Last Update 22 November 2014
ARTICLE XII
RIGHTS OF MORTGAGEES

Notwithstanding any other provision of this Declaration, no amendment or violation of this Declaration shall operate to defeat or render invalid the rights of the Beneficiary under any Deed of Trust upon a Condominium made in good faith and for value, provided that after the foreclosure of any such Deed of Trust such Condominium shall remain subject to this Declaration, as amended. Notwithstanding any and all provisions of this Declaration to the contrary, in order to induce The Mortgage Corporation (“FHLMC”), the Government National Mortgage Association (“GNMA”) and the Federal National Mortgage Association (“FNKA”) to participate in the financing of the sale of Condominiums within the Project, the following provisions are added hereto (and to the extent these added provisions, pertaining to the rights of Mortgagees, FHLMC, FNMA, GNMA, VA and FHA, conflict with any other provisions of this Declaration or any other of the Restrictions, these added restrictions shall control):

  1. Each first Mortgagee of a Mortgage encumbering any Condominium, upon filing a written request for notification with the Board, is entitled to written notification from the Association of any defaut by the Mortgagor of such Condominium in the performance of such Mortgagor's obligations under the Restrictions, the Articles or the By-Laws (collectively referred to as the “Project Documents”), which default is not cured within thirty (30) days after the Association learns of such default. For purposes of this Declaration. a “first Mortgagee” shall mean a Mortgagee of a Mortgage with first priority over other Mortgages.

  2. Every Unit owner, including every first Mortgagee of a Mortgage encumbering any Condominium, which obtains title to such Condominium pursuant to the remedies provided in such Mortgage, or pursuant to foreclosure of the Mortgage, or by deed (or assignment) in lieu of foreclosure, shall be exempt from any “right of first refusal”.

  3. Each first Mortgagee of a Mortgage encumbering any Condominium, which obtains title to such Condominium, pursuant to judicial foreclosure, pursuant to the powers provided in such Mortgage or by deed (or assignment) in lieu of foreclosure, shall take title to such Condominium free and clear of any claims for unpaid assessments or charges against such Condominium which accrued prior to the time such holder acquires title to such Condominium.

  4. (d) Unless at least three-four (3/4ths) of the first Mortgagee* (based upon one vote for each Mortgage owned) three-fourths (3/4ths) of the Unit Owners (other than Grantor) have given their prior written approval, neither the Association nor the Unit Owners shall:

    1. by act or omission seek to abandon or terminate the Project,

    2. change the method of determining the obligations, assessments, dues or other charges [other than the Special Assessments or late charges imposed by the Board in accordance with the provisions of this Declaration] which may be levied against any Unit owner, or the method of allocating distributions of hazard insurance proceeds or condemnation awards;

    3. by act or omission change, waive or abandon any scheme of regulations, or enforcement thereof, pertaining to the architectural design or the exterior appearance of the Common Areas of the Project;

    4. fail to maintain or cause to be maintained Fire and Extended Coverage on insurable Common Areas as provided in Article X of this Declaration;

    5. use hazard insurance proceeds for losses to Improvements to any condominium property (whether to Units or the Common Areas) for other than the repair, replacement or reconstruction of such Improvements, subject to the provisions of Article X of this Declaration:

    6. take any action to implement a decision by the Association to terminate professional management and assume self-management of the Project;

    7. by act or omission seek to abandon, partition, subdivide, encumber, sell or transfer the Common Area. (The granting of easement for public utilities or for other purposes consistent with the intended use of the Common Areas under this Declaration shall not be deemed a transfer within the meaning of this clause.)

  5. First Mortgagees, upon written request, shall have the right to (1) examine the books and records of the Association during normal business hours, (2) require from the Association the submission of annual financial reports and other financial data, (3) receive written notice of all meetings of the Unit Owners, and (4) designate in writing a representative to attend all such meetings.

  6. All first Mortgagees, upon written request, shall be given thirty (30) days written notice prior to the effective date of any proposed, material amendment to the Project Documents which amendment would adversely affect the rights of first Mortgagees under this Declaration.

  7. The Reserve Fund described in Article V of this Declaration must be funded by regular scheduled monthly, quarterly, or semi-annual payments rather than by large Special Assessments.

  8. The Board shall secure and cause to be maintain in force at all times a fidelity bond for any Person handling funds of the Association, including, but no limited to, employees of the professional Manager.

  9. In a addition to the foregoing, the Board may enter into such contracts or agreements on behalf of the Association as are required in order to satisfy the guidelines of the VA, the FHA, the FHLMC, the FNMA or the GNMA or similar entities, so as to allow for the purchase guaranty or insurance, as the case may be, by such entitiesmof the first Mortgages encumbering Condominiums. Each Unit Owner hereby agrees that it will benefit the Association and the membership of the Association, as a class of potential Mortgage borrowers and potential sellers of their residential Condominiums, if such agencies approve the Project as a qualifying subdivision under their respective policies, rules and regulations, as adopted from time to time. Mortgagees are hereby authorized to furnish information to the Board concerning the status of any Mortgage encumbering a Condominium.

  10. Each Unit Owner hereby authorizes the first Mortgagee of a first Mortgage on his condominium to furnish information to the Board concerning the status of such first Mortgage and the loan which it secures.
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