maintained by the Associate in good condition and repair at such Associate’s sole cost and expenses; and each Associate shall be liable for any taxes assessed thereon, which taxes shall be paid directly to the taxing authority.

e. No activity which is deemed by the Directing Committee in its reasonable discretion to be noxious or offensive shall be carried on upon any Private Area, nor shall anything be done or placed thereon which may be or become a nuisance to other Associates in the enjoyment of their Private Areas or Restricted Private Areas, or in their enjoyment of Common Areas, Restricted Common Areas, and Project Areas.

Section 3.03 Private Areas Construction

Any action by an Associate to construct, reconstruct, refinish, alter or maintain any improvement upon, under, or above any excavation or fill thereon, or to make any change in the natural or existing surface drainage thereof, or to install any utility line (wire or conduit) thereon or there over, is absolutely prohibited until and unless the Associate first obtains written approval from the Architectural Committee, in addition to such Governmental and regulatory approvals as may be necessary. The Association shall correct any violation of this prohibition, and the Associate shall be required to reimburse the Association for all expenses incurred in connection therewith in conformance with the proceeding established for such purposes in the Association Bylaws.
Any Associate proposing to construct or reconstruct, paint, refinish, or alter any part of the exterior of any improvement on or within his/her Private Area, or to perform any work which requires the prior approval of the Architectural Committee, shall apply to the Architectural Committee for approval as follows:

a. The Associate shall notify the Architectural Committee of the nature of the proposed work.

b. The Associate shall submit to the Architectural Committee for approval such plans and specifications for the proposed work as the Architectural Committee may from time to time request, or as shall be required by the Design Rules. The Architectural Committee shall require that the submission of plans and specifications be accompanied by a reasonable timetable for completion; that the plan comply with the provisions herein and the Association Bylaws, Chapter Eight, Article Nineteen; and that the Associate pay a reasonable inspection fee, if applicable.

c. Subject to the provisions of paragraph d. below, the Architectural Committee shall approve the plans, drawings and specifications submitted pursuant to paragraph a. and b. only if the following conditions shall have been satisfied:
1. The Associate shall have strictly complied with the provisions of paragraph a. and b. above; and
2. The submitted plans and specifications conform to these Protections and the Design Rules in effect.
All such approvals shall be in writing and may be conditioned upon the submission by the Associate of such additional plans and specifications as the Design Committee shall deem appropriate.
Plans, drawings and specifications which have not been rejected within sixty (60) days from the date of submission thereof to the Architectural Committee shall be deemed approved. This presumption of approval, however, shall not be effective until the Associate applicant shall have communicated with the chairperson of the Architectural Committee on or after the 60th day to ascertain definitively the Architectural Committee’s decision, or failure to render a decision, regarding the application. If the answer received at that time is a disapproval, then the presumption of approval shall not apply. The reason for this procedure is to avoid misunderstandings which may arise where the Architectural Committee does not have a means of conveniently communicating with an Associate applicant or where notice of the Committee decision may not be deliverable for some reason. It is of course in the best interest of the Associate applicant to maintain periodic communication with the Committee during the application period.

d. Notwithstanding the provisions of paragraph c. above, if the members of the Architectural Committee, in their sole discretion, unanimously find that the proposed work would for any reason whatsoever (including the design, height, or location of any proposed improvement and the probable effect thereof on other Associates in the use and enjoyment of their Private, Restricted Private, Common, Restricted Common, or Project Areas) be incompatible with the welfare of Plaza del Mar, Club Section, then the Architectural Committee shall disapprove the plans, drawings and specifications submitted to it pursuant to paragraph a. and b. above and shall so notify the Associate concerned in writing, setting forth the reason for such disapproval.

e. Upon approval of his/her request, the Associate shall commence the construction, reconstruction, refinishing, alterations or other work pursuant to the approved plans within one (1) year from the date of such approval. If the Associate shall fail to comply with this paragraph, any approval given shall be deemed revoked unless, upon the written request of the Associate prior to or after expiration of said one (1) year period, and upon a finding by the Architectural Committee that there has been no change in circumstances, the time for such commencement may be extended in writing by the Architectural Committee.

f. Upon completion of any construction or reconstruction of, or the alteration or refinishing of the exterior of, any improvement, or upon the completion of any other work for which approved plans are required under this Section, the Associate shall give notice thereof to the Architectural Committee, and within sixty (60) days thereafter the Architectural Committee or its duly authorized representative may inspect such improvement to determine whether it was constructed, reconstructed, altered, or refinished in substantial compliance with approved plans. If the Architectural Committee finds that such or any other construction, reconstruction, alteration, or refinishing was not done in substantial compliance with approved plans or was not done in accordance with the requirements or the spirit of the Association Bylaws and these Protections, or any other applicable rules and regulations, it shall notify the Associate of such noncompliance within the sixty (60) day period and shall require the Associate to remedy such non-compliance at his or her own expense. If upon the expiration of sixty (60) days from the date of such notification the Associate shall have failed to remedy such non-compliance, the Architectural Committee shall notify the Directing Committee of such failure; the Association at its option may then either remove the improvement or remedy the non-compliance, and the Associate shall reimburse the Association for all expenses incurred in connection therewith. Furthermore, at the request of the Architectural Committee the Directing Committee or Board of Directors may fine said Associate in accordance with the provisions of the Association Bylaws and these Protections. If for any reason the Architectural Committee fails to notify the Associate of any such non-compliance within sixty (60) days after receipt of said notice of completion thereof, the improvement shall be deemed to be in accordance with said approved plans, except that such presumption shall not be effective unless the Associate has established that he/she has complied with the personal communication procedure set forth at the end of paragraph 3.03c above.

g. In the event that the construction or work planned for a Private Area is such that the natural landscape within such area will be destroyed, the Association shall have the right to remove such landscaping for the Association’s or the Developer’s use, unless the Associate elects to remove and properly store such landscaping for re-use.

Section 3.04 Restricted Private Areas

The Restricted Private Area of certain Lots shall be for the exclusive use and benefit of the Associate owning direct title to or the "B" Beneficial Trust Interest Title over such Lot, House, or Condominium Unit, subject to all of the following limitations and restrictions and the Rules of Conduct and Design Rules, the major purpose of which is to assure that Restricted Private Areas are maintained in a manner that is attractive when they are viewed and does not inhibit views to adjacent open space.

a. The Association, or its authorized agents, shall have the right at any time, without any liability to the Associate, to enter upon any Restricted Private Area for the purpose 1) of maintaining such Restricted Private Area, as provided for in paragraph b. of Section 5.06; 2) of maintaining Private Areas, Common Areas, and Restricted Common Areas; 3) of removing any improvement constructed, reconstructed or maintained upon such Restricted Private Area in violation of paragraph a. of Section 3.07; and 4) of otherwise enforcing the restrictions set forth in this Section and Section 3.07.

b. No improvement, excavation, or other work which in any way alters such Restricted Private Area (or disturbs the vegetation, surface, or objects of nature reposing on such restricted Private Area) from its natural or existing state on the date such Restricted Private Area was first designated for the use and enjoyment of, or conveyed to, an Associate shall be done except upon strict compliance with, and within the restrictions and limitations of, the provisions of Section 3.07.

c. There shall be no use of Restricted Private Areas whatsoever except 1) use to effect improvement permitted under paragraph b above, and 2) natural recreational uses which do not cause unreasonable disturbance to other Associates in their enjoyment of their Private and Restricted Private Areas, or in their enjoyment of Common, Restricted Common, and Project Areas.

d. Each Associate shall be liable for any taxes levied or assessed against the Restricted Private Area within the Lot which is owned by or for which the "B" Beneficial Trust Interest title is held by the Associate, which taxes shall be paid directly to the taxing authority.

Section 3.05 Common Areas

Use of Common Areas shall be reserved exclusively and equally to all Associates and to Guests, subject, however, to the following limitations and restrictions:

a. Use of Common Areas shall be subject to these Protections and the Rules of Conduct attached hereto as well as any other applicable document related to such areas.

b. Use of Common Areas shall be subject to such easements and rights as the Developer shall reasonably require for the construction and operation of Plaza del Mar, Club Section; to such road and public utility easements and rights of way as may from time to time be taken under power of eminent domain; and to such other road and public and private utility easements as may at any time be granted by the Association pursuant to the provisions of paragraph d. of Section 5.06.

c. No improvement, excavation, or other work which in any way alters any Common Area from its natural or existing state on the date of commencement of these Protections shall be made or done except upon strict compliance with, and within the restrictions and limitations of, the provisions of Section 3.07.

d. Any portion of a Common Area reserved for development of a recreational facility may be developed into one or more recreational facilities pursuant to the provisions of Article 7. Such portion shall be used as Common Area until such time as any such recreational facility is developed. Upon the development of any such recreational facility by the Association pursuant to the provisions of Section 7.02, such facility may be used by any Associate or Guest, subject to the provisions of the Rules of Conduct with respect to such use.

e. Except to the extent otherwise permitted pursuant to the provisions of paragraph d. above and Section 3.07, there shall be no use of Common Areas, exclusive of roads or designated paths for horses, bicycles, or pedestrians, except natural recreational uses which do not injure or scar the Common Area, or cause unreasonable disturbance to Associates in their enjoyment of their Private and Restricted Private Areas. Additional limitations on the use of the Common Areas shall be provided in the Rules of Conduct.

Section 3.06 Restricted Common Areas

Exclusive use of Restricted Common Areas shall be reserved equally to the Associates within Projects areas which are contiguous to such Restricted Common Area, provided, however, that the limitations and restrictions set forth in paragraphs a., b., c., and e. of Section 3.05 with respect to the use of Common Areas by Associates and Guests shall be applicable to the use of Restricted Common Areas by Associates and Guests within Projects which are contiguous to such Restricted Common Area.

Section 3.07 Common Area, Restricted Common Area, and Restricted Private Area Construction.

No improvement, excavation, or work which in any way alters any Common Area, Restricted Common Area, or Restricted Private Area from its natural or existing state on the date of these Protections, shall be made or done except upon strict compliance with, and within the restrictions and limitations, as follows:

a. Except to the extent otherwise provided in these Protections, no person other than the Association or the Developer or their duly authorized agents, or an Associate in the case of a Restricted Private Area, shall construct, reconstruct, refinish, alter, or maintain any excavation or fill upon; or shall change the natural or existing drainage of; or shall destroy or remove any tree, shrub, or other vegetation from; or plant any tree, shrub or other vegetation upon; or disturb any object of nature reposing on a Restricted Private Area, Common Area, or Restricted Common Area.

b. Except to the extent otherwise provided in paragraph c. below, if the Association, or an Associate in the case of Restricted Private Area, proposes to construct or reconstruct, or to refinish or alter the exterior of, any structure upon a Common Area or Restricted Common Area; or if the Association proposes to make or create any excavation or fill, or to change the natural or existing drainage of surface waters, or to remove any trees, shrubs or other vegetation, or to plant any trees, shrubs or ground cover upon any Restricted Private Area, Common Area, or Restricted Common Area, the Association, or Associate, as the case may be, shall submit to the Architectural Committee for written approval two sets of plans and specifications for any such work in such form and containing such information as the Architectural Committee may at any time require. The Architectural Committee shall require that the submission of plans and specifications be accompanied by a reasonable plans inspection fee. All approvals of such submissions shall be in writing, provided, however, that plans that have not been rejected within sixty (60) day from the date of submission thereof to the Architectural Committee shall be deemed approved, except that such presumption shall not be effective unless the Associate has established that he has complied with the personal attendance procedure set forth at the end of paragraph 3.03b above. Rejection of plans by the Architectural Committee shall be in writing and shall set forth the reasons for such rejection.

c. At any time, the Developer and/or the Association may construct, reconstruct, refinish or alter any improvement upon; or make or create any excavation or fill upon; or change the natural or existing drainage of; or move or remove or plant any trees, shrubs, ground cover, or object of nature reposing upon any common Area or Restricted Common Area if either the Developer or the Association shall determine that any such work: 1) is reasonably necessary for any utility installation serving any property within Plaza del Mar, Club Section, or any participating organization; 2) is reasonably necessary for the construction of any recreational facility; 3) is desirable in order to provide or improve access to or to enhance the use and enjoyment of such Common Area or Restricted Common Area; 4) is desirable to protect, support, or preserve any property which constitutes a part of Plaza del Mar, Club Section; or 5) corresponds to any of the reasons provided in paragraph 3.02a above.

Section 3.08 Project Areas

Project Areas shall be for the exclusive use and benefit of the Associates within the Project area or section involved, subject, however, to all of the following limitations and restrictions:

a. The Association, or its duly authorized agents, shall have the right at any time, and from time to time, without any liability to the Project Committee or to any Associate within the Project, to enter upon any Project Area for the purpose of 1) maintaining all or any part of the project area, as provided for in paragraph c. of Section 5.05; 2) maintaining Private Areas, Restricted Private Areas, Common Areas, and Restricted Common Areas; 3) removing any improvement constructed, reconstructed, refinished, altered, or maintained upon such Project Area in violation of Section 3.09; 4) restoring or otherwise reinstating such Project Area as authorized by Section 3.09; and 5) enforcing the restrictions set forth or incorporated in this Section or in Section 3.09.

b. No improvement, excavation, or other work may be made or done to or upon any Project Area except upon strict compliance with the Rules of Conduct, the Design Rules attached hereto, and the Association Bylaws and Section 3.09 herein and any other applicable provisions of these Protections.

c. Project Areas shall be used exclusively for residential or for related recreational-service purposes, and no more than one family (including its servants and transient visitors) shall occupy a Unit within such project, provided, however, that nothing in this paragraph shall be deemed to prevent:

1) Any person from pursuing his/her professional calling within his/her Unit if such person also uses such Project Area for residential purposes, is self-employed and has no employees working in such Project Area, and does not advertise or offer any product or service for sale to the public in or from such Project Area.
2)The leasing of any Lot, House, or Condominium Unit from time to time by the Associate, according to his/her trust agreement, subject also to these Protections and the Rules of Conduct as well as the Bylaws of which they are a part, and all other provisions which could otherwise be applicable to Associates.
3) The use by the Developer of residential buildings or Project Areas for purposes of offices or activities of real estate brokers or real estate sales and leasing. This right of use may also be sub-licensed to others by the Developer under such terms and conditions as the Developer may deem reasonable and are consistent with local regulations and the Bylaws and related provisions of the Association, which should be previously notified in writing to the Association for its concurring.

d. Each Project Area, and any and all improvements from time to time located thereon, shall be maintained by the Associates therein in good condition and repair at such Associates’ sole cost and expense; and the Associates shall be liable for any taxes assessed thereon, which taxes shall be paid directly to the taxing authority.

e. No activity which is deemed by the Directing Committee in its reasonable discretion to be noxious or offensive, shall be carried on in any Project Area, nor shall anything be done or placed thereon which may be or become a nuisance to other Associates in the enjoyment of their Units or their Private or Restricted Private Areas, or in their enjoyment of Common and Restricted Common Areas.

Section 3.09 Project Area Construction and Alteration of Improvements.

Any actions by an Associate or Project Committee of the Project involved to construct, reconstruct, refinish, alter, or maintain any improvement upon, under, or above any Project Area; or to make or create any excavation or fill thereon; or to make any change in the natural or existing drainage thereon; or to install any utility line (wire or conduit) thereon or there over; or to plant, destroy, or remove any tree or other vegetation there from; or to disturb any object naturally reposing on the surface shall be subject to these provisions and the Rules of Conduct and the Design Rules herein. All of the limitations, restrictions, and conditions set forth in paragraphs a. through f. inclusive of Section 3.03 with respect to Private Areas shall apply to Project Areas, provided, however, that all references in said paragraphs to the Associate shall include either the Associate of the Project Area or the Project Committee of the Project involved, whichever the case may be.

Section 3.10 Presumption of Compliance

All of the following improvements, excavations, fill, and other work shall, for all purposes of Plaza del Mar, Club Section Protections, be conclusively presumed to be approved in compliance with the provisions of this Article 3:

a. Those existing or maintained within or upon any property within Plaza del Mar, Club Section at the time such property became a part of Plaza del Mar, Club Section.

b. Those existing or maintained within or upon any Private Area or Restricted Private Area at the time the ownership or Beneficiary "B" Trust Interest Title in such Private Area or Restricted Private Areas was first acquired by an Associate.

c. Except in the case of residential structures as such, those at any time constructed, reconstructed, refinished, altered, installed, or maintained within or upon any property within Plaza del Mar, Club Section, by the Developer or pursuant to plans and specifications that have been approved by the Architectural Committee and which approval has not thereafter been revoked.

Article 4. Architectural Committee

Section 4.01 Organization

There shall be an Architectural Committee organized as follows:

a. The Architectural Committee shall consist of three Associates approved by the Chairperson appointed by the Directing Committee. Preferably at least one of the Associates shall be an architect or from a profession or experience similar or related, and he/she shall be designated the Technical Associate. Each member of this committee shall hold office until such time as he/she resigns or he has been removed and his/her successor has been appointed, as set forth in the Association Bylaws and herein.

b. Any member of the Architectural Committee may, at any time, resign from the Architectural Committee upon written notice delivered to the Directing Committee or Board of Directors complying with the provisions set forth in the Association Bylaws and the Protections herein.

Section 4.02 Duties

It shall be the duty of the Architectural Committee a) to study and act upon the proposals or plans submitted to it pursuant to Section 3.03, 3.07, 3.09 and 7.02; b) to adopt Design Rules pursuant to Section 4.04; and c) to perform all duties delegated to it by these Protections, the Rules of Conduct, the Design Rules, the Association Bylaws, or the Directing Committee.

Section 4.03 Meetings, Action, Compensation, and Expenses.

The Architectural Committee shall meet or vote separately by common arrangement from time to time as necessary to properly perform its duties hereunder. A vote or written consent by any two (2) members shall constitute an act by the Architectural Committee. All acts by the Architectural Committee shall be reported to, and shall be subject to approval by, the Board of Directors. Unless authorized by the Board of Directors, the members of the Architectural Committee shall not receive any compensation for services rendered. All members of the Committee shall be entitled reimbursement for reasonable expenses incurred by them in connection with the performance of any assigned Architectural Committee function.

Section 4.04 Design Rules

The Architectural Committee shall from time to time and subject to approval by the Board of Directors , adopt, amend, and/or repeal by unanimous vote rules and regulations to be known as "Design Rules," which, among other things, shall interpret or implement the previsions of Section 3.03, 3.07, and 3.09. It is understood that any changes in the Design Rules shall be consistent with the basic theme expressed in the initial Design Rules and with the overall standards contained therein. See exhibit B.

Article 5. The Plaza del Mar, Club Section, Civil Association


Section 5.01 Organization

The Association is a Mexican "Asociación Civil" charged with the duties and empowered with the rights set forth in its Bylaws and herein.

Section 5.02 Membership

Each direct owner of, or holder of title through a beneficiary "B" trust interest in, a Lot, House, or Condominium Unit shall be a member of the Association and known as an Associate under the terms established by the Association Bylaws, Chapter Two, Article Five.

Section 5.03 Meetings of Associates

Meetings shall take place in accordance with the provisions of the Association Bylaws. The following rules shall apply concerning meetings of Associates:

a. In order to attend and vote at a meeting, Associates must be prepared to present evidence of ownership of legal title to, or beneficiary trust interest in, a Lot, House, or Condominium Unit in Plaza del Mar, Club Section. If any Associate’s interest is held by two or more people, they shall agree as a condition of their right to vote on the designation of a single representative. No Associate "not in good standing" (Bylaws, Chapter Three, Article Eight) shall be permitted to attend meetings or vote in meetings.

b. Associates shall attend meetings in person or be represented by an attorney-in-fact, by a general or specific power of attorney executed before a notary public, or by a proxy document signed before two witnesses as established by Association Bylaws (Chapter Nine, Article Twenty-Two).



Section 5.04 Directing Committee or Board of Directors

The rights, powers, and authorities of the Association shall be exercised by, and all business of the Association shall be conducted by, the Directing Committee, also known as the Board of Directors, of the Association.

Section 5.05 Duties and Obligations of the Association

The duties and obligations of the Association, acting through the Directing Committee or Board of Directors, and subject to these Protections, shall be to do and perform each and every one of the following for the benefit of the Associates and for the maintenance and improvement of Plaza del Mar, Club Section:

a. The Association shall accept as part of Plaza del Mar, Club Section, all property annexed to Plaza del Mar, Club Section, pursuant to Article 2 herein and shall accept all Associates as members of the Association.

b. The Association shall maintain, or provide for the maintenance of, Common Area, Restricted Common Areas, and recreational facilities areas including all improvements of whatever kind and for whatever purpose at any time located thereon in good order and repair; provided, however, that notwithstanding the foregoing, while the Association may elect to do so, it shall have no obligation to maintain in good order and repair any improvement constructed upon a Restricted Common Area or Restricted Private Area by any Associate of a Project Area pursuant to Section 3.07.

c. The Association shall enter upon and maintain, or provide for the maintenance of, any Private Area or Project Area which is not maintained by the Associate or Project Committee thereof in accordance with the requirements of Sections 3.02 and 3.08, respectively

d. To the extent not assessed to the Associates, the Association shall pay all real property taxes and assessments levied upon any portion of Common Areas or upon any recreational facilities. To the extent not assessed to the Associates pursuant to paragraph d. of Section 3.02 or paragraph d. of Section 3.04, or paragraph d. of Section 3.08, the Association may also pay all taxes levied upon the Private Areas, Restricted Private Areas, and Project Areas.

e. Unless adequately or sufficiently provided by a municipal, state or other governmental body and unless the cost thereof is assessed, directly or indirectly, against the Associates by such body, the Association shall contract for, employ, or otherwise provide police, volunteer fire, and refuse disposal services.


f. The Association shall accept and act upon applications submitted to it for the development of public recreational facilities.

g. The Association shall take such action, whether or not expressly authorized by these Protections, Rules of Conduct, and Design Rules, as may reasonably be necessary to respond to an emergency and to enforce these Protections.

Section 5.06 Powers and Authority of the Association.

The Association shall have all of the powers to do any and all lawful things which may be authorized, required, or permitted to be done by the Association under and by virtue of these Protections, the Association Bylaws, and any other applicable regulations as may be necessary or proper for or incidental to the exercise of any of the express powers of the Association or for the peace, health, comfort, safety and/or general welfare of the Associates and Guests of Plaza del Mar, Club Section. Without in any way limiting the generality of the foregoing the Association shall have the power:

a. At any time, and without liability to any Associate or Project Committee, to enter upon any Private Area or Project Area for the purpose of enforcing any and all of the provisions of Section 3.03, 3.07, 3.08, and 3.09 or for the purpose of maintaining and repairing any such area if for any reason whatsoever the Associate or the Project Committee of the Project involved fails to maintain and repair such area as required by paragraph d. of Section 3.02 and paragraph d. of Section 3.08, respectively. The Association shall also have the power, authority, and responsibility, in its own name, on its own behalf, or on behalf of any Associate or Associates who consent thereto, to commence and maintain actions and suits to restrain and enjoin any breach or threatened breach of these Protections and to enforce, by mandatory injunction or otherwise, all of the provisions of these Protections.

b. To fulfill its obligations and duties under these Protections, including, without limitations, the maintenance, repair, operation, or administration of Common Areas, Restricted Common Areas, and recreational facilities, and only for remedial purposes, to the extent necessitated by the failure of the Associates thereof, Private Areas, Restricted Private Areas, and Project Areas. In relation to this provision the Association shall have the power and authority:
1) To contract and pay for, or otherwise provide for, the maintenance, restoration and repair of all improvements of whatever kind and for whatever purpose at any time located upon Common Areas, Restricted Common Areas, or within any recreational facility;
2) without being obligated to, to obtain, maintain, and pay for such insurance policies or bonds as the Directing Committee shall deem to be appropriate for the protection or benefit of Plaza del Mar, Club Section, the Association, the members of the Directing Committee, the members of the Architectural Committee, and Associates or Guests;
3) to contract and pay for, or otherwise provide for, such utility services, including, but without limitation, as water, sewer, garbage electrical, cable-television, telephone and gas services, as may at times be required;
4) to contract and pay for, or otherwise provide for, the services of architects, engineers, attorneys, certified public accountants, and such other professional and non-professional services as the Association deems necessary;
5) to contract and pay for, or otherwise provide for, fire, police and such other protection services as the Association deems necessary for the benefit of Plaza del Mar, Club Section, any property located within Plaza del Mar, Club Section, Members and Guests;
6) to contract and pay for, or otherwise provide for, such materials, supplies, furniture, equipment, and labor as the Directing Committee deems necessary; and
7) to pay any or all liens at times placed or imposed upon any Common Area, Restricted Common Area or recreational facility on account of any work done or performed by the Association in the fulfillment of its obligations and duties of maintenance, repair, operation or administration.

c. The Association shall have the power and authority to grant and convey to any third party easements, rights of way, and lots or strips of land, in, on, over, or under any Common Area, Restricted Common Area, or recreational facility for the purpose of constructing, erecting, operating and maintaining: 1) public roads, streets, walks, driveways, and park areas; 2) poles, wires, and conduits for the transmission of electricity for lighting, heating, power, telephone, television, or other purpose and for the necessary attachments in connection therewith, and 3) public and private sewers, storm water drains, land drains and pipes, water systems, sprinkling systems, water, heating, and gas lines or pipes, and any and all equipment in connection with the foregoing.
The Association shall also have the power and authority to grant and convey rights to any by-product of the Association’s temporary or permanent subjects of activity. To the extent it shall have any authority over the sewage treatment plant or plants the Association hereby grants the full right, without charge or cost therefore, to the Developer, to all or any portion of the sewage effluent as the Developer may elect.

d. The Association, in accordance with its Bylaws, shall employ the services of a Manager to manage the affairs of the Association upon such conditions as are deemed advisable by the Directing Committee, which may delegate to the Manager any of its non-policy making powers under these Protections. Any contract with the Manager shall contain reasonable termination provisions.

e. The Association may, from time to time and upon such terms and conditions as it may deem appropriate, agree with a Project Committee of any project to manage the affairs of such Project Committee with costs for these services above normal member service costs charged to the project members as an additional assessment.

Section 5.07 The Rules of Conduct

a. The Directing Committee shall, subject to Association Bylaws and the provisions of these Protections, adopt, amend, and repeal rules and regulations, to be known as the Rules of Conduct governing the use of any portion of Plaza del Mar, Club Section.

b. With respect to paragraph a. above, the Plaza del Mar, Club Section Rules of Conduct shall, without limitation and to the extent deemed necessary by the Association, preserve the benefits of Plaza del Mar, Club Section for all Associates, their families, invitees, licensees, lessees, and Guests. Said Rules of Conduct shall restrict and/or govern the use of Common Areas, Restricted Common Areas, and recreational facilities by any Guest, by any Associate, by the family of any Associate, or by any invitee, licensee, or lessee of any Associate, provided, however, that with respect to use of Common Areas and recreational facilities, the Rules of Conduct may not discriminate between Guests, Associates, and the families, invitees, and lessees of Associates.

c. A copy of the Rules of Conduct, subject to their being at times amended or repealed, is attached hereto as Exhibit C, according to the provisions of these Protections.

Article 6. Funds and Assessments

Section 6.01 Operating and Special Funds

There shall be an operating fund, a perpetual legal fund, a perpetual Northgate Project Fund, and other funds as may be determined by the Association, into which the following monies shall be deposited:
a. maintenance assessments;
b. recreational assessments;
c. special assessments;
d. use fees paid by users of Association recreational facilities;
e. use fees paid by Participating Facilities;
f. management fees from Project Committees per agreements entered into pursuant to paragraph f. of Section 5.06;
g. reimbursements for property taxes paid pursuant to Section 5.05 d. above;
h, miscellaneous fees; and
i. income attributable to the operating fund.

From these funds the Association shall make disbursements to perform the functions for which the foregoing assessments have been levied.

Section 6.02 Maintenance Assessment

a. Within ninety (90) days prior to the commencement of each fiscal year the Directing Committee shall estimate the costs and expenses to be incurred by the Association during such fiscal year in performing its functions under Article 5 herein (including a reasonable provision for contingencies and replacements), and shall subtract from such estimate:

1) the estimate of costs and expenses referred to in Section 6.03

2) an amount equal to the anticipated balance (exclusive of any reserves for contingencies and replacements) in the operating fund at the start of such fiscal year which is attributable to maintenance assessments; and the estimated receipts for all use fees to be collected from users of public recreational facilities and from participating facilities during the next fiscal year.

b. The sum or net estimate determined pursuant to paragraph a. above shall be assessed equally to the Associates as maintenance assessment, except as to taxes assessed as provided in paragraph d. of Section 5.05.

c. If at any time, during any fiscal year, the maintenance assessment proves inadequate for any reason, including non-payment of any Associate’s share thereof, a further assessment may be levied in the amount of such actual estimated inadequacy, which shall be assessed to the Associates in the manner set forth in paragraph b. above.

d. Maintenance assessments shall be due and payable by the Associates in equal monthly installments, on the first day of each month during the fiscal year, or in such other manner as the Directing Committee shall designate in accordance with the Association Bylaws or these provisions.

e. Monthly invoices for maintenance and any other fees or assessments shall be sent by the twentieth (20th) day of the month prior to the month in which they are due. A late fee of $15.00 will be assessed for any fee payment not received by the tenth (10th) calendar day of the month in which it is due. This fee shall be accumulative and in addition to the five percent (5%) and the fifty percent (50%) penalties for default after ninety days (Bylaws, Chapter Three, Article Eight). Special assessments are not exempt from this provision.

Section 6.03 Recreational Assessment

a. Within ninety (90) days prior to the commencement of each fiscal year the Directing Committee shall estimate the costs and expenses to be incurred by the Association during such fiscal year in performing its functions with respect to each recreational facility developed pursuant to Article 7, and shall subtract from each such estimate the amount, if any, of the anticipated balance in the operating fund at the start of the next fiscal year attributable to recreational assessments for each such recreational facility.

b. The sum or net estimate determined pursuant to paragraph a. above for each recreational facility shall be assessed equally to the Associates as a recreational assessment if such monies are needed.

c. If at any time during a fiscal year any recreational assessment proves, or appears likely to prove, inadequate for any reason, including nonpayment of any Associate’s share thereof, the Directing Committee may levy a further assessment in the amount of such actual or estimated inadequacy, which shall be assessed to each Associate in the manner and to the extent provided for in paragraph b. above.

d. Recreational assessments shall be due and payable by the Associates in equal monthly installments, on the first day of each month during the fiscal year, or in such other manner as the Directing Committee shall designate in accordance with the Association Bylaws or these provisions..


Section 6.04 Special Assessments

The Directing Committee shall levy a special assessment against any Associate whose action(s), or failure or refusal to act or to otherwise comply with these Protections, the Rules of Conduct, the Design Rules, or other provision related or pertaining to provisions of the Association Bylaws made it necessary for the Association to expend monies from the operating fund for materials and/or services performed for or because of such Associate by the Association pursuant to its functions under these Protections. Such assessment shall be in the amount so expended or in the value of the services performed by Association employees, and shall be payable to the Association when levied.

Section 6.05 Development Fund

There may be a development fund, into which the Association shall deposit all such monies paid to it as the following:

a. A recreational facility development assessment.

b. Income attributable to the development fund or other special project fund.

From this fund the Association shall make disbursements in performing the functions for which the assessments are levied.




Section 6.06 Recreational Facility Development Assessment.

To provide for the development of recreational facilities, the Directing Committee shall, subject to the provisions of paragraph b. below, from time to time assess to the Associates as a recreational facility development assessment such amount or amounts as the Directing Committee or Board of Directors may determine to be appropriate in the following manner:

a. The amount of the assessment shall be fixed by the Board of Directors and/or a General Assembly meeting and shall be assessed to an Associate as to each Unit owned or in which a beneficial interest is held by such Associate.

b. If the assessments made pursuant to paragraph a. above are not adequate, an additional amount may be assessed equally to the Associates as a recreational facility assessment pursuant to paragraph c. below.

c. No recreational facility development assessment pursuant to paragraph c. above shall be levied unless the Associates, excluding the Developer, shall by majority vote have approve such assessment.

d. Recreational facility development assessments shall be due and payable by the Associates in such installments and during such period or periods, as the Directing Committee shall designate in accordance with the Association Bylaws or these provisions.

Section 6.07 Default in Payment of Assessments

Each assessment under this Article 6 shall be a separate, distinct, and personal debt and obligation of the Associate against whom it is assessed. In compliance with the Association Bylaws, if the Associate does not pay such assessment or any installment thereof when due, the Associate shall be deemed to be in default, and the amount of the assessment not paid, together with the amount of any subsequent default, plus interest at five (5%) per cent per month or the average moratorium interest rates prevailing for the relative period among the principal banking institutions in Tijuana, which ever is higher, plus costs, including reasonable attorney’s fees, shall become a registered debt upon the Unit of such Associate, by virtue of the proceeding set forth in the Association Bylaws provisions for Associates in Default; and the corresponding remedy established therein shall take place in addition to any other remedies provided by law for the enforcement of such assessment obligations.

Article 7. Development and use of Recreational Facilities

Section 7.01 Introduction

In order to promote the beneficial recreational use of Common Areas in a manner which fosters the diverse recreational interests of the Associates and which is compatible with the rights of other Associates in their enjoyment of the environment of Plaza del Mar, Club Section, provision is hereby made in this Article for the development by the Association of recreational facilities, which shall be for the use and enjoyment of any Associate of Guest.

Section 7.02 Recreational Facilities; Procedure for Development

a. One or more Associates may at any time petition the Directing Committee for the development of a recreational facility on any portion of Common Area reserved by the Developer for such development. Such petition shall contain such information as the Directing Committee may require. The Directing Committee may, at any time on its own initiative, move for the development of a recreational facility, in which case such motion shall be treated as if it were a petition submitted by one or more Associates.

b. The petition shall be approved by a majority of the Members of the Association, excluding the Developer.

c. If the Directing Committee or a General Assembly meeting of the Association approves the petition, the Directing Committee shall prepare, or cause to be prepared, and submit to the Architectural Committee pursuant to paragraph b. of Section 3.0, two sets of plans and specifications for the proposed recreational facility.

d. If the Architectural Committee approves the plans and specifications, the Directing Committee shall obtain firm bids on the total cost of constructing and otherwise developing the proposed recreational facility, and the lowest acceptable bid or bids shall be deemed the estimated total cost of development of such facility.

e. If the Architectural Committee rejects such plans and specifications, the Directing Committee shall reconsider the petition in the light of the reasons given by the Architectural Committee. If upon such reconsideration the Directing Committee reaffirms the finding made pursuant to paragraph b. above, such plans and specifications shall be deemed approved by the Architectural Committee.

f. The Directing Committee shall give final approval to the petition if it finds, on the basis of the plans and specifications approved by the Architectural Committee and the estimated total cost of development, that the proposed recreational facility is financially feasible and is compatible with the proposal approved by the Association. In its final approval the Directing Committee may impose such restrictions upon use and operation of the facility, including reasonable use fees to be charged Associates and Guests for the use thereof, as it may deem advisable to assure the satisfactory functioning and financial stability of the facility, or to protect other Associates in their use and enjoyment of Plaza del Mar, Club Section.

g. After its final approval of the petition, the Directing Committee shall allocate funding for the development of the proposed recreational facility in an amount equal to the total estimated cost of development of such facility (including a reasonable provision for contingencies) from the portion, if any, of the development fund attributable to recreational facility development assessments levied for the development of such a facility. If no such assessments have been made, the Directing Committee shall allocate such amount from the unallocated balance of such fund.

h. After allocation of monies pursuant to paragraph g. above, the Directing Committee at such time and on such terms and conditions as it may deem appropriate, but not exceeding the estimated total cost of development determined pursuant to paragraph d. above, shall commence or contract for the development and construction of the recreational facility in accordance with the plans and specifications reviewed by the Architectural Committee.

i. If the amount allocated from the development fund pursuant to paragraph g. above from time to time proves or appears to be inadequate to cover the actual cost of development of the recreational facility, the Directing Committee shall at its option and from time to time:
1) levy an additional recreational facility development assessment pursuant to Section 6.06 in amount sufficient to cover such actual or estimated inadequacy ; or
2) allocate an amount sufficient to cover such actual or estimated inadequacy from the unallocated balance of the development fund to the development of such facility.

j. Any monies allocated to the development of a given recreational facility pursuant to paragraph g. or i, above which are not needed for such purpose shall, upon completion of the development of such facility, become part of the unallocated balance of the development fund or any other fund agreed by the Directing Committee.

k. If for any reason the Directing Committee does not give final approval to the petition as described in paragraph f. above, all expenses incurred by the Directing Committee in obtaining plans and specifications pursuant to paragraph c. above shall be paid out of the unallocated balance of the development fund.

l. Any improvement constructed or to be constructed by the Developer on any portion of Common Areas reserved for development as a recreational facility shall be deemed to be a Recreational facility developed by the Association upon completion of such improvement by the Developer.

Article 8. Participating Organizations

8.01 Introduction

In order to permit persons other than Associates to benefit from the environmental and recreational features of Plaza del Mar, Club Section, this provision authorizes the Association, at its discretion and in recognition of the rights and interests of Associates in their enjoyment of Plaza del Mar, Club Section, to execute an agreement for extending the privilege of using Common Areas and recreational facilities to Guests of other organizations. Such organizations shall be recognized as Participating Organizations upon execution of an agreement with them. However, provisions are also to be made to insure that use by Guests of Participating Organizations will not overburden Common Areas and recreational facilities.

Section 8.02. Benefits.

Among the benefits which may accrue to Plaza del Mar, Club Section as a result of extending use privileges to Guests of other organizations are the following:

a. A more efficient use of Common Areas and recreational facilities and a broader base for sharing the costs of operating and maintaining the same, and

b. the attraction to the vicinity of Plaza del Mar, Club Section of the various services which Participating Facilities may offer and of which Associates may avail themselves as members of the public but which, because of the nature or cost of such services, would not otherwise be available to Associates.

Section 8.03 Provisions that shall be included in Agreements with Participating Facilities.

Any agreement entered into pursuant to Sections 8.01 and 8.02 shall:

a. Be for a term not to exceed the terms of these Protections.

b. Designate the Common Areas and Recreational Facilities which may be used by the Guests of the Participating Facilities.

c. Subject to Section 8.04, establish the allocation of Guest cards to the Participating Facilities.

d. Establish the amount of the use fee to be paid by the Participating Facilities to the Association for each fiscal year with respect to each Guest card allocated to it, which use fee shall be reasonably related or in proportion to the actual use by the Guests using such cards.

e. Subject to these Protections, set forth such other terms and conditions as may be appropriate concerning the use of Common Areas and recreational facilities by Guests.

Section 8.04 Limitation on Number of Guests Cards; Allocation

a. Each Participating Facility shall issue to each Guest, in such numbers as allocated by the Developer or the Association (whichever then has the right pursuant to paragraph b. of Section 8.01 and 8.02 to contract with a Participating Facility) Guest cards evidencing such Guests’ privileges to use the Common Area and recreational facilities designated in the agreement between such Participating Facility and the Association. The aggregate number of such Guest cards for all Participating Facilities shall not exceed the total number of Lots, House, and Condominium Units within Plaza del Mar, Club Section. For the purpose of this Section the use of roads for access by a Participating Facility shall not be deemed to be use of Common Area.
b. Any increase in the number of Lots, House, or Condominium Units in Plaza del Mar, Club Section, by reason of the annexation of property pursuant to Section 2.02, shall result in a like increase in the aggregate number of permissible Guest cards. The Association, pursuant to Section 8.01 to contract with a Participating Facility, may allocate additional Guest cards to Participating Facilities that request them.

Section 8.05 Use Fees; Default; Termination.

a. Each Participating Facility shall pay to the Association for each fiscal year a use fee for each Guest card allocated to it. Use fees for Guest cards allocated after the commencement of a fiscal year shall be appropriately prorated. Use fees shall be payable in monthly installments or in such other reasonable manner as the Directing Committee may designate.

b. The amount of use fee for each Guest card shall be that established in the agreement between such Participating Facility and Developer or the Association, whichever then has the right pursuant to section 8.01 to contract with a Participating Facility.

c. If a Participating Facility does not pay any fee or installment thereof when due, it shall be deemed to be in default. Upon the continuation of any default for two (2) or more successive months, the Directing Committee may terminate the agreement to which the default relates.

Section 8.06 Use Privileges, Condition, Revocation

After a Participating Facility and the Developer or the Association, as the case may be, have entered into an agreement pursuant to Section 8.01 and 8.02, and prior to the termination of such agreement, the Guests of such Participating Facility, not to exceed the number of Guest cards allocated to such Participating Facility, shall have the privilege to use the Common Area and recreational facilities designated in such agreement, subject to all of the limitations and restrictions of these protections, provided, however, that such privilege shall be abated during the period of any default pursuant to paragraph c, section 8.05; and provided further that noncompliance by any guest with the limitations and restrictions of these Protections shall automatically revoke such guest’s privilege to use such common areas and recreational facilities.

Article 9. Miscellaneous provisions

Section 9.01. Amendment.

In addition to the rights referred to in section 2.03 to modify or supplement these Protections with respect to property annexed to Plaza del Mar, Club Section, and unless specifically provided to the contrary herein, these protections or any part thereof, as in effect with respect to all or any part of Plaza del Mar, Club Section, and with respect to any limitation, restriction, covenant or condition there of, may:

a. Be amended or repealed with the approval of a special majority vote of sixty-six per cent (66%) of the Associates pursuant to provisions contained in the Association Bylaws, to the extent necessary to change these Protections and for this Association to become, if necessary, a different system such as a Condominium System under the pertaining Laws of the State of Baja California.

b. Be amended or repealed to the extent necessary in order to comply with the requirement of any governmental agencies or laws of any jurisdiction under which the Plaza del Mar, Club Section development, or the Property, may be registered or licensed in order to be permitted to promote, solicit, or sell in said jurisdiction; or for any other justified and worthy reason suggested by the Developer and/or considered by the Association.

Section 9.02 Enforcement; Non-Waiver

Except to the extent otherwise expressly provided herein, the Association or any Associates shall have the right to enforce any or all the limitations, covenants, conditions, restrictions, and obligations, now or hereafter imposed by these Protections, upon other Associates, or upon any property within Plaza del Mar, Club Section. In the case of the above right of the Associates, however, it is understood that any such Associates shall be entitled to exercise such right only after written petition to the Association for enforcement thereof and the Association, after being afforded a reasonable opportunity, shall not or shall be unable to do so, and a reply to that effect is given in writing by the Association to the requesting Associate.
Any act or omission whereby any condition, covenant or restriction of these Protections is violated in whole or in part may be enjoined or abated, whether or not the relief sought is for negative or affirmative action, by the Association or by an Associate, provided, however, that any provision to the contrary notwithstanding, only the Association or its duly authorized agents may enforce by self-help any limitation, condition, covenant, restriction, or obligation herein set forth.



Section 9.03. Term.

All of the limitations, covenants, conditions, and restrictions of these protections shall commence upon the date of its approval by the General Assembly of the Association and shall continue and remain in full force and effect at all times, with respect to all property and each part thereof included within Plaza del Mar, Club Section, and with respect to any person considered an Associate by virtue of these provisions or the Bylaws or by virtue of the State Decree Approval of the Plaza del Mar Club Section Development or any other such official document.

Section 9.04 Consolidation of Units.

No two or more Lot, House, or Condominium Units within Plaza del Mar, Club Section, shall be consolidated into one unless written consent of the Architectural Committee is obtained.

Section 9.05 Assignment Powers

Any and all of the rights and powers vested in the Developer pursuant to these Protections may be delegated, transferred, assigned, conveyed, or released in writing by the Developer to the Association; and the Association shall accept the same, effective upon the delivery to the Trustee by the Developer of a written notice of such delegation, transfer, assignment, conveyance, or release.

Section 9.06 Condemnation of Common Areas and Restricted Common Areas.

If at any time, all or any portion of Common Areas or Restricted Common Areas, or any interest therein or any other area related to said areas within the Development, be taken for any public or quasi public use, under any statute, by right of eminent domain or by private purchase in lieu of eminent domain, the entire award in condemnation shall be paid to the Association if not otherwise foreseen in the Plaza del Mar Club Section Master Trust Agreement.

Section 9.07 Repair and Restoration

In the event of damage to or destruction of the improvements within a Lot, Private Area, Project Area, or Common Area (including a recreational facility), the Associate, Members within the Project, or the Association, as the case may be, consistent with the Association Bylaws, and in order to avoid a fine imposed by the Directing Committee, shall be responsible to either:

a. Commence repair or reconstruction of the damage within 120 days from the date of occurrence according to the original plans or pursuant to new plans approved by the Architectural Committee and to diligently pursue such repair or reconstruction; or

b. Remove the improvements entirely and restore the Lot, House, or Condominium Unit, area or facility, to a condition substantially consistent with its condition prior to construction of the improvements.

Section 9.08 Obligations of Owners, Avoidance, Termination

No Associate, through his/her non-use of any Common Area, Restricted Common Area, Project Area or recreational facility, or by abandonment of his/her property Lot, House, or Condominium Unit, may avoid the burdens or obligations imposed on him by these Protections, related provisions, and the Association bylaws. Respecting changes in their holding of property, Associates:

a. Upon the conveyance, sale, assignment, or other transfer of a Lot, House, or Condominium Unit to a new Associate, shall not be liable for assessments levied with respect to such property after the date of such transfer, if they have paid their assessments in full up to the date of transferal; and the purchaser, by virtue of the Purchaser’s Agreement and acceptance of membership, shall be considered an "Associate" and thus subject to the Association Bylaws and these provisions including but not limited to prompt payment of all assessments set forth herein.

b. No person, after the termination of his or her status as Associate and prior to becoming once again an Associate, shall incur any of the obligations or enjoy any of the benefits of an Associate under these Protections and complimentary provisions following the date of such termination.

Section 9.9 Non-liability

No member of the Directing Committee or the Architectural Committee, or of any other committee established pursuant to these Protections, or their agents, shall be personally liable to any member or to an other person for any error or omission of any of the above committees or of the Manager, their representatives or employees, provided that such person has acted in good faith.