GENERAL REGULATIONS OF THE VALLE ESCONDIDO HOMEOWNERS ASSOCIATION
COVENANTS, RIGTHS, DUTIES AND RESTRICTIONS
CHAPTER I
DEFINITIONS
Article 1. "Association" shall refer to VALLE ESCONDIDO HOMEOWNERS ASSOCIATION, its successors and assignees.
Article 2. "Regulations" shall refer to these General Regulations of the Valle Escondido Homeowners Association. Covenants, Rights, Duties and Restrictions applicable to the properties or lots of the Valle Escondido Urbanization.
Article 3. “Valle Escondido Project”: Touristic Development and Urbanization from the main Property No. 50,694, duly registered at Code 4301, Document 298240 of the Public Registry, located in Boquete, in the province of Chiriquí, Republic of Panama.
Article 4. "Urbanization" shall mean exclusively the collection of lots or real property segregated from the main Property No. 50,694, duly registered at Code 4301, Document 298240 of the Public Registry, located in Boquete, in the province of Chiriquí, Republic of Panama which with the objective of establishing familiar homes, have subscripted adherence to the Statute and all Regulations of the Association in the contract of purchase and sale. The common areas, internal ways, annexations that from time to time could be presented within the jurisdiction of the Association.
Article 5. "Common Areas"' shall mean all real property for the common use and enjoyment of the members of the Association.
Article 6. "Lot" shall refer to any plot of land segregated or to be segregated from Property No. 50,694, with the objective of building a home, duly registered, adherent to the Association, its Statutes and Regulations, that comprise the Urbanization, with the exception of the Common Area, and areas dedicated as public use.
Article 7. "Owner" shall refer to the record owner, whether one or more persons or entities, of a fee simple title to any Lot which is a part of the Urbanization, excluding those having such interest merely as security for the performance of an obligation
Article 8. "Member" shall mean and refer to every person or entity who owns holds membership in the Association and who has subjected the purchase to the Statutes and Regulations of the Association.
Article 9. Structure” shall refer to any building, including houses, or portion thereof, fences, pavement, driveway or appurtenances to any of the aforementioned.
Article 10. "Mortgagee" shall refer to any person or entity secured by a duly registered first mortgage on any Lot.
Article11. “LECHERÍA, S.A.” Developer of the Valle Escondido Project, which takes place on the real property, segregated from the above mentioned Property No. 50,694, and on the free remainder of that property.
Article 12. Section shall refer to each division of the Master Plan:
Vista Golf I Vista Golf II Vista Golf III Barú Vista Río Cerquita
CHAPTER II
POWERS AND DUTIES OF THE ASSOCIATION
Article 1. Discretionary Powers and Duties. The Association shall have the following powers and duties, which may be exercised at its discretion:
(a) To enforce any building restrictions which are imposed by the terms on the Statute and Regulations or which may hereafter be imposed on any part of the Valle Escondido Project. The expenses and costs of any enforcement proceedings initiated by the Association shall be paid out of the general fund of the Association, as hereafter provided for;
(b) To provide such light as the Association may deem advisable on streets and for the maintenance of any and all improvements, structures or facilities which may exist or be erected from time to time on any Common Area;
(c) To use the Common Area and any improvements, its structures or facilities erected thereon subject to the general rules and regulations established and prescribed by the Association and to establish charges for their use;
(d) To mow and sow the grass and to care for, spray, trim, protect, plant and replant trees and shrubs growing on the Common Area and to pick up and remove from said property and area all loose material, rubbish, filth and accumulations of debris; and to do any other thing necessary or desirable in the judgment of the Association to " keep the Common Area in neat appearance and in order;
(e) To exercise all rights and control over any easements which the Association may from time to time acquire, including, but not limited to, those easements specifically reserved to the Association in Article IX, hereof;.
(f) To employ legal counseling for the Meetings of Board of Directors, the Internal Committee of Evaluation and Execution and General Assemblies, to institute and prosecute such suits as the Association may deem necessary or advisable, and to defend suits brought against the Association;
(h) To employ from time to time such agents and workers as the Association may deem necessary in order to exercise the powers, rights and privileges granted to it, and to make contracts; and
(i) To contract, maintain, and negotiate so LECHERIA, S.A, for an annual fee, provides the services of maintenance, gardening and lightning of the principal access road of the Urbanization, as much as to guarantee its peaceful enjoyment from all the members; and
(j) To create and publish such rules and regulations as needed to regulate the use of any parking areas that may be constructed or authorized on Common Area for the benefit of all Owners, which rules and regulations may include assignment of parking spaces and no restriction or prohibition on certain vehicles as provided in the Statutes and Regulations of the Association.
Article 2. Mandatory Powers and Duties. The Association shall exercise the following rights, powers and duties:
(a) To hold and administer the Common Areas for the benefit and enjoyment of the owners and occupiers of lots in the subdivision. The purpose of this provision is to impose on the Association the obligation maintain the same for the benefit of owners and occupants of Lots; and
(b) To create and enforce the rules that govern the usage of the Common Areas and all the regulations provided by these Covenants, Rights, Duties and Restrictions.
(c) To create, to enforce, to collect and to manage of the maintenance fees and the charges for the services provided for the benefit of every member of the Association.
(d) To provide the personnel, procedures and equipment of the vigilance security staff in the Valle Escondido Urbanization.
Article 3. The Association shall be empowered to obtain fidelity coverage against dishonest acts on the part of directors, managers, trustees, employees, or agents responsible for handling funds collected and held for the benefit of the Association.
Article 4. The Association shall maintain a comprehensive policy of public liability insurance covering the Common Area. Such insurance policy shall contain a severability of interest clause of endorsement, which shall preclude the insurer from denying the claim of an Owner because of negligent acts of the Association or other Owners
Article 5. The Board of Directors shall have the authority to adopt such rules and regulations regarding Articles 1 through 24 of Article VII, as it may from time to time consider necessary or appropriate, as long as every resolution is previously approved by the Internal Committee of Evaluation and Execution.
Article 6. Internal Committee of Evaluation and Execution: Internal organism composed by 5 members or their assignees by power of attorney, which will be elected for a two year term by more than two thirds (2/3) of each kind of members who vote personally or by proxy in a meeting duly called for that purpose, whose written notification will be sent to all members no less than twenty five (25) working days or more than fifty (50) previous working days, establishing the purpose of the meeting. The required quorum for this meeting will be the same established in Article 8 Chapter V. Due to the limited number of homeowners in the Project the first members for the first two year will be appointed by LECHERIA, S.A.
These five (5) members will elect among themselves one Director and one Assistant. The Committee will decide by simple majority, support to any action of the Board of Directors, and its approval will be stamped in all minutes of Board of Directors by the signature of the Director and the Assistant.
CHAPTER III
VOTING RIGHTS
Article 1. The Association shall have two classes of voting membership:
Class A: Class A members shall be all those Owners as defined herein with the exception of LECHERIA, S.A. Class A members shall be entitled to one vote for each Lot in which they hold the interest required for membership by Article II. When one home is constructed on two or more lots, the Proprietary will be entitled to only one vote, and the assessments will be collected to the ratio of one per constructed home. When more than one person holds such interest in any Lot, all such persons shall be members. The vote for such Lot shall be exercised as they among themselves determine, but in no event shall more than one vote be cast with respect to any Lot.
Class B: The Class B member shall be LECHERIA, S.A. in its quality of owner of the lots not sold yet. The Class B member shall be entitled 1 vote per lot of its property. The purpose of the class B membership is to insure that the Association continues the original vision for the Project.
CHAPTER IV
PROPERTY RIGHTS
Article 1. Members' Easements of Enjoyment. Every member shall have a right of enjoyment in and to the Common Areas and such easement shall be appurtenant to and shall pass with the title to every Lot.
Article 2. Delegation of Use. Any member may delegate, in accordance with the Statute and Regulations, his right of enjoyment to the Common Area and facilities to the members of his family, his tenants, or shareholders who reside on the member's Lot.
CHAPTER V
COVENANT FOR MAINTENANCE ASSESSMENTS
Article 1. Creation of the Lien and Personal Obligation of Assessments. LECHERIA, S.A., for each Lot/home owned within the Valle Escondido Development hereby covenants and each Owner of any Lot by acceptance of a deed therefore, are deemed to covenant and agree to pay to the Association:
(a) Annual assessments or charges, and
(b) Since January 1, 2003, the maximum annual assessment may be increased above that established by subparagraph (a) annually provided that any such change shall have the assent by a vote of more than two-thirds (2/3) of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose, written notice of which shall be sent to all members not less than twenty-five (25) days nor more than fifty (50) days in advance of the meeting setting forth the purpose of the meeting.
Article 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively for the purpose of promoting the recreation, health, safety and welfare of the residents in the Urbanization and in particular for the improvements and maintenance of services and facilities devoted to this purpose and related to the use and enjoyment of the Common Areas.
Article 3. Basis of Annual Assessments. Since January 1, 2003 the annual assessment shall be nine hundred dollars ($900.00) per Lot.
After consideration of current maintenance costs and further needs of the Association, the Board of Directors, with the authorization of the Internal Committee of Evaluation and Execution may fix the annual assessment, without exceeding a range of 0.1% to 20% of the current fee in a two year period. Any extraordinary increment will require the vote of the General Assembly of Members any such assessment shall have the assent of more than two-thirds (2/3) of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose, written notice of which shall be sent to all members not less than twenty-five (25) days nor more than fifty (50)· days in advance of the meeting setting forth the Purpose of the meeting.
Article 4. Special Assessments. In addition to the annual assessments authorized above, the Association may levy in any assessment year, a special assessment applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction repair or replacement of a capital improvement upon the Common Area, including the fixtures and personal property related thereto, or other specified purpose, as long such special assessments are approved by the General Assembly of Member as provided in Article 3 of this Chapter.
Article 5. The Association can fix a yearly special assessment for the maintenance and cleaning of those homes connected to the central sewage system. The rate of this assessment shall be relative to the specific needs of the homes. This assessment has to be approved the Board of Directors, duly authorized by a simple majority of the Internal Committee of Evaluation and Execution.
Article 6. The Association can fix a yearly special assessment for the painting of those homes connected by means of a multifamiliar construction. The rate of this assessment shall be relative to the specific needs of the homes. This assessment has to be approved the Board of Directors, duly authorized by a simple majority of the Internal Committee of Evaluation and Execution.
Article 7. Rate of Assessment. Annual assessments shall be fixed at a uniform rate for all Lots not owned by LECHERIA, S.A. Any unoccupied Lot or Lots owned by LECHERIA, S.A. shall be assessed at twenty-five percent (25%) of the rate of Lots not owned by LECHERIA, S.A. As long as LECHERIA, S.A. retains the right to pay only partial assessments for the unoccupied lots in any section, he must also maintain the Common Areas in such Section at no cost to the Association.
Article 8. Quorum for any Authorized Action of the General Assembly of Members. At the first meeting called, as provided in Article 3 and 4 herein, the presence at the meeting of members or proxies entitled to cast sixty percent (60%) of all the votes of each class of membership shall constitute a quorum. If the required quorum is not forthcoming at any meeting, another meeting may be called subject to the notice requirements set forth in Articles 3 and 4, and the required quorum at any such subsequent meeting shall be one-half (1/2) of required quorum at the preceding meeting. No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting.
Article 9. Date of Commencement of Annual Assessments
Due Dates. The annual assessments provided for herein shall commence as to all Lots, in any section, no later than thirty (30) days following the formation of the Association. The first annual assessment shall be adjusted according to the number of months remaining in the calendar year. The Board of Directors, with the authorization of the Internal Committee of Evaluation and Execution shall fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period. E-mail, fax or written notice of the annual assessment shall be sent to every Owner subject thereto. The due dates shall be established by the Board of Directors, authorized by the Internal Committee of Evaluation and Execution. The Treasurer will issue receipts upon payment of the assessments. The Association shall upon demand at any time furnish a certificate in writing signed by an officer of the Association setting forth that the assessments on a specified Lot have been paid. A reasonable charge may be made by the Board of Directors, duly authorized by the Internal Committee of Evaluation and Execution for the issuance of these certificates. Such certificates shall be conclusive evidence of payment of any assessment therein stated to have been paid.
Article 10. Remedies of the Association in the Event of Default. Breach on any article of the Statute and General Regulations, habilitates the Association to send up to two notices regarding the same matter over a two month period to the Member in breach. After this action the Association could use the legal means foreseen in the Statute and the Regulations to enforce compliance.
If any assessment is not paid within ninety (90) days after the due date, the assessment shall bear interest from the date of delinquency at the rate of 10 percent (10%) per annum. The Association in its discretion may:
(a) Impose a penalty as established by the Board of Directors establishes;
(b) Bring an action at law against the Owner personally obligated to pay the same, and/or foreclose the lien against the property, and interest, costs and reasonable attorney's fees of any such action shall be added to the amount of such assessment.
No Owner may waive or otherwise escape liability for the assessments provided for herein by-non-use of the Common Area or abandonment of his Lot.
Article 11. Subordination of the Lien to Mortgages. The lien of the assessments provided for herein shall be subordinate to the lien of any registered mortgage. Sale or transfer of any Lot shall not affect the assessment lien. No sale or transfer shall relieve such Lot from liability for any assessments which thereafter become due or from the lien thereof.
CHAPTER VI
RESTRICTIVE COVENANTS
Article 1. The Urbanization shall be used exclusively for residential purposes. Only one home may be constructed on a lot, but two (2) lots can be used to construct one (1) single home. However, LECHERIA, S.A., reserves for itself, its successors and assignees, the right, prior to sale and transfer of any Lot, to alter, amend and change any lot lines or subdivision plans.