HomeMy WebLinkAbout07-15-2022 Applicant Response to Hualalai Comm. Assoc. Testimony (REMAND SPP-16-188) Item 42 Bolton, Inc. (REMAND SPP-16-000188)
7/15/2022 Applicant's Response to Hualalai C.A. Testimony
Mori, Ashley
From: Ron Kim <rkim@yehandkim.com>
Sent: Friday, July 15, 2022 3:31 PM
To: LPCtestimony; Kekai, Malia; Campbell, Jean K; michael matsukawa
Subject: Bolton, Inc.'s Additional Testimony re: Leeward Planning Commission Hearing on
7/21/22, Remand of Special Permit Application of Bolton Inc. (Remand SPP No.
16-000188)
Attachments: ATT00001.bin
Dear Leeward Planning Commission and Counsel,
Bolton, Inc. is submitting the attached additional testimony for the Leeward Planning Commission's consideration.
Thank you,
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Ron Kim
1
Law Offices of Yeh & Kim RONALD N.W.KIM RKim@yehandkim.com
OF COUNSEL:
505 Kilauea Avenue, Suite B, Hilo, Hawaii 96720-3059 THOMAS L.H.YEH TLY(cr;yehandkimxom
Telephone: (808) 961-0055 JILL D.RAZNOV Jramov@yehandkim.com
Website: www.yehandklm.com JOHN MUKAJ jmukai(uyehandkim.com
July 15, 2022
Michael Vitousek, as Chairman for
the Leeward Planning Commission
Aupuni Center
101 Pauahi Street, Suite 3
Hilo, Hawaii 96720
Via email to LPCtestimony@hawaiicounty.gov
Re: Bolton, Inc.'s Response to Testimony of The Community Associations of
Hualalai, Inc. for Leeward Planning Commission Hearing on July 21, 2022,
Remand of Special Permit Application of BOLTON INC. (REMAND SPP NO.
16-000188)
Dear Mr. Vitousek,
Bolton, Inc. ("Bolton") submits this additional testimony for the Leeward Planning
Commission's consideration in light of Petitioner the Community Associations at Hualalai, Inc.'s
("Petitioner") recently submitted testimony. Bolton notes that: a) the Leeward Planning
Commission lacks jurisdiction to review the Planning Director's decisions, b) that the Special
Permit Application before the Leeward Planning Commission in Special Permit SPP NO. 16-
000188 was for a baseyard/staging area and commercial excavation, and not the drainage
floodway improvement project, and c) that two of Petitioner's members have foundational
association documents which bar them from pursuing the complaints in their Petition.
The Leeward Planning Commission lacks jurisdiction to review the Planning Director's
decisions and/or application of Hawaii Revised Statutes ("HRS") Chapter 205 or the Zoning
Code, as the Hawaii County Board of Appeals and not the Leeward Planning Commission has
jurisdiction to review such decisions. The Planning Director is authorized to administer and
enforce zoning laws. See County Charter § 6-7.2; HRS § 205-12; Hawaii County Code
("HCC") § 25-2-1. In contrast to the dearth of authority granted to the Leeward Planning
Commission to review the Planning Director's decisions, the Hawaii County Board of Appeals
expressly has jurisdiction to review the Planning Director's decisions. See County Charter § 6-
9.2, HCC § 25-2-20. The Leeward Planning Commission has the jurisdictional authority to
ultimately grant or deny an application for a Special Permit. HRS § 205-6. The Planning
Commissions delegated the authority to handle accepting and processing applications for Special
Permits to the Planning Department. See Rule 6-4 of the Planning Commission's Rules of
Practice and Procedure. The Leeward Planning Commission's jurisdiction in this matter was
over Bolton's Special Permit application for a baseyard or staging area and commercial
Mr. Michael Vitousek
July 15, 2022
Page 2
excavation operations, which Bolton has voluntarily withdrawn. Any review of the Director's
prior determination that Bolton's drainage floodway improvement project did not require a
Special Permit needed to have been initiated by filing an appeal of that decision within thirty
days of September 21, 2016. See HCC § 25-2-20. Further, the Director's prior determination
was unequivocally correct, as the definition of"commercial excavation"which would require a
Special Permit expressly excludes the excavation of natural materials that is related to or
occasioned by an impending development. See HCC § 25-1-5 (defining "commercial
excavation" as "any excavation or removal of natural materials for profit which is not related to
or not occasioned by an impending development of the site of such excavation").
Petitioner states that the "exact nature of the activity that is before the commission in SPP
16-000188"is "[a] flood control project that is augmented by other activities." Bolton factually
disagrees with this statement as its Application for Special Permit SPP NO. 16-000188 was for a
baseyard/staging area and commercial excavation operations. On its face, the Application was
for a baseyard/staging area, storage of materials, stockpiling and crushing of natural materials for
commercial use, and a security dwelling. Bolton's Application further explained that Bolton was
pursuing the Special Permit due to the Zoning Code enforcement action, which Bolton
understood to require a Special Permit for"commercial excavation"in distinction to its
permitted work for the drainage floodway improvement project.
Finally, Bolton notes that two associations which are members of Petitioner, the Heights
on Hualalai and Pualani Estates at Kona have Declarations of Covenants, Conditions and
Restrictions ("CC&Rs") which expressly acknowledge and waive any claims based on dust or
noise complaints due to activities on surrounding properties. These CC&Rs and a sample
Warranty Deed and Reservation of Rights for Pualani Estates at Kona Phase 3 have been
enclosed for the Leeward Planning Commission's reference.
The CC&Rs for Pualani Estates at Kona, which encumbered and bound all property
within that subdivision, provided for each lot owner to understand and acknowledge that:
the Community is located near or adjacent to properties which are or may be used for
agricultural, farming, animal husbandry or related uses (the "Agricultural and Farming
Properties"), commercial and other purposes; further development, construction and sale
of residential, commercial, industrial,recreational and public projects by the Declarant
and others is ongoing and may continue within the Community and within the vicinity of
the Community for an indefinite period; lands adjacent to the Community may used for
... rock processing and crushing, quarrying ... [and] easements shall be retained over the
Property for some or all of the foregoing described uses, including, specifically,
easements permitting the commencement, continuation and resulting effects of the
foregoing uses, and all activities incidental to such uses (collectively ... referred to herein
as the ("Surrounding Uses")).
See Pualani Estates at Kona Declaration of Covenants, Conditions, Restrictions and Easements
("Pualani Estates CC&Rs") § 17.1.
2
Mr. Michael Vitousek
July 15, 2022
Page 3
Furthermore, all owners also understood and acknowledged that:
the Community may be located near or adjacent to the Agricultural and Farming
Properties. Farming operations may result in smoke, dust, noise, vibrations and other
annoying activities that may constitute a nuisance and could interfere with the reasonable
use and enjoyment of the Property, including the Lots therein. Among others, and
without limitation, these uses may result in...noise from farm equipment and vehicles;
and dust created during plowing or cultivation. Owners are advised that the farming
operations and resulting consequences are protected under the provisions of Sections
165-1 through 165-4, Hawaii Revised Statutes (the"Hawaii Right to Farm Act")."
Pualani Estates CC&Rs § 17.2.
The Pualani Estates CC&Rs further provided that
each Owner, in purchasing or otherwise taping title to any Lot, does so with the
express understanding and acknowledgment that the Community and the Owner's Lot
may be periodically affected by various hazards and by noise, dust, smoke, earthshock,
soot, ash, odor, mold and mold spores, noxious vapors, transmission of pollutants or other
hazardous materials, surface water runoff, or other adverse environmental conditions,
including but not limited to those attributable to winddrift and other weather factors (the
"Surrounding Use Effects") created by or attributable to the location of the Home,
historical, existing, and prospective surrounding construction, development, agricultural,
pasture, golf course, commercial and other non-residential uses and activities, and
specifically approves all of those uses and activities, which include, but are not limited to:
(a) the items described in this Article 17 or elsewhere in this Declaration; (b) agricultural
crop burning, harvesting, tending, as well as fertilization and pest and weed control; (c)
pets that may be objectionable to residents, (d) quarrying; (e) changes in use due to
zoning changes or other governmental authorization or otherwise, construction, grading,
improvement and maintenance of adjacent and surrounding properties, including
roadways, drainage facilities, sewage treatment facilities and the like ... (collectively the
"Surrounding Operations"). Each Owner hereby covenants and agrees that each
Owner, and the tenants, lessees, family, servants, guests, invitees, licensees and
employees of each Owner, assumes any and all risks associated with such Surrounding
Operations and the annoyances, inconveniences, Surrounding Use Effects and
nuisances created thereby, and expressly waives all rights to any claim against the
Declarant, its successors and assigns, its affiliates, successors-in-title or assigns arising
out of or in connection with such activities, annoyances, inconveniences and nuisances,
including but not limited to (i) any right to seek damages attributable thereto or for the
design or the placement of improvements to the Community, any Lot or the surrounding
property, or any part thereof, or related or adjacent facilities or(ii) the abatement or
elimination thereof. Such waiver, however, shall not include claims arising out of or in
connection with the gross negligence and/or willful misconduct of such entities.
Pualani Estates CC&Rs § 17.5.
3
Mr. Michael Vitousek
July 15, 2022
Page 4
The sample Warranty Deed and Reservation of Rights for Pualani Estates at Kona Phase
3, which conveyed title to various lot owners expressly confirmed these disclosures,
acknowledgements, assumptions, encumbrances, and waivers, stating that
[b]y acquiring ownership of the Property hereby conveyed, the Grantee acknowledges
that the Grantee has become a member of the Community Association, has received,read
and understood the Community Declaration ... and acknowledges, agrees with, and
accepts the disclosures, conditions, covenants, easements, and reservation of rights
therein.... The Grantee acknowledges and agrees that the Community Declaration, the
Supplemental Declaration, the Limited Warranty and the Design guidelines contain
...disclosures, covenants, undertakings, waivers of rights, disclaimers, limitations,
requirements and restrictions, all of which are binding upon Grantee and all owners of
Property within the Community. These provisions include...specific provisions
disclosing and authorizing continued extensive construction and sales activities within
and around the Community, which may result in, among other things, noise, dust,
vibration, and other nuisances, disturbances, annoyances, hazards, and effects, and
providing for acceptance by Grantee of any and all nuisance, inconvenience, irritation,
annoyance and risk of damage attributable to such activities, and further providing for the
agreement by Grantee to suffer and permit all actions and consequences incidental to
such ongoing construction and sales activities [and] specific provisions disclosing
environmental hazards or conditions, including without limitation, noise, dust, smoke,
soot, ash, odor, mold and mold spores, noxious vapors, surface water runoff,rock slide,
or other adverse environmental conditions and providing for Grantee's acceptance of the
possibility that such conditions may occur, Grantee's assumption of the risk of any
damage resulting from such occurrence, and the express waiver of all claims against
...others arising out of or in connection with such conditions, including the right to seek
damages or the abatement or elimination of such conditions.
The CC&Rs for the Heights at Hualalai similarly disclosed that"[c]onstruction activity
by Declarant and other Lot Owners may continue within the Project, as well as on properties
adjacent to and in the vicinity of the Project. Such construction activity may result in the
transmission, discharge, or emission of surface water runoff, smoke, noise, dust, odors, noxious
vapors, chemicals, vibrations, and other annoyances, as well as pose certain risks of injury to an
Owner and the Owner's guests and visitors". See The Heights on Hualalai Declaration of
Covenants, Conditions and Restrictions ("Heights on Hualalai CC&Rs") § 17.1. Each lot owner
in this subdivision took their lot subject to an easement "for the transmission, discharge, or
emission of surface water runoff, smoke, noise, dust, noxious vapors, odors, chemicals,
vibrations, or other substances or nuisances over the Project which are created by or result from
such construction activities." Heights on Hualalai CC&Rs § 17.1.
Given the foregoing disclosures, acknowledgements, assumptions, encumbrances, and
waivers, which necessarily bind all lot owners within the Pualani Estates and the Heights at
Hualalai subdivisions, neither the community associations nor its lot owner members should be
4
Mr. Michael Vitousek
July 15, 2022
Page 5
able to make or pursue complaints against Bolton in any forum' for noise, dust, or vibrations
attributed to Bolton's operations.
Ultimately, Bolton unequivocally requested the withdrawal of its application for Special
Permit SPP NO. 16-000188 in 2016, and has no interest in pursuing this application before the
Leeward Planning Commission. From Bolton's perspective, after the Leeward Planning
Commission rules on Petitioner's request to intervene there are no further contested issues for the
Leeward Planning Commission to decide. In any event, Bolton confirms that it has withdrawn
its application for Special Permit and has no interest in participating in any subsequent contested
case regarding Special Permit SPP NO. 16-000188.
Very truly yours,
LAW OFFICES OF YEH & KIM
RONALD N.W. KIM
Cc: Michael J. Matsukawa, Esq.
Jean Campbell, Esq.
Malia A. Kekai, Esq.
' Bolton submits that the Leeward Planning Commission is not the proper forum for Petitioners to pursue these
complaints.
5
R-804 STATE OF HAWAII
BUREAU OF CONVEYANCES
RECORDED
OCT 27, 2003 08:02 AM
Doc No(s) 2003-234864
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Is/CARL T. WATANABE
REGISTRAR OF CONVEYANCES
so ill Z6
RETUeWy6kbvg1CKUP F-1 TO:
& LOMBARDI
A Low Corporation
737 Bishop Street, Suite 2600 p-K(7 /7 rl
Honolulu, Hawaii 96813-3214
.........................
PLIALANI ESTATES AT KONA
DECLARATION
OF
COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS
Pualani Kona 10-9-03
22594174/282690.9
PUALANI ESTATES AT KONA
DECLARATION OF
COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS
ARTICLE 1. DEFINITIONS..................................................................................................I
ARTICLE 11. STATEMENT OF PURPOSE AND IMPOSITION OF COVENANTS...............7
ARTICLE 111. LAND USE CLASSIFICATIONS .....................................................................7
Section 3.1 Land Use Classifications.........................................................................7
Section 3.2 Designation of Use Classification............................................................8
Section 3.3 Future Development Area .......................................................................8
ARTICLE IV. USE RESTRICTIONS......................................................................................8
Section 4.1 Hazardous Materials ...............................................................................8
Section 4.2 Property Restrictions...............................................................................9
Section4.3 Rezoning.................................................................................................9
Section 4.4 Covenants, Conditions, Restrictions and Easements Applicable
to Lots Within the Residential Area..........................................................9
Section 4.5 Amendment of Article.............................................................................13
ARTICLE V. MAINTENANCE.............................................................................................14
Section 5.1 Association's Responsibility ................................................................._14
Section 5.2 Owner's Responsibility; Generally (Landscaping and Improvements) ....16
Section 5.3 Standard of Performance.......................................................................17
Section 5.4 Assessment of Certain Costs of Maintenance and Repair
of the Area of Common Responsibility ...................................................17
Section 5.5 Improper Maintenance and Use of Lots..................................................17
Section 5.6 Party Walls and Party Fences................................................................18
Section5.7 Trees......................................................................................................18
Section 5.8 Grade of Lot................ ..........................................................................18
Section 5.9 Cleaning and Maintaining Sidewalks......................................................18
Section 5.10 Declarant's Uses....................................................................................18
ARTICLE V1. ARCHITECTURAL AND LANDSCAPE CONTROL.......................................19
Section 6.1 Design Review Committee.....................................................................19
Section 6.2 Design Guidelines..................................................................................19
Section 6.3 General Provisions.................................................................................20
Section 6.4 Approval and Conformity of Drawings and Specifications.......................21
Section 6.5 Non-Liability for Approval for Drawings and Specifications.....................21
Section 6.6 Inspection and Recording of Approval....................................................21
Section 6.7 New Construction...................................................................................22
Section 6.8 Additional Powers ..................................................................................23
Section 6.9 No Waiver of Future Approvals ..............................................................23
Section6.10 Variance.................................................................................................23
Section 6.11 Right of Removal....................................................................................23
Section 6.12 Amendment of Article..... .......................................................................23
Pualan!Kona 10-9-03
22594-174/282690.9 Page 1
ARTICLE V111. THE ASSOCIATION.......................................................................................23
Section 7.1 Purpose of the Association.....................................................................23
Section 7.2 Articles and Bylaws................................................................................24
Section 7.3 Declarant's Control of the Association....................................................24
Section 7.4 Board of Directors and Officers..............................................................24
Section 7.5 Association Rules...................................................................................25
Section7.6 Indemnification.......................................................................................25
Section 7.7 Non-Liability of Officials..........................................................................25
Section7.8 Easements.............................................................................................26
Section7.9 Accounting.............................................................................................26
Section7.10 Records ............................................................................................._..26
Section 7.11 Manager or Managing Agent..................................................................26
Section 7.12 Rights of Enforcement................................. ..........................................26
Section 7.13 Contracts with Others for Performance of Association's Duties..............27
Section 7.14 Duty to Accept Common Area Transferred by Declarant........................27
Section 7.15 Assist Design Review Committee...........................................................28
Section 7.16 Implied Rights and Obligations...............................................................28
ARTICLE VIII. MEMBERSHIP AND VOTING......................................................................1.28
Section 8.1 Membership in Association ....................................................................28
Section8.2 Voting.....................................................................................................28
Section 8.3 Transfer of Membership.........................................................................29
Section 8.4 Pledge of Voting Rights..........................................................................29
ARTICLEIX. ASSESSMENTS.............................................................................................29
Section 9.1 Creation of Lien and Personal Obligation...............................................29
Section 9.2 Purpose of Assessments........................................................................29
Section 9.3 General Assessments............................................................................30
Section 9.4 Special Assessments.............................................................................30
Section 9.5 Subdistrict Assessments........................................................................30
Section 9.6 Benefitted Assessments.........................................................................30
Section 9.7 Rate of Assessment................ ..............................................................31
Section 9.8 Date of Commencement of Assessments...............................................31
Section 9.9 Time and Manner of Payment; Late Charges and Interest.....................31
Section9.10 No Offsets.................. ...........................................................................31
Section 9.11 Rules Regarding Billing and Collection Procedures................................31
Section 9.12 Enforcement of Lien...............................................................................32
Section 9.13 Subordination of the Assessment Lien...................................................32
Section 9.14 Capitalization of Association ..................................................................32
Section 9.15 Pledge of Assessment Rights as Security..............................................32
Section9.16 Waiver of Use ........................................................................................33
Section 9.17 No Declarant Assessment......................................................................33
ARTICLE X. SUBDISTRICTS, SUBDISTRICT ASSOCIATIONS
AND SUPPLEMENTAL DECLARATIONS.....................................................33
Section10.1 Formation...............................................................................................33
Section 10.2 Effect of Supplemental Declarations.......................................................33
ARTICLEX1. COMMON AREA............................................................................................33
Section11.1 Common Area........................................................................................33
Pualan!Kona 10-9-03
22594-174/282690.9 Page 2
ARTICLE X11. SECURITY DISCLAIMER...............................................................................34
ARTICLE X111. INSURANCE ..................................................................................................34
Section 13.1 Authority to Purchase.............................................................................34
Section 13.2 Non-Liability of Association, Board and Officers.....................................34
Section13.3 Premiums...............................................................................................34
Section 13.4 Insurance Claims ...................................................................................35
Section13.5 Benefit...............1....I...............................................................................35
Section 13.6 Provisions Common to Association Insurance........................................35
Section 13.7 Annual Insurance Review.......................................................................35
Section 13.8 Individual Insurance...............................................................................36
ARTICLE XIV. RIGHTS OF MORTGAGEES..........................................................................36
Section 14.1 General Provisions.................................................................................36
Section 14.2 Subordination of Lien .............................................................................36
Section 14.3 No Personal Liability ..............................................................................37
Section 14.4 Enforcement After Foreclosure Sale.......................................................37
Section 14.5 Exercise of Owner's Rights ....................................................................37
Section 14.6 Subject to Declaration and Subdistrict Declaration.................................37
Section 14.7 Notices of Action............................................................... ....................37
Section 14.8 Other Provisions for First Mortgagees....................................................37
Section 14.9 Applicability of Article XIV.......................................................................38
Section 14.10 Failure of Mortgagee to Respond...........................................................38
ARTICLE XV. ANNEXATION OF ADDITIONAL PROPERTY...............................................38
Section 15.1 Annexation.............................................................................................38
Section 15.2 Approval of Association............................................. ............................38
Section 15.3 Withdrawal of Property...........................................................................38
ARTICLE XVI. EASEMENTS .................................................................................................39
Section 16.1 Reservation of Easements....................... .............................................39
Section 16.2 Easements for Surrounding Uses...........................................................39
Section 16.3 Easement for Ongoing Construction.......................................................40
Section 16.4 Recorded Easements.............................................................................40
Section 16.5 Maintenance Easement..........................................................................40
Section 16.6 Drainage Easements..............................................................................40
Section 16.7 Easements for Encroachment................................................................40
Section 16.8 Easements for Sales Activities...............................................................41
Section 16.9 Repair Easement ...................................................................................41
Section 16.10 Storm Sewer..........................................................................................41
Section 16.11 Further Encumbrances...........................................................................41
Section 16.12 Common Area........................................................................................41
Section16.13 Views.....................................................................................................42
ARTICLE XVII. SURROUNDING USES AND COMMUNITY CONDITIONS............................42
Section 17.1 Surrounding Uses ..................................................................................42
Section 17.2 Adjacent Agricultural and Farming Uses ................................................42
Section 17.3 Condition of Land...................................................................................43
Section 17.4 Other Environmental Issues...................................................................44
Section 17.5 Nuisances Related to the Community and Adjacent Properties..............45
Section 17.6 Assumption of Risk, Waiver of Claims, Hold Harmless and Defend........46
Pualani Kona 10-9-03
22594-174/282690.9 Page 3
ARTICLEXVIII. RESERVED....................................................................................................46
ARTICLE XIX. DECLARANT'S RIGHTS AND RESERVATIONS ..........................................47
Section 19.1 Reserved Rights.....................................................................................47
Section 19.2 Declarant's Rights to Complete Development........................................47
Section 19.3 Construction at or Adjacent to Community and Access..........................47
Section 19.4 Declarant's Right to Amend Declaration.................................................47
Section 19.5 Transfer of Declarant's Rights................................................................48
ARTICLE XX. DECLARANT'S DISCLAIMER OF REPRESENTATIONS;
NO COVENANTS OR RESTRICTIONS; ZONING AND PLAN ......................48
Section 20.1 Declarant's Disclaimer of Representations.............................................48
Section 20.2 No Express or Implied Covenants or Restrictions...................................48
Section20.3 Zoning and Plan.....................................................................................48
ARTICLE XXI. LIMITATION ON DECLARANT'S LIABILITY.................................................49
ARTICLEXXII. AMENDMENT................................................................................................49
Section 22.1 Amendment to Declaration.....................................................................49
Section 22.2 Effect of Amendment..............................................................................50
Section 22.3 Declarant Power to Amend; Required Approvals....................................50
Section 22.4 Requested Amendment; Legislative Change..........................................50
ARTICLE XXIII. TERM; TERMINATION...................................................................................51
ARTICLE XXIV.CLAIMS AND LITIGATION
NEGOTIATION, MEDIATION AND ARBITRATION .......................................51
Section 24.1 Limitation on Liability..............................................................................51
Section 24.2 Negotiation, Mediation and Arbitration....................................................51
ARTICLE XXV. GENERAL PROVISIONS...............................................................................55
Section25.1 Notice.................................................................................... ................55
Section 25.2 Captions; Construction...........................................................................55
Section 25.3 Severability ............................................................................................56
Section 25.4 Rule Against Perpetuities.......................................................................56
Section 25.5 Mortgage of Lots and Parcels.................................................................56
Section 25.6 Power of Attorney...................................................................................56
Section 25.7 Gender and Number ..............................................................................56
Section 25.8 Interpretation..........................................................................................56
Section 25.9 References to Declaration in Deeds.......................................................56
Section 25.10 Incorporation of Exhibits.........................................................................57
Section25.11 Roadways..............................................................................................57
Pualani Kona 10-9-03
22594-174/282690.9 Page 4
PLIALANI ESTATES AT KONA
DECLARATION OF
COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS
THIS DECLARATION OF COVENAPffS, CONDITIONS, RESTRICTIONS AND
EASEMENTS (this "Declaration") is made as of C*ob4^ .7,0 2003, by D.R. HORTON-
SCHULER HOMES, LLC, a Delaware limited liability company, dba SCHULER HOMES
("Declarant"), the address of which is 828 Fort Street Mall, 4th Floor, Honolulu, Hawaii 96813.
Declarant is the owner of that certain real property situated at Kona, Island,
County and State of Hawaii, described in Exhibit A which references Lots therein by their
subdivision Lot numbers. If available, the exhibit also notes the corresponding File Plan Lot
numbers. Declarant desires to develop the Property (as hereinafter defined) as an integrated
and planned development, and intends by this Declaration to impose upon the Property certain
covenants, conditions, restrictions and easements under a general plan of development in order
to provide a flexible and reasonable procedure for the incremental and overall development of
the Property. Declarant further intends by this Declaration to provide a procedure and
government for the use and interrelationships of the various components of the development
and to establish a method for the administration, maintenance, preservation, use, regulation and
enjoyment of the Property.
ARTICLE I
Definitions
Defined terms appear throughout this Declaration with the initial letter of each
such term capitalized. For clarity, individual Lots are described by reference to the subdivision
lot number throughout the body of this Declaration. Unless the context clearly requires
otherwise, the following terms used in this Declaration (in addition to those terms that may be
defined internally)are defined as follows:
Section 1.1. Arbitration is defined at Article XXIV. All Disputes, which is also
defined in that Article, shall be arbitrated pursuant to the Federal Arbitration Act and subject to
the procedures set forth in Section 24.2, after such Dispute shall have first been submitted to
the process of"Negotiation" and "Mediation" defined and described in Article XXIV.
Section 1.2. Articles or Articles of Incorporation means the Articles of
Incorporation of the Association, as filed or to be filed with the Director of the Department of
Commerce and Consumer Affairs of the State of Hawaii, as such Articles may be amended from
time to time, or any successor thereto.
Section 1.3. Assessments include (a) Benefitted Assessments, (b) General
Assessments, (c) Special Assessments, and (d) Subdistrict Assessments, all as defined in
Article IX Assessment Lien is also defined in Article IX
Section 1.4. Association means the Pualani Estates at Kona Community
Association, a Hawaii non-profit corporation, its successors and assigns.
Pualani Kona 10-9-03
22594-1741282690.9 Page 1
Section 1.5. Association Rules means the rules and regulations, if any,
adopted by the Association pursuant to Section 7.5.
Section 1.6. Board of Directors or Board means the board of directors of the
Association.
Section 1.7. Bylaws refer to the Bylaws of the Association adopted or to be
adopted in accordance with the Articles, as amended from time to time, or of any successor
thereto.
Section 1.8. Common Area is an inclusive term referring to both general
common area and limited common area. Area of Common Responsibility refers to the
Common Areas and those areas or matters, which by the terms of this Declaration, any
Supplemental Declaration or other applicable covenant, contract or agreement, the Association
is responsible for maintaining, managing and/or operating. The term includes, without limitation,
the property to be maintained by the Association pursuant to Article V of this Declaration. The
Area of Common Responsibility and Common Areas are described as the common elements
in Declarant's limited warranty, The Common Area includes each of the following items without
limitation of those other items identified in this Declaration:
(1) Entrance Landscape and Sign Monument Area means and describes the
landscaped median, if any, within the Community Access Road intersecting with Queen
K Highway shown on the Subdivision Map as well as the sign monument and landscape
features constructed in the setback areas affecting those lots and shown on the
Subdivision Map. Sometimes these features are described as the Entrance Landscape
Area.
(2) Roadway Landscape Corridor or Corridors which include certain landscape areas
within the roadway "setback" area adjacent to the paved portion of the Community
Access Road.
(3) Community Access Road(s) means and describes the "Entrance Road" (Lot 132,
File Plan 2352) and the roads serving the Community, which will be included in the
Community Common Area until dedicated to the County, if at all.
(4) Common Drainage Facilities means and describes those facilities, together with all
inlets and outlets thereto, serving to control and direct the drainage of surface water
within the Community, including without limitation those facilities shown on the
Subdivision Map.
(5) Community Water Facilities means and describes the those source, storage and
transmission facilities designed to provide potable water to Homes in the Community
and to provide irrigation water for yard and common area landscaping, if any. These
facilities, although the administration and control of the facilities may be the responsibility
of others, may be included in the Community Common Area if not dedicated to the
County.
(6) Common Utility Facilities means and describes those sewer facilities, together
with all inlets and outlets thereto, serving to control and direct the sewage, electrical,
cable and other utility services to, from and within the Community, including without
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limitation those facilities shown on the Subdivision Map and those located outside of the
Community.
(7) Community Parks refer to the approximate 6.835 acres proposed "Regional Park"
located at the intersection of the Community Access Road and Queen K Highway and
each of those "passive" parks located within the Community. The Regional
Park may be included in the Community Common Area if the County does not accept or
delays acceptance of the dedication of the park.
(8) Historic Sites refer to culturally significant sites located outside of Pualani Estates
for which the Community Association has a continuing responsibility to share in the cost
of their care and maintenance. The actual care and maintenance of Historic Sites is the
responsibility of others and will be administered in the future by a separate association
yet to formed.
(9) Road Widening Lot means and describes Lot 128 as shown on File Plan 2352
along Queen K Highway. The Road Widening Lot may be dedicated to the County, but
is included in the Community Common Area until the County's acceptance of the
dedication of this lot.
Section 1.9. Common Expenses means the actual and estimated costs
incurred or anticipated to be incurred by the Association and/or its designees in administering,
maintaining and operating the Area of Common Responsibility, and in owning, leasing,
operating or maintaining any portions thereof, and otherwise acting pursuant to this Declaration,
including, but not limited to, the following: (a) Maintenance, management, operation, repair and
replacement of all or any portion of the Area of Common Responsibility; (b) Unpaid
Assessments; (c) The costs of management and administration of the Association; (d) The costs
of insurance maintained by the Association as required or permitted herein; (e) Reasonable
reserves for contingencies, replacements and other proper purposes, if deemed appropriate by
the Association to meet the costs and expenses of maintenance, repairs and replacement of
those portions of the Area of Common Responsibility which must be maintained, repaired, or
replaced on a periodic basis; (f) The costs which the Board elects to incur to bond the members
of the Board, officers of the Association, any professional managing agent or any other person
handling the funds of the Association; (g) Taxes paid by the Association; (h) Amounts paid by
the Association for discharge of any lien or encumbrance levied against the Common Area or
portions thereof; (i) The costs incurred by the Design Review Committee; 0) The costs incurred
by any other committees established by the Board; and (k) Other expenses incurred by the
Association for any reason whatsoever in connection with the Area of Common Responsibility,
or the costs of any other item or items designated by, or to be provided or performed by the
Association pursuant to this Declaration, any Supplemental Declaration, the Articles, Bylaws,
Association Rules or Design Guidelines, or in furtherance of the purposes of the Association or
in the discharge of any duties or powers of the Association, including, but not limited to, legal
fees and costs incurred by the Association. Without limitation of the foregoing, the Association
shall be responsible for and the Common Expenses shall include any and all costs necessary to
improve, modify the Community Access Roads, the roadway shoulders, the Community Park,
and other Common Area, or improvements located in any of the foregoing (regardless of
whether it is intended to dedicate the same), so as to cause such item comply with any and all
future rules or regulations applicable to such items or the use of such Common Areas, 'Including
any rules and regulations applicable to public access and use of facilities of the nature involved.
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Section 1.10. Community means the planned development created by and
subject to this Declaration consisting of the Property and all of the Improvements now or
hereafter located thereon as described in this Declaration and any Supplemental Declarations.
This Community may be developed in multiple increments and may include the Annexation
Property described at Article XV.
Section 1.11. Community-Wide Standard means the standard of conduct,
construction, maintenance, repair or other activity generally prevailing throughout the Property.
Such standard may be more specifically determined and set forth by the Board and the Design
Review Committee.
Section 1.12. Declarant means Schuler Homes, and its successors or
assigns. A person or entity shall be deemed a successor and assign of Declarant if a successor
by merger and otherwise only if specifically so designated in a duly Recorded written instrument
as a successor or assign of Declarant under this Declaration and/or under any Supplemental
Declaration and shall be deemed a successor and assign of Declarant only as to the particular
rights or interests of Declarant under this Declaration or under such Supplemental Declarations
which are specifically designated in the Recorded written instrument. Any such instrument may
include only specific rights of Declarant hereunder and be subject to such conditions and
limitations as Declarant may impose in its sole and absolute discretion.
Section 1.13. Declarant Control Period is defined in Section 7.3.
Section 1.14 Declarant's Limited Warranty is defined at Article V and
describes that express limited warranty by Declarant in favor of the Association and the Owners,
which is conditioned on appropriate regular and routine maintenance, inspection and repair of
the common elements by the Association and the Property by the Owner, that the construction
of the Common Area, with respect to the Association and the Property, with respect to an
Owner, has been completed in general conformity with approved plans and specifications,
subject to appropriate or required field changes (Declarant's performance standards) and
provides coverage for Construction Defects defined in the limited warranty. The exact terms of
this limited warranty are set forth in Exhibit C and only those items described in the limited
warranty are covered by the limited warranty, notwithstanding anything to the contrary contained
in this Declaration. The limited warranty shall be administered by Professional Warranty
Service Corporation ("PWC"), as Declarant's administrator. Other than the Declarant's limited
warranty and the Declarant's Customer Care Program, which is also defined at Article V,
Declarant is making no other representations, promises, or warranties of any kind, including,
without limitation, any express or implied warranties of merchantability, habitability, quality of
construction, or fitness for a particular purpose with respect to the Property, the Residence, or
the Community.
Section 1,15. Declaration means this instrument, as it may be from time to
time supplemented or amended in accordance with this Declaration.
Section 1.16. Design Guidelines are defined in Section 6.2.
Section 1.17. Development Plan means the land use plan(s) for the
Community, or portions thereof, as may be established and amended from time to time by
Declarant.
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Section 1.18. Dwelling Unit means any building or portion of a building
(including a duplex structure) situated upon a Lot designed and intended for use and occupancy
by a Single-Family and containing only one kitchen. References to a Residence or a Home
refers to the Dwelling Unit on the Lot.
Section 1.19. Improvement means all buildings, parking areas, fences,
walls, hedges, plantings, poles, antennas, driveways, decks, signs, changes in any exterior
color or shape, excavation and all other site work including without limitation grading, road
construction, utility improvements, removal of trees or plantings and so forth, and any new
exterior construction or exterior improvement which may not be included in the foregoing.
"Improvement" does not include turf, shrub, or tree repair or replacement of a magnitude which
does not change exterior colors or exterior improvements. "Improvement" does include both
original improvements and all later changes and improvements.
Section 1.20. Pualani Estates at Kona or any variation thereof means and
refers to the real property, together with the Improvements and facilities thereon, described in
Exhibit A to this Declaration and the Annexation Property described in Exhibit B.
Section 1.21. Pualani Estates at Kona Association or Association or any
variation thereof refers to the Pualani Estates at Kona Community Association.
Section 1.22. Lot means any area of the Property which is designated as a
lot on any subdivision map or file plan Recorded by or with the consent of Declarant, and
classified or intended for residential use. Upon a permitted consolidation of two or more Lots,
the term "Lot" shall mean the parcel consisting of the Lots so consolidated.
Section 1.23. Lot Slope Area means and includes any portion of any
residential lot within the Community having a grade of 3 feet/1 foot or more. Special limitations
on the improvement of these portions of the Lots are set out in this Declaration and in the
Design Guidelines.
Section 1.24. RESERVED
Section 1.25. Member means every Person who is entitled to membership in
the Association, as provided in Section 8.1. Members include the Class "A" members and the
Class "B" members, both defined in Article VIII.
Section 1,26. Membership means a membership in the Association.
Section 1.27. Mortgage means any Recorded or otherwise perfected
instrument, which is not a fraudulent conveyance under Hawaii law, given in good faith and for
valuable consideration as security for the performance of an obligation, including without
limitation a deed of trust or agreement of sale, but shall not include any instrument creating or
evidencing solely a security interest arising under the Hawaii Uniform Commercial Code (Hawaii
Revised Statutes Ch. 490, as amended). First Mortgage means a Mortgage which is the first
and most senior of all Mortgages upon the same property. Mortgagee means the holder of a
note or interest secured by a Mortgage. First Mortgagee means the holder of a First Mortgage.
Mortgagor means the party executing a Mortgage as obligor.
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Section 1.28. Occupant means any Person, other than an Owner, in rightful
possession of any portion of the Property, whether as a guest, tenant or otherwise.
Section 1.29. Owner or Homeowner means the Record owner, whether one
or more Persons, of fee simple title, whether or not subject to any Mortgage, to any Lot,
including contract purchasers, but excluding those having such interest merely as security for
the performance of an obligation. If a Lot is sold under a Recorded agreement of sale, or is
leased for a term of thirty or more years under a Recorded lease, the purchaser or lessee
(rather than the fee owner) will be considered the Owner. For purposes of limitations and
restrictions set forth in Articles IV, V and VI, the term "Owner' shall not include Declarant with
respect to any Lots owned by Declarant.
Section 1.30. Parking Strip refers to the land area, if any, together with the
landscaping thereon, either; (a) between the front (Road-side) boundary of Lots and the Road
and/or(b) between the sidewalk and curb or Road.
Section 1.31. Person means a natural person, a corporation, a partnership,
a trustee or other entity capable of holding title to real property, and such holder's respective
heirs, personal representatives, successors and assigns.
Section 1.32. President means the duly elected or appointed president of
the Association.
Section 1.33. Property means the real property described in Exhibit A
attached hereto and any additional real property made subject to this Declaration by Annexation
pursuant to Article XV but only after completion of such annexation, together with all
Improvements now or hereafter located thereon, and all easements, rights, appurtenances and
privileges belonging or in any way pertaining thereto. Reference to an Owner's Property, where
the context requires, refers to the Owner's Lot and associated Improvements, including without
limitation the Home situate on the Lot.
Section 1.34. Record, Recorded, Recording, Recordation or a like
reference means an instrument of record in, or the act of recording or filing or having recorded
or filed an instrument with the Assistant Registrar of the Land Court of the State of Hawaii
("Land Court") or the Bureau of Conveyances ("Bureau") and/or the Department of Commerce
and Consumer Affairs of the State of Hawaii, as appropriate.
Section 1.35. Road or Roadway means any paved vehicular right-of-way
constructed within or upon any portion of the Property (other than Lots) for the purpose of
providing access to Lots and includes the Community Access Roads.
Section 1.36. Single-Family means (i) a group of one or more persons each
related to the other by blood, marriage or legal adoption; and/or (ii) a group of no more than five
unrelated adult natural Persons who maintain a common household in a Dwelling Unit.
Section 1.37. Supplemental Declaration means a declaration containing
covenants, conditions, restrictions, assessments, charges, servitudes, liens, reservations and/or
easements, or similar instrument supplementing or amending this Declaration as it relates to all
or any portion of the Property or the Annexation Property, which is Recorded from time to time
in accordance with this Declaration.
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22594.174/282690.9
ARTICLE 11
Statement of Purpose and Imposition of Covenants
-----------------
Declarant intends to develop the Community by subdivision and otherwise into
various Lots and Roads, and to develop and/or sell and convey the Lots (in general improved
with Homes) as portions of the Community are developed. Declarant may, with respect to
particular property constituting part of the Property, choose to Record one or more
Supplemental Declarations which will incorporate this Declaration and may establish additional
covenants, conditions, restrictions and easements as may be appropriate for that property.
Declarant hereby declares that all of the real property within the Property is and shall be held,
conveyed, hypothecated, encumbered, leased, occupied, built upon or otherwise used,
improved or transferred, in whole or in part, subject to this Declaration and any Recorded
Supplemental Declarations applicable thereto, as amended or modified from time to time;
provided, however, that property which is dedicated to the public or a governmental entity for
public purposes shall not be subject to this Declaration while owned by the public or the
governmental entity, although restrictions imposed in this Declaration upon the Owners and
Occupants concerning the use and maintenance of such public areas shall at all times apply to
the Owners and Occupants. This Declaration and any Supplemental Declarations are declared
and agreed to be in furtherance of a general plan for the subdivision, improvement and sale of
the Property and are established for the purpose of enhancing and perfecting the value,
desirability and attractiveness of the Property and every part thereof. All of this Declaration
shall run with the Property for all purposes and shall be binding upon and inure to the benefit of
Declarant, the Association, all Owners and Occupants, and their successors in interest.
Further, the covenants, conditions, restrictions and easements herein contained and
encumbering the Property shall benefit specifically, as a dominant tenement, all adjacent or
nearby property owned by Declarant.
ARTICLE III
Land Use Classifications
Section 3.1. Land Use Classifications. Declarant may, at its discretion,
designate land use classifications for certain areas of the Property, including specific
restrictions, easements, rights of way, maintenance responsibilities and other matters, including
new or different uses and restrictions therefor and including any number of subclassifications
thereof for any special uses. Such land use classifications may be fixed by Declarant in this
Declaration or in a Supplemental Declaration which may be Recorded by Declarant for that
portion of the Property. Any such Supplemental Declaration shall be construed as a
supplement to this Declaration and fully a part hereof for all purposes to the same extent as if all
of the provisions thereof were set forth in this Declaration. In exercising its authority to Record
Supplemental Declarations, Declarant shall not impose any new land use classifications or new
restrictions which are not generally in conformance with the scheme of development
contemplated by the Development Plan, as amended from time to time, and this Declaration;
provided, however, that any Supplemental Declaration may impose such further conditions,
covenants, restrictions, land uses and limitations as Declarant may deem appropriate, taking
into account the nature or particular requirements of each area of development. The inclusion
in any Supplemental Declaration of conditions, covenants, restrictions, land uses and limitations
which are more restrictive or more inclusive than those contained in this Declaration shall not be
deemed to constitute a conflict with the provisions of this Declaration. Land use classifications
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for portions of the Property and any Annexation Property which may be annexed hereto, as
provided in Article XV, may include the following:
(a) Residential Area.
(b) Non-Residential Area.
(c) Common Area.
(d) Roadway.
(e) Future Development Area.
Should Declarant wish to establish one or more additional land use classifications which are not
included in the foregoing land use classifications, Declarant may, at its option and in its sole
discretion, create such land use classifications as will accommodate the particular use, and
establish Membership and voting rights and Assessments with respect to Property within such
additional land use classifications. Unless otherwise specifically provided in this Declaration,
the definitions and characteristics of a designated land use classification, and any use
restrictions applicable thereto, shall be determined and as set forth in a Supplemental
Declaration.
Section 3.2. Designation of Use Classification. The initial Property subject
to this Declaration, as described in Exhibit A to this Declaration, including all Lots therein, is
hereby classified as within the Residential Area (except for those Lots which are specifically
designated or intended as Roadways).
Section 3.3. Future Development Area. Declarant may, at any time and at its
option and sole discretion, change the land use classification of any portion of the Property
classified in this Declaration or in any Supplemental Declaration as "Future Development
Area," to accommodate any proposed use or development of such property. Such change in
land use classification shall be set forth in a Supplemental Declaration which may be Recorded
by Declarant for that portion of the Property.
ARTICLE IV
Use Restrictions
The Property shall be used in accordance with the covenants, conditions,
restrictions and easements set forth in this Declaration, any Supplemental Declarations, the
Association Rules and the Design Guidelines, as they may be amended from time to time.
Nothing herein shall restrict or limit any Supplemental Declaration, the Association Rules and
the Design Guidelines from imposing stricter or further standards than those contained in this
Declaration upon any one or more land use classifications or Subdistricts.
Section 4.1. Hazardous Materials. Each Owner and Occupant shall comply
with all federal, state and local statutes, regulations, ordinances, or other rules intended to
protect the public health and welfare as related to land, water, groundwater, air or other aspects
of the natural environment (the "Environmental Laws"). The Environmental Laws shall
include, but are not limited to, those laws regulating the use, generation, storage or disposal of
hazardous substances, wastes and materials (collectively, the "Hazardous Materials"). No
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Owner shall knowingly use, generate, manufacture, store, release, dispose of or knowingly
permit to exist in, on, under or about any Lot, any Common Area or any portion of the Property,
or transport to or from any portion of the Property any Hazardous Materials except in
compliance with the Environmental Laws.
Section 4.2. Property Restrictions. No covenants, conditions, restrictions or
easements, or similar instruments shall be Recorded by any Owner or other Person, except
Declarant, against any Lot without the provisions thereof having been first approved in writing by
the Board and Declarant, which approval may be withheld in the sole discretion of the Board
and Declarant, and any such covenants, conditions, restrictions or easements Recorded without
the Board's and the Declarant's approval being evidenced thereon shall be null and void.
Section 4.3. Rezoning. No applications for general plan changes, rezoning,
variances, special permits, use permits or the like affecting any Lot shall be filed with any
governmental authority unless the proposed use of the Lot has first been approved by the Board
and Declarant and the proposed use otherwise complies with this Declaration and any
applicable Supplemental Declaration. This provision shall not in any way prohibit, restrict or
otherwise limit the right of Declarant to apply for, prosecute and receive rezoning and/or
reclassification of any portion of the Property or the Annexation Property then owned (or the
subject of an option to purchase) by Declarant, or to apply for, prosecute and receive variances
or use permits relating to such property.
Section 4.4 Covenants, Conditions, Restrictions and Easements
Applicable to Lots Within the Residential Area. The following covenants, conditions,
restrictions and reservations of easements and rights shall apply to all Lots, the Owners thereof,
and all Occupants within the Residential Area:
(a) Single-Family Use. Each Lot or Dwelling Unit (if so designated in
a Supplemental Declaration) in the Residential Area shall be used only for the construction and
occupancy of a Single-Family Dwelling Unit and typical residential activities incidental thereto.
All such Lots shall be used, improved, and devoted exclusively to Single-Family residential use.
No gainful occupation, profession, trade or other non-residential use shall be conducted on any
such Lot except qualified home businesses as prescribed by applicable State of Hawaii and/or
County laws and regulations. No Lot shall be occupied by more than one Single-Family.
(b) Garages. No garage shall be used for other than the parking of
trailers, transportation vehicles or recreational vehicles, provided, however, that a garage may
be used for laundry, storage purposes or minor repairs not otherwise prohibited, so long as such
use is not visible from any sidewalk or Road. No garage shall be used for living, cooking or
sleeping purposes.
(c) Violation of Law or Insurance. No Owner or Occupant shall
permit anything to be done or kept in or upon such Owner's Lot or in or upon any Common Area
which will result in the cancellation, or increase in premium, or reduction in coverage of
insurance maintained by the Association or which would be in violation of any law.
(d) Signs. No sign of any kind shall be displayed to the public view or
from any Lot without the approval of the Design Review Committee, except: (i) a single sign, no
larger than 2 feet by 3 feet, as may be used by an Owner in connection with the sale or leasing
of the Owner's Lot; (ii) such signs as may be used by Declarant in connection with the
development and sale or leasing of Lots, Parcels or other property in the Property and the
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22594-1741282890,9
Community in general; (iii) such signs as may be required by legal proceedings, or the
prohibition of which is precluded by law; and (iv)as may be approved by Declarant or the Board,
such signs as may be required for traffic control and regulation of Roadways or Common Area.
(e) Animals. No animals, including without limitation horses or other
domestic farm animals or poultry of any kind, may be kept, bred or maintained in or on any Lot
or in or upon any Common Area, except a reasonable number of commonly accepted
household pets in accordance with the Association Rules. No animals shall be kept, bred or
raised within the Property for commercial purposes. In no event shall any domestic pet be
allowed to run free away from its owner's Lot without a leash, or conduct itself so as to create an
unreasonable annoyance.
M Nuisances; Construction Activities. No Owner shall permit or
suffer anything to be done or kept about or within such Owner's Lot, or on or about the Property,
which will obstruct or interfere with the rights of other Owners or Occupants, or annoy them by
unreasonable noises or otherwise, nor shall an Owner commit or permit any nuisance or commit
or suffer any illegal act to be committed therein or thereabout. Each Owner shall comply with
the Association Rules and the requirements of all health authorities and other governmental
authorities having jurisdiction over the Property. Normal construction activities and parking in
connection with the building of Improvements on a Lot shall not be considered a nuisance or
otherwise prohibited by this Declaration, but Lots shall be kept in a neat and tidy condition
during construction periods, trash and debris shall not be permitted to accumulate, and supplies
of brick, block, lumber and other building materials will be piled only in such areas as may be
approved by the Design Review Committee. In addition, any construction equipment and
building materials stored or kept on any Lot during construction of improvements may be kept
only in areas approved by the Design Review Committee, which also may require screening of
the storage areas. The Board in its sole discretion shall have the right to determine the
existence of any unreasonable annoyance or nuisance under this Declaration.
(g) Boats and Motor Vehicles, Except as specifically permitted by
the Association Rules: (i) no boats, trailers, busses, motor homes, campers or other vehicles
shall be parked or stored in or upon the Roads or stored upon a Lot except within an enclosed
garage as permitted by the Design Guidelines or as permitted under subsection (Iii) below; (ii)
no vehicle shall be repaired, serviced or rebuilt on any Lot (except within an enclosed garage) or
upon the Roads; and (iii) nothing shall be parked on the Roads except in such parking areas as
may be designated by the Board or as designated by the County if the roads are dedicated.
The Board may remove, or cause to be removed, any unauthorized vehicle at the expense of
the owner thereof in any manner consistent with law. The provisions of this Section 4.4(h) shall
not be deemed to prohibit commercial and construction vehicles, in the ordinary course of
business, from making deliveries or otherwise providing service to or within the Property.
(h) Lights. No spotlights, flood lights or other high intensity lighting
shall be placed or utilized upon any Lot which in any manner will allow light to be directed or
reflected on any other Lot, except as may be expressly permitted by the Association Rules or
the applicable Design Guidelines.
(i) Antennas. No radio, television or other antennas of any kind or
nature, or device for the reception or transmission of radio, microwave or other similar signals,
shall be placed or maintained upon any Lot except as may be permitted by the Association
Rules or in accordance with the Design Guidelines, Declarant and/or the Association may
erect an aerial or other apparatus for a master antenna or cable system, should any such
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22594-174/282690.9
master system or systems be utilized by Declarant or the Association and require any such
exterior apparatus.
0) Garbage. No garbage or trash shall be kept, maintained or
contained in any Lot so as to create a strong or offensive odor or be visible from another Lot or
the Roads except temporarily, in containers approved by Association Rules, for pickup. No
incinerators shall be kept or maintained in any Lot. No refuse pile, garbage or unsightly objects
shall be allowed to be placed, accumulated or suffered to remain anywhere on a Lot, provided
that non-commercial, non-odoriferous, contained and reasonably concealed composting and
mulching shall be permitted.
(k) Mining. No Lot shall be used in any manner to explore for or
remove any water, oil or other hydrocarbons or minerals of any kind or earth substance of any
kind. Nothing herein shall prohibit or restrict Declarant or any other owner or operator of a water
system serving the Property with Declarant's approval from exploring and drilling for, pumping
and removing water from the Property, or the installation and operation of water wells by
Declarant.
(1) Safe Condition. Without limiting any other provision in this
Section 4.4, each Owner shall maintain and keep such Owner's Lot at all times in a safe, sound
and sanitary condition and repair and shall correct any condition or refrain from any activity
which might interfere with the reasonable enjoyment by other Owners of their respective Lots.
(m) Fires. Other than barbecues, in properly constructed barbecue
pits or grills, and fire pits in compliance with the Association Rules and the Design Guidelines,
or as otherwise expressly permitted in the Association Rules, no open fires shall be permitted
on Lots nor shall any other similar activity or condition be permitted which would tend to
increase the insurance rates for the Association or for other Owners.
(n) Drainage. No Owner shall erect, construct, maintain, permit or
allow any fence or other Improvement or other obstruction which would interrupt the existing
drainage of the land. For the purpose hereof, "existing" drainage is defined as the drainage
which exists at the time the Lot is conveyed to an Owner by Declarant, or later grading changes
which are shown on plans approved by the Design Review Committee as provided in Section
6.4. The "existing" drainage may include drainage from Common Area or other property
across any Lot. Each Owner shall maintain the drainage system, if any, constructed or
otherwise in place with the Dwelling Unit upon its conveyance to an Owner by Declarant. Each
Owner shall be solely responsible for all surface water escaping the Owner's Lot and any and all
damages resulting therefrom. This Section shall not be deemed to restrict or otherwise affect
rights reserved to Declarant to alter or change drainage patterns within or upon the Property.
(o) Rental of Lots. An Owner who leases or otherwise grants
occupancy rights to such Owner's Lot to any Persons shall be responsible for assuring
compliance by the Occupant with all of the provisions of this Declaration, any Supplemental
Declaration, the Articles, Bylaws, Association Rules and Design Guidelines, all as amended and
supplemented from time to time, and shall be jointly and severally responsible for any violations
by the Occupant thereof.
(p) Temporary Occupancy and Temporary Buildings. No trailer,
basement of any incomplete building, tent, shack, garage or barn, and no temporary buildings or
structures of any kind, shall be used at any time for a residence, either temporary or permanent.
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Temporary buildings or structures used during the construction of Improvements on any
property shall be removed immediately after the completion of construction.
(q) Maintenance of Lawns and Plantings. Each Owner of a Lot
shall keep all appropriate areas of the Lot (including setback areas and slope areas on the Lot
to the extent provided in the Design Guidelines) landscaped and shall keep all shrubs, trees,
hedges, grass and plantings of every kind located on such Owner's Lot (including setback areas
and slope areas to the extent provided in the Design Guidelines), neatly trimmed, shall keep all
such areas properly cultivated and free of trash, weeds and other unsightly material and shall
maintain all paved and concrete areas, including driveways and parking areas, in good condition
and repair.
(r) Diseases and Insects. No Owner shall permit any thing or
condition to exist upon any Lot, which shall induce, breed or harbor infectious plant diseases or
noxious insects, rodents or other pests. All earth and fill material under concrete slabs shall be
chemically treated for subterranean termites by a reliable, established and licensed termite
control company. Treatment shall be guaranteed in writing against subterranean infestation for
at least 3 years or such period of time as is determined by the Board from time to time, and a
certified copy of this guaranty shall be filed with the Board. Further, Owner shall regularly cause
Owner's Home to be treated against the risk of termite infestation by a licensed termite contract
company. Any failure to regularly maintain and treat the Home shall be at Owner's sole risk and
shall void the warranty.
(s) Machinery and Equipment. No machinery or equipment of any
kind shall be placed, operated or maintained upon or adjacent to any Lot except: (i) such
machinery or equipment as is usual and customary in connection with the use, maintenance or
construction (during the period of construction) of a Dwelling Unit, appurtenant structures, or
other Improvements; or (ii)that which Declarant or the Association may require for the
development operation and maintenance of the Property.
M Offensive Activity. No Lot shall be used, in whole or in part, for
the storage of any property or thing that will cause such Lot to appear to be in an unclean or
untidy condition or that will be obnoxious to the eye; nor shall any substance, thing, or material
be kept upon any Lot that will emit foul or obnoxious odors or that will cause any noise or other
condition that will or might disturb the peace, quiet, safety, comfort, or serenity of the occupants
of surrounding property. No noxious or offensive activity shall be conducted upon any Lot, nor
shall anything be done thereon tending to cause embarrassment, discomfort, annoyance, or
nuisance to any Person using any property adjacent to the Lot. There shall not be maintained
any plants or animals or device or thing of any sort whose activities or existence in any way is
noxious, dangerous, unsightly, unpleasant, or of a nature as may diminish or destroy the
enjoyment of the Property.
(u) Unsightly or Unkempt Conditions. The pursuit of hobbies or
other activities, including specifically, without limiting the generality of the foregoing, the
assembly and disassembly of motor vehicles and other mechanical devices which might tend to
cause disorderly, unsightly, or unkempt conditions, shall not be pursued or undertaken on any
Lot.
(v) Timeshare and Transient Rentals Prohibited. No timeshare,
interval ownership, transient vacation rentals or other similar use or ownership shall be
permitted within any Lot, unless authorized by a Supplemental Declaration Recorded by
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Declarant and made applicable to specific Lots. Bed and breakfast type commercial operations
are specifically prohibited.
(w) Clotheslines, Tanks, Etc. All clotheslines, dumpsters,
above-ground tanks, and other similar items shall be located or screened so as to be concealed
from view of any other Lot or adjacent Roadway.
(x) Guns and Projectiles. The discharge of firearms, including
blanks, and other projectiles within the Property is prohibited except by police officers and
security personnel while acting in their official capacities. The term "firearms" includes "B-B"
guns, pellet guns, and other firearms of all types, regardless of size. The term "projectiles"
includes, but is not limited to, sling shots and bows and arrows, regardless of size.
(y) Artificial Vegetation, Exterior Sculpture, and Similar Items.
No artificial vegetation shall be permitted on any Lot except within an enclosed Dwelling Unit.
Exterior sculptures, fountains, flags, and similar items must be approved by the Design Review
Committee.
(z) Energy Conservation Equipment. No solar energy collector
panels or attendant hardware or other energy conservation equipment shall be constructed or
installed unless it is an integral and harmonious part of the architectural design of a structure
and is approved by the Design Review Committee.
(aa) Excavation. No excavation shall be made except in connection
with Improvements approved as provided in this Declaration. "Excavation" shall mean any
disturbance of the surface of the land (except to the extent reasonably necessary for approved
landscape planting) which results in a disturbance of earth, rock, or other substance a depth by
removal or fill of more than 12 inches below or above, respectively, the natural surface of the
land.
(bb) Continuity of Construction. All Improvements commenced on
any Lot shall be prosecuted diligently to completion, pursuant to the applicable Design
Guidelines.
(cc) Subdivision and Consolidation. No Lot shall be further
subdivided or separated into smaller lots or parcels by any Owner, and no portion less than all
of any such Lot, nor any easement or other interest therein, shall be conveyed or transferred by
any Owner without the prior written approval of the Board, which approval must be evidenced
on the map, plan or other instrument creating the subdivision, easement or other interest. This
provision shall not in any way prohibit, restrict or otherwise limit Declarant from subdividing,
condo miniumizi ng, separating, consolidating or resubdividing Lots or any other property at and
when it is owned by Declarant, Consolidated Lots shall constitute a single Lot for voting and
assessment purposes if so designated in a Supplementary Declaration filed by Declarant,
otherwise the Consolidated Lots shall retain their character as multiple Lots subject to multiple
assessments but entitling the ultimate Owner thereof to multiple votes.
Section 4.5. Amendment of Article. This Article IV may not be amended
without Declarant's written consent and joinder at any time prior to expiration of the Declarant
Control Period.
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ARTICLE V
Maintenance
Section 5.1. Association's Responsibility.
5.1.1. The Association, or its duly delegated representatives, shall
maintain, manage and keep in good repair the Common Area and the Area of Common
Responsibility, such maintenance to be funded as provided in this Declaration. The Area of
Common Responsibility shall include, but need not be limited to:
(a) any landscaping and other flora, structures and all other
Improvements located upon and within any Common Area described in this Declaration and/or
transferred to or acquired by the Association as well as the obligation to participate in and
contribute (on a pro-rata basis based on the total number of users in) the care, maintenance,
repair and upkeep of the Historic Sites;
(b) the Roadways (the Community Access Roads) and the medians
and rights-of-way along or within the Roadways, including any trees and other landscaping
and/or irrigation facilities located therein or thereon, as well as the Common Water Facilities and
the Regional Park unless and until the same have been dedicated to the County, or agency
thereof, and the maintenance thereof assumed by the County;
(c) the rights-of-way along the Roadways including any trees and
other landscaping and/or irrigation facilities located therein or thereon, regardless of whether the
Roadway is dedicated to the County;
(d) any property which becomes the responsibility of the Association
by agreement with the County; and
(a) such additional property as may be designated or described as
part of the Area of Common Responsibility in this Declaration, any Supplemental Declaration or
any contract or agreement for maintenance thereof by the Association.
5.1.2. The Area of Common Responsibility shall not be reduced by
amendment of this Declaration or any other means without the prior written approval of
Declarant. Dedication of any portion of the Property to the County or the State of Hawaii or
other governmental or quasi-governmental agency shall not relieve the Association of its
maintenance obligations, unless the terms of the dedication indicate otherwise.
5.1.3. Except as otherwise provided in this Declaration or in any
Supplemental Declaration, all costs associated with maintenance, management, operation,
repair and replacement of the Area of Common Responsibility shall be Common Expenses.
5.1.4 The Common Area and the Area of Common Responsibility and
their use is subject to an express limited warranty by Declarant in favor of the Association which
is conditioned on appropriate regular and routine maintenance, inspection and repair of the
common elements by the Association that the construction of the Common Area has been
completed in general conformity with approved plans and specifications, subject to appropriate
or required field changes ("Declarant's performance standards"). The exact terms of this
limited warranty are set forth in Exhibit C and such limited warranty shall be effective upon the
recording of this Declaration, The limited warranty shall be administered by the PWC, as the
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administrator of Declarant's limited warranty. An appropriate validation form, described in the
limited warranty, will be delivered to the Association not later than the termination of the
Declarant Control Period. It is expressly understood and agreed by and between Declarant and
each Owner and the Association that, other than this express limited warranty, DECLARANT
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE COMMON
ELEMENTS, THE COMMUNITY OR CONSUMER PRODUCTS OR OTHER THINGS WHICH
MAY BE INSTALLED OR WHICH ARE CONTAINED IN THE COMMON ELEMENTS OR THE
COMMUNITY, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, HABITABILITY, WORKMANLIKE CONSTRUCTION OR FITNESS FOR
A PARTICULAR USE. During the term of such limited warranty afforded by Declarant, the
Association shall in each and all instances permit Declarant or Declarant's designated
representative to repair any and all items classified by Declarant as items covered by such
warranty, and that the Association and its members shall have no further rights and Declarant
no further obligation to the Association and/or its members in respect of such matters repaired
by Declarant or Declarant's representative.
5.1.5. In providing for the maintenance, management and repair of the Area of
Common Responsibility (which are defined as Common Elements in Declarant's limited
warranty) pursuant to this Article V, the Association shall comply with each of those obligations
specified in the attached form of Declarant's limited warranty and undertake each of those
actions therein required to be taken by the Association. In that regard, the Association shall let
appropriate contracts to service professionals in order to provide and shall provide regular and
routine maintenance, inspection and repair of the Common Area. Without limitation of the
obligations imposed on the Association pursuant to this Section, the Association, through its
Board, shall execute all necessary documents in order to effectuate the limited warranty,
including without limitation, the "Limited Warranty Validation Form". With respect to the
Declarant's limited warranty, the Association acknowledges and agrees
With respect to items covered under the limited warranty, the Association
hereby waives all other express or implied warranties, as set forth in the limited warranty, to the
fullest extent permitted by law.
• PWC is only administrator of the limited warranty.
Each and every requirement contained in the limited warranty, including
without limitation those for written notice, access, right of repair and review etc., as detailed in
the limited warranty.
0 The Association board has received and shall maintain a copy of
Declarant's performance standards and further understands and acknowledges that these
performance standards will be utilized in determining coverage under the limited warranty.
That the Association has affirmative maintenance obligations as set forth
in the limited warranty, in addition to any maintenance obligations otherwise required by this
Declaration or by applicable law.
The Association may, subject to any other applicable provisions of this Declaration, in
the sole discretion of the Board:
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(a) Construct, reconstruct, repair, replace or refinish any
Improvement or portion thereof upon the Area of Common Responsibility;
(b) Replace injured and diseased trees and other vegetation in the
Area of Common Responsibility, and plant trees, shrubs and ground cover to the extent that the
Board deems necessary for the conservation of water and soil and for aesthetic purposes; and
(c) Do all such other and further acts that the Board deems
necessary or appropriate to preserve and protect the Area of Common Responsibility and the
beauty thereof, in accordance with the Community-Wide Standard and the general purpose of
this Declaration. Subject to the obligations specified in this Section and imposed on the
Association pursuant to Declarant's limited warranty, the Board shall be the sole judge as to the
appropriate maintenance of the Common Area. The Board may cause the Association to
contract with others for the performance of the maintenance and other obligations of the
Association under this Section 5.1.
Section 5.2. Owner's Responsibility; Generally (Landscaping and
Improvements). Except as otherwise specifically provided in this Declaration, any
Supplemental Declaration, or any agreement with the Association, the performance and cost of
all maintenance and repair of each Lot and all structures, parking areas, landscaping and other
Improvements located on or within such Lot shall be the sole responsibility of the Owner thereof.
Owners of Lots adjacent to any Roadway shall maintain the driveway serving their respective
Lots, whether or not the driveway lies entirely within the Lot boundaries. Each Owner shall
maintain all Improvements, including landscaping upon or within such Owner's Lot, in a state of
good condition and repair in accordance with this Declaration. The Design Guidelines require
that the Owner's yard and the planting strip between the sidewalk and the street curb-line, if
any, be landscaped within 90 days after Owners purchase. In the event an Owner fails to
landscape these areas on Owner's Lot within 120 days after Owner's purchase, unless such
time is extended pursuant to the Design Guidelines, the Declarant and/or Design Review
Committee may, at its option, perform all such clearing and landscape work and the Owner shall
reimburse the Declarant and/or Design Review Committee for the cost thereof upon demand
together with interest thereon at the maximum rate allowed by law; provided, however, that the
cost thereof does not exceed $5,000, exclusive of interest. Similarly, if after 30 days written
demand, the Owner fails to maintain the landscaping on the Lot in a neat and attractive manner,
the Declarant and/or Design Review Committee may at its option perform the work and shall be
reimbursed therefor, together with the aforesaid interest on such work. Any sums not paid by
the Owner shall be a lien against the Lot, subject to foreclosure.
(a) Declarant's limited warranty and Customer Care Program. Owner
acknowledges and agrees that, except for (i) the express written limited warranty known as the
"Home Builder's Limited Warranty" (Declarant's limited warranty), a specimen of which is
attached to this Declaration as Exhibit C, which limited warranty is to be administered by PWC,
provided by Declarant to the initial Owner of a Lot in the Community, and (ii) Declarant's
Customer Care Program (which will be administered by Declarant pursuant to Declarant's
manual commonly referred to as the "Home Owners Manual And Customer Care Program
Guide" (the "HomeOwner's Manual")) (the "Customer Care Program"), Declarant is not
making or offering any warranties, express or implied, with respect to the Property, the
Residence, or the Community, including, without limitation, any warranties of merchantability,
habitability, quality of construction, or fitness for a particular purpose. Declarant expressly
disclaims any warranties other than Declarant's limited warranty and the Customer Care
Program, including, without limitation, any express or implied warranties of merchantability,
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habitability, quality of construction, or fitness for a particular purpose with respect to the
Property, the Residence, or the Community. Owner acknowledges that (i) Owner has received,
read and understands the terms of a sample Declarant's limited warranty and Declarant's
HomeOwner's Manual provided to Owner and is familiar with the coverage and exclusions
therein, and (ii) other than the Declarant's limited warranty and the Customer Care Program,
Declarant is making no other representations, promises, or warranties of any kind, including,
without limitation, any express or implied warranties of merchantability, habitability, quality of
construction, or fitness for a particular purpose with respect to the Property, the Residence, or
the Community. Neither the Declarant's limited warranty nor the Customer Care Program cover
any appliance, equipment, or other items which are "consumer products" for purposes of the
Magnuson-Moss Warranty Act, 15 USC 2301, et seq., or which are "consumer goods". The
only warranties of such consumer products or goods are those which the manufacturer provides
to the purchaser. Declarant does not assume any obligation to service or repair such consumer
products or goods. They are included on an "AS IS" basis with Owner assuming the entire cost
of all necessary service, repair, or replacement in the event of defect in quality or performance.
Section 5.3. Standard of Performance. The Property, including all Lots,
shall be maintained, managed and repaired by the Association and the Owners, as applicable,
under this Declaration and any Supplemental Declaration, in a manner consistent with the
Community-Wide Standard and all applicable covenants, conditions and restrictions. Unless
and to the extent otherwise specifically provided in this Declaration or any Supplemental
Declaration, responsibility for maintenance shall include responsibility for repair and
replacement, as necessary. Notwithstanding anything to the contrary contained in this
Declaration, each Owner shall have and shall comply with each of those obligations specified in
the attached form of Declarant's limited warranty and undertake each of those actions therein
required to be taken by the Homeowner.
Section 5.4. Assessment of Certain Costs of Maintenance and Repair of
the Area of Common Responsibility. In the event that the need for maintenance or repair of
any portion of the Area of Common Responsibility is caused through the willful or negligent act
of any Owner or Occupant or the family, guests, or invitees of such Owner or Occupant, the cost
of such maintenance or repairs shall be a Special Assessment against the Owner and such
Owner's Lot, secured by the Assessment Lien.
Section 5.5. Improper Maintenance and Use of Lots. In the event any
portion of any Lot is so maintained as to present a public or private nuisance or an
unreasonable condition (as determined by the Board) with respect to other Owners or
Occupants, or as to substantially detract from the appearance or quality of the surrounding Lots
or other areas of the Property, or in the event any portion of a Lot is being used in a manner
which violates this Declaration, any applicable Supplemental Declaration or the applicable
Design Guidelines, or in the event the Owner of any Lot or portion thereof is failing to perform
any of its obligations under this Declaration, any applicable Supplemental Declaration or the
Design Guidelines (including, but not limited to, the maintenance of Lots consistent with the
Community-Wide Standard), the Board may by resolution make a finding to such effect,
specifying the particular condition or conditions which exist, and pursuant thereto, give notice to
the offending Owner that, unless corrective action is taken within ten days, the Board may
cause such action to be taken at the Owner's cost. If, at the expiration of said ten-day period of
time, the requisite corrective action has not been taken, the Board shall be authorized and
empowered to cause such action to be taken and the cost thereof shall be a Special
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Assessment against the offending Owner and the Owner's Lot, secured by the Assessment
Lien.
Section 5.6. Party Walls and Party Fences. Each wall or fence built as a
part of the original construction on the Lots which shall serve and separate any two adjoining
Lots shall constitute a party wall or fence and, to the extent not inconsistent with the provisions
of this Section, the general rules of law regarding party walls and liability for property damage
due to negligence or willful acts or omissions shall apply thereto. The cost of reasonable repair
and maintenance of a party wall or fence shall be shared by the Owners who make use of the
wall or fence in equal proportions. If a party wall or fence is destroyed or damaged by fire or
other casualty, then to the extent that such damage is not covered by insurance and repaired
out of the proceeds of insurance, any Owner who has used the wall or fence may restore it. If
the other Owner or Owners thereafter make use of the wall or fence, they shall contribute to the
cost of restoration thereof in equal proportions without prejudice, however, to the right of any
such Owners to call for a larger contribution from the others under any rule of law regarding
liability for negligent or willful acts or omissions. The right of any Owner to contribution from any
other Owner under this Section 5.6 shall be appurtenant to the land and shall pass to such
Owner's successors-in-title. In the event of any dispute arising concerning a party wall or fence,
or under the provisions of this Section 5.6, such dispute shall be submitted for arbitration as
provided in Article XXIV.
Section 5.7. Trees. The Association, Declarant and/or the County may plant
trees in Lot or in the planting strip along roadways in the Community. No trees planted by the
Declarant shall be removed, changed or relocated without the prior written consent of the
Declarant. Each Owner shall be responsible for the proper maintenance and care of any trees
planted on Owner's Lot and/or any planting strip adjacent to Owner's Lot. Owners may not
remove, change, alter or relocate any trees or planting so located. Trees that die may be
replaced with a tree(s) of the same species and truck circumference.
Section 5.8. Grade of Lot. Each Owner shall maintain the grade and ground
cover of the Owner's Lot so as to prevent soil erosion, excessive water run-off onto any
neighboring Lot or property, and the ponding of any water on the Lot. Such erosion and
ponding may contribute to expansion or shrinking of soils underlying improvement and damage
the area.
Section 5.9. Cleaning and Maintaining Sidewalks. The Owner of any Lot
abutting or adjoining a public street shall maintain, and keep clean, passable and free from
weeds and noxious growths, the sidewalk and gutter area which abuts or adjoins their property
and any area between the sidewalk and fence line within the Lot. This requirement shall not
apply where maintenance of an abutting sidewalk and gutter may be hazardous to the Owner,
or if there is no reasonable access from the property to the sidewalk and gutter. The term
"sidewalk" as used herein shall mean that portion of a street between a curb line or the
pavement of a roadway, and the adjacent property line intended for the use of pedestrians,
including any setback area acquired by the city for road widening purposes. The term "gutter"
as used herein shall mean that paved portion of a roadway immediately adjacent to the curb or
that portion of a roadway in concrete and 12 to 14 inches wide immediately adjacent to the curb.
Section 5.10. Declarant's Uses. Uses of the Land and activities engaged in
thereon which are incident to the initial development of the Community by the Declarant or any
successor in interest to the Declarant as developer of the Community shall be permitted uses
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and activities notwithstanding any apparent violation of the foregoing restrictions and
notwithstanding that such uses and activities may cause temporary annoyance, inconvenience
or nuisance to Owners.
ARTICLE VI
Architectural and Landscape Control
The Board and the Design Review Committee (sometimes "DRC") shall have the
authority and standing, on behalf of the Association, to enforce in courts of competent
jurisdiction, or by arbitration should the Board so elect, decisions of the Design Review
Committee established pursuant to Section 6.1 below. The Board shall also have the standing
and authority to enforce any design and development guidelines adopted by the Design Review
Committee, and may delegate the right to enforce such decisions and guidelines to the Design
Review Committee. No construction, which term shall include within its definition staking,
clearing, excavation, grading, and other site work, and no plantings or removal of plants, trees,
or shrubs, shall take place except in strict compliance with this Article VI, until the requirements
hereof have been fully met, and until the approval of the Design Review Committee has been
obtained.
Section 6.1. Design Review Committee. The DRC, which shall consist of no
fewer than three but no more than five members, shall have exclusive jurisdiction over all
construction on any portion of the Property and over all modifications, additions or alterations
made to Improvements on the Property. Declarant initially shall appoint all members of the
DRC, once twenty percent (20%) of the Lots described at Section 3.2 have been transferred to
Owners at least one member of the DRC shall be an Owner (other than a representative of
Declarant). Until expiration of the Declarant Control Period, shall have the right to appoint,
augment or replace all members of the DRC. There shall be no surrender of this right prior to
the expiration of the Declarant Control Period, except in a written instrument in Recordable form
executed by Declarant. Upon expiration of the Declarant Control Period, the Board shall
appoint the members of the DRC, who shall serve at the discretion of the Board. Without
limitation of the foregoing, the DRC may establish one or more subcommittees as it or the Board
may determine appropriate including without limitation new construction, modification,
enforcement and variance committees.
Section 6.2. Design Guidelines. The DRC shall establish and, on behalf of
the Board, shall promulgate design and development guidelines and application and review
procedures (the "Design Guidelines"). Initial Design Guidelines have been adopted by
Declarant. The Design Guidelines may, at the discretion of the DRC, contain design and
development guidelines specific to any land use classification or to any Subdistrict, and may
otherwise contain specific provisions which vary from one portion of the Property to another
depending upon the location, unique characteristics and intended use thereof. The DRC may,
at any time and in its sole discretion, supplement the Design Guidelines, or promulgate
additional Design Guidelines specific to any other land use classification(s), Subdistrict(s) or
other portions of the Property. The DRC shall also have sole and full authority to modify and
amend the Design Guidelines from time to time without the consent or approval of any Owner or
other Person, and shall likewise have sole and full authority to prepare and amend application
and review procedures. The DRC shall make the Design Guidelines and its application and
review procedures available to the Owners, and all Owners shall be bound in strict accordance
therewith.
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The Design Guidelines may include, among other things, the following
restrictions and limitations:
(a) Time limitations for the completion, within specified periods after
approval, of the Improvements for which approval is required pursuant to the Design Guidelines;
(b) Procedures for assuring conformity of completed Improvements to
drawings and specifications approved by the DRC; and
(c) Such other limitations and restrictions as the Board or the DRC in their
reasonable discretion shall adopt, including, without limitation, the regulation of all landscaping
(including without limitation absolute prohibition of certain types of land use, lighting, signage,
landscaping, trees and plants), construction, reconstruction, exterior addition, change or
alteration to or maintenance of any building, structure, wall or fence, including, without limitation,
the nature, kind, shape, height, materials, exterior color, surface texture, and location of any
such Improvement.
Section 6.3. General Provisions. The following general provisions are
without limitation to other rights of the Board, Declarant or the DRC pursuant to this Article VI:
(a) The DRC may assess reasonable fees to Owners in connection with its
review of drawings and specifications and shall promulgate appropriate fee schedules from time
to time, which fees may in the discretion of the DRC be set forth in the Design Guidelines.
(b) The DRC may delegate all or any portion of its drawings and
specifications review responsibilities to one or more of its members or architectural consultants
retained by the DRC. The DRC may further avail themselves of technical and professional
advice and consultants (architectural, design, landscaping, etc.) as it deems appropriate, the
cost of which shall be borne by the Owner seeking review of plans.
(c) The DRC shall approve, approve with conditions or disapprove any
drawings and specifications submitted in accordance with the Design Guidelines within such
period as may be specified in the Design Guidelines.
(d) The Board or the DRC (if authorized by the Board) may enforce the
Design Guidelines, and any disapproval or conditional approval of construction or other decision
of the DRC, against any Member and the cost incurred in connection with any such
enforcement, including reasonable attorneys' fees and experts fees, shall be reimbursed by the
Member to the Association upon demand therefor by the Board.
(e) Without limitation of the foregoing the DRC (if authorized by the Board)
may when confronted with a violation (e.g., no approval was obtained or the constructed
improvements do not conform to the approval given):
1. Notify the violator to correct the violation and afford the violator
an opportunity to cure by either (a) seeking appropriate approval where no approval was
originally obtained or (b) modifying the improvement so that it conforms with a pre-existing
approval.
2. Fine the violator pursuant to Section 6.8.
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3. Retain counsel to communicate the DRC demands to a violator
and assess the violator for the cost incurred by the DRC in that effort.
4. Retain a professional to correct the violation after (a) an
appropriate finding by the DRC of the violation and (b) providing the violator an opportunity to
cure.
5. File an assessment lien against the violator's property for the
costs incurred by the DRC which may thereafter be foreclosed by action of the Board if not paid.
6. File suit to enforce the regulations.
Section 6.4. Approval and Conformity of Drawings and Specifications.
No building, fence, wall or other structure or Improvement of whatever type shall be constructed,
erected or maintained upon the Property, nor shall there be any modifications, additions or
alterations to any Improvement upon a Lot, or to the landscaping, grading or drainage thereof,
nor shall there be any change to the exterior of any residence or other Improvements including,
without limitation, the painting (other than painting with the same color and type of paint as
previously existed) of exterior walls, patio covers and fences, except in compliance with
complete plans thereof and specifications therefor which have been submitted to and approved
by the DRC in accordance with the applicable Design Guidelines as to design and harmony of
external design and location in relation to surrounding structures and topography and finish
grade elevation. No permission or approval shall be required to repaint in accordance with an
originally approved color scheme or to rebuild in accordance with originally approved plans and
specifications. Nothing contained herein shall be construed to limit the right of an Owner to
remodel the interior or to paint the interior of such Owner's structure any color desired.
Section 6.5. Non-Liability for Approval of Drawings and Specifications.
Plans and specifications shall be reviewed by the DRC as to style, exterior design, appearance
and location, and are not approved for engineering design or for compliance with zoning and
building ordinances, and, by approving such plans and specifications, neither the DRC, any
member thereof, the Association, the Board, any officer or director of the Association, nor
Declarant assumes any liability or responsibility therefor, or for any defect in any structure
constructed from such drawings and specifications. Neither the DRC, any member thereof, the
Association, or any Committees of the Association, the Board, any officer or Director of the
Association nor Declarant shall be liable to any Members, Occupant, Owner, the Association or
other Person for any damage, loss or prejudice suffered or claimed on account of (i) the
approval or disapproval of any plans and specifications, whether or not defective, (ii) the
construction or performance of any work, whether or not pursuant to approved plans and
specifications, (iii) the development, or manner of development, of any property within the
Property, (iv) any change of the natural or existing grade of any Lot, or (v) the execution and
filing of an estoppel certificate pursuant to the Design Guidelines, whether or not the facts
therein are correct; provided, however, that such action, with the actual knowledge possessed
by the decision maker, was taken in good faith. Approval of plans and specifications by the
DRC, or a change in the natural or existing grade of any Lot is not, and shall not be deemed to
be, a representation or warranty that said plans, specifications or changes comply with
applicable governmental ordinances or regulations including, but not limited to, zoning
ordinances and building codes.
Section 6.6. Inspection and Recording of Approval. Any member or
authorized consultant of the DRC, or any authorized officer, director, employee or agent of the
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Association, may at any reasonable time enter, without being deemed guilty of trespass, upon
any Lot, except the interior of any completed Dwelling Unit, after reasonable notice as provided
herein to the Owner, in order to inspect Improvements constructed or being constructed on such
Lot, or any changes in the grade thereof, to ascertain that such Improvements or changes have
been or are being built or changed in compliance with the Design Guidelines and this
Declaration. The DRC may cause such an inspection to be undertaken within thirty days of a
request therefor from any Owner as to the Owner's Lot, and if such inspection reveals that the
Improvements or changes located on such Lot have been completed in compliance with this
Article VI and the Design Guidelines, the DRC shall provide to such Owner a notice of such
approval in Recordable form which, when Recorded, shall be conclusive evidence of
compliance, as of the date of inspection, with the provisions of this Article VI and the Design
Guidelines as to the Improvements or changes described in such Recorded notice, but only as
to such identified Improvements or changes.
Section 6.7. New Construction.
(a) Fences and walls. Generally any walls or fences installed or constructed
on a Lot (other than by Declarant) shall comply with the Design Guidelines adopted by the
Design Review Committee and shall in all respects comply with all rules and regulations issued
by and all ordinances enforced by the applicable planning department of the County including,
without limitation, applicable zoning or building code ordinance of the County prior to the
issuance of any building permit for such improvements. For purposes of this Declaration, the
initial construction and any subsequent alteration of all such fences and walls shall be included
within the definition of improvements subject to prior review and approval of the Design Review
Committee pursuant to its Design Guidelines.
(b) Retaining Walls and Other Improvements to Lot Slope Areas.
Improvements to portions of an Owner's Lot constituting a Lot Slope Area, if any, require special
engineering considerations. No retaining walls or other Improvements may be installed or
constructed on a Lot Slope Area except in compliance with complete and engineered plans and
specifications therefor (stamped and approved by a professional engineer) which have been
submitted to and approved by the DRC in accordance with the applicable Design Guidelines.
Any Improvements to Lot Slope Areas must conform in design and harmony with surrounding
structures, and topography and finish grade elevation. Further, any such fence or wall or
Improvement must conform in design and color (to the extent practicable) with existing fences
and walls constructed by Declarant.
(c) Future Additions and Alterations. No Owner shall add to or alter any
Improvement constructed by the Declarant, including the Homes, without the prior written
approval of the DRC. All improvements constructed on the Lot by an Owner, including pools
and the like, shall conform with the restrictions contained in this Declaration and Design
Guidelines. Specifically, but without limitation, yard setbacks and the height of all Improvements
on each Lot shall comply with any and all applicable zoning requirements, including, without
limitation, any applicable requirements of the rules and regulations of the applicable zoning or
planning agency of the County. Further, no Improvements may be installed or constructed on a
Lot except in compliance with complete and engineered plans and specifications therefor
(stamped and approved by a professional engineer or soils engineer, if required by the DRC)
which have been submitted to and approved by the DRC in accordance with the applicable
Design Guidelines and are approved by the County.
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Section 6.8. Additional Powers. The Board or the DRC may promulgate as
a part of the Design Guidelines such additional architectural and landscape standards, rules and
regulations as it deems to be appropriate and as are not in conflict with this Declaration.
Without limiting the generality of the preceding sentence, the Board or the DRC may fix a fine of
up to $5,000 for failure to obtain any required approval from the DRC and may require security
deposits to assure compliance.
Section 6.9. No Waiver of Future Approvals, The approval of the DRC of
any proposals or plans and specifications or drawings for any work done or proposed, or in
connection with any other matter requiring the approval and consent of either the DRC, shall not
be deemed to constitute a waiver of any right to withhold approval or consent as to any similar
proposals, plans and specifications, drawings or matters whatever subsequently or additionally
submitted for approval or consent.
Section 6.10. Variance. The DRC may, in its discretion, authorize variances
from compliance with any of the provisions of the Design Guidelines when circumstances such
as topography, natural obstructions, hardship, aesthetic or environmental considerations
require, but only in accordance with its duly adopted rules and regulations. Such variances may
only be granted, however, when unique circumstances dictate and no variance shall (i) be
effective unless in writing; (ii) be contrary to the restrictions set forth in this Declaration or any
Supplemental Declaration; or (iii) estop the DRC from denying a variance in other
circumstances. Variances may be issued in the sole and absolute discretion of the DRC for
"after the fact" violations where removal of a non-conforming improvement might result in
significant economic waste or hardship. For purposes of this Section, the inability to obtain
approval of any governmental agency, the issuance of any permit or the terms of financing shall
not be considered a hardship warranting a variance.
Section 6.11. Right of Removal. Any construction, alteration, or other work
done in violation of this Article VI shall be deemed to be nonconforming. Upon written request
from the Board, the DRC or Declarant, Owners shall, at their own cost and expense, remove
such nonconforming construction, alteration, or other work and shall restore the land to
substantially the same condition as existed prior to the nonconforming construction, alteration,
or other work. Should an Owner fail to remove and restore as required in this Section, the
Board, Declarant or DRC or their respective designees shall have the right to enter the Lot,
remove the violation and restore the property to substantially the same condition as existed prior
to the nonconforming construction, alteration or other work. The Owner shall be liable for all
costs thereof together with interest thereon at the maximum rate then allowed by law, and the
Association shall have an Assessment Lien to secure the payment of such costs.
Section 6,12. Amendment of Article. This Article V1 may not be amended
without Declarant's written consent and joinder at any time prior to expiration of the Declarant
Control Period.
ARTICLE VII
The Association
Section 7.1. Purpose of the Association. The Association has been, or will
be, incorporated as a nonprofit corporation to serve as the governing body for all of the Owners
for the protection, improvement, alteration, maintenance, repair, replacement, administration
and operation of the Property, the assessment of expenses, payment of losses, disposition of
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casualty insurance proceeds, and other matters as provided in this Declaration, any
Supplemental Declaration, the Articles, Bylaws, Association Rules and any Design Guidelines.
The Association shall not be deemed to be conducting a business of any kind, and all funds
received by the Association shall be held and applied by it for the benefit of the Owners in
accordance with the provisions of this Declaration, any Supplemental Declaration, the Articles
and the Bylaws.
Section 7.2. Articles and Bylaws. In addition to the rights and powers of the
Association set forth in this Declaration, the Association and its Directors, officers, employees,
agents and Members shall have such rights and powers as are set forth in the Articles and
Bylaws and are not inconsistent with law or this Declaration. Such rights and powers, subject to
the approval thereof by any agencies or institutions deemed necessary by Declarant, may
encompass any and all things which a natural person could do or which now or hereafter may
be authorized by law, provided the Articles and Bylaws are not inconsistent with the provisions
of this Declaration and are necessary, desirable or convenient in furtherance of the purposes
set forth in this Declaration. After incorporation of the Association, a copy of the Articles and
Bylaws shall be available for inspection at the office of the Association during reasonable
business hours.
Section 7.3. Declarant's Control of the Association. Notwithstanding
anything in this Declaration to the contrary, at all times during the Declarant Control Period
Declarant shall maintain absolute control over the Association, including, without limitation, the
right to: adopt and/or amend the Articles; adopt and/or amend the Bylaws; adopt and/or amend
the Association Rules; appoint all (or a majority if so provided in the Bylaws) of the members of
the Board; and appoint all members of the Design Review Committee. At all times during the
Declarant Control Period, only Declarant will be entitled to cast any vote with respect to the
appointment of Directors, as specified in the Bylaws, or the removal of such Directors. The
"Declarant Control Period" shall commence on the filing of this Declaration and shall expire
upon the first to occur of the following: (i) when all of the Annexation Property (if any) has
become part of the Property in accordance with Article XV and ninety percent (90%) of the Lots
in the Community have been conveyed to Persons other than Declarant or developers holding
title solely for the purpose of development and sale; (ii) such date as Declarant, in its sole
discretion, declares in a Recorded instrument that the Members shall assume control of the
Association; or (iii) December 31, 2024. In the event Declarant voluntarily relinquishes control
of the Association pursuant to this Section 7.3, Declarant may reserve the right of prior written
approval of certain actions by the Board, including, without limitation, the following: (i) any action
that imposes or increases Assessments on property owned by Declarant; and (ii) any action
that, in Declarant's opinion, impairs or restricts Declarant's ability to develop and/or market
property within the Community and/or other projects developed or to be developed by Declarant
which are adjacent to or in the vicinity of the Project, or impairs or restricts the operation of any
part of the Community and/or other projects developed by Declarant which are adjacent to or in
the vicinity of the Community.
Section 7.4. Board of Directors and Officers. The affairs of the Association
shall be conducted by the Board and such officers as the Board may elect or appoint in
accordance with the Articles and the Bylaws, as the same may be amended from time to time.
Subject to the provisions of Section 7.3, the number, term, election and qualifications of the
Board shall be as set forth in the Articles and the Bylaws. The Board may, by resolution,
delegate portions of its authority to an executive committee or to other committees, to officers of
the Association or to agents and employees of the Association, but such delegation of authority
shall not relieve the Board of the ultimate responsibility for management of the affairs of the
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Association. Action by or on behalf of the Association may be taken by the Board or any duly
authorized executive committee, officer, agent or employee, without a vote of the Members,
except as may be otherwise specifically provided in this Declaration.
Section 7.5. Association Rules. The Board shall be empowered to adopt,
amend or repeal such rules and regulations as it deems reasonable and appropriate (the
"Association Rules"), effective upon adoption or at such later time as may be specified therein,
and binding upon all Persons subject to this Declaration and governing the use and/or
occupancy of the Common Area and any other part of the Property, including Lots therein;
provided, however, Declarant on behalf of the association to be formed, is empowered and shall
adopt initial Association Rules. The Association Rules may include the establishment of a
system of fines and penalties enforceable as Special Assessments. The Association Rules
shall govern such matters in furtherance of the purposes of the Association, including, without
limitation, the use and/or occupancy of the Common Area, including the Community Parks, and
any other part of the Property, including Lots therein; provided, however, that the Association
Rules may not discriminate among Owners except as expressly provided or permitted herein,
and shall not be inconsistent with this Declaration, the Articles, Bylaws or Design Guidelines.
The Association Rules shall have the same force and effect as if they were set forth in and were
part of this Declaration and shall be binding on the Owners and Occupants, and all other
Persons having any interest in, or making any use of, the Property. The Association Rules shall
be available at the principal office of the Association to each Owner or other Person reasonably
entitled thereto, upon request. In the event of any conflict between any provision of the
Association Rules and any provisions of this Declaration, or the Articles, Bylaws or Design
Guidelines, the provisions of the Association Rules or Private Park Rules shall be deemed to be
superseded by the provisions of this Declaration, the Articles, Bylaws or Design Guidelines to
the extent of any such conflict.
Section 7.6. Indemnification. To the fullest extent permitted by law, every
Director and officer of the Association, every member of the Design Review Committee, and
Declarant (to the extent a claim may be brought against Declarant by reason of its appointment,
removal or control over members of the Board or the Design Review Committee) shall be
indemnified by the Association, and every other Person serving as an employee or direct agent
of the Association, or on behalf of the Association as a member of a committee or otherwise
may, in the discretion of the Board, be indemnified by the Association against all expenses and
liabilities, including, without limitation, attorneys' fees, reasonably incurred by or imposed upon
such Person in connection with any proceeding to which such Person may be a party, or
become involved, by reason of such Person being or having served in such capacity on behalf
of the Association (or in the case of Declarant by reason of having appointed, removed or
controlled or failed to control members of the Board or the Design Review Committee), or any
settlement thereof, whether or not such Person is a Director, officer or member of the Design
Review Committee or serving in such other specified capacity at the time such expenses are
incurred, provided that if the Board shall determine, in good faith, that such officer, Director,
member of the Design Review Committee or other Person, or Declarant, did not act, fail to act,
or refuse to act with gross negligence or fraudulent or criminal intent in the performance of such
Person's duties. The foregoing rights of indemnification shall be in addition to and not exclusive
of all other rights to which such Persons may be entitled at law or otherwise. Without limiting
the foregoing, the Association shall have the powers and duties of indemnification to the extent
set by Hawaii law.
Section 7.7. Non-Liability of Officials. To the fullest extent permitted by law
and to the extent provided in the Articles and Bylaws of the Association, neither Declarant (its
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officers, directors and employees), the President, the Board, the Design Review Committee or
any other committees of the Association or any member thereof, nor any Directors or officers of
the Association, shall be liable to any Member, Owner, Occupant, the Association or any other
Person for any damage, loss or prejudice suffered or claimed on account of any decision,
course of action, act, inaction, omission, error, negligence or the like made in good faith and
which Declarant, the President, the Board, or such committees or Persons reasonably believed
to be within the scope of their respective duties.
Section 7.8. Easements. In addition and without limitation to the easements
reserved or granted in Article XVI and elsewhere in this Declaration, the Association is
authorized and empowered to grant over, upon, across or under real property owned or
controlled by the Association such permits, licenses, easements and rights-of-way for sewer
lines, water lines, underground conduits, storm drains, television cable and other similar public
or private utility purposes, security lines, roadways or other purposes as may be reasonably
necessary and appropriate for the orderly maintenance, preservation and enjoyment of the
Common Area or for the preservation of the health, safety, convenience and welfare of the
Owners.
Section 7.9. Accounting. The Association, at all times, shall keep, or cause
to be kept, true and correct records of account in accordance with generally accepted
accounting principles, which shall specify in reasonable detail all expenses incurred and funds
accumulated from Assessments or otherwise.
Section 7.1 p. Records. The Association shall, upon reasonable written
request and during reasonable business hours, make available for inspection by each Owner,
Member and Mortgagee the books, records and financial statements of the Association together
with current copies, as amended from time to time, of this Declaration and the Articles, Bylaws,
Association Rules and Design Guidelines. Declarant shall be under no obligation to make its
own books and records available for inspection by any Owner, Member, Mortgagee or other
Person. The books and records of the Association may be audited or unaudited as the Board
from time to time may determine.
Section 7.11. Manager or Managing Agent. All or any of the powers, duties
and rights of the Association or the Board, as provided by law and herein, may be delegated to
a manager or managing agent. Any agreement for management, or any other contract
providing for services to the Association, shall not exceed a term of three years, which term may
be renewed by agreement of the parties. The Board shall not be liable for any omission or
improper exercise by a manager of any power, duty or right delegated to the manager by written
instrument executed by or on behalf of the Association or the Board.
Section 7.12. Rights of Enforcement. The Association and Declarant shall
have the right to enforce the provisions of this Declaration and/or any and all covenants,
restrictions, reservations, charges, servitudes, assessments, conditions, liens or easements
provided for in any contract, deed, declaration or other instrument which: (i) shall have been
executed pursuant to, or subject to, the provisions of this Declaration; or (ii) otherwise shall
indicate that the provisions of such instrument were intended to be enforced by the Association
or by Declarant. If, however, the Association shall fail or refuse to enforce this Declaration or
any provision hereof for an unreasonable period of time after written request to do so, then an
Owner may enforce such provisions on behalf of the Association by any appropriate legal
action, whether at law or in equity. The Association may, by contract or other agreement,
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enforce state laws and County ordinances, or permit the state or County to enforce such laws or
ordinances, on the Property for the benefit of the Association or the Members.
Section 7.13. Contracts with Others for Performance of Association's
Duties. Subject to the restrictions and limitations contained herein, the Association may enter
into contracts and transactions with others, including Declarant and any affiliated Persons, for
the performance of the Association's duties and other purposes consistent with this Declaration,
and such contracts or transactions shall not be invalidated or in any way affected by the fact that
one or more Directors or officers of the Association or members of any committee may be
employed by or otherwise connected with Declarant or its affiliates or other Person, provided
that the fact of such interest shall be disclosed or known to the other Directors, officers or
committee members acting upon such contract or transaction, and provided further that the
transaction or contract is fair and reasonable. Any such director, officer or committee member
may be counted in determining the existence of a quorum at any meeting of the Board or
committee of which he is a member which shall authorize any contract or transaction described
above or grant or deny any approval sought by Declarant or its affiliates, or other Person, and
may vote there to authorize or deny any such contract, transaction or approval with like force
and effect as if such director, officer or committee member were not so interested.
Section 7.14. Duty to Accept Common Area Transferred by Deciarant. The
Association shall accept title to any property, including any Improvements thereon and personal
property described as Common Area in this Declaration and transferred to the Association by
Declarant, together with the responsibility to perform any and all duties associated therewith,
which, upon conveyance or dedication to the Association, the Association shall maintain at its
expense for the benefit of the Members as provided in this Declaration. Property interests
transferred to the Association by Declarant may include the Common Area or any other portion
of the Area of Common Responsibility, the Roadways, and may encompass fee simple title,
easements, leasehold interests and licenses to use; provided, however, that any property or
interest in property transferred to the Association by Declarant shall, except to the extent
otherwise specifically approved by resolution of the Board, be transferred to the Association "as
is", "where is", free and clear of all liens and encumbrances except for the following: (i) the lien
for property taxes and assessments not then due and payable; (ii) the terms of this Declaration
and the terms of the Supplemental Declaration annexing the property to the Property; (iii)
easements, rights-of-way, reservations, covenants, conditions, restrictions and equitable
servitudes or other non-financial encumbrances as Declarant in its discretion may deem
appropriate; and (iv) such financial encumbrances as may be reasonably accepted and
assumed by the Association and specifically approved by resolution of the Board. Any property
or interest in property transferred to the Association by Declarant shall not impose any
unreasonable or special burden on the Association other than the normal burdens of ownership
and maintenance of property and the operation of facilities thereon. Each Owner, by accepting
title to any portion of the Property and becoming an Owner, is deemed to approve and accept
the acquisition by the Association of Common Area as provided herein, and any Common
Expenses which may relate thereto. The conveyance by Declarant may be without warranty of
any kind except as aforesaid and without the benefit of escrow or title insurance, provided,
however, the Association may purchase such title insurance, at the Association's expense, as
the Association may wish. Upon transfer, the Association agrees to assume the obligations of
the Declarant under any applicable leases, contracts, and other agreements. Furthermore, and
notwithstanding anything to the contrary contained or implied in this Declaration, Declarant shall
have the absolute right, without consent or joinder of the Association, or any member thereof or
its Board to convey to the Association Common Area(s) described in this Declaration.
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Section 7.15. Assist Design Review Committee. The Association shall in all
respects cooperate with and assist the Design Review Committee in the complete attainment of
the Design Review Committee's functions, and shall in all respects assist the Design Review
Committee in the enforcement of the Design Guidelines and the Design Review Committee's
guidelines, rules, regulations and decisions.
Section 7.16. Implied Rights and Obligations. The Association may exercise
any other right or privilege given to it expressly by this Declaration, and every other right or
privilege reasonably to be implied from the existence of any right or privilege given to it herein or
reasonably necessary to effectuate any such right or privilege.
ARTICLE Vill
Membership and Voting
Section 8.1. Membership in Association. Every Owner of a Lot which is
subject to Assessment under this Declaration or any Supplemental Declaration shall be a
Member of the Association. The Person who constitutes the Owner of a Lot shall automatically
be the holder of the Membership in the Association appurtenant to that Lot, and such
Membership shall automatically pass with fee simple title to the Lot subject to the provisions of
Section 4.4(cc) Subdivision and Consolidation. No Owner, whether one or more Persons, shall
have more than one Membership per Lot owned, but all of the Persons owning each Lot shall be
entitled to rights of Membership and of use and enjoyment appurtenant to ownership of a Lot,
subject to any limitations relating to multiple party ownership of Lots set forth in this Declaration,
Bylaws or the Association Rules. Each Owner recognizes that actions of Declarant may reduce
or expand the Owners' "Membership" interest, voting power and assessments level through
amendment of this Declaration.
Section 8.2. Voting, The Association shall have two classes of Membership,
Class "A" and Class "B", as follows:
8.2.1. Class "A". Class "N' Members shall be all Owners, with the
exception of the Class "B" Member, if any. Each Class "A" Member shall be entitled to one
equal vote for each Lot owned by such Member. There shall be only one vote per Lot. Each
Owner, by acceptance of a deed or other conveyance for a Lot, consents and agrees to being a
Member and to an increase or dilution of that Owner's voting interest in the Association by virtue
of the submission from time to time of Annexation Property to this Declaration, modification of
the Development Plan for the Community or other reasons set forth in this Declaration.
In any situation where there is more than one Owner of a Lot, the vote for such Lot shall be
exercised as such Persons among themselves determine, and the secretary of the Association
shall be notified in writing of such designation not less than one week prior to any meeting. In
the absence of such advice, the vote for the Lot shall be suspended in the event more than one
Person seeks to exercise it. Any Owner of a Lot which is leased may assign the voting right
appurtenant to such Lot to the lessee, provided that a copy of the instrument of assignment is
furnished to the secretary of the Association not less than one week prior to any meeting.
8.2.2. Class "B". The sole Class "B" Member shall be Declarant and
any successor of Declarant who takes title for the purpose of development and sale, and who is
designated as such in a Recorded instrument executed by Declarant. The Class "B" Member
shall have such rights as are specified in this Declaration, any Supplemental Declaration and
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the Bylaws. The Class "B" Membership shall terminate and become converted to Class "A"
Membership within 120 days after expiration of the Declarant Control Period, as provided in
Section 7.3. The Class "B" Member shall then be deemed to be a Class "A" Member entitled to
vote in accordance with Section 8.2.1 above. At such time, Declarant shall call a meeting of the
Association, as provided in the Bylaws for special meetings, to advise the Association of the
termination of Class "B" status.
Section 8.3. Transfer of Membership. The rights and obligations of a
Member shall not be assigned, transferred, pledged, conveyed or alienated in any way except
upon transfer of ownership to an Owner's Lot, and then only to the transferee of ownership to
the Lot. A transfer of ownership to a Lot may be effected by deed, intestate succession,
testamentary disposition, foreclosure of a Mortgage, or such other legal process as now in effect
or as may hereafter be established under or pursuant to the laws of the State of Hawaii. Any
attempt to make a prohibited transfer shall be void. Any transfer of ownership to a Lot shall
operate to transfer the Membership(s)appurtenant to said Lot to the new Owner thereof.
Section 8.4. Pledge of Voting Rights. Notwithstanding the foregoing
provisions of this Article VIII, in the event that an Owner has granted an irrevocable proxy or
otherwise pledged the voting right appurtenant to the Membership with respect to such Owner's
Lot to a Mortgagee as additional security, only the vote of such Mortgagee will be recognized in
regard to such special matters if a copy of such proxy or other instrument pledging such vote
has been filed with the Association. In the event that more than one such instrument has been
filed, the Association shall recognize the rights of the first Mortgagee to so file, regardless of the
priority of the Mortgages themselves.
ARTICLE IX
Assessments
Section 9.1. Creation of Lien and Personal Obligation. Each Owner,
excluding Declarant, by acceptance of a deed or other conveyance of an interest in a Lot and/or
title thereto, is deemed to covenant and agree to pay to the Association: General Assessments;
Special Assessments; Subdistrict Assessments; Benefitted Assessments; and Capital
Improvement Assessments, such Assessments to be established and collected from time to
time as provided in this Declaration. The Assessments, together with interest thereon, late
charges, attorneys' fees and court costs, and other costs of collection thereof, as hereinafter
provided, shall be a continuing lien (the "Assessment Lien"), upon the Lot against which the
Assessments are made with priority over all and any other monetary lien on such Lots except to
the extent subordinated by Sections 9.13 and 14.2. Each Assessment, together with such
interest and other costs, shall also be the personal obligation of the Member to whom such
Assessment relates. The personal obligation of delinquent payments shall not pass to a
Member's successor in title unless expressly assumed by the successor.
Section 9,2. Purpose of Assessments. The Assessments levied by the
Association shall be used to promote the recreation, health, culture, safety and welfare of the
Members, to enhance the quality of life within the Property, to preserve the value of the
Property, to pay the costs of administration of the Association, and all other Common Expenses,
and otherwise to further the interest of the Association. If a Lot has separate security, gas,
electrical, sewer, or other similar utilities services, the cost of the same shall be the personal
obligation of the Owner of such Lot.
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Section 9.3. General Assessments. Each Owner (for such time as they are
Members hereunder), excluding Declarant, shall pay General Assessments as provided in this
Section 9.3. Except as otherwise specifically provided herein, payment of General
Assessments shall be in such amounts and at such times as may be provided in the Articles
and Bylaws or as determined by the Board. Not later than 60 days prior to the beginning of
each fiscal year of the Association, the Board shall prepare a pro-forma operating statement or
budget for the upcoming fiscal year which shall, among other things, estimate the total Common
Expenses to be incurred for such fiscal year. The Board shall at the time determine the amount
of the General Assessment to be paid by each Member and notify such Member. Each Member
shall thereafter pay to the Association said General Assessment in quarterly installments. Each
such installment shall be due and payable on the date and in the manner specified by the
Board. In the event the Board fails for any reason to determine the budget for any fiscal year,
then and until such time as a budget shall have been determined as provided herein, the budget
and General Assessments in effect for the then-current fiscal year shall continue for the
succeeding fiscal year. If the Board determines that the total General Assessments for the
current year are, or will become, inadequate to meet all Common Expenses for whatever
reason, including Common Expenses in excess of the estimated Common Expenses used in
preparation of the Association's budget for that year, but excluding any Common Expenses
allocated as Subdistrict Expenses, Special Assessments or Benefitted Expenses, the Board
shall then immediately determine the approximate amount of such inadequacy and issue a
supplemental estimate of the Common Expenses and determine the revised amount of General
Assessments to be paid by each Member for the balance of the year, and the date or dates
when due. If the estimated total General Assessments for the current year prove to be
excessive in light of the actual Common Expenses, the Association may, at the discretion of the
Board, retain such excess as additional working capital or reserves, reduce the amount of the
General Assessments for the succeeding year, or abate collection of General Assessments for
such period as it deems appropriate.
Section 9.4. Special Assessments. Special Assessments shall be levied by
the Association against an Owner and such Owner's Lot to reimburse the Association for: (a)
Costs incurred in bringing an Owner or such Owner's Lot into compliance with the provisions of
this Declaration, any Supplemental Declaration, the Articles, Bylaws, Association Rules or
Design Guidelines; (b) Any other charge designated as a Special Assessment in this
Declaration, any Supplemental Declaration, the Articles, Bylaws, Association Rules or Design
Guidelines; (c) Fines levied or fixed by the Board as otherwise provided herein; and (d)
Attorneys' fees, interest and other costs or charges provided to be paid as, or which are
incurred in connection with, a Special Assessment in accordance with this Declaration, any
Supplemental Declaration, the Articles, Bylaws, Association Rules or Design Guidelines.
The Board may also levy a Special Assessment against any Subdistrict to reimburse the
Association for costs incurred in bringing the Subdistrict into compliance with the provisions of
this Declaration, the Articles, the Bylaws, the Association Rules and the Design Guidelines.
Section 9.5. Subdistrict Assessments. Subdistrict Assessments shall be
levied by the Association against the Lots in any Subdistrict(s) for whose benefit Common
Expenses are incurred which benefit less than the Association as a whole, and to fund any other
Subdistrict Expenses, as provided in this Declaration or in any Supplemental Declaration,
subject to the budgetary requirements herein contained.
Section 9.6. Benefitted Assessments. The Board shall have the power and
authority to specifically assess Lots receiving benefits, items or services provided to less than all
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Lots within the Property (the "Benefitted Assessments"). Costs and expenses of the
Association which are incurred upon the request of a Member for specific items or services
relating to or benefitting such Member or such Member's Lot, or which are incurred pursuant to
this Declaration, any Supplemental Declaration, the Articles, Bylaws, Association Rules or
Design Guidelines, for specific items or services relating to or benefitting certain Lots, shall be
specifically assessed as Benefitted Assessments against the Lot(s) benefitted.
Section 9.7. Rate of Assessment. The amount of any General
Assessments, shall be fixed and levied at a uniform (equal) rate for each Lot subject to
assessment under the terms of this Declaration. Subdistrict Assessments shall be allocated in
the same manner but only among the Lots within the Subdistrict(s) to which the Subdistrict
Expenses relate.
Section 9.8. Date of Commencement of Assessments. Subject to the
prepayment of Assessments and funds required for capitalization as set forth in Section 9.14
and the rights of Declarant set forth in Section 9.17, the obligation to pay Assessments shall
commence as to all Lots subject to this Declaration on the first day of the month following the
conveyance of the first Lot to an Owner other than Declarant. Assessments shall commence for
Lots contained in each phase or increment of the Annexation Property annexed to the Property
on the first day of the month following the later to occur of (i) the recording of the Supplemental
Declaration incorporating such Annexation Property into the Property, or (ii) the conveyance of
the first Lot or Parcel located in such Annexation Property to an Owner other than Declarant.
Assessments shall be due and payable in a manner and on such schedule as the Board may
provide.
Section 9.9. Time and Manner of Payment; Late Charges and Interest.
Assessments shall be due and payable by Owners in such manner and at such times as the
Board shall designate. If not paid when due, but paid within ten days after its due date, each
such Assessment shall have added to it a late charge equal to ten percent (10%) of the amount
of Assessment or such other charge as the Board may specify from time to time. Thereafter,
any such delinquent Assessment and the applicable late charge shall bear interest from the
tenth day after the date the Assessment was due at the rate of twelve percent (112%) per annum,
until paid. The Association may, in its discretion and without waiving the imposition of a late
charge or interest in any other instance, waive the late charge and/or interest in any particular
instance. A delinquent Owner shall also be liable for attorneys' fees and other related costs
incurred by the Association as a result of such delinquency, and if any suit, action or arbitration
proceeding is brought to collect any such Assessment or charge, then there shall be added to
the amount thereof costs of suit and reasonable attorneys' fees to be fixed by the court and
included in any judgment or award rendered thereon.
Section 9.10. No Offsets. All Assessments shall be payable in the amount
specified in the Assessment or notice of Assessment and no offsets against such amount shall
be permitted for any reason, including, without limitation, a claim that: (i) the Association, the
Board or Declarant is not properly exercising its duties and powers as provided in this
Declaration; (ii) Assessments for any period exceed Common Expenses; or (iii) an Owner has
made, and elects to make, no use of the Common Area or any portion thereof.
Section 9.11. Rules Regarding Billing and Collection Procedures. The
Board shall have the right to adopt rules and regulations setting forth procedures for the
purpose of making the Assessments provided herein and for the billing and collection thereof,
provided that such procedures are not inconsistent with the provisions hereof. The failure of the
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Association to send a bill to an Owner shall not relieve any Owner of such Owner's liability for
any Assessment or charge under this Declaration, but the Assessment Lien therefor shall not be
foreclosed or otherwise enforced until the Owner has been given not less than thirty days'
written notice prior to such foreclosure or enforcement, at the address of the Owner on the
records of the Association, that the Assessment or any installment thereof is or will be due and
of the amount owing. Such notice may be given at any time prior to or after delinquency of such
payment. The Association shall be under no duty to refund any payments received by it even
though the ownership of a Membership changes during an assessment period. Successor
Owners of Lots shall be given credit for prepayments made by prior Owners on a prorated
basis.
Section 9.12, Enforcement of Lien. The Assessment Lien may be foreclosed
by the Association in any manner provided or permitted for the foreclosure of mortgages in the
State of Hawaii. All of the provisions of this Article IX relating to the enforcement of the
Assessment Lien provided for herein (including without limitation the provisions of this Section
9.12) shall apply with equal force in each other instance provided for in this Declaration, any
Supplemental Declaration, the Association Rules or Design Guidelines wherein it is stated that
payment of a particular Assessment, charge or other sum shall be secured by the Assessment
Lien. Nothing herein shall be construed as requiring that the Association take any action
required hereunder in any particular instance, and the failure of the Association to take such
action at any time shall not constitute a waiver of the right to take such action at a later time or
in a different instance.
Section 9.13. Subordination of the Assessment Lien. The Assessment Lien,
including interest, late charges (subject to the limitations of Hawaii law), and costs (including
attorneys' fees) provided for herein, shall be subordinate to the lien of any First Mortgage upon
any Lot. The sale or transfer of any Lot shall not affect the Assessment Lien, However, the
sale or transfer of any Lot pursuant to judicial or nonjudicial foreclosure of a First Mortgage shall
extinguish the Assessment Lien as to payments which became due prior to such sale or
transfer. No sale or transfer, including transfer to a receiver or trustee in bankruptcy, shall
relieve such Lot from the Assessment Lien for any Assessments thereafter becoming due.
Where the Mortgagee of a First Mortgage of Record obtains title, neither it nor its successors
and assigns shall be liable for the share of the Common Expenses or Assessments by the
Association chargeable to the Lot securing such Mortgage which became due prior to the
acquisition of title to such Lot. Such unpaid share of Common Expenses or Assessments shall
be deemed to be Common Expenses collectible from all of the Members, including the
Mortgagee, its successors and assigns.
Section 9.14. Capitalization of Association. Upon acquisition of Record title
to any Lot upon which structures have been constructed by any prior Owner thereof, a
contribution shall be made by the acquiring Owner to the capital of the Association in an amount
equal to two-thirds of a quarterly installment of the General Assessment for that type of Lot as
determined by the Board, and the acquiring Owner shall prepay two-thirds of the first Quarterly
installment due in respect of such Lot. This amount shall be deposited into the purchase and
sales escrow and disbursed therefrom to the Association.
Section 9.15. Pledge of Assessment Rights as Security. The Association
shall have the power to pledge the right to exercise its assessment powers and rights provided
for in this Declaration as security; provided, however, that any such pledge occurring after
expiration of the Declarant Control Period shall require the affirmative vote of a majority of the
Class "A" voting power of the Association.
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Section 9.16. Waiver of Use. No Owner shall be exempt from personal liability
for Assessments, nor shall any Lot owned by such Owner be released from the liens, charges
and other provisions of this Declaration, any Supplemental Declaration, the Articles, Bylaws,
Association Rules or Design Guidelines, by voluntary waiver of, or suspension or restriction of,
such Owner's right to the use and enjoyment of the Common Area, or the abandonment of such
Owner's Lot.
Section 9.17. No Declarant Assessment. Declarant may, but is under no
obligation to contribute to Assessment obligations hereunder, by paying the Association in the
form of a subsidy the difference (or any portion thereof elected by Declarant) between the
amounts received by the Association in Assessments from all Owners other than Declarant and
the amount of the actual expenditures required to operate the Association during the fiscal year.
Nothing herein shall be interpreted to require Declarant to establish, or pay over to the
Association to establish, reserves or reserve accounts for capital improvements or for
maintenance of any part of the Property, provided, however, that should Declarant elect to
contribute a subsidy to the Association, such payment by the Declarant shall constitute full
payment and release of any assessment obligations of Declarant.
ARTICLE X
Subdistricts, Subdistrict Associations and Supplemental Declarations
Section 10.1. Formation. Any portion of the Property, including Lots therein,
may be located within a designated "Subdistrict" established by Declarant by the adoption and
Recordation of a Supplemental Declaration for such Subdistrict. Any provision to the contrary
herein notwithstanding, Declarant may unilaterally amend this Declaration or any Supplemental
Declaration at any time to designate or redesignate Subdistrict boundaries, provided that two or
more Subdistricts may not be combined without the consent of Owners of a majority of the Lots
in each of the affected Subdistricts. Any Subdistrict may have a Recorded Supplemental
Declaration which may be entitled as a "Declaration" containing additional covenants,
conditions, restrictions and easements for the Subdistrict, which may, but need not, provide for
the formation of a Subdistrict Association.
Section 10.2. Effect of Supplemental Declarations. Upon proper adoption
and Recording, any such Supplemental Declaration shall be effective with respect to the portion
or whole of the Property described in the Supplemental Declaration. In the event of a conflict
between the Supplemental Declaration and this Declaration, this Declaration shall control,
except under circumstances where the Supplemental Declaration specifically provides that it is
intended to amend this Declaration.
ARTICLE XI
Common Area
Section 11.1. Common Area. Should Declarant convey Common Area to the
Association as permitted pursuant to Section 7.14, an appropriate Supplemental Declaration
detailing the rights of every Owner and Occupant in and to the Common Area, and any portion
thereof designated as Limited Common Area pursuant to such Supplemental Declaration, may
be Recorded in respect thereof. Each Owner is hereby granted a non-exclusive right to use the
Common Area subject to the restrictions and limitations set forth in this Declaration.
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ARTICLE XII
Security Disclaimer
NEITHER THE ASSOCIATION NOR DECLARANT SHALL IN ANY WAY BE CONSIDERED INSURERS OR
GUARANTORS OF SECURITY WITHIN OR RELATED TO THE PROJECT, AND NEITHER THE ASSOCIATION
NOR DECLARANT SHALL BE HELD LIABLE FOR ANY LOSS OR DAMAGE BY REASON OF FAILURE TO
PROVIDE ADEQUATE SECURITY OR INEFFECTIVENESS OF SECURITY MEASURES UNDERTAKEN WITHIN
OR RELATING TO THE COMMUNITY. EACH OWNER AND OCCUPANT ACKNOWLEDGES AND
UNDERSTANDS THAT DECLARANT, THE ASSOCIATION, THE BOARD AND THE DESIGN REVIEW
COMMITTEE ARE NOT INSURERS AND THAT EACH OWNER AND OCCUPANT ASSUMES ALL RISKS FOR
LOSS OR DAMAGE TO PERSONS, TO LOTS AND TO THE IMPROVEMENTS AND PERSONAL PROPERTY
THEREON, AND FURTHER ACKNOWLEDGES THAT DECLARANT, THE ASSOCIATION, THE BOARD AND
THE DESIGN REVIEW COMMITTEE HAVE MADE NO REPRESENTATIONS OR WARRANTIES, NOR HAS ANY
OWNER OR OCCUPANT RELIED UPON ANY REPRESENTATIONS OR WARRANTIES, EXPRESSED OR
IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, RELATIVE TO ANY SECURITY MEASURES OR SECURITY SYSTEMS UNDERTAKEN,
RECOMMENDED OR INSTALLED WITHIN OR RELATED TO THE COMMUNITY.
ARTICLE XIII
Insurance
Section 13.1. Authority to Purchase, The Board shall have the power and
authority to, and shall, purchase with Association funds such public liability, fire and casualty,
officers' and directors' liability and indemnity, workmen's compensation and other insurance and
such fidelity bonds as the Board shall deem necessary or appropriate from time to time. Such
policies shall be on such terms and conditions as the Board shall direct, subject to this Article
XIII. All such policies and claims thereunder shall be administered by the Board. To the extent
reasonably available, the Association shall maintain at least $2,000,000 (combined limits) of
insurance against liability incurred as a result of death or injury to persons or damage to
property on the Area of Common Responsibility and the actions of the Association relating
thereto. Fire and casualty insurance shall be in an amount as near as possible to the full
replacement value of all Improvements located on the Area of Common Responsibility, and
shall be written with extended coverage and an inflation guard endorsement, if reasonably
available.
Section 13.2. Non-Liability of Association, Board and Officers. Neither the
Association nor any Board member nor officer of the Association nor Declarant shall be liable to
any Owner, Mortgagee or other Person if any risks or hazards are not covered by insurance or if
the amount of insurance is not adequate, and it shall be the responsibility of each Owner to
ascertain the coverage and protection afforded by the Association's insurance and to procure
and pay for such additional insurance coverage and protection as the Owner may desire.
Section 13.3. Premiums. Premiums for insurance policies purchased by the
Association shall be paid by the Association as a Common Expense, except that the amount of
increase over any annual or other premium occasioned by the use, misuse, occupancy or
abandonment of a Lot or its appurtenances, or of the Common Area, by an Owner or Occupant
or the agent, employee or invitee of either, shall be assessed against that particular Owner as a
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Special Assessment. Premiums for insurance provided by the Association to Subdistricts may,
at the discretion of the Board, be charged as Subdistrict Assessments.
Section 13.4. Insurance Claims. The Association, through such persons as
the Board may delegate, is hereby irrevocably appointed and authorized, subject to the
provisions contained herein, to adjust all claims arising under insurance policies purchased by
the Association and to execute and deliver releases upon the payment of claims, and to do all
other acts reasonably necessary to accomplish any of the foregoing. The Board, at its
discretion, may appoint an authorized representative, or enter into an insurance trust agreement
wherein the trustee shall have authority to negotiate losses under any policy purchased by the
Association.
Section 13.5. Benefit. Except as otherwise provided herein, all insurance
policies obtained by the Board shall be for the benefit of, and any proceeds of insurance
received by the Association or any insurance trustee shall be held or disposed of for, the
Association and the Owners, as their interests may appear.
Section 13.6. Provisions Common to Association Insurance. Any insurance
coverage obtained by the Association pursuant to this Article XIII shall be subject to the
following provisions and limitations: (a) The named insured under any such policies shall be the
Association and/or its authorized representative(s). (b) In no event shall the insurance coverage
obtained and maintained by the Association be brought into contribution with insurance
purchased by the Owners, Occupants, or their Mortgagees. (c) The policies shall provide that
coverage shall not be prejudiced by (a) any act or neglect of the Owners when such act or
neglect is not within the control of the Association, or (b) failure of the Association to comply
with any warranty or condition with regard to any portion of the Community over which the
Association has no control. (d) The policies shall provide that coverage may not be canceled or
substantially modified (including cancellation for non-payment of premium) without at least thirty
days' prior written notice to any and all First Mortgagees and insureds named therein. (e) All
policies shall be written with a company licensed to do business in Hawaii and holding a rating
of A or better in the financial category as established by A.M. Best Company, Inc., if reasonably
available, or, if not available, the most nearly equivalent rating. (f) Insurance policies shall
include the following provisions, if reasonably available: (i) A waiver of subrogation by the
insurer as to any and all claims against the Association and any Owner and their respective
agents, employees or tenants, and of any defenses based upon co-insurance or upon invalidity
arising from the acts of the insured; (ii) Notwithstanding any provisions which give the insurer
the right to elect to restore damage in lieu of making a cash settlement, such option shall not be
exercisable (1) without the prior written approval of the Board or (2) when in conflict with the
provisions of (a) any insurance trust agreement to which the Association may be a party or (b)
any requirement of law; and (iii) No policy may be canceled, invalidated, or suspended on
account of the conduct of any member of the Board, officer, or employee of the Association or
its duly authorized manager without prior demand in writing delivered to the Association to cure
the defect and the allowance of a reasonable time thereafter within which the defect may be
cured by the Association, its manager, any Owner or Mortgagee.
Section 13.7. Annual Insurance Review. The Board shall review the
insurance carried by or on behalf of the Association, at least annually, for the purpose of
determining the amount of casualty and other insurance required. If economically feasible, the
Board may obtain a current appraisal of the full replacement value of the Improvement on the
Association land, without deduction for depreciation, from a qualified independent insurance
appraiser, prior to any such annual review.
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Section 13.8. Individual Insurance. By virtue of taking title to a Lot, each
Owner covenants and agrees with all other Owners and with Declarant and the Association that
such Owner shall carry or provide for blanket all-risk casualty insurance on such Owner's Lot
and Improvements thereon on such terms and with such limits as a reasonably prudent person
would obtain, and in an amount that is sufficient to ensure that the Owner will meet his
obligation to either restore the Lot and Improvements (in the manner set forth herein) or clear
the affected Lot (in the manner set forth herein). Each Owner further covenants and agrees that
in the event of a partial loss or damage and destruction resulting in less than total destruction of
Improvements on such Owner's Lot, the Owner shall proceed promptly to repair or to
reconstruct the damaged Improvements in a manner consistent with the original construction, or
in such other manner as may be approved pursuant to Article VI. In the event that an
Improvement is totally destroyed and the Owner determines not to rebuild or to reconstruct, the
Owner shall clear the affected Lot of all debris and return the land to substantially the natural
condition in which it existed prior to the beginning of construction of the Improvement thereon.
The Board or the Design Review Committee may impose more stringent requirements regarding
the standards for rebuilding or reconstructing structures on each Lot and the standard for
returning the Lot to its natural state in the event the Owner decides not to rebuild or reconstruct.
Additional Recorded covenants applicable to any Subdistrict may also impose more stringent
requirements with respect to Lots within the Subdistrict.
ARTICLE XIV
Rights of Mortgagees
Section 14.1. General Provisions. Notwithstanding any other provisions of
this Declaration, any Supplemental Declaration, the Articles, Bylaws, Association Rules or
Design Guidelines, the following provisions shall apply to and benefit each holder of a First
Mortgage (and, in the case of Sections 14.4 and 14.6, to the holder of any Mortgage) upon a
Lot.
Section 14.2. Subordination of Lien. The Assessment Lien against a Lot
shall be subordinate to the lien of a prior Recorded First Mortgage on the Lot, acquired in good
faith and for value, except to the extent it secures the amount of any unpaid Assessments
(together with any interest, costs, reasonable attorneys' fees and any late charges related
thereto) accrued from and after the date on which a First Mortgagee comes into possession of
or acquires title to the Lot, whichever occurs first. If the Assessment Lien for unpaid
Assessments, which become payable after Recordation of the First Mortgage, but prior to the
date the First Mortgagee comes into possession of or acquires title to the Lot, is not
extinguished to the extent it secures said unpaid Assessments by the process by which such
First Mortgagee acquired title to the Lot, neither such First Mortgagee nor a third-party
purchaser shall be liable for the unpaid Assessments, and, upon written request to the
Association by such First Mortgagee or purchaser, the Assessment Lien shall be released in
writing by the Association to the extent it secures the unpaid Assessments. Nevertheless, in
the event the Owner against whom the original Assessment was made is the purchaser or
redemptioner, the Assessment Lien shall continue in effect and may be enforced by the
Association, or by the Board, for the respective Lot's Assessment that was due prior to the final
conclusion of any such foreclosure or equivalent proceedings. Further, any such unpaid
Assessment shall continue to exist as the personal obligation of the defaulting Owner of the
respective Lot to the Association, and the Board may use reasonable efforts to collect the same
from said Owner even after he is no longer the Owner of the Lot. Any unpaid Assessments
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which are extinguished pursuant to this Section 14.2 may also be reallocated by the Association
among all Owners as part of the Common Expenses. Except as above provided (and except for
liens for taxes and other public charges which by applicable law are made prior and superior),
the Assessment Lien shall be prior and superior to any and all charges, liens or encumbrances
which hereafter in any manner may arise or be imposed on any Lot.
Section 14.3. No Personal Liability. A First Mortgagee shall not in any case
or manner be personally liable for the payment of any Assessment or charge, nor the
observance or performance of any covenant, restriction, the Association Rules, or any provision
of the Articles or Bylaws, or any management agreement, except for those matters which are
enforceable by injunctive or other equitable actions, not requiring the payment of money, except
as specifically provided in this Article XIV.
Section 14.4. Enforcement After Foreclosure Sale. An action to abate the
breach of any of the covenants, conditions, restrictions, servitudes and reservations in this
Declaration may be brought against the purchasers who have acquired title through foreclosure
of a Mortgage and the subsequent foreclosure or trustee's sale (or through any equivalent
proceedings), and the successors in interest to said purchasers, even though the breach existed
prior to the time said purchaser acquired an interest in such Lot.
Section 14.5. Exercise of Owner's Rights. During the pendency of any
proceedings to foreclose a First Mortgage (including any period of redemption), the Mortgagee,
or a receiver appointed in any such action, may, but need not, exercise any or all of the rights
and privileges of the Owner in default including, but not limited to, the right to vote as a Member
of the Association in the place and stead of the defaulting Owner.
Section 14.6. Subject to Declaration and Subdistrict Declaration. At such
time as a Mortgagee shall come into possession of or become Record Owner of a Lot, the
Mortgagee shall be subject to all of the terms and conditions of this Declaration including, but
not limited to, the obligation to pay all Assessments and charges accruing thereafter, in the
same manner as any other Owner.
Section 14.7. Notices of Action. A First Mortgagee who provides written
request to the Association (such request to state the name and address of such First Mortgagee
and the address of the affected Lot) will be entitled to timely written notice of: (a) any proposed
termination of the Association; (b) any condemnation loss or any casualty loss which affects a
material portion of the Property or which affects the Lot subject to the Mortgage held by such
First Mortgagee; (c) any delinquency in the payment of Assessments or charges owed by an
Owner of the Lot subject to the Mortgage held by such First Mortgagee, where such
delinquency has continued for a period of sixty days; (d) any lapse, cancellation, or material
modification of any insurance policy or fidelity bond maintained by the Association; and (e) any
proposed action which would require the consent of a First Mortgagee, pursuant to Section 14.8
or Article XXIII.
Section 14.8. Other Provisions for First Mortgagees. To the extent possible
under Hawaii law, any restoration or repair of the Common Area after a partial condemnation or
damage due to an insurable hazard shall be substantially in accordance with this Declaration
and the original plans and specifications unless the approval is obtained of the Mortgagees
holding First Mortgages on Lots to which at least fifty-one percent (51%) of the votes of Lots
subject to such First Mortgages appertain.
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Section 14.9. Applicability of Article XIV. Nothing contained in this Article
XIV shall be construed to reduce the percentage vote that must otherwise be obtained under
this Declaration, the Articles or Bylaws or Hawaii law for any of the acts set out in this Article
Xiv.
Section 14.10, Failure of Mortgagee to Respond. Any Mortgagee who
receives a written request from the Board to respond or consent to any action shall be deemed
to have approved such action if the Board does not receive a written response from the
Mortgagee within fifteen days of the date of the Board's request, provided such request is
delivered to the Mortgagee by certified or registered mail, return receipt requested.
ARTICLE XV
Annexation of Additional Property
It is contemplated that the additional real property adjacent to the Community
including without limitation the real property described in Exhibit B (herein the "Annexation
Property"), may be annexed to and become subject to this Declaration.
Section 15.1. Annexation, Declarant shall have the unilateral right, privilege,
and option from time to time and at any time during the Declarant Control Period, but shall not
be obligated, to annex the Annexation Property and other additional real property, whether in
fee simple or leasehold, to this Declaration in increments of any size whatsoever, or to annex
more than one such increment at any given time and in any given order. Any such property not
specifically annexed by Supplemental Declaration properly Recorded shall not become subject
to this Declaration. Supplemental Declarations may contain such complimentary or
supplementary additions and modifications of the provisions of this Declaration as may be
necessary to reflect the different character, if any, of the property being annexed and may add,
delete, or modify provisions of this Declaration as it applies to the property being annexed. The
Recordation of such Supplemental Declaration shall constitute and effectuate the annexation of
the property described therein, unless a later effective date is specified in the Supplemental
Declaration, making such real property subject to this Declaration and subject to the functions,
powers and jurisdiction of the Association, and thereafter said real property shall be part of the
Property for all intents and purposes of this Declaration and all of the owners of Lots in the
annexed property shall automatically be Owners hereunder.
Section 15.2. Approval of Association. Prior to expiration of the Declarant
Control Period, the Annexation Property and other additional property may be annexed to and
become subject to this Declaration and subject to the jurisdiction of the Association without the
approval, assent or vote of the Association or the Class "A" Members. Such Annexation shall
result in a diminishment of individual Class "A" Members voting power. Following expiration of
the Developer Control Period, the Association may annex real property to the provisions of this
Declaration and the jurisdiction of the Association upon the affirmative vote of Members
representing a majority of the Class "A" voting power of the Association, present at a meeting
duly called for such purpose, and Recording an appropriate Supplemental Declaration with
respect to the property being annexed.
Section 15.3. Withdrawal of Property. Declarant may and hereby reserves
the right to unilaterally at any time remove and release any portion of the Property from
coverage of this Declaration and the jurisdiction of the Association, provided that: (i) Declarant,
or an affiliate of Declarant, is the owner of such portion of the Property to be so removed and
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released; and (ii) a Notice of Withdrawal of Property, executed by Declarant, is Recorded. The
removal and release of any portion of the Property shall be effective upon the date of
Recordation of the Notice of Withdrawal of Property, or such later date as may be provided in
the Notice of Withdrawal of Property. The Notice of Withdrawal of Property shall contain a legal
description of the portion of the Property to be removed and released, and shall note the
removal and release of this Declaration as an encumbrance upon such portion of the Property.
Upon removal and release pursuant to this Section, such portion of the Property shall be free
and clear of, and no longer subject to, any of the terms, covenants, conditions, restrictions and
easements contained in this Declaration or any Supplemental Declaration. No removal and
release pursuant to this Section shall cancel Assessments already due and payable by the
Owner of such portion of the Property, nor cancel any Assessment Lien against such portion of
the Property.
ARTICLE XVI
Easements
The rights and easements set forth in this Article XVI are in addition and without
limitation to any other rights and easements created by or set forth in this Declaration or any
Supplemental Declaration.
Section 16.1. Reservation of Easements. Declarant hereby reserves the right
for itself and its successors and assigns to designate, grant, convey, transfer, cancel, relocate,
reserve or otherwise deal with any easements and rights of way at any time for utilities, sanitary
and storm sewers, cable television transmission facilities, communication lines and systems,
refuse disposal, landscaping maintenance, roadways and other similar purposes, over, across,
under and through the Property, and each Lot therein, including without limiting the generality of
the foregoing, the right of entry to construct, reconstruct, operate, maintain, repair and relocate
such lines, facilities and appurtenances and to grant any such easements or rights of way to
governmental or quasi-governmental authorities, utility or service companies, the Association or
other entities and the right to grant, dedicate, designate, use and enjoy easements and/or
rights-of-way for access purposes. These reserved rights shall be exercised in a manner that
will cause the least practicable interference with the use or enjoyment of any Lot or Dwelling
Unit. Each Owner consents to any such designation, granting, conveyance, transfer,
cancellation, relocation and reservation of easements and/or rights of way as provided above
without the necessity of any Owner, or those claiming by, through or under an Owner, entering
into any further agreement respecting such action or document; provided, however, that such
Owner and those claiming by, through or under an Owner, agrees to join in an execute such
documents and instruments and do such other things as may be necessary or convenient to
effect the same promptly at the request of Developer without payment of additional
consideration. Upon request by an Owner, Declarant shall execute and Record an estoppel
certificate which shall limit the rights provided in this Section 16.1 so that easements hereunder
may only be taken through certain utility corridors as set forth in the estoppel certificate. The
rights reserved in this Section 16.1 shall continue until December 31, 2024 (which date may be
extended to the extent that Declarant shall experience delays in development of nay additional
phase or increment of the Project, for reasons beyond Declarant's reasonable control, but in no
event beyond December 31, 2030).
Section 16.2. Easements for Surrounding Uses. Easements are hereby
reserved over, across, under and through the Property, and each Lot therein, for the benefit of
the owners of the "Agricultural and Farming Properties" (as defined in Section 17.1) and
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other properties in the vicinity of the Project, and their successors in title, for the
commencement, continuation and resulting effect of the Surrounding Uses (as defined in
Section 17.1), and all activities related or incidental thereto.
Section 16.3, Easement for Ongoing Construction. Dieciarant, and its
agents, employees, contractors, licensees, successors, mortgagees and assigns, shall have
and there is hereby created an easement over, under and upon the Property, including the Lots
therein, to create and cause noise, dust, vibration and other nuisances or annoyances created
by or resulting from any work connected with or incidental to the development, construction
and/or sale of any Lot or Dwelling Unit or other Improvement to the Property, including the
Annexation Property, or any other community which Declarant, its successors or assigns, may
develop on property adjacent to in the vicinity of the Community. Each and every Owner or
other person acquiring any interest in the Community waives any and all rights, claims or
actions that might otherwise be asserted against Declarant, its agents, employees, licensees,
successors, mortgagees and assigns, based on any such noise, dust, vibration and other
nuisances or annoyances.
Section 16.4. Recorded Easements. Each Lot shall be subject to all
easements shown on any Recorded subdivision map or file plan affecting such Lot, and to any
easement of Record or of use, which shall include without limitation, use for construction,
installation and repair of utilities, maintenance, encroachment, drainage and ingress and egress.
Section 16.5. Maintenance Easement. Declarant hereby reserves to itself and
the Association, and their respective officers, agents, employees, and assigns, an easement
upon, across, over, in, and under the Common Areas and any portion of the Property, including
Lots, and a right to make such use of such property and easement area as may be necessary or
appropriate to perform the rights, duties and functions which the Association is obligated or
permitted to perform pursuant to the Declaration, any Supplemental Declaration or the
Association Rules, including the right to enter upon any Lot for the purpose of performing
maintenance to the landscaping or the exterior of Improvements to such Lot as required or
permitted by this Declaration, any Supplemental Declaration or the Association Rules.
Section 16.6. Drainage Easements. Declarant hereby reserves to itself and
the Association, and their respective officers, agents, employees, successors, and assigns, an
easement to enter upon, across, over, in, and under any portion of the Property, including Lots,
for the purpose of changing, correcting, or otherwise modifying the grade or drainage channels
of any portion of the Property so as to improve the drainage of water on the Property.
Reasonable efforts shall be made to use this easement so as to disturb as little as possible the
uses of the Owners, the Association and Declarant, as applicable, to prosecute such drainage
work promptly and expeditiously, and to restore any areas affected by such work to a sightly
and usable condition as soon as reasonably possible following such work. The rights reserved
in this Section 16.6 shall continue until December 31, 2024 (which date may be extended to the
extent that Declarant shall experience delays in development of any additional phase or
increment of the Project, for reasons beyond Declarants reasonable control, but in no event
beyond December 31, 2030).
Section 16.7. Easements for Encroachments. There shall be reciprocal
appurtenant easements of encroachment as between adjacent Lots due to the unintentional
placement or settling or shifting of the Improvements constructed, reconstructed, or altered
thereon (either initially by Declarant or subsequently in accordance with the terms of this
Declaration) to a distance of not more than one foot, as measured from any point on the
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common boundary between said adjacent Lots, along a line perpendicular to such boundary at
such point; provided, however, in no event shall an easement for encroachment exist if such
encroachment occurred due to willful and knowing conduct on the part of an Owner, Occupant
or the Association. Any such easements for encroachment shall be for the encroachment and
for the maintenance thereof.
Section 16.8. Easements for Sales Activities. Declarant, and its agents,
successors, mortgagees and assigns, shall have the right and an easement to conduct
extensive sales activities on and at the Community relating to the sale of any Dwelling Unit
and/or Lot including the use of any Dwelling Unit or Lot owned by Declarant for model home
displays, sales and management offices, parking and extensive sales displays and activities and
the posting and maintenance of signs and other advertisements relating to such sales activities.
The rights reserved in this Section 16.8 shall continue until Declarant has sold all Lots within the
Community, including without limitation, any property included within the Annexation Property.
Section 16.9. Repair Easement. Declarant and its agents, employees,
contractors, licensees, successors, mortgagees and assigns shall have an easement over,
under and upon any portion of the Community, including the Common Area and any Lot or
Home, as may be reasonably necessary for the completion of improvements to and correction
of defects and other"punchlist" and warranty items in the Community, Lot or Home. The rights
reserved in this Section shall continue until ten (10) years after the later of (i) the "date of
completion" of the improvements as evidenced by the filing of a Notice of Completion or (6) the
expiration of the applicable limited warranty period for any portion or portions of the Property.
Section 16.10, Storm Sewer. Each Owner acknowledges and agrees that
Declarant, on behalf of the Association, may seek or has obtained certain licenses and permits
from the Department of Public Works of the County (the "DPW") relating to the connection of the
Community to the public storm sewer system, if any. To the extent that any such licenses or
permits have not been issued to the Association, Declarant and its agents, employees,
contractors, licensees, successors, mortgagees and assigns, reserve the right to transfer to the
Association any and all obligations in connection with such permits. In connection with such
permits and licenses, the Association shall have the responsibility to comply at all times now
and in the future with all DPW regulations and any other applicable statutes, ordinances and
rules and regulations of Federal, State or County agencies relating to the discharge, drainage
and runoff of storm water and surface water, and their constituents, from the Community into the
public storm sewer system. Neither the Association nor any Owner shall take any actions that
may in any way undermine the Association's obligations to comply with such regulations. Each
Owner and the Association shall execute any and all documents required by Declarant in
Declarant's sole discretion to transfer, if required, any applicable license(s) relative to such
discharge, drainage and runoff to the Association. Each Owner shall indemnify and hold
harmless Declarant, its successors and assigns, from and against any and all claims and
demands for damages in connection with the Association's fulfillment of its storm sewer
connection obligations.
Section 16.11. Further Encumbrances. Declarant hereby reserves the right to
encumber the Common Areas with an Agreement in favor of the City and County, State of
Hawaii or adjacent landowners in respect of the various improvements to be installed in the
Common Area.
Section 16.12. Common Area. The Declarant, its contractors, subcontractors,
licensees, mortgagees and assigns, and their respective employees and agents, shall have the
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right and an easement in favor of the Declarant and its successors and assigns is hereby
granted at any time and from time to time for a period through and including the later of the
thirtieth (30th) anniversary date of this Declaration or for a period of ten (10) years after the
Declarant Control Period, to enter upon, use, remove, replace, add to, or otherwise alter the
improvements in the Common Areas of the Community and to do all things reasonably
necessary, desirable or useful for designing, developing, constructing or completing the
Community, and selling the Homes; provided that the exercise of the rights granted herein shall
not cause any permanent or avoidable interruption in the service of utilities to the property, and
provided further that any person exercising such rights shall use reasonable efforts, without
additional cost to the Declarant and consistent with maintaining the progress of the design,
development, construction, completion and sale of the additional increment, to minimize
interference with the Owners' use and enjoyment of the property.
Section 16.13. Views. Views from Lots within the Community are not assured
or guaranteed in any way. There is no warranty concerning the preservation of any view or view
plane from the Lots and each Owner by accepting title to or an ownership interest in a Lot for
such Owner and/or the family, lessees, tenants and guests of such Owner and Owner's
successors and assigns acknowledges and agrees and accepts that: (a) completion of the
Community (through the construction of Homes or otherwise) and the future development of
land adjacent to or in the vicinity of the Community may have a detrimental effect on the views
from the Lots and other parts of the Community, and (b) there are no view easements or rights
appurtenant to any Lot or the Community. Further, changes in the landscaping on adjacent
property (which is not within the control of Declarant), through the addition, removal or trimming
of trees or other vegetation, may occur in the future and may adversely affect views from the
Community.
ARTICLE XVII
Surrounding Uses and CorkmuntlConditions y_ _
Section 17.1, Surrounding Uses. Each Owner', for itself and any Person
claiming through such Owner, understands and acknowledges that: (I) the land of the
Community may have been used previously for commercial agricultural and farming operations
and in connection therewith, fertilizer and pesticides, among other things, may have been
applied to and used upon the land of the Community or lands adjacent thereto; (ii) the
Community Is located near or adjacent to properties which are or may be used for agricultural,
farming, animal husbandry or related uses (the "Agricultural and Farming Properties"),
commercial and other purposes; (iii) further development, construction and sale of residential,
commercial, industrial, recreational and public projects by the Declarant and others is ongoing
and may continue within the Community and within the vicinity of the Community for an
indefinite period; (iv) certain lands within the surrounding area may be irrigated with treated
effluent, reclaimed water or other sources of nonpotable water; (v) the land of the Community is
subject to potential adverse soil conditions, (vi) lands adjacent to the Community may used for
sanitary or other landfill activities, rock processing and crushing, quarrying, cemeteries and
sewage treatment plants; (vii) easements shall be retained over the Property for some or all of
the foregoing described uses, including, specifically, easements permitting the commencement,
continuation and resulting effects of the foregoing uses, and all activities incidental to such uses
(collectively all the foregoing uses set forth in this Section 17.1 are referred to herein as the
"Surrounding Uses").
Section 17.2. Adjacent Agricultural and Farming Uses. Each Owner, for
itself and any Person claiming through such Owner, understands and acknowledges that the
Community may be located near or adjacent to the Agricultural and Farming Properties.
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Farming operations may result in smoke, dust, noise, vibrations and other annoying activities
that may constitute a nuisance and could interfere with the reasonable use and enjoyment of the
Property, including the Lots therein. Among others, and without limitation, these uses may
result in (a) odors from fertilizers, insecticides, pesticides, and herbicides; (b) noise from farm
equipment and vehicles-, and (c) dust created during plowing or cultivation. Owners are advised
that the farming operations and resulting consequences are protected under, the provisions of
Sections 165-1 through 165-4, Hawaii Revised Statutes (the "Hawaii Right to Farm Act").
Section 17.3. Condition of Land.
(a) Owner understands and hereby acknowledges that the land of the
Community may have been used previously for ranching and agricultural purposes. Owner also
understands that the Property and the Lot have been graded, soil removed and added to reach
its finished height and form, and contains (or may contain) expansive soils, and, as a result,
may be subject to subsidence, settlement or expansion. Owner also acknowledges that
standard construction techniques and applicable designs for the Home's foundation slab may
result in a degree of non-structural cracking or "spider" cracking within the slab and that certain
slabs will contain contraction joints. Except as expressly set forth herein, Owner is relying and
will rely solely upon Owner's own inspection and investigation of the land of the Community and
surrounding properties, and is not relying and will not rely in any way upon any representations,
statements, warranties, or other information or material furnished by Seller or its
representatives, whether oral or written, express or implied. Without limiting the generality of
the foregoing, Owner assumes all risks associated with the condition of the Property and the
Lot, the nature of the soils making up the Property and the Lot and of hazardous materials on,
about, around, under, over or within the Community, including all risks of (1) any and all
enforcement, clean up, or other governmental or regulatory actions instituted or threatened
pursuant to any hazardous material laws affecting the Community, (ii) all claims made or
threatened by any third party against Owner or the Community relating to damage, contribution,
compensation, loss or injury resulting from any hazardous materials and (iii) Owner's discovery
of any occurrence or condition on the land of the Community or any land adjoining or in the
vicinity of the Community which might result in Owner or the Property being made subject to
restrictions on ownership, occupancy, transferability or use of the Property or the Community
pursuant to any applicable hazardous materials laws. As used herein, the term "hazardous
materials" includes, but is not limited to, any and all radioactive materials, asbestos,
polychlorinated biphenyl ("PCB's"), chemicals which cause cancer or reproductive toxicity,
pollutants, contaminants, hazardous wastes, toxic substances, and other hazardous substances
or materials listed, described or defined in 40 CFR Para. 302, as amended from time to time.
(b) The Property has been graded and is comprised of excavated and/or
built-up earth fill overlaying the pre-existing earth and various expansive clays. Soils within the
Property are expansive, and settlement and/or movement of the earth in the Property may
occur. Each Owner is responsible for the maintenance of the Owner's Lot, for the prevention of
sinkholes and/or settlement of the earth in or upon such Owner's Lot, and for taking reasonable
efforts to prevent sinkholes and/or movement and settlement of the earth in adjoining properties.
These efforts shall include the prevention of excessive water saturation of the earth near or
beneath the Home, and the prevention of accumulation or ponding of water in any area.
Without limitation as to the nature or extent of such efforts, and in addition to all other
requirements in this Declaration, each Owner shall be responsible for and do the following
things:
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W Keep all swales, ditches, drains, sub-drains and other drainage
ways on or within such Owner's Lot free of debris, and open and in good and operating
condition;
(ii) Divert any surface water from any source (such as an eave,
gutter or downspout) on a Lot away from the foundations of the Home and other improvements
on such Owner's Lot and on adjoining properties;
(iii) Refrain from excessive watering of landscaping in all places, but
particularly near or next to any building foundation; and
(iv) Maintain the earth within or upon such Owner's Lot such that it
slopes and drains away from the foundation of the Home and other improvements as well as
away from improvements on the adjoining properties. This includes filling in any depressions
and refraining from creating any depressions, including "planting beds," in the earth near or next
to any foundation.
Section 17.4. Other Environmental Issues. Mold and mold spores are present
throughout the environment and residential home construction is not, and cannot be, designed
to exclude mold spores. All mold is not necessarily harmful, but certain strains of mold have
been shown to have adverse health effects in susceptible persons. The most common effects
are allergic reactions, including skin irritation, watery eyes, runny nose, coughing, sneezing,
congestion, sore throat and headache. Individuals with suppressed immune systems may risk
infections. Moisture is the only mold growth factor that can be controlled in a residential setting.
By minimizing moisture, a homeowner can reduce or eliminate mold growth. Although the
Center for Disease Control states that a causal link between the presence of toxic mold and
serious health conditions has not been proven, the Owners should take positive steps to reduce
or eliminate the occurrence of mold growth and thereby minimize any possible adverse effects
that may be caused by mold by, without limitation, doing the following:
(a) Before bringing items into the home, check for signs of mold. Potted
plants (roots and soil), furnishings, or stored clothing and bedding material, as well as many
other household goods, could already contain mold growth. Avoid storing organic material in
basements or damp areas.
(b) Regular vacuuming and cleaning will help reduce mold levels. Mild
bleach solutions and most the cleaners are effective in eliminating or preventing mold growth.
(c) Keep the humidity in the Home low. Vent clothes dryers to the outdoors.
Ventilate kitchens and bathrooms by opening the windows, by using exhaust fans, or by running
the air conditioning to remove excess moisture in the air, and to facilitate evaporation of water
from wet surface. Maintain and properly service your air conditioning system, furnaces, heat
pumps, and humidifiers attached to furnaces to keep them in full working condition.
(d) Promptly clean up spills, condensation and other sources of moisture.
Thoroughly dry any wet surfaces or material. Do not let water pool or stand in the Home.
Promptly replace any materials that cannot be thoroughly dried, such as drywall or insulation.
(e) Inspect for leaks on a regular basis. Look for discolorations or wet spots.
Repair any leaks promptly. Inspect condensation pans (refrigerators and air conditioners) for
mold growth. Take notice of musty odors, and any visible signs of mold,
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(f) Seek to prevent water intrusion into the Home by regular caulking and
painting and maintaining the appropriate grade to allow water to drain away from the house and
irrigation systems the proper distance from the home.
(g) Should mold develop, thoroughly clean the affected area with a mild
solution of bleach. First, test to see if the affected material or surface is color safe. Porous
materials, such as fabric, upholstery or carpet should be discarded. Should the mold growth be
severe, call on the services of a qualified professional cleaner.
Owner acknowledges and agrees that Declarant will not be liable for any actual,
special, incidental or consequential damages based on any legal theory whatsoever, including,
but not limited to, strict liability, breach of express or implied warranty, negligence or any other
legal theory with respect to the presence and/or existence of molds, mildew and/or microscopic
spores unless caused by the sole negligence or willful misconduct of Declarant. Owner, on
behalf of itself and its family members, tenants, invitees and licensees, hereby releases
Declarant and its officers, directors, partners, members, affiliates, subsidiaries, parent,
successors and assigns from and against any and all claims, actions, damages, causes of
action, liabilities and expenses (including without limitation, attorneys' fees and costs of
enforcing this indemnity) for property damage, injury or death resulting from the exposure to
microscopic spores, mold and/or mildew and from any loss of resale value due to the presence
and/or existence of mold, mildew and/or microscopic spores.
Section 17.5. Nuisances Related to the Community and Adjacent
Properties. Without In any manner limiting the preceding sections, each Owner, in purchasing
or otherwise taking title to any Lot, does so with the express understanding and
acknowledgment that the Community and the Owner's Lot may be periodically affected by
various hazards and by noise, dust, smoke, earthshock, soot, ash, odor, mold and mold spores,
noxious vapors, transmission of pollutants or other hazardous materials, surface water runoff, or
other adverse environmental conditions, including but not limited to those attributable to
winddrift and other weather factors (the "Surrounding Use Effects") created by or attributable
to the location of the Home, historical, existing, and prospective surrounding construction,
development, agricultural, pasture, golf course, commercial and other non-residential uses and
activities, and specifically approves all of those uses and activities, which Include, but are not
limited to,. (a) the items described in this Article 17 or elsewhere in this Declaration; (b)
agricultural crop burning, harvesting, tending, as well as fertilization and pest and weed control;
(c) pets that may be objectionable to residents, (d) quarrying; (e) changes in use due to zoning
changes or other governmental authorization or otherwise, construction, grading, improvement
and maintenance of adjacent and surrounding properties, Including roadways, drainage
facilities, sewage treatment facilities and the like; (f) schools, churches, parks, recreational and
related facilities; (g) presence of aboveground and underground radio transmission wires and
high voltage electric lines within and around the Community, which lines purportedly may emit
electric and magnetic fields; (h) uses within the Common Area, (I) commute and off-hours (non-
peak) traffic and parking, and (j) earthquakes, VOG, volcanic ash, volcanic eruptions, flooding,
rockslides and other natural disasters (collectively the "Surrounding Operations"). Each
Owner hereby covenant's and agrees that each Owner, and the tenants, lessees, family,
servants, guests, invitees, licensees and employees of, each Owner, assumes any and all risks
associated with such Surrounding Operations and the annoyances, inconveniences,
Surrounding Use Effects and nuisances created thereby, and expressly waives all rights to any
claim against the Declarant, its successors and assigns, its affiliates, successors-in-title or
assigns arising out of or in connection with such activities, annoyances, inconveniences and
nuisances, including but not limited to (I) any right to seek damages attributable thereto or for
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the, design or the placement of improvements to the Community, any Lot or the surrounding
property, or any part thereof, or related or adjacent facilities or (ii) the abatement or elimination
thereof. Such waiver, however, shall not include claims arising out of or in connection with the
gross negligence and/or willful misconduct of such entities.
Section 17.6, Assumption of Risk, Waiver of Claims, Hold Harmless and
Defend. Each Owner covenants and agrees, on behalf of such Owner and the tenants,
lessees, family, servants, guests, invitees, licensees and employees of the Owner (i)to accept
any nuisance, inconvenience, irritation or annoyance which the Owner or such other Person
claiming through the Owner may experience as a result of the foregoing activities and conditions
described in this Declaration, including without limitation those described In this Article and the
presence of mold in the Home and agrees to suffer and permit all actions and consequences
incidental to such activities and conditions; (ii) to assume and does hereby assume any and all
risks associated with the Surrounding Operations and the annoyances, inconveniences,
Surrounding Use Effects and other nuisances thereby created, as well as with the ongoing
construction and sales activities; (iii) to waive and does hereby expressly waive all rights to
make any claim against Declarant, the Association, the Board, and any of their related entities,
affiliates, successors-in-title or assigns, arising out of or in connection with the ongoing
construction and sales activities, the Surrounding Operations and the annoyances,
inconveniences, Surrounding Use Effects and other nuisances thereby created, the clean-up or
remediation of the same, including but not limited to (a) any claim for damages attributable
thereto or for the design or the placement of Improvements to the Project, including the Lots
therein, or the, surrounding property, or any part thereof, or related or adjacent facilities, or (b)
claims for the abatement or elimination thereof (such waiver, however, shall not include claims
arising out of or in connection with the gross negligence and/or willful misconduct of such
entities); (iv) to indemnify and hold harmless Declarant, the Association, the Board, and any of
their related entities, affiliates, members, successors-in-title or assigns, and their respective
affiliates, successors and assigns, from and against any and all claims, demands, actions,
lawsuits, proceedings, fines, penalties, damages, liabilities, judgments, awards, expenses and
costs (including attorneys' fees and costs) which may arise out of or may directly or indirectly be
attributable to any and all of the foregoing Surrounding Uses, Surrounding Use Effects,
Surrounding Operations and ongoing construction and sales activities; and (v) to defend
Declarant, the Association, the Board, and any of their related entities, affiliates, successors-in-
title or assigns, and their respective affiliates, successors and assigns, against any and all
claims, demands, actions, lawsuits, proceedings, fines, penalties, damages, liabilities,
judgments, awards, expenses and costs (including attorneys' fees and costs) which may arise
out of or may directly or indirectly be attributable to any and all of the foregoing Surrounding
Uses, Surrounding Use Effects, Surrounding Operations and ongoing construction and sales
activities.
ARTICLE XVIII
RESERVED
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ARTICLE XIX
Declarant's Rights and Reservations
Section 19.1. Reserved Rights. The rights, reservations and easements of
Declarant set forth in this Declaration, including without limitation those set forth in Article XV ,
XVI and XXII, shall be deemed excepted and reserved in each Recorded Supplemental
Declaration, in each conveyance of any interest in property by Declarant to the Association and
in each deed or other instrument by which any portion of the Property is conveyed by Declarant
or any other Owner, whether or not specifically stated therein. The rights, reservations and
easements of Declarant set forth in this Declaration shall be prior and superior to any other
provisions of this Declaration and any Supplemental Declaration and may not, without
Declarant's prior written consent, be modified, amended, rescinded or affected by any
amendment of this Declaration or any Supplemental Declaration. Declarant's consent to any
one such amendment shall not be construed as consent to any other or subsequent
amendment. The rights, reservations and easements of Declarant set forth in this Article XIX
are in addition to, and shall in no way affect or otherwise be interpreted to limit or restrict any of
the rights, reservations and easements of Declarant contained elsewhere in this Declaration or
in any Supplemental Declaration.
Section 19.2. Declarant's Rights to Complete Development. No provision of
this Declaration shall be construed to prevent or limit Declarant's rights to complete the
development, subdivision, consolidation, construction, promotion, marketing, sale and/or leasing
of all or any portion of the Property and/or the Annexation Property; to construct or alter
Improvements on any property owned by Declarant within such properties; to maintain model
homes, offices for construction, sales or leasing purposes or similar facilities on any property
owned by Declarant or owned by the Association within such properties; to post signs incidental
to the development, subdivision, consolidation, construction, promotion, marketing, sale, leasing
and/or use of such properties; or to apply for, process and receive zoning or changes in zoning
or to uses of, or changes in density of, or other changes in any land use restrictions affecting all
or any portion of the Property and/or the Annexation Property, so long as Declarant is the owner
of the property affected. Nothing contained in this Declaration shall limit the foregoing rights of
Declarant, including specifically, but not limited to the provisions of contained in Article IV and
Article VI, which provisions shall not apply to Lots owned by Declarant or to any Improvements
proposed or made by Declarant in connection with its development, construction, promotion,
marketing, sale or leasing of any Lot or Dwelling Unit or any other portion of the Property.
Section, 19.3. Construction at or Adjacent to Community and Access.
Each Owner, in purchasing or otherwise taking title to any Lot, shall do so with the express
understanding and acknowledgment that construction activity by Declarant and other third
parties or other Owners or Occupants may continue in the Community area and adjacent areas
after such; Owner has occupied the Lot and that this activity may result in noise, dust, or other
annoyances to the Owner and may limit the Owners access to portions of such Lot or other
areas adjacent thereto, and each Owner shall 'thereby accept any such inconvenience or
annoyance and expressly waive any rights, claims, or actions which the Owner might otherwise
have against Declarant or third parties (including various contractors who may be involved in
such construction activity)as a result of such circumstances.
Section 19.4 Declarant's Right to Amend Declaration. Declarant shall have
the power to amend this Declaration reserved to Declarant under Section 22.3.
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Section 19.5. Transfer of Declarant's Rights. Any or all of the rights,
reservations and easements of Declarant may be transferred to any other Person, provided that
the transfer shall not enlarge a right or reservation beyond that contained herein, and provided
further, no such transfer shall be effective unless it is in a written instrument signed by Declarant
and Recorded. Notwithstanding the foregoing, any and all rights, reservations and easements
of Declarant shall be transferred automatically (without the need of a recorded instrument) to
any successor of Declarant by merger.
ARTICLE XX
Declarant's Disclaimer of Representations;
No Covenants or Restrictions; Zoning and Plan
Section 20.1. Declarant's Disclaimer of Representations. Notwithstanding
anything to the contrary in this Declaration, Declarant makes no warranties or representations
whatsoever that the Development Plan or any other plans presently envisioned for the complete
development of the Community can or will be carried out, or that any land now owned or
hereafter acquired by Declarant is or will be subjected to this Declaration, or that any such land
(whether or not it has been subjected to this Declaration) is or will be committed to or developed
for a particular (or any) use, or that if such land is once used for a particular use, such use will
continue in effect. Nothing in this Declaration shall be construed to prevent Declarant from
modifying the Development Plan or any portion thereof as it relates to property owned by
Declarant, or from developing, dedicating or conveying portions of the Property, including
Roadways, for other uses. The Development Plan, any subdivision map for, the Project, and
any and all general plan maps or development plans or depictions of proposed improvements to
areas surrounding the Property are intended to show only the layout, location, and dimensions
of the Lots and are not intended to be andl do not constitute any representation or warranty by
Declarant. No warranty or representation, whatsoever is being made that any development plan
depictions or any other plans presently envisioned for the development of the properties
adjacent to, surrounding, or in the vicinity of Community can or will be carried out, or that any
land now owned or hereafter acquired by Declarant Is or will be subjected to this Declaration, or
that any such land (whether or not it has been subjected to the Declaration) is or will be
committed to or developed for a particular (or any) use or developed in accord with any
particular phasing plan or timetable or that if such land is once used for a particular use, such
use will continue in effect.
Section 20.2. No Express or Implied Covenants or Restrictions. Nothing in
this Declaration shall create, or be deemed to create, any express or implied covenants or
restrictions with respect to any real property, including without limitation the Annexation Property
described in Exhibit B attached hereto, not annexed hereto in the manner provided in Article
XV. Without limiting the generality of the preceding sentence, nothing in this Declaration shall
limit or restrict, or be deemed to limit or restrict, the use of any real property not annexed hereto
in the manner provided in Article XV.
Section 20.3. Zoning and Plan. Each Owner, by accepting title to a Lot and
becoming an Owner, acknowledges and is aware that the Community may be an extensive
project the development of which may extend over many years, and agrees, so long as he or
she is the Owner of the Lot, not to protest or otherwise object to: (i)zoning or changes in zoning
or to uses of, or changes in density of, the property in the Community (other than within said
Owner's Subdistrict); or (ii) changes in any conceptual or master plan, including without
limitation the Development Plan for property, in the Community (other than within said Owner's
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Subdistrict); provided, in either case, said zoning, use, density, or conceptual, development or
master plan revision is or would be lawful (including without limitation lawful by special permit,
use permit, variance or the like) and is not inconsistent with what is permitted by this Declaration
(as amended or supplemented from time to time). Anything to the contrary in this Section 20.3
notwithstanding, the provisions of this Section 20.3, shall be enforceable only to the extent not
in violation of any applicable provision of law.
ARTICLE XXI
Limitation on Declarant's Llablllt
Each Owner, by accepting title to any portion of the Property and becoming an
Owner, for itself and any Person claiming through such Owner, and others who may acquire an
interest in any portion of the Property, acknowledges and agrees that neither Declarant
(including without limitation any assignee of the interest of Declarant hereunder) nor any officer,
director, partner or shareholder of Declarant (or any partner or shareholder in any such
assignee) shall have any personal liability to the Association, or to any Owner, Member or other
Person, arising under, in connection with, or resulting from (including without limitation resulting
from action or failure to act with respect to)this Declaration or the Association.
ARTICLE XXII
Amendment
Section 22.1. Amendment to Declaration. Amendments to this Declaration
shall be made by an instrument in writing entitled "Amendment to Declaration" which sets forth
the entire amendment. Except as otherwise specifically provided in this Declaration, any
proposed amendment must be approved by a majority of the Board prior to its adoption by the
Members. Amendments may be adopted, subject to the provisions of this Article XXII, at a duly
held meeting of the Members upon the affirmative vote of Class "A" Members representing
sixty-five percent (65%) of the Class "A" voting power of the Association; provided, however,
that the approval of eligible holders of First Mortgages, hereinafter defined, on Dwelling Units
and/or Lots to which at least sixty-seven percent of the votes of Owners whose Lots and or
Dwelling Units subject to mortgages held by such eligible holders are allocated, together with
such other approval requirements as set forth in this Article, shall be required to materially
amend any provision of this Declaration, or to add any material provisions hereto, which
establish, provide for, govern or regulate any of the following: (a) voting; (b) assessments,
assessment liens or subordination of such liens; (c) responsibility for maintenance and repair of
the Project; (d) expansion or contraction of the Community or the addition, annexation or
withdrawal of property to or from the Project; (e) imposition of any right of first refusal or similar
restriction on the right of an Owner to sell, transfer, or otherwise convey his or her Dwelling Unit;
or (f) establishment of self-management by the Association. In the event that the Association
acquires Common Area in accordance with the terms of this Declaration the foregoing actions
and approvals shall be required to materially amend any provision of this Declaration, or to add
any material provisions hereto, which establish, provide for, govern or regulate any of the
following (a) reserves for maintenance, repair and replacement of the common elements; (d)
insurance or fidelity bonds; (b) right to use of the common elements; and (c) the interests in the
common elements or limited common elements. To qualify as an "eligible holder of First
Mortgage," a First Mortgagee must have made a written request to the Association for timely
written notice of proposed amendments to the Community Documents, as provided in the
Bylaws. In all events, the amendment when adopted shall bear the signature of the President or
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a vice president of the Association and shall be attested to by the secretary or an assistant
secretary of the Association, who shall state whether the amendment was properly adopted,
and shall be acknowledged by them as officers of the Association. Amendments once properly
adopted shall be effective upon Recording of the Amendment to Declaration, or at such later
date as may be specified in the amendment.
Section 22.2. Effect of Amendment. Any amendment to this Declaration
properly adopted will be completely effective to amend any and all provisions of this Declaration
which may be affected and any or all clauses of this Declaration, unless otherwise specifically
provided in the Section being amended or the amendment itself.
Section 22.3. Declarant Power to Amend; Required Approvals.
Notwithstanding the provisions of this Article XXII or any other provision of this Declaration:
(a) At all times during the Declarant Control Period, this Declaration may not
be amended by the Members pursuant to Section 22.1 without the written consent of Declarant,
which consent may be withheld for any reason in the sole and absolute discretion of Declarant.
(b) At all times during the Declarant Control Period, Declarant reserves the
right to unilaterally amend this Declaration without the approval of the Board or the Members or
any other Person; provided, however, that after the conveyance of the first Lot to an Owner
other than Declarant, any such amendment shall have no material adverse effect upon the
rights or obligations of the Owners of Lots, except as expressly permitted in this Declaration.
Nothing in this Section 22.3 shall be deemed or construed to limit or restrict the rights of
Declarant to amend and supplement this Declaration as provided elsewhere herein.
(c) Notwithstanding any provision to the contrary, this Declaration may not, at
any time, be amended without the written consent of Declarant which may be withheld in
Declarant's sole discretion to remove, revoke or modify any right or privilege of Declarant under
this Declaration or any Supplemental Declaration. This Article and, without limitation by way of
example Articles XII, XIV, XV, XVI, XVII, XIX, XX, XXI and XXIV and Sections 6.5, 7.6, 7.12,
and 9.17, may not be amended at any time (even following the Declarant Control Period)
without Declarant's recorded consent.
Section 22.4. Requested Amendment; Legislative Change. The foregoing
provisions of this Article XXII notwithstanding, and until the conveyance of all Lots in the Project,
including the Annexation Property to Persons other than Declarant, Declarant reserves the right
to unilaterally amend all or any part of this Declaration and/or the Bylaws, without the approval
of the Board or the Members or any other Person, to such an extent and with such language as
may be required by law or requested by the Federal Housing Administration ("FHA"), the
Veterans Administration ("VX), the Federal National Mortgage Association ("FNMA") or the
Federal Home Loan Mortgage Corporation ("FHLMC"), and to further amend to the extent
requested by any other federal, state or local governmental agency which requests such an
amendment as a condition precedent to such agency's approval of this Declaration or the
Project, or by any chartered lending institution as a condition precedent to lending funds upon
the security of all or any portion of the Property, including the Lots therein. It is the desire of
Declarant to retain control of the Association and its activities for so long as Declarant desires to
do so. If any amendment requested pursuant to the provisions of this Section 22.4, or if any
federal, state or other legislation hereafter enacted, diminishes or alters such control, Declarant
shall have the right to prepare, provide for and adopt, as an amendment hereto, other and
different control provisions to achieve such control or equivalent control.
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ARTICLE XXIII
Term; Termination
This Declaration shall be effective upon the date of Recordation hereof and, as
amended from time to time, shall continue in full force and effect for a term of thirty years (the
"Initial Term"), and thereafter shall continue for successive periods of fifteen years each, unless
there is an affirmative vote, not more than 360 days prior to the date otherwise scheduled for
commencement of the next extension of the term of this Declaration, to terminate this
Declaration by a vote of a majority of the Members at a duly held meeting of the Members, or
without any meeting if all Members have been duly notified and if a majority of the Members
consent in writing to such termination within said 360-day period. This Declaration may be
terminated at any time after the Initial Term upon a vote in favor of termination by ninety percent
(90%) of the Members, including Declarant, at a duly held meeting of the Members for such
purpose. Anything in the foregoing to the contrary notwithstanding, no vote to terminate this
Declaration shall be effective unless and until the written consent to such termination has been
obtained, within a period of 180 days prior to such vote to 180 days after such vote, from the
holders of Recorded First Mortgages on seventy-five percent (75%) of the Lots upon which
there are such Recorded First Mortgages. If the necessary votes and consents are obtained,
the Board shall cause to be Recorded a Certificate of Termination, duly signed by the President
or a vice president of the Association and attested by the secretary or an assistant secretary of
the Association. Thereupon, this Declaration, as of the date the next extension of the term
hereof would otherwise have commenced, shall have no further force and effect, and the
Association shall be dissolved.
ARTICLE XXIV
Claims and Litigation
Negotiation, Mediation and Arbitration
Section 24.1. Limitation on Liability. Notwithstanding anything to the contrary
in this Declaration, each Owner, by accepting title to any Lot, acknowledges and agrees that no
officer, director, partner or shareholder of Declarant (or of Declarant's successor or assignee)
shall have any personal liability to any Owner or other person, arising under, in connection with,
or resulting from (including without limitation resulting from action or failure to act with respect
to)this Declaration.
Section 24.2. Negotiation, Mediation and Arbitration.
(a) No Litigation. Except as specifically permitted in this Section no judicial
or administrative (inclusive of arbitrations) proceeding shall be commenced or maintained by
Owner. in respect of a Covered Matter. Further, no judicial proceeding shall be commenced or
prosecuted by the Association except those specifically permitted by this Section. This Section
shall not apply, however, to, and the following judicial actions are permitted by the Association:
(i) actions brought by the Association to enforce the provisions of this Declaration, the Bylaws,
the Association Rules or the Design Guidelines (including without limitation, the foreclosure of
liens) excluding those covered by the Declarant's limited warranty; (ii) the imposition and
collection of Assessments as provided in Article IX: or (iii) counterclaims brought by the
Pualani Kona 10-9-03
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Association in proceedings instituted against it. Further, the limitation on the commencement of
judicial proceedings contained in this Section 24,2(a) may not be amended except at a duly held
meeting of the Members upon the affirmative vote of Class "A" Members representing eighty-
five percent (85%) of the Class "A" voting power of the Association but in no event may the
provision be amended to permit a judicial action or proceeding against PWC.
(b) Negotiation, Mediation and Arbitration.
(1) Each Owner on behalf of Owner, Owner's successors and
assigns agree that there shall be no right to litigate in respect of the Covered Matters,
hereinafter defined, and in the event Owner or any other person with an interest in the
Community shall have any claim or cause of action arising out of or in any way related to this
Declaration (and any and all rules, regulations and Supplemental Declarations promulgated
pursuant to the foregoing, and the enforcement thereof), the design, orientation of the
improvements to the Lot (e.g., the Home and related facilities) or the Lot as they relate to
exposure to the sun and/or wind and/or adjacent properties, the development, construction,
quality, sales, marketing, disclosures concerning, financing, delivery of the Community or any
Lot, improvements to the Lot, Declarant's limited warranty, each of those items identified in the
attached limited warranty, all of which are incorporated into this Section by this reference,
Declarant's "Customer Care Program" or any other aspect of or activity with respect to the
Community or the Property (herein collectively the "Covered Matters"), against any of those
persons hereinafter defined as Covered Parties, such claim or cause of action (a "Dispute")
whether such dispute is based on contract, tort, or statute, including, without limitation, any
dispute over (1) the disposition of any deposits hereunder, (2) breach of contract, (3) negligent
or intentional misrepresentation or fraud, (4) nondisclosure, (5) breach of any alleged duty of
good faith and fair dealing, (6) allegations of latent or patent construction defects, or (7) any
other matter arising from or related to the interpretation of any term or provision of this
Declaration, or any defense going to the formation or validity of this Declaration, or any
provision of this Declaration, including, without limitation, allegations of unconscionability, fraud
in the inducement, or fraud in the execution, whether such dispute arises before or after the
close of escrow, shall be arbitrated pursuant to the Federal Arbitration Act and subject to the
procedures set forth in this Section ("Arbitration" or "arbitration"), after it shall have first been
submitted to the process of "Negotiation" and "Mediation" defined and described below. Any
such claim or cause of action shall be subject to Negotiation, Mediation and Arbitration
regardless of whether the claim is against another Owner, Declarant, PWC, Declarant's real
estate broker, agent or attorney, the architects, engineers, or other design consultants for the
Community, the contractor, subcontractors, sub-subcontractors, material suppliers, managing
agent or other persons involved with the Community, and their respective officers, directors,
agents, servants, employees or representatives, and each of those persons or entities
described in Declarant's limited warranty (the "Covered Parties"), provided that such person(s)
has entered into an agreement or otherwise agree to negotiate, mediate and/or arbitrate such
disputes; or if such claim or cause of action is filed jointly and severally against other parties, it
shall be subject to mediation and arbitration with respect to those parties that have agreed to
arbitration, regardless or whether other parties are bound to or are willing to submit to arbitration
as herein provided. Any dispute concerning the interpretation or the enforceability of this
Section, including, without limitation, its revocability or voidability for any cause, any challenges
to the enforcement or the validity of this Declaration, or this Section, or the scope of arbitrable
issues under this Section, and any defense relating to the enforcement of this Section,
including, without limitation, waiver, estoppel, or laches, shall be decided by an arbitrator in
accordance with this Section and not by a court of law. Further, in the event that a Dispute is
raised between the parties after an Owner's acquisition of the Owner's Property (sometimes a
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Post-closing dispute"), whether such Dispute is related to, or arises from, an act, omission or
other event occurring prior to such acquisition, such Dispute shall be decided by an arbitrator in
accordance with this Section and not by a court of law.
(2) In respect of all Covered Matters, the Owner agrees to participate
in a period of good faith negotiation (the "Negotiation"). Each Owner recognizes that the
Negotiation process must be completed before the Mediation and/or Arbitration process
described in this Section can begin. As such, the claimant Owner must first give written notice
to the Covered Party describing the nature of the Dispute and a description of what the Owner
believes ought to be done to resolve the Dispute. Owner must also propose a date and time for
a conference, which date must fall on a business day between fifteen (15) and twenty (20) days
after the date the claimant sends the foregoing notice to the Covered Party (the "Conference"),
unless mutually extended by the parties. The Conference shall be held at a mutually agreed-
upon location. Within five business (5) days of this Conference notice, the Covered Party shall
provide a follow-up notice to the claimant confirming the time of the Conference and stating the
name and title of Covered Party's representative to the Conference. Prior to the Conference,
claimant will, in good faith, discuss with the Covered Party's representative and consider
possible resolutions of the claim. At the Conference, the claimant (and claimant's
representatives, if any) and Covered Party's representatives shall confer together to resolve the
Dispute for a maximum period of two (2) hours, although the parties may extend or adjourn the
meeting by mutual agreement. If, as a result of the Conference, the Dispute or certain issues in
the Dispute have been resolved, the parties shall jointly state in writing the issues that have
been resolved and the issues, if any, that remain unresolved and will require Mediation and
Arbitration.
(3) In the event that the parties have completed Negotiation as
required by this Section but failed to resolve the entire Dispute, then, if either of the parties
wishes to pursue the Dispute further, the unresolved aspects of the Dispute shall be resolved, if
possible, by mediation conducted with the assistance of a single mediator approved by
Construction Arbitration Services, Inc. (hereinafter, "CAS") in accordance with its rules or the
rules of the approved mediator in effect at the time of the initiation of the mediation (the
"Mediation"). Any counterclaim a Covered Party may have against a claimant shall also be a
subject of (and an attempt shall be made to resolve the same in the context of and by)
Mediation. Any Mediation shall be conducted in the County where the Property is located. The
parties shall share equally the expense of the mediator.
(4) In the event that the parties have completed Negotiation and
Mediation as required by this Section but failed to resolve the claim, then, if any one of the
parties wishes to pursue the Dispute further, the unresolved aspects of the Dispute shall be
submitted to binding arbitration by and pursuant to the rules of CAS in effect at the time of the
initiation of the arbitration. Notwithstanding the foregoing, no arbitration may be commenced
until Declarant is provided access to the Home or common area which is subject to the Dispute
and a reasonable opportunity to cure the alleged defect as permitted under Section 16.9 of this
Declaration. Declarant shall be provided a minimum of thirty (30) days to exercise its right to
repair or remedy any alleged defect or damage, without a waiver of any right by Declarant to
seek recovery of the cost of such effort, following notice of the claimant's intent to proceed to
arbitration of a Dispute. Any counterclaim a Covered Party may have against a claimant shall
also be resolved in the context of and by Arbitration. In the event an arbitration under this
provision involves the PWC as the administrator of Declarant's limited warranty, and CAS is
unwilling or unable to serve as the arbitrator, then PWC shall be entitled to select another
reputable arbitration service, at its sole discretion, at the time the request for arbitration is
Pualanj Kona 10-9-03
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submitted. In the event that PWC selects an alternate arbitration service, the rules and
procedures of such arbitration service in effect at the time the request for arbitration is submitted
shall be followed. The following provisions shall apply to any arbitration commenced by the
parties:
(a) Each Owner, the Association and Declarant expressly
agree and acknowledge that this Declaration involves and concerns interstate commerce and is
governed by the provisions of the Federal Arbitration Act (9 U.S.C. §1, et seq.) now in effect and
as the same may from time to time be amended, to the exclusion of any different or inconsistent
state or local law, ordinance, regulation, or judicial rule. Accordingly, any and all Disputes shall
be arbitrated — which arbitration shall be mandatory and binding — pursuant to the Federal
Arbitration Act. To the extent that any state or local law, ordinance, regulation, or judicial rule
shall be inconsistent with any provision of the rules of the arbitration service under which the
arbitration proceeding shall be conducted, the latter rules shall govern the conduct of the
proceeding.
(b) This Section shall inure to the benefit of, and be
enforceable by, Declarant's subcontractors, agents, vendors, suppliers, design professionals,
insurers and any other person(s)whom Owner contends is responsible for any alleged defect in
or to the Property or the Home or Residence or any improvement or appurtenance thereto.
(c) In the event any Dispute is submitted to arbitration, each
party shall bear its own attorneys' fees and costs (including expert costs)for the arbitration.
(d) The decision of the arbitrator shall be final and binding.
Owner, the Association and Declarant expressly agree that an application to confirm, vacate,
modify or correct an award rendered by the arbitrator shall be filed in any court of competent
jurisdiction in the county in which the Property is located.
(e) The participation by any party in any judicial proceeding
concerning this Section or any matter arbitrable hereunder shall not be asserted or accepted as
a reason to delay, to refuse to participate in, or to refuse to enforce this Section. Any
counterclaim a Covered Party may have against a claimant shall also be resolved in the context
of and by Arbitration.
M Except as otherwise agreed by the parties pursuant to
Declarant's limited warranty or as required by applicable law, the administration and/or arbitrator
fees charged by the arbitration service shall be borne pro rata by the parties to the arbitration;
provided, however, the administration and/or arbitrator fees and any other fees and costs of the
arbitration shall ultimately be borne as determined by the arbitrator.
impartial individual. (g) The arbitrator appointed to serve shall be a neutral and
(h) The venue of the arbitration shall be in the county where
the Property is located unless the parties agree in writing to another location. To the extent
permitted by the Federal Arbitration Act, no punitive damages shall be awarded in any claim
against Declarant or any other Covered Parties, and no award for damages attributable to
emotional distress or a multiple of actual damages based upon any theory of law may be made
or awarded in any claim against or Dispute involving Declarant or any of the other Covered
Parties, all of which are expressly waived by the Association and each Owner. No award of
Pualani Kona 10-9-03
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consequential or incidental damages, as defined in the Declarant's limited warranty, shall be
awarded. The arbitrator may award equitable relief pursuant to any Arbitration instituted to
enforce this Declaration or any Supplemental Declaration.
(i) If any provision of this Section shall be determined to be
unenforceable or to have been waived, the remaining provisions shall be deemed to be
severable therefrom and enforceable according to their terms.
(j) In the event the foregoing arbitration provision is held not
to apply or is held invalid, void or unenforceable in its entirety for any reason, Owner, the
Association and Declarant agree that all Disputes shall be tried before a judge in a court of
competent jurisdiction without a jury. The judge in such court of competent jurisdiction shall
have the power to grant all legal and equitable remedies and award compensatory damages.
Declarant, the Association and Owner each hereby waive and covenant not to assert their
constitutional right to trial by jury of any Disputes, including, but not limited to, Disputes relating
to construction defects, misrepresentation or Declarant's failure to disclose material facts.
Declarant, the Association and Owner hereby covenant and agree that their mutual waiver of
jury trial shall be binding upon their respective successors and assigns and upon all persons
and entities asserting rights or claims or otherwise acting on behalf of Declarant or Owner or
their successors and assigns,
(5) Notwithstanding the provisions of this Section, the Declarant may
proceed by litigation, in connection with: (i) the imposition and collection of assessments by the
Declarant under the terms of this Declaration and Supplemental Declaration and/or duly
adopted Design Guidelines, including foreclosure actions necessitated by the failure of an
Owner to pay the required assessments; or (ii) counterclaims brought by the Declarant in
proceedings instituted against it.
ARTICLE XXV
General Provisions
Section 25.1. Notice. Notices to the Association provided for in this
Declaration, the Bylaws, Association Rules or Design Guidelines shall be in writing and shall be
addressed to the Association at the address specified in the Bylaws or as provided in this
Section 25.1. The Association may from to time designate a different address or addresses for
notice by giving written notice of such change of address to all Owners. If notice of any action
or proposed action by Declarant, the Association, the Board or any committee or of any meeting
is required by applicable law, this Declaration or resolution of the Board to be given to any
Owner or Occupant then, unless otherwise specified herein or in the resolution of the Board,
such notice shall be considered delivered and effective upon personal delivery, or three days
after posting, when sent by certified mail, to the address of such Owner on file in the records of
the Association at the time of such mailing. This Section 25.1 shall not be construed to require
that any notice be given if not otherwise required and shall not prohibit satisfaction of any notice
requirement in any other manner. General notices to all Owners or any classification thereof
need not be certified, but may be sent by regular first class mail.
Section 25.2. Captions; Construction. Captions given to various Articles and
Sections are for convenience only and are not intended to modify or affect the meaning of any
of the substantive provisions hereof. The provisions of this Declaration shall be liberally
Pualani Kona 10-9-03
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Page 55
construed to effectuate its purpose of creating a uniform plan for the development and operation
of the Property as hereinabove set forth.
Section 25.3. Severability. If any provision of this Declaration, the Articles,
Bylaws, Association Rules or Design Guidelines, or any section, clause, sentence, phrase or
word, or the application thereof in any circumstance, is held invalid, the validity of the remainder
of this Declaration, the Articles, Bylaws, Association Rules or Design Guidelines, and of the
application of any such provision, section, sentence, clause, phrase or word in any other
circumstances, shall not be affected thereby, and the remainder of this Declaration, the Articles,
Bylaws, Association Rules or Design Guidelines shall be construed as if such invalid part were
never included therein.
Section 25.4. Rule Against Perpetuities. If any of the options, privileges,
covenants or rights created by this Declaration shall be unlawful, void or voidable for violation of
the rule against perpetuities, then such provision shall continue until twenty one years after the
death of the survivor of the now living descendants of the late Joseph Patrick Kennedy.
Section 25.5. Mortgage of Lots and Parcels. Each Owner shall have the
right, subject to the provisions hereof, to make separate Mortgages for such Owner's respective
Lot. No Owner shall have the right or authority to make or create or cause to be made or
created any Mortgage, or other lien or security interest, on or affecting the Property or any part
thereof, except only to the extent of such Owner's Lot.
Section 25.6. Power of Attorney. Unless otherwise specifically restricted by
the provisions of this Declaration, in any instance in which the Association or Declarant is
empowered to take any action or do any act, which may at any time be deemed to require the
act of an Owner or Member, the Owners and Members and each of them hereby constitute and
appoint the Association or Declarant, as appropriate, as their attorney-in-fact for the purposes of
taking such action or doing such acts including but not limited to executing, acknowledging and
delivering any instruments or documents necessary, appropriate or helpful for such purposes. It
is acknowledged that this power of attorney is irrevocable and coupled with an interest and by
becoming an Owner or a Member of the Association or by the acceptance of a deed for a Lot or
by signing a contract for purchase of a Lot or by succeeding in any other manner to the
ownership of a Lot, or any interest therein, or a Membership in the Association, each Owner and
Member shall be deemed and construed to have ratified and expressly granted the above power
of attorney.
Section 25.7. Gender and Number. Masculine, feminine and neuter
references herein, whether singular or plural, each shall include the others as the context
requires.
Section 25.8. Interpretation. Except for judicial construction, the Association,
by its Board, shall have the exclusive right to construe and interpret the provisions of this
Declaration. In the absence of any adjudication to the contrary by a court of competent
jurisdiction, the Association's construction or interpretation of the provisions hereof shall be final,
conclusive and binding as to all persons and property benefitted or bound by the provisions
hereof.
Section 25.9. References to Declaration in Deeds. Deeds to and instruments
affecting any Lot or any part of the Property may contain the provisions herein set forth by
reference to this Declaration; but regardless of whether any such reference is made in any deed
Pualad Kona 10-9-03
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or instrument, all of the provisions hereof shall be binding upon the grantee-Owner or other
person claiming through any instrument and such person's heirs, executors, administrators,
successors and assigns as though set forth in full in such instrument.
Section 25.10. Incorporation of Exhibits. The exhibits as they may be
amended from time to time in accordance with this Declaration, are incorporated into this
Declaration by this reference.
Section 25.11. Roadways. Each Owner shall have a non-exclusive right to
enter upon and use for ingress and egress purposes the roadway lots (hereinafter the
"Roadway" or "Roadways") within the Community described in Exhibit A attached hereto.
Such right of entry shall automatically terminate upon dedication of the Roadway to the County,
the State of Hawaii or any other governmental authority. Declarant hereby discloses and each
Owner acknowledges that Declarant intends to use the Roadway to conduct and perform its
construction and sales activities within the Community until all of the homes and improvements
have been completed and sold, respectively, and the Roadway will be used for access purposes
by other Owners in the Community. These activities may result in noise, vibration and other
nuisances and hazards, including traffic congestion and temporary impairment of access to
portions of the Project, and each Owner covenants that he, she or they assume all risks
associated with each Owner's use of the Roadway. Until the Roadway is dedicated as
aforesaid, (a) the provisions of the Declaration shall apply to and govern each Owner's use of
the Roadway, and (b) each Owner shall indemnify and hold harmless the Declarant, its
successors and assigns, from and against any and all claims and demands for damages made
by, through or under such Owner in connection with the right of entry granted by Declarant to
such Owner pending dedication as aforesaid.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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DECLARANT has duly executed this Declaration as of the date first referenced
above.
D.R. HORTON — SCHULER HOMES, LLC,
a Delaware limited liability company,
dba Schuler Homes
By VERTICAL CONSTRUCTION CORPORATION,
a Delaware corporation,
Its Manager
By
ffichael T. Jones
Its Executive Vice Fr1resident
Deciarant
Puaiani Kona 10-9-03
22594-174!282690.9 Page 58
STATE OF HAWAII
SS:
CITY AND COUNTY OF HONOLULU
On this day of OCT 2 0 2003 _, 2003, before me personally
appeared MICHAEL T. JONES, to me personally known, who, being by me duly sworn or
affirmed, did say that such person(s), and if applicable, in the capacities shown, having been
duly authorized to execute such instrument in such capacities.
\N F F-1
Notary Public, Stafe' of Hawaii
Type or print name: cv1r;si-ine Ellizaide
My commission expire^:
AUG 1 2 2005
*6.t
ii;Wi WOO '
Pualani Kona 10-9-03
22594.174/282690,9 Page 59
EXHIBIT A
[LEGAL DESCRIPTION OF PROPERTY]
PARCEL FIRST (Phase 1)
All of those certain parcels of land situate between Hawaii Belt Road (Queen
Kaahumanu Highway Extension) and about 1000 feet West of Hualalai Road at Puapuaaiki and
Puapuaanui, North Kona, Island of Hawaii, State of Hawaii, being Lots 1 through 127, inclusive,
of the "Pualani Estates Subdivision, Phase 1", as shown on File Plan 2352, filed in the Bureau
of Conveyances of the State of Hawaii.
Being a portion of the premises acquired by that certain deed dated October 19, 2001,
recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2001-176108.
PARCEL SECOND (Road Widenina Lot)
All of that certain parcel of land situate between Hawaii Belt Road (Queen Kaahumanu
Highway Extension) and about 1000 feet West of Hualalai Road at Puapuaaiki and Puapuaanui,
North Kona, Island of Hawaii, State of Hawaii, being Lot 128, of the "Pualani Estates
Subdivision, Phase 1", as shown on File Plan 2352, filed in the Bureau of Conveyances of the
State of Hawaii.
Being a portion of the premises acquired by that certain deed dated October 19, 2001,
recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2001-176108.
PARCEL THIRD (Community Park Lot)
.............. ......-
All of that certain parcel of land situate between Hawaii Belt Road (Queen Kaahumanu
Highway Extension) and about 1000 feet West of Hualalai Road at Puapuaaiki and Puapuaanui,
North Kona, Island of Hawaii, State of Hawaii, being Lot 129, of the "Pualani Estates
Subdivision, Phase 1", as shown on File Plan 2352, filed in the Bureau of Conveyances of the
State of Hawaii.
Being a portion of the premises acquired by that certain deed dated October 19, 2001,
recorded in the Bureau of Conveyances of the State of Hawaii as Document No, 2001-176108.
PARCEL FOURTH (Phase 1 Roadways)
All of those certain parcels of land situate between Hawaii Belt Road (Queen
Kaahumanu Highway Extension) and about 1000 feet West of Hualalai Road at Puapuaaiki and
Puapuaanui, North Kona, Island of Hawaii, State of Hawaii, being Lots 132 through 141,
inclusive, of the "Pualani Estates Subdivision, Phase I", as shown on File Plan 2352, filed in the
Bureau of Conveyances of the State of Hawaii.
Being a portion of the premises acquired by that certain deed dated October 19, 2001,
recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2001-176108.
Pualani Kona 10-9-03
22594-174/282690.9 Page 1
EXHIBIT B
[ANNEXATION PROPERTY]
All of that certain parcel of land situate between Hawaii Belt Road (Queen Kaahumanu
Highway Extension) and about 1000 feet West of Hualalai Road at Puapuaaiki and Puapuaanui,
North Kona, Island of Hawaii, State of Hawaii, being Lot 131, of the "Pualani Estates
Subdivision, Phase 1", as shown on File Plan 2352, filed in the Bureau of Conveyances of the
State of Hawaii.
Being a portion of the premises acquired by that certain deed dated October 19, 2001,
recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2001-176108.
Pualani Kona 10-9-03
22594-174!282690.9 Page 1
WE have contracted with PWC for certain administrative services relative to this LIMITED WARRANTY. PWC's
sole responsibility is to provide administrative services. Under no circumstances or conditions is PWC responsible
for fulfilling OUR obligations under this LIMITED WARRANTY,
If any provision of this LIMITED WARRANTY is determined to be unenforceable, such a determination will not
affect the remaining provisions. If this LIMITED WARRANTY or any provision herein is determined to be
unenforceable as to a HOMEOWNERS ASSOCIATION or a specific HOMEOWNER,such a determination will not
affect the enforceability of this LIMITED WARRANTY or such provision as to any other HOMEOWNERS
ASSOCIATION or any other HOMEOWNER. The issue of enforceability, as well as all other issues, will be
determined by Binding Arbitration as provided for in this LIMITED WARRANTY.
1. Coverage Limit
The amount shown on the Limited Warranty Validation Form is OUR limit of liability. It is the most WE will pay or
expend for all covered CONSTRUCTION DEFECTS regardless of the number of requests for warranty
performance made against this LIMITED WARRANTY. Once OUR limit of liability has been paid, no further
requests for warranty performance can be made against this LIMITED WARRANTY or any other PWC
administered Builder's Limited Warranty issued for the HOME or the COMMON ELEMENTS.
11. Warranty Coverage
v rageun grthis L ITE WAR FANTYi ex resslylmiiDdtoCON UG'TIOI1 DEFECTS which occur uring
e 3AN�Y P to i icated on th L' it d V/ar,antyrY*datii Form and are raport U in
�d to
ntyD
ccor e with the ot tio requ rem nt 0 Sel tion VII Pro odftelt RaquestUSToFerfo n rThIs
TED W RA Y.
rag D ring the WA R Tl� RI indiat cd or the Limite WMaIrranty Vali atio Form that is
, LI�j IV V
tac and m de of hi ARRANT , W warra t he an the
OM ON EM 1S?iIbefeeofCOqSiTRJCTIOND E �TS. To e ligible for cov rage
U o t e alleged CO LE A=IQN DEFECT as soon as it
OF
must receive written tice ram e
is reasonably possible after YOU have become aware or should have become aware of a
CONSTRUCTION DEFECT but in no event later than thirty(30) days after the expiration of the
coverage.
Ill. OUR Coverage Obligations
All notices of alleged CONSTRUCTION DEFECTS, and complaints under this LIMITED WARRANTY must be
made by YOU in writing. Telephonic or face-to-face discussion will not protect YOUR rights under this LIMITED
WARRANTY (see Section VII, Procedure to Request US To Perform Under This LIMITED WARRANTY).
In the event YOU allege a CONSTRUCTION DEFECT occurs during the WARRANTY PERIOD, upon receiving
written notice from YOU, WE,or a third party designated by US or acting on OUR behalf, will inspect, investigate
and/or test (including destructive testing) the alleged CONSTRUCTION DEFECT to determine if a
CONSTRUCTION DEFECT exists. Upon confirmation of a CONSTRUCTION DEFECT, WE, or a third party
designated by US or acting on OUR behalf, will (1) repair or replace the CONSTRUCTION DEFECT, (2) pay to
YOU the actual amount it would cost US to repair or replace the CONSTRUCTION DEFECT or(3)PAY to YOU an
amount equal to the diminution in fair market value caused by the CONSTRUCTION DEFECT. The decision to
repair, replace, or to make payment to YOU is at OUR or OUR authorized representative's sole option.
WE will have been considered to have breached this LIMITED WARRANTY only if WE fail to resolve a
CONSTRUCTION DEFECT in accordance with the terms and conditions of this LIMITED WARRANTY.
PWC FORM NO. 117 Sample Rev.05/02 2
A. Standards By Which the Presence of a CONSTRUCTION DEFECT Will Be Determined
in the event YOU believe that a flaw in the HOME or the COMMON ELEMENTS constitutes a
CONSTRUCTION DEFECT, the following factors will be considered by US in determining whether the
condition constitutes a CONSTRUCTION DEFECT. Should either YOU or WE elect to initiate binding
arbitration, these factors will be considered by the arbitrator in rendering a decision:
1. Any performance standards or guidelines or other documents or manuals that contain OUR
building standards,that were provided to YOU at or prior to closing on the HOME,or in the case of
the HOMEOWNERS ASSOCIATION, prior to transferring title to all the COMMON ELEMENTS.
Absent such standards, the Residential Construction Performance Guidelines published by the
National Association of Home Builders, in effect at the time of closing on the HOME,or in the case
of the HOMEOWNERS ASSOCIATION, at the time of transferring title to all the COMMON
ELEMENTS shall apply. Absent a specific standard in the documents identified above, building
practices and standards in use in the region of the country in which the HOME or the COMMON
ELEMENTS are located shall apply;
2. Consideration as to whether the magnitude of the flaw or imperfection:
• materially affects the structural integrity of the HOME or COMMON ELEMENTS; or
• has an obvious and material negative impact on the appearance of the HOME or COMMON
ELEMENTS; or
•jeopardizes the life or safety of the occupants; or
inabilit HO V1 he a'� OM ELEMEN-3 to piuvide he
* result
nctio s that d�n reasonably 9 xpectebinsuch A,HOM orCOMMON ELEMENT.
3. Consi era n a tow ethe a o dit' )n isithe resul;or 11 vear and tear(c)nditi re
orm I w a an tea-. or re au )d t y r ormal.3wear nd tear are not C ONST]RUCTI N
E CT
rt e dltion�va causedby,orin�anyway resuje from,thefail re
of OME OWNER SOCIATIOR tn nprfnrrn n e
maintenance (any condition that is determined to be a HOMEOWNER or HOMEOWNERS
ASSOCIATION maintenance issue, or any condition that results from improper or inadequate
HOMEOWNER or HOMEOWNERS ASSOCIATION maintenance, is not a CONSTRUCTION
DEFECT);
5. Consideration as to whether the condition was caused by the HOMEOWNER or HOMEOWNERS
ASSOCIATION or their representatives,other than US,after the HOMEOWNER took possession
of the HOME or the COMMON ELEMENTS(WE and YOU conducted a walk through inspection
just prior to closing on the HOME. Damage that was caused by YOU or YOUR representatives is
not a CONSTRUCTION DEFECT,for example, a large,visible scratch on marble the in the entry
foyer that was not noted in the walk through inspection, but was reported after furniture was
moved into the HOME, will not be considered a CONSTRUCTION DEFECT);
6. Recognition that any condition resulting directly or indirectly from or worsened by changes,
additions, alterations or other actions or omissions by the HOMEOWNER or HOMEOWNERS
ASSOCIATION or their agents, other than US, will not be considered a CONSTRUCTION
DEFECT (this includes changes to the topography, drainage or grade of the property);
7. Any Exclusions contained in this LIMITED WARRANTY.
PWC FORM NO. 117 Sample Rev.05/02
IV. Homeowner Maintenance Obligations
Maintenance of the HOME and the COMMON ELEMENTS is YOUR responsibility. All homes and common
elements require periodic maintenance to prevent premature deterioration,water intrusion and to ensure adequate
performance of the SYSTEMS.WE will make a"Homeowner Maintenance Manual"or similar publication available
to YOU upon request. Whether from this document or others that are readily available to YOU, YOU must
understand and perform the maintenance that the HOME and COMMON ELEMENTS require.As stated in other
sections of this LIMITED WARRANTY,WE are not responsible for HOME or COMMON ELEMENTS maintenance
issues or for damage that results from YOUR failure to maintain the HOME or the COMMON ELEMENTS,
V. Coverage Limitations
When WE or a third party designated by US or acting on OUR behalf, repair or replace a CONSTRUCTION
DEFECT the repair or replacement will include the repair or replacement of only those surfaces, finishes and
coverings that were damaged by the CONSTRUCTION DEFECT that were part of the HOME or the COMMON
ELEMENTS when title was first transferred by US. Surfaces, finishes and coverings that require repair or
replacement in order for US or a third party designated by US to repair or replace CONSTRUCTION DEFECTS will
be rep�J�ror replaced. The extent of e repair and re lacement of these surfaces,finishes or coverinas will b to
e r air and lac
xi
J_ to
I r
app -a y esame onditi nthey verein riortothe(',OIISTRUCTI DE FEC' but not nocessarily to a Ike
no co n.
CT'
W n repain r rep cin Urfa es,f nish s the
ac erings, he rGQ or r la coment will attei npt to ac iev as
' v a
closematch 'th t e o igi al rrotindir a Jas. is reasonably Dpo ible, but an exact inatch nno be
r_
9 ee uet s chf sAs adi ig,a 'ng an navaill ility sane mat ials.
UC ION PIE Et'. e ist le
In e case w r a C I a thd HOME is rendered�Uni habitable Sand 9
-*r4p Pr ro 1—eftr of
CO 0 . — d th air , eplacements IWO file UCI 11
the HOMEOWNER'S alternative shelter until the HOME is made habitable.
V1. Exclusions
A. This LIMITED WARRANTY does not cover:
1 Any CONSTRUCTION DEFECTS or other damages resulting, either directly or indirectly, from the
following causes or occurring in the following situations:
a. Fire;
b. Lightning;
C. Explosion;
d. Riot And Civil Commotion;
e. Smoke;
f. Hail;
9. Aircraft;
h. Falling Objects;
i. Vehicles;
j. Floods;
k. Earthquake;
1. Landslide or mudslide originating on property other than the site of the HOME or the COMMON
ELEMENTS or other property developed by the BUILDER;
M. Mine subsidence or sinkholes;
PWC FORM NO. 117 Sample Rev.05102 4
n. Changes in the underground water table not reasonably foreseeable by the BUILDER;
0. Volcanic eruption; explosion or effusion;
P. Wind including:
(i). Gale force winds;
(ii). Hurricanes;
(iii), Tropical storms;
(iv). Tornadoes;
q. Insects, animals or vermin;
r. Changes of the grading of the ground by anyone other than US or OUR agents,or subcontractors
which results in surface drainage towards the HOME or other improper drainage or permits water
to pond or become trapped in localized areas against the foundation or otherwise;
S. Changes, additions, or alterations made to the HOME or the COMMON ELEMENTS by anyone
after the WARRANTY PERIOD begins, except those made or authorized by US;
t. Any defect in material or workmanship supplied by anyone other than US or OUR agents, or
subcontractors;
U. Improper maintenance,negligence or improper use of the HOME or the COMMON ELEMENTS
by YOU or anyone other than US that results in rot, dry rot, moisture, rust, mildew or any other
damage;
V. Dampness or condensation due to YOUR failure to maintain adequate ventilation;
W. Damage resulting from the weight and/or performance of any type of waterbed or other
furnishings which exceeds the load-bearing design of the HOME or the COMMON ELEMENTS;
Normal ear nd tea or nor al error do o ma erg ;
Econo is da gesdietoth H ME'S c rhe COMMON LEMEN'rs,failure to meet consu er
xpe I.11 S.
MON
D
2. Any cos ari ing f o ,or ny ON R CT )NCEFSCTrIesultin rofn the actual,alle;edorthreate ed
ill L4 t r
arg , d' per , elea e c r es� f ILL T NTS. ill no-cov r costs o axpe ses arising
!Sir
ro the n' habitability of e HOA or th M 0 ELEMENTS or healt I to the of
s r.
.ction v.r m
s s re
P LLU A TS. ill no c)ver ts, r xpe ;I silting from tie direction e ny governme al
0 t an-up, E, i on XLUTANTSi
3. Any costs arising from, or any CONSTRUCTION DEFECT resulting from the effects of electromagnetic
fields (EMF's)or radiation;
4. Any damage to personal property that does not result from a CONSTRUCTION DEFECT;
5. Any"CONSEQUENTIAL OR INCIDENTAL DAMAGES";
6. Any damage to CONSUMER PRODUCTS;
7. Any CONSTRUCTION DEFECT as to which YOU have not taken timely and reasonable steps to protect
and minimize damage after WE or OUR authorized representative have provided YOU with authorization to
prevent further damage;
8. Any damage to the extent it is incurred after or as a result of YOUR failure to notify US in a reasonably
timely manner after YOU have become aware or should have become aware of the CONSTRUCTION
DEFECT or condition causing such damage.
9. Any costs or obligations paid or incurred by YOU in violation of Section VII, C. below;
10. Any non-conformity with local building codes, regulations or requirements that has not resulted in a
CONSTRUCTION DEFECT. While WE acknowledge OUR responsibility to build in accordance with
applicable building codes, this LIMITED WARRANTY does not cover building code violations in the
absence of a CONSTRUCTION DEFECT;
PWC FORM NO. 117 Sample Rev.05/02 5
11. Any deviation from plans and specifications that has not resulted in a CONSTRUCTION DEFECT.
B. OUR LIMITED WARRANTY does not cover any CONSTRUCTION DEFECT which would not have
occurred in the absence of one or more of the excluded events or conditions listed in Exclusions, Section
VI. A.1 a.—A.1.q., A.2. or A.3. above, regardless of:
1. the cause of the excluded event or condition; or
2. other causes of the loss or damage; or
3. whether other causes acted concurrently or in any sequence with the excluded event or condition to
produce the loss or damage.
VII. Procedure to Request US To Perform Under
This LIMITED WARRANTY
If YOU become aware of a condition that YOU believe is a CONSTRUCTION DEFECT under this LIMITED
WARRANTY, YOU have the following responsibilities:
A. No n
U m s otify Sin a soon sit Ay p oss ible '- 'YO ha/e be come awa,e or ve
ome eo aC !�IfON EF ut i1I no 4 It'tn
be We it Y U I ril',en n)tice of a C ONS TION
0
DE CTorY R wr' en e u for
'arra ian c e b pos asked YO
r r"N)d by USI ter than thirty 30)
days this LI IT D A RA Y as i ir
If t ewr noti i po dor eiv d y m:)re I la thi C(30)days4ter the expir i of ID
W RANTY, E hall ave ob do to rem dy the C NS UCTION IVEFECT. In r t a
notice
s ou
record o Imely noti ication, W recommend t a wrilien— e uld always-5—esent
receipt requested.
B. Cooperate With US
YOU must give US and any third parties acting on OUR behalf reasonable help in inspecting, investigating,testing
(including destructive testing),monitoring,repairing,replacing or otherwise correcting an alleged CONSTRUCTION
DEFECT. Help includes,but is not limited to,granting reasonable access to the HOME or COMMON ELEMENTS
for the forgoing purposes. If YOU fail to cooperate or provide such reasonable access to the HOME or COMMON
ELEMENTS, WE will have no obligation to do any of the foregoing.
C. Do Not Make Voluntary Payments
YOU agree not to make any voluntary payments or assume any obligations or incur any expenses for the remedy of
a condition YOU believe is a CONSTRUCTION DEFECT without prior written approval from US,or other parties
authorized to act on OUR behalf. WE will not reimburse YOU for costs incurred where YOU did not obtain prior
written approval.
However, YOU may incur reasonable expenses in making repairs in an EMERGENCY CONDITION without prior
written approval, provided the repairs are solely for the protection of the HOME or COMMON ELEMENTS from
further damage or to prevent an unsafe living condition and provided YOU notify US as soon as is reasonably
possible. To obtain reimbursement for repairs made during an EMERGENCY CONDITION,YOU must provide US
with an accurate written record of the repair costs.
PWC FORM NO. 117 Sample Rei•.05/02 6
D. Sign A Release
When WE or a third party designated by US or acting on OUR behalf have completed repairing,replacing or paying
YOU as to any CONSTRUCTION DEFECTS or other related damage to the HOME or the COMMON ELEMENTS
covered by this LIMITED WARRANTY. YOU must sign a full release of OUR obligation for the CONSTRUCTION
DEFECTS. The release shall be applicable to the CONSTRUCTION DEFECTS and shall not prevent YOU from
notifying US should YOU become aware of a subsequent CONSTRUCTION DEFECT.
E. If YOU Disagree With US
If YOU believe WE have not responded to YOUR request for warranty performance to YOUR satisfaction or in a
manner that YOU believe this LIMITED WARRANTY requires, YOU may provide written notice to PWC requesting
Mediation. Upon PWCs receipt of written notice from YOU, PWC may review and mediate YOUR request by
communicating with YOU, US, and any other individuals or entities that PWC believes may possess relevant
information. If after forty-five (45) days, PWC is unable to successfully mediate YOUR request for warranty
performance, or at any earlier time when PWC determines that YOU and WE are at an impasse, PWC will notify
YOU that YOUR request for warranty performance remains unresolved and that YOU may elect to initiate Binding
Arbitration. Binding Arbitration as described in the following section is the sole remedy for the resolution of disputes
between YOU and US as set forth in the following section.
Bir in i rat on e 4 ruT?
An dis e een U nd S,or art s t* 9 01 JR eha ,in Judi g I'WC,related to r aris n from this
An dis e een 0 nd S ,gn
from this
Ll TED WA ANT th esig or c)ns cti O?f e� 0 E or CO MON El EMENTS or the sale of the
IOM f L� e
HOM transfe of ifle t t C M E wi I bE resolved1b ind ng a bitration. ffindin ion
the sole i t tiv
t
r r
the sol �d y for re'so, in an nd al spu�es be en YOU a id R repr sentatives.
s re e 0
Ij puts
jest
0 in
i it
ot
Di pute jec indi' itrati n iclu but r not Gm ted t
3 r I
AnyIs me M
ny isagreemen t a a con itioK—in the or the Mt:N1S is a
CONSTRUCTION DEFECT and is therefore covered by this LIMITED WARRANTY;
B. Any disagreement as to whether a CONSTRUCTION DEFECT has been corrected in compliance
with this LIMITED WARRANTY;
C. Any alleged breach of this LIMITED WARRANTY;
D. Any alleged violation of consumer protection, unfair trade practice, or any other statute;
E. Any allegation of negligence, strict liability, fraud, and/or breach of duty of good faith, and any
other claims arising in equity or from common law;
F. Any dispute concerning the issues that should be submitted to binding arbitration;
G. Any dispute concerning the timeliness of OUR performance and/or YOUR notifications under this
LIMITED WARRANTY;
H. Any,dispute as to the payment or reimbursement of the arbitration filing fee;
I. Any dispute as to whether this LIMITED WARRANTY,or any provision hereof, including,but not
limited to any waiver hereunder, is unenforceable;
J. Any other claim arising out of or relating to the sale,design or construction of YOUR HOME or the
COMMON ELEMENTS, including, but not limited to any claim arising out of,relating to or based
PWC FORM NO. 117 Sample Rev.05/02 7
on any implied warranty or claim for negligence or strict liability not effectively waived by this
LIMITED WARRANTY,
The arbitration shall be conducted by Construction Arbitration Services, Inc., or such other reputable arbitration
service that PWC shall select, at its sole discretion, at the time the request for arbitration is submitted. The rules
and procedures of the designated arbitration organization,that are in effect at the time the request for arbitration is
submitted,will be followed. A copy of the applicable rules and procedures will be delivered to YOU upon request.
This arbitration agreement shall be governed by the United States Arbitration Act (9 U.S.C.§§ 1 - 16) to the
exclusion of any inconsistent state law,regulation or judicial decision. The award of the arbitrator shall be final and
binding and may be entered as a judgment in any court of competent jurisdiction.
Each party shall bear its own attorneys fees and costs(including expert costs)for the arbitration. The arbitration
filing fee and other arbitration fees shall be divided and paid equally as between YOU and US.This filing fee shall
be no more than the amount charged by the arbitration service to PWC: for each arbitration. Contact PWC to
determine the arbitration filing fee in effect at the time an arbitration is being requested. The arbitrator shall,as part
of any decision,award to the party prevailing at the arbitration any applicable filing fees or other arbitration fees paid
by that party.
The process for YOU to initiate arbitration is described below.
St I YOU c Mplets la-Bin 'na Art ReFuest Fq and maDINO WC alon(
ar 'tratidn filind!ea., A 1:�ricling krbi ti n e est Fa ' n 1 wit the aDQr0ori to
'o w
Arbitr#—onleq st F im I:d tis LI ITED WA IRA R
u e eh ed'nolsl�eir n i ty ( 0) days after t ED
XTI N DEFEE
W Y xpiybA. Y U m sts, I'n t y of j in (lege N R:LC
WARR 1 20", ;rats soon as it is
3U '41 ware oulc ecorl
sona ly ossbW aft Y v c
ha become aw the
CO ST U TION DEFEC t it i eve t th,tn thi (30) f t s LIMITED day., afte or of t s LIMITED
'A
Es'R P ate a Wwh le OU r4 (10) ays after&is LIMITED IRANTY expi s
to no " U an ninety 90 1 Lgifer't ex it ile for a bitratio me eno o N 7e
n,thi;time d )s not extend e
WARRANTY PERIOD for CONSTRUCTION DEFECTS. Additionally,no investigation, inspection,testing,
repair, replacement,or payment, nor any promise of same by US under this LIMITED WARRANTY, nor
any dispute resolution efforts, shall extend the term of this LIMITED WARRANTY or extend or toll any
statutes of limitations or any of YOUR rights or remedies.
Step 2 PWC Will Arrange the Arbitration Proceeding, The arbitrator or arbitration organization will notify YOU of
the time, date and location of the arbitration hearing. Most often the hearing will be conducted at the
HOME or the COMMON ELEMENTS or some other location that is agreeable to all the parties to the
dispute. In scheduling the hearing the arbitrator will set a time and date that is reasonably convenient to all
the parties.
Step 3 The Arbitration Hearing. The parties at the arbitration hearing will include the arbitrator,YOU,US and/or a
third party designated by US or acting on OUR behalf. Any party to the proceeding may be represented at
the hearing. All persons who are parties to the arbitration, as well as representatives and witnesses,are
entitled to attend hearings.
After evidence is presented by YOU,US or OUR representatives,a decision will be rendered by the arbitrator. The
decision is final and binding on YOU and US. The arbitrator first will determine whether any claimed or alleged
CONSTRUCTION DEFECT exists and whether it is OUR responsibility. Second, if the arbitrator finds US
responsible for a CONSTRUCTION DEFECT,the arbitrator will determine the scope of any repair or replacement,
OUR cost of any such repair or replacement, and the diminution in fair market value, if any, caused by such
CONSTRUCTION DEFECT. Based upon the arbitrator's decision,WE shall choose whether WE shall(1)repair,
replace the CONSTRUCTION DEFECT, (2)pay to YOU the actual amount it would cost US to repair or replace the
CONSTRUCTION DEFECT or(3)PAY to YOU an amount equal to the diminution in fair market value caused by
PWC FORM NO. 117 Sample Rev.05/02 8
the CONSTRUCTION DEFECT. The decision to repair, replace,or to make payment to YOU is at OUR or OUR
authorized representative's sole option. In addition, the arbitrator shall render a decision resolving any other
disputed matters or issues related to or arising from this LIMITED WARRANTY, the design orconstruction of the
HOME or the COMMON ELEMENTS or the sale of the HOME or transfer of title to the COMMON ELEMENTS.
Step 4 OUR Arbitration Performance Obligations. WE will comply with the arbitrator's decision no later than 60
days from the date of the award or other such date as may be specified or allowed in the decision.
However,delays caused by circumstances beyond OUR or OUR representative's control shall be excused.
Step 5, If YOU believe WE Have Failed To Comply With The Award. YOU should contact PWC at its mailing
address specified in this LIMITED WARRANTY if YOU believe WE have not complied with the arbitrator's
award. PWC will mediate this dispute and if it cannot be resolved, will advise YOU that a compliance
inspection arbitration is available to determine whether WE have performed adequately under the original
arbitration award. PWC will communicate these findings to both US and YOU. If it is determined that WE
have not properly performed, WE will be obligated to immediately comply.
PWC's sole responsibility is to administer this LIMITED WARRANTY on OUR behalf and as such PWC assumes
no other liabilities in connection with this LIMITED WARRANTY. Under no condition or circumstance is PWC
responsible for fulfilling any of OUR obligations under this LIMITED WARRANTY,
IX. General Conditions
A. are 'on of his LI ITED NARR NT From Th a CodLact 0 S1 is
n NARR NT From
t
isions of t
s ep Co onstructi
a n kdd ent
rat
81
0 tr fe
This ITE of y le co trc ct bc tween YO J an the
A Y is se rat nd id4�)en dent
constru ion nd/ r le the HO E tr fer )f t 1'e COMMO EL EME 1 41TS. The )rovisions of his
cV
7
e ic exp
L TE W FIR sh I in no a be re ti ctei I or yanyhingiontainedi the nstruc ion
TE W co loc ts t e )U
n or, les ncontract or of r I Joc nts; tee' I Y1 a
a-Aer seque kzeAN
This LIMITED WARRANTY will transfer to now owners of the HOME for the remainder of the WARRANTY
PERIOD. YOU agree to provide this LIMITED WARRANTY to any subsequent purchaser of the HOME as
a part of the contract of sale of the HOME. OUR duties under this LIMITED WARRANTY to the new
HOMEOWNER will not exceed the limit of liability then remaining, if any.
C. Transfer of Manufacturer's Warranties
WE assign to YOU all the manufacturer's warranties on all appliances,fixtures and items of equipment that
WE installed in the HOME. Should an appliance or item of equipment malfunction YOU must follow the
procedures set forth in that manufacturer's warranty to correct the problem. OUR obligation under this
LIMITED WARRANTY is limited to the workmanlike installation of such appliances and equipment. WE
have no obligation for appliances and equipment defined as CONSUMER PRODUCTS.
D. Recovery Rights
If WE or a third party designated by US or acting on OUR behalf repairs, replaces or pays YOU as to a
CONSTRUCTION DEFECT,or other related damage to the HOME or the COMMON ELEMENTS covered
by this LIMITED WARRANTY,WE are entitled,to the extent of OUR payment,to take over YOUR related
rights of recovery from other people and organizations, including but not limited to, other warranties and
insurance. YOU have an obligation not to make it harder for US to enforce these rights. YOU agree to
sign any papers, deliver them to US, and do anything else that is necessary to help US exercise OUR
rights.
PWC FORM NO. 117 Sample Rev.05102 9
E• General Provisions
1. If any provision of this LIMITED WARRANTY is determined to be unenforceable,such a determination will
not affect the remaining provisions. If this LIMITED WARRANTY or any provision herein is determined to
be unenforceable as to a HOMEOWNERS ASSOCIATION or a specific HOMEOWNER, such a
determination will not affect the enforceability of this LIMITED WARRANTY or such provision as to any
other HOMEOWNERS ASSOCIATION or any other HOMEOWNER.The issue of enforceability,as well as
all other issues,will be determined by Binding Arbitration as provided for in this LIMITED WARRANTY.
2. This LIMITED WARRANTY and the binding arbitration process are binding on YOU and US. It is also
binding on YOUR and OUR heirs, executors, administrators, successors, and assigns, subject to
paragraph B of the General Conditions.
& As may be appropriate,the use of the plural in this LIMITED WARRANTY includes the singular, and the
use of one gender includes all genders,
X. Definitions
BUILDER means the individual, partnership, corporation or other entity , which participates in the Warranty
Program administered by the Professional Warranty Service Corporation and provides YOU with this LIMITED
WARRANTY. Throughout this document the BUILDER is also referred to as "WE", "US" and "OUR".
COM EMENTS the pro iarhLasspec d1a:he 4�oven ai L�4 3nditions a as
t
th
,OM
to h :01 S,
co on area dany o erpr "attowhi "'N"ZIR A�='AA iCI%TIO 4 has scan i ling under the w
to a aim. h' s not Ii it tc,street., Slo the s ruiture Dr compon mts re
)h er the
the
M u e
is Re'I e I h of
dq e, but is n
is
s S(
Op E q loca e(
!r t cc S I
or th r e H ME orn ors, Dbbi 's, e icqtrarspLati n el me ts, rdon s, balconi( s,cl bhouses or
Ot paces tare or co mon use f t re den iDelop ei t'in I which the � DME is loca ed.
:s c I the
f such SYSTE ISO
SYS servi g oo m re 0 M---S, a d 9 L tbui dins that cc in p arts
in in is d, fl tion,
CO SEQ EN A OR NCID N OA1141A ES Eans an loss or injury other than:
A. OUR cost to correct a CONSTRUCTION DEFECT including the correction of those surfaces,
finishes and coverings damaged by the CONSTRUCTION DEFECT;
B. OUR cost of repair or replacement of furniture, carpet or personal property damaged by the
CONSTRUCTION DEFECT. Should replacement be necessary, OUR obligation is limited to
replacement with items providing the same function and quality and that are readily available at
the time the item is being replaced.
C. OUR costs of removal or replacement in order to repair or replace a CONSTRUCTION DEFECT;
D. The reasonable cost of the HOMEOWNER'S alternative shelter where the HOME is unhabitable
due to a CONSTRUCTION DEFECT or where the HOME is rendered unhabitable by the repair of
the CONSTRUCTION DEFECT.
Diminished fair market value is considered "CONSEQUENTIAL OR INCIDENTAL DAMAGE" and is excluded
under this LIMITED WARRANTY unless WE elect this remedy in lieu of the repair,replacement or other payment
as to a CONSTRUCTION DEFECT.
CONSTRUCTION DEFECT(S)means a flaw in the materials or workmanship used in constructing the HOME that,
• materially affects the structural integrity of the HOME or the COMMON ELEMENTS; or
•has an obvious and material negative impact on the appearance of the HOME or the COMMON ELEMENTS;
or
•jeopardizes the life or safety of the occupants; or
•results in the inability of the HOME or the applicable COMMON ELEMENTS to provide the functions that can
reasonably be expected in a residential dwelling.
WE and any arbitrator assigned to rule relative to a CONSTRUCTION DEFECT will consider both this definition and
PWC FORM NO.117 Sample Rev.05/02 10
Section III — A. (Standards By Which the Presence of a CONSTRUCTION DEFECT Will Be Determined) in
determining the existence of a CONSTRUCTION DEFECT, A flaw is a CONSTRUCTION DEFECT if either WE or
an arbitrator conducting a binding arbitration hearing declares the flaw to be a CONSTRUCTION DEFECT. OUR
obvious and visible failure to complete the construction of the HOME or COMMON ELEMENTS,or any portion of
the HOME or COMMON ELEMENTS, is not a CONSTRUCTION DEFECT.
CONSUMER PRODUCT means any item of equipment, appliance or other item defined as a CONSUMER
PRODUCT in the Magnuson-Moss Warranty Act (15 U.S.C.§. 2301, et seq.) Examples of Consumer Products
include, but are not limited to dishwasher, garbage disposal, gas or electric cook-top, range, range hood,
refrigerator or refrigerator/freezer combination,gas oven,electric oven, microwave oven,trash compactor,garage
door opener,clothes washer and dryer, hot water heater and thermostat,
EMERGENCY CONDITION means an event or situation that creates the imminent threat of damage to the HOME
or COMMON ELEMENTS, or results in an unsafe living condition due to a CONSTRUCTION DEFECT that YOU
(or as applicable,the HOMEOWNERS ASSOCIATION)become aware of at a point in time other than OUR normal
business hours and YOU were unable to obtain OUR or OUR authorized representative's prior written approval to
initiate repairs to stabilize the condition or prevent further damage.
HOME means a single family residence either attached or detached covered by this LIMITED WARRANTY or a
condominium or cooperative unit in a multi-unit residential structure/building covered by this LIMITED WARRANTY.
HOME BUILDER'S LIMITED WARRANTY means only this express warranty document provided to YOU by US.
HOMEOWNER means the first person(s)to whom a HOME(or a unit in a multi-unit residential structure/building)is
Id m for y b7 such p on c person's family . ch
SO such cons )r ' 0"u Qjch
per on slu essor in title the HOM or 0 91ceas in posses 'on and any reprecentat,ive of s
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pe son kh�i I$t kding to�nake a cl im ory t at p soi(s) 541f, in 1 u Jing any class epreLentative or
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HOME ERS S CZON ea s a I) fit rn r pro C� r inco porn d associa ion, I - ion,
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to a art o e ON E
POLLUTANTS means all solid,liquid,or gaseous irritants or contaminants. The term includes,but is not limited to,
petroleum products,smoke, vapors,soot, fumes, acids,alkalis,toxic chemicals,radon gas,and waste materials,
including materials to be recycled.
PWC means Professional Warranty Service Corporation, which administers the warranty program in which WE
participate. As such, PWC assumes no other liabilities in connection with this LIMITED WARRANTY.The PWC
mailing address is: Professional Warranty Service Corporation
P.O. Box 800 Annandale,VA 22003-0800
SYSTEMS means the following:
(a) Plumbing system - gas supply lines and fittings; water supply, waste and vent pipes and their fittings;
septic tanks and their drain fields; and water, gas and sewer services piping and their extensions to the
tie-in of a public utility connection or on-site well and sewage disposal system.
(b) Electrical system - all wiring, electrical boxes, switches, outlets, and connections up to the public utility
connection.
(c) Heating,Cooling,and Ventilation system-all duct-work,steam,water and refrigerant lines;and registers,
connectors,•radiation elements and dampers.
WARRANTY PERIOD shall commence on the date the title to the HOME is transferred to the first HOMEOWNER.
Notwithstanding anything to the contrary set forth in this LIMITED WARRANTY,the WARRANTY PERIOD for the
COMMON ELEMENTS of an individual structure/building commences on the date the title for the first HOME in the
structure/building is transferred to the first HOMEOWNER or as concerns clubhouses or outbuildings or other
COMMON ELEMENTS not part of the HOME the date the title to these structures is transferred to the
PWC FORM NO. 117 Sample Rev.05/02 11
HOMEOWNERS ASSOCIATION. The dates the WARRANTY PERIOD begins and ends are indicated on the
Limited Warranty Validation Form, which is attached to and made part of this LIMITED WARRANTY,
WE, US,OUR means the BUILDER.
YOU, YOUR means the HOMEOWNER and the HOMEOWNERS ASSOCIATION.
PWC FORM NO. 117 Sample Rev.05/02 12
BINDING ARBITRATION REQUEST FORM
Dear Homeowner(Homeowners Association):
Prior to requesting binding arbitration under the terms of the HOME BUILDER'S LIMITED WARRANTY,you should have sent your
builder a clear and specific written request outlining the situation or condition that you are herein submitting to binding arbitration. If
you have taken this step and believe the builder has not properly responded in accordance with the HOMEBUILDER'S LIMITED
WARRANTY, fill out this form and send it to PWC along with the arbitration filing fee. Be sure to attach a copy of all pertinent
correspondence between you and your builder relative to the issue.
The information you need to fill out this form can be found on the Limited Warranty Validation Form, However, if you do not know the
answers to any questions, write"Don't Know." Please do not leave any item blank.
Your name:
Address:
CITY STATE ZIP
Home Phone- u Inss Phone:
%
LIMITED W R Date 1A Farra .rl I 4gin s:-
Builder's Na 0
R.
Address:
Describe the�dlsbute t t 4u to s. A to bitr tic n under the terins of the H41VE BUILDER' LIMITED
WARRANTY. ftpv�e�puteA r ative to s rmio ec se Tff=de informa th uc defect(s)
first occurred or when you first noticed the construction defect. (Attach additional sheets, If necessary).
I/we are hereby requesting PWC to Initiate a binding arbitration to resolve the dispute described herein above.
Signature Date Signature Date
INSTRUCTIONS: Photo-copy this form and complete the fields.
Obtain the required arbitration filing fee by contacting PWC at 1-800/850-2799.
Send this Binding Arbitration Request Form and the arbitration filing fee to:
PROFESSIONAL WARRANTY SERVICE CORPORATION
P.O. BOX 800
ANNANDALE,VIRGINIA 22003-0800
PWC Form No.301
04/02
SUBSEQUENT HOME BUYER ACKNOWLEDGMENT AND TRANSFER
Any coverage remaining under the HOME BUILDER'S LIMITED WARRANTY applicable to the home specified on
the Limited Warranty Validation Form is transferred to the subsequent homeowner. Any obligations under the
HOME BUILDER'S LIMITED WARRANTY to any subsequent homeowner shall not exceed the limit of liability
remaining at the time of transfer, if any.
The undersigned home buyer(s)hereby acknowledge and agree:
I/we acknowledge that I have reviewed, understand and agree to all the terms of the HOME BUILDER'S
LIMITED WARRANTY document(PWC Form No. 117)
I/we understand and acknowledge that Professional Warranty Service Corporation ("PWC") Is not the
warrantor of the HOME BUILDER'S LIMITED WARRANTY.
I)v6 under' nd that we resp Hsi I for he ma nti inanc—e_ofVtR ho ne chiding maintenance c#the
radthe and s round 9 the 7home, an that t a builder shall 4ot be r sponsibli for any deldct of
e
h lb
s 'a r 4
am ho w ch the -esu It o y/ irfellueto ai tall th�ho e.
I/ nowl dg an a ree o the B di I he
ra tio v Procedur co r fain d in the I IOM ER'S
t
E AR TY.�
Signature(s)of Subsequent Home Buyer(s): Date-
Date-
Print above name(s):
Re-issuance of the Limited Warranty Validation Form with the name(s) of the new Home Buyer(s) Is not
necessary for you to receive the coverage remaining under the HOME BUILDER'S LIMITED WARRANTY.
Upon receipt of this signed form, PWC will update Its records to reflect the name(s) of the new
homeowner(s).If you want PWC to Issue another Limited Warranty Validation Form with your name(s)on
the form, please check the box below and send a check in the amount of $20.00 made payable to"PWC"
with your submission of this form.
YES, re-issue the Limited Warranty Validation Form in the above name(s) (check box) initial
Address of Home:
Limited Warranty No.:
INSTRUCTIONS: Photo-copy this form. Provide information requested,sign,fill in Limited Warranty#in the space
provided (this number is provided on the Limited Warranty Validation Form), and provide a telephone number
where you can be reached(—) . If you want the Limited Warranty Validation Form reissued
in your name, enclose your check to PWC in the amount of$20.00(check box above and initial). To reach PWC
by phone,call: 1-800/850-2799.
Mail this form and a photocopy of applicable settlement/closing documents indicating transfer of title, to:
PROFESSIONAL WARRANTY SERVICE CORPORATION P.O. BOX 800 ANNANDALE,VA 22003-0800
TATE 01 HAWAII
URF OF Co VEYANCES
BUREA N
CORDED
July 5,2012 8:01 AM
Doe No(s) A-45894181
Is,NjcKI ANN THOMPSON
REGISTRAR
KEO Conveyance Tax:$346.00
8.32097758
fa After Recordation, Return By: Mail a Pickup
Carole Joan Steers Trust Agreement Escrow No.: 3995937
75-6088 Kaanee Place Title No.: 3996937
Kallua-Kona, Hl 96740 Total Pages
PUALANI ESTATES AT KONA PHASE 3
WARRANTY DEED AND RESERVATION OF RIGHTS
THIS DEED is made ono?2n4L !2 -2111.2 , by and between
D.R. HORTON - SCHULER HOMES, LLC, a Dela re limited liability company, dba D.R.
HORTON - SCHULER DIVISION, the address of which is 650 IwHei Road, Suite 209, Honolulu,
Hawaii 96817 (hereinafter called the "Grantor"), and CAROLE JOAN STEERS, Trustee of
that certain John W. Steel and Carole Joan Steel Trust dated April 18, 1997, as It may be
amended and/or restated, whose address Is 76-167 Kamilo Street, Kallua-Kona, Hawaii
96740 (hereinafter collectively called the"Grantee");
WITNESSETH THAT
The Grantor, in consideration of the sum of TEN DOLLARS ($10.00) and other
good and valuable consideration to the Grantor paid by the Grantee, receipt of which is
acknowledged, and of the promises and covenants set forth in this Deed and on the part of the
Grantee to be faithfully observed and performed, does hereby grant, bargain, sell and convey
unto the Grantee, as tenant In severalty in trust, with power to sell, convey, exchange,
partition, mortgage, lease, pledge or otherwise deal with and dispose of the lands of the trust
estate, all that certain real property in the residential subdivision known as "Pualani Estates
Phase 3" (the "Community" or the "Pualani Estates Subdivision, Phase 3") situate at North
Kona, Island of Hawaii, State of Hawaii, more particularly described as Lot 11, area 6,168 r
square feet, of the subdivision map titled "Pualani Estates Subdivision of Lot C Phase Ill", and in
Exhibit A (the "Lot" together with its improvements the "Property"), and the reversions,
remainders, rents, issues and profits of the Property, and all of the estate, title and interest of
the Grantor, both at law and in equity, in and to the Property,
fi
Pualani 31Steel Trust Sales Lot 11
22594-312M406095.1
TOGETHER with all buildings, improvements, rights, easements, privileges and
appurtenances on, to and running with the Property, Including those with respect to use of
private roadway facilities, if any, as may be set forth in Exhibit A, and the right of access from
the Property to a public roadway, subject to the terms and conditions contained in Exhibit A,
SUBJECT, HOWEVER, TO the encumbrances affecting the Property as set forth
in Exhibit A, AND EXCEPTING AND RESERVING to the Grantor, its successors and assigns,
each of those easements, restrictions, reservations, covenants, liens, acknowledgments, and
other encumbrances set forth in the PUALANI ESTATES AT KONA DECLARATION OF
COVENANTS, CONDITIONS, RESTRICTIONS and EASEMENTS, as the same may be
amended and/or supplemented (the "Community Declaration"), creating the Pualani Estates
Community Association (the "Community Association"), the SUPPLEMENTAL
DECLARATION OF RESTRICTIVE COVENANTS FOR PUALANI ESTATES AT KONA
(PHASE 3) (the "Supplemental Declaration"), as the same may be amended, this
WARRANTY DEED AND RESERVATION OF RIGHTS and its exhibit (this "Deed"), and the
exhibits attached to the Community Declaration and Supplemental Declaration, and the limited
warranty ("the "Limited Warranty") delivered to Grantee, all of which burden the Property and
benefit the Grantor,
AND FURTHER EXCEPTING AND RESERVING to the Grantor, its successors
and assigns, all easements of record described in Exhibit A and perpetual easements and
rights of way over, across, under and through the Property conveyed by this Deed for all utilities
(whether public or private or for the benefit it offers homeowners in the Community) including
but not limited to water, Irrigation, drainage (including drainage channels, swales and ditches),
sewer, gas, telephone, electricity, cable (including without limitation television cable), security
systems, communication lines and systems and electromagnetic and optical transmission
facilities and other similar service purposes as the Grantor in its discretion may designate,
create, or grant, whether or not the easements or rights of way are for the purpose of serving
the Property hereby conveyed, including, without limitation, the right to enter upon the Property
to construct, (even after recording of this deed), install, operate, maintain, repair, reconstruct,
and relocate such lines, wires, circuits, conduits, cables, channels, pipes, swales, ditches,
facilities and appurtenances for the indicated purposes and the right to grant such easements or
rights of way to governmental agencies, public, quasi-public or private utility or service
companies, other private entities, the association of homeowners, if any, or any other
homeowner or group of homeowners in the Community or any adjacent Community, without
joinder or consent of Grantee or Grantee's mortgagee. These reserved rights are to be
exercised in a manner that will cause the least practicable interference with the Grantee's
occupancy of the Property.
GRANTOR FURTHER EXCEPTS AND RESERVES the benefits and burdens of
the reciprocal appurtenant easements, for encroachment and maintenance purposes, as
between each Lot in'the Community or as between adjacent Lots as set forth in the Community
Declaration and Supplemental Declaration,
TO HAVE AND TO HOLD the same, together with all rights, easements,
privileges and appurtenances thereunto belonging or appertaining or held and enjoyed therewith
unto the Grantee, absolutely and forever and in fee simple, according to the tenancy and estate
set forth herein.
2
Pualanl 3/Steel Trust Sales Lot 11
22594-312/1406095.1
The Grantor hereby covenants with the Grantee that the Grantor is lawfully
seized In fee simple of the Property conveyed by this Deed; that the Property is free and clear of
and from all encumbrances except as described in this Deed and in Exhibit A and except for
the lien of real property taxes not yet by law required to be paid; that the Grantor has good right
and title to sell and convey the Property in the manner herein set forth', and the Grantor will
WARRANT AND DEFEND the same unto the Grantee forever against the lawful claims and
demands of all persons, except as mentioned in this Deed.
The Grantee hereby further covenants, for the benefit of the Grantor and
Grantee, and their respective successors and assigns, that Grantee and Grantee's family,
lessees, tenants, servants, guests, invitees, Ii6ensees, employees, or other persons who may
occupy or otherwise use the Property or improvements to the Property with Grantee's
permission will, at all times, observe, perform, comply With and abide by all of the covenants,
agreements, obligations, conditions and other provisions set forth in this Deed, the Community
Declaration and the Supplemental Declaration. The Grantee covenants to indemnify, hold'
harmless, and defend the Grant6r for any failure to comply with, observe and perform any such
covenant, condition, restriction or other provision contained in this Deed, the Community
Declaration and/or the Supplemental Declaration, and any existing or future supplement(s)
and/or amendments to either of the foregoing, including without limitation the Limited Warranty
and the Rules and Guidelines of the Design Review Committee described In the Community
Declaration ("Design Guidelines").
By acquiring ownership of the Property hereby conveyed, the Grantee
acknowledges that the Grantee has become a member of the Community Association, has
received, read and understood the Community Declaration, the Supplemental Declaration, the
and the Design Guidelines, and acknowledges, agrees with and accepts the disclosures,
conditions, covenants, easements and reservations of rights contained therein; and the Grantee
agrees to observe and perform all of the terms, covenants, conditions and provisions required to
be observed and performed by an Owner under the Community Declaration, the Supplemental
Declaration, and the Design Guidelines; and the Grantee further agrees that the Grantee's
family, lessees, tenants, servants, guests, invitees, licensees, employees, or other persons who
may occupy or otherwise use the Property or improvements to the Property will abide by all of
the applicable terms, covenants, conditions and provisions set forth in the Community
Declaration, the Supplemental Declaration, the Design Guidelines, and any other duly adopted
rules and regulations of the Community Association, hereinafter defined.
The Grantor acknowledges and accepts that the Property and the Community
are affected by and subject to the following specific disclosures and conditions set forth in the
Community Declaration and the Supplemental Declaration which include without limitation: (I)
the land of the Community was used previousiy for commercial agricultural and farming
operations and in connection with such use, fertilizer and pesticides, among other things, may
have been applied to and used upon the land of the Community or lands adjacent to the
Community; (ii) the Community is located near or adjacent to properties which are or may be
used for agricultural, farming, animal husbandry, pasture, or related uses, commercial, cultural
or archaeological preservation purposes and other purposes; (III) further development,
construction and sale of residential, commercial, industrial, recreational and public projects by
the Developer and others is ongoing and may continue within the Community and within the
vicinity of the Community for an indefinite period; (iv) certain lands within the surrounding area
may be irrigated with treated effluent, reclaimed water or other sources of nonpotable water; (V)
the land of the Community is subject to potential adverse soil conditions, and (vi) easement's
shall be retained over the Property for some or all of the above described uses, Including,
3
Puelani 3/Steel Trust Sales Lot 11
22694312/1406096.1
specifically, easerrients, permitting the commencement, continuation and resulting effects of
those uses.
The Grantee acknowledges and agrees 'that the Community Declaration, the
Supplemental Declaration, the Limited Warranty and the Design Guidelines contain various
reservations In favor of the Grantor, as "'Declarani as 'well, as disclosures, covenants,
undertakings, waivers of rights, disclaimers, limitations,, requirements and: restrictions, all of
which are binding upw Grantee and all owners, of Property within the Community. These
provisions include, but are not limited to: (a) specific restrictions and requirements pertaining to
the construction, installation, repair, modification, maintenance and/or appearance of
improvements, landscaping (which must be installed within a limited time at Grantee's cost),
private roadways, sewer, drain and electrical improvements and facilities, and boundary fences
and walls, among others-, (b) specific disclosures and disclaimers concerning the plans for the
development and use of all or any part of the Community, which may change at any time
without notice to the Grantee; (c) specific provisions disclosing, and authorizing continued
extensive construction "i sales activities within and around the Community, which may result
In, among other things, noise, dust, vibration and other nuisances, disturbances, annoyances,
hazards and effects, and providing for the acceptance by Grantee of any and all nuisance,
inconvenience, Irritation,, annoyance and risk of damage attributable to such activities, and
further providing for the agreement by Grantee to suffer and permit, all actions and
consequences Incidental to such ongoing construction ands sales activities; (d) specific
provisions disclosing +environentalll hazards or conditions, Including without limitation, noise,
dust, smoke, soot, ash, odor, mold and mold spores, noxious vapors, surface water runoff, rock
slide, or other adverse environmental conditions and providing for Grantee's acceptance of'the
possibility that such conditions may occur, Grantee's assumption of the risk of any damage
resulting from such occurrence, and the express waiver of all claims against Grantor, the
Community Association, the State of Hawaii, and the County of Hawaii, and others arising out of
or In connection with such adverse conditions, including the right to seek damages or the
abatement or elimination of such conditions; (e) specific provisions reserving by or on behalf of
Grantor, and/or others various rights and easements affecting the Property and affording the
Grantor the right to make specific grants of such rights and easements without joinder by
Grantee, and (f) specific limitations on the scope, nature and location of improvements, and the
need for pre-construction approval of the proposed design of improvements, which may include
special setbacks restrictions for various lots in the Community.
In furtherance of and without diminution of the foregoing, Grantee hereby further
acknowledges and approves the obligations imposed on Grantee pursuant to the terms of the
Community Declaration, the Supplemental Declaration, the Limited Warranty and the Design
Guidelines and reservation by Grantor of each and all of the following rights and easements:
(a) Grantor, and its agents, successors, mortgagees, and assigns,
shall have 'the right and an easement to conduct extensive sales activities on and at the
Community, including the use of any home owned by Grantor (and any other home, with the
express permission of the owner of such home) for model homes, sales and management
offices, parking and extensive sales displays and activities, and the posting and maintenance of
signs and other advertisements relating to such sales activities.
(b) Grantor and its agents, employees, contractors, licensees,
successors, mortgagees and assigns shall have an easement over, under and upon the
Community, including the Lot and the Home, as may be reasonably necessary for the
completion of improvements to and correction of construction defects, as the term is defined in
4
Puslani 3/Steel Trust Sales Lot 11
22594-31211406095.1
the Limited Warranty and other warranty or "punchlist" items in the Community, the Lot or the
Home.
(c) Grantor and its agents, employees, contractors, licensees,
successors, mortgagees and assigns shall have an easement over, under and upon the
Community and each and any portion of the Community including the Lot and the individual
homes to create and cause noise, dust, vibration and other nuisances or annoyances created
by and resulting from any work connected with or incidental to the development, construction
and sale of any home or other improvement to the Community, any additional phase to the
Community, or any other community which Grantor, its successors or assigns, may develop on
property adjacent to or in the vicinity of the Community. The Grantee and any other person
acquiring any interest in the Community waives any and all rights, claims or actions that might
otherwise be asserted against Grantor, its members, managers, agents, employees, licensees,
successors, mortgagees and assigns, based on any such noise, dust, vibration and other
nuisances or annoyances.
(d) Grantor hereby reserves an easement to enter upon, across, over,
in, and under any portion of the Community, including the Lot, for the purpose Of changing,
correcting, or otherwise modifying the grade or drainage channels of any portion of the
Community so as to improve the drainage of water on the Community. Reasonable efforts shall
be made to use this easement so as to disturb as little as possible the uses of the Grantee, to
undertake such drainage work promptly and expeditiously, and to restore any areas affected by
such work to a sightly and usable condition as soon as reasonably possible following such work,
(e) There shall be reciprocal appurtenant easements of
encroachment as between adjacent Lots due to the unintentional placement or settling of
shifting of the improvements constructed, reconstructed, or altered thereon (either initially by
Grantor or subsequently by Grantee if in accordance with the terms of the Declarations) to a
distance of not more than one foot, as measured from any point on the common boundary
between said adjacent Lots, along a line perpendicular to such boundary at such point;
provided, however, in no event shall an easement for encroachment exist if such encroachment
occurred due to willful and knowing conduct on the part of a Grantee as opposed to Grantor.
These easements shall be for the encroaching improvements and their maintenance (including
access to and from the encroachment).
(f) Grantee acknowledges and agrees that, except for (1) the express
written limited warranty described herein as the Limited Warranty, a copy of which has been
provided by Grantor to Grantee and a copy of which is included in the Grantor's Homeowner
Manual (the "Homeowner's Manual"), and (ii) Grantor's Customer Care Program, which will be
administered by Grantor pursuant to that portion of Grantor's Homeowners Manual commonly
referred to as the "Customer Care Program guide" (the "Customer Care Program"), Grantor is
not making or offering any warranties, express or implied, with respect to the Property or the
Community, including, without limitation, any warranties of merchantability, habitability, quality of
construction, or fitness for a particular purpose. Grantor expressly disclaims any warranties
other than Grantor's Limited Warranty, including, without limitation, any express or implied
warranties of merchantability, habitability, quality of construction, or fitness for a particular
purpose with respect to the Property or the Community. Grantee acknowledges that (i) Grantee
has received, read and understands the terms of Grantor's Limited Warranty and Grantor's
Homeowner's Manual provided to Grantee and is familiar with the coverage and exclusions
contained in Grantor's Limited Warranty, and (Ii) other than the Grantor's Limited Warranty and
the Customer Care Program, Grantor is making no other representations, promises, or
Pualaril 3/6teel Trust sales Lot 11
22694-31211406095.1
warranties of any kind, including, without limitation, any express or implied warranties of
merchantability, habitability, quality of construction, or fitness for a particular purpose with
respect to the Property, the Residence, or the Community. Grantor's Limited Warranty and the
Customer Care Program do not cover and Grantee acknowledges that the Limited Warranty and
the Customer Care Program do not cover (I) any consequential damages, including, but not
limited to, damage to the Property or the Community that is caused by a warranted defect (as
defined in Grantor's Limited Warranty), but is not itself a warranted defect and/or the costs of
shelter, transportation, food, moving, storage or other incidental expenses related to relocation
during repairs of the Property, or (ii) any appliance, equipment, or other items which are
"consumer products" for purposes of the Magnuson-Moss Warranty Act, 15 USC 2301, et seq..
The only warranties of such consumer products or goods are those which the manufacturer
provides to the purchaser. Information as to such manufacturer's warranties will be provided to
Grantee. They are Included on an "AS IS" basis with Grantee assuming the entire cost of all
necessary service, repair, or replacement in the event of defect in quality or performance. With
respect to appliances or other consumer products included in Grantee's purchase of the
Property, this Deed operates as an assignment from Grantor to Grantee of all manufacturer's or
dealer's warranties, if any, covering any such appliances or consumer products for the
unexpired term thereof to the extent that Grantor has the right and power to make such an
assignment. Grantee acknowledges and understands that Grantor is not stating that any such
warranties exist, or that such an assignment will be effective, nor is Grantor adopting any such
manufacturer's or dealer's warranties or acting as a co warrantor, but Grantor is merely
attempting to pass through to Grantee the benefits of such warranties, if any exist. Grantee
specifically agrees that during the term of the limited warranty afforded by Grantor to Grantee
under the terms of Grantor's Limited Warranty, Grantee shall in each and all instances permit
Grantor or Grantor's designated representative and/or the administrator of or insurer under
Grantor's Limited Warranty or their respective representative to repair any and all items
Classified by Grantor or the administrator as items covered by such warranty or provide such
alternate coverage in respect of warranted items available under the Grantor's Limited
Warranty, and that Grantee shall have no further rights and Grantor no further obligation to
Grantee in respect of such matters repaired or administered as provided in the Limited
Warranty.
(g) Grantee specifically agrees and acknowledges that Grantee shall
not erect or place any building foundation of any kind below the surface of any easement areas
or at any time erect or place any building, improvement or structure of any kind, including
fences, walls, roads, walks, curbs or appurtenances thereof, or stockpile any material above or
on the surface of the easement area, unless said building, building foundation, improvement,
structure, appurtenances or stockpile, is first approved by the grantee of such easement area,
which grantee may include anyone or more of the County of Hawaii Department of Wastewater,
Department of Public Works, and/or Board of Water Supply, or any other County agency or the
other parties identified above. Under no circumstances shall Grantee under this deed or his/her
assigns or successors interfere with the use of the easement area for construction,
reconstruction, installation, maintenance, operation, repair and removal of, access to the above
described facilities or easement area. Notwithstanding the foregoing, however, Grantee shall
not be prohibited from planting or maintaining grass and ground cover within any such
easement area. Grantee under this Deed or his/her assigns or successor shall allow the County
the right of ingress to and egress from any easement area granted to the County or one of its
agencies required or necessary for all purposes in connection with the use and purpose of the
easement area.
6
Pualan)3IStes)Trust Sales Lot 11
22594-312/1406095.1
The Grantor hereby grants the Grantee a non-exclusive right of entry for access
purposes over, upon and across the roadway lots owned by the Grantor and more Specifically
described in Cxhibit A attached to this deed (the "Roadway Lots"); provided, however, that
such right of entry shall automatically terminate upon dedication of the Roadway Lots to any
governmental authority. The Grantee, for the Grantee and the Grantees family, lessees,
tenants, servants, guests, invitees, licensees, employees, or other persons who may occupy or
otherwise use the Property or improvements to the Property, acknowledges, covenants and
agrees that: (a) the Grantor may continue to use the Roadway Lots for construction and sales
activities within the Community, which may from time to time result in noise, vibration and other
hazards and inconveniences to the Grantee; (b) the Grantee shall use the Roadway Lots with
due care for public and private safety; (c) the Grantee shall indemnify and hold harmless the
Grantor, its affiliates, members, managers, officers, directors, representatives, employees and
agents, from and against any and all loss, damage, costs, expenses, including attorneys! fees,
liability, demands, or causes of action resulting from nuisance, injury, harm or death to persons
or property arising out of or In any way connected with the right of entry granted by the Grantor
pending dedication as described above, except any loss or damage caused by the gross
negligence or wilful misconduct of the Grantor; and (d) the Grantee fully realizes and assumes
all risks of using the Roadway Lots prior to dedication of the Roadway Lots as described above,
including, but not limited to, the dangers associated with construction equipment and workers on
or near the Roadways, the dangers resulting from the condition of the Roadways, and the
dangers of collision with other vehicles and pedestrians using the Roadways,
The Grantee further acknowledges and agrees to all of the reservations of rights
and easements in favor of the Grantor and the Grantor's successors and assigns as "Declarant"
under the Community Declaration and the Supplemental Declaration, each of which is hereby
incorporated into this Deed by this reference. Grantee acknowledges and agrees that each and
every covenant herein contained shall run with the land. By acceptance of this Deed, the
Grantee hereby agrees with the Grantor that in order to effectuate the rights and easements
reserved to the Grantor as described above and contained in the Community Declaration and
the Supplemental Declaration, the Grantor shall also have the right to prepare, execute, file,
process and record necessary documents to establish and grant easements and to make
appropriate amendments to the Community Declaration and the Supplemental Declaration, By
such acceptance, the Grantee also agrees to execute all documents and to do 611 other things
as may be necessary or convenient to effect the same; and such acceptance shall be deemed
an appointment of the Grantor, with full right of substitution,. as the attorneys-In-fact of the
Grantee (and any mortgagee of the Grantee)to execute such documents and to do such things
on the Grantee's (or the Grantees mortgagees) behalf, which grant of such power, being
coupled with an interest, Is Irrevocable for the term of the Grantor's reserved rights and shall not
be affected by the disability of the Grantee.
Grantee on behalf of Grantee and Grantee's successors and assigns agrees that
in the event Grantee or any other person with an interest in the Community or the Property shall
have any claim or cause of action arising out of or in any way related to this Deed, the
Community Declaration and the Supplemental Declaration (and any and all rules, regulations
and supplemental declarations promulgated pursuant to the foregoing, and the enforcement
thereof), the design, orientation of the improvements to the Lot (e.g., the Home and related
facilities) or the Lot as they relate to exposure to the sun, moisture, mold and/or wind and/or
adjacent properties, the development, construction, quality, sales, marketing, disclosures
concerning, financing, delivery of the Community or any Lot, improvements to the Lot, the
Limited Warranty, each of those items identified in the Limited Warranty, all of which are
incorporated into this section by this reference, Grantor's "Customer Care Program" or any
7
Pualani 3/Steel Trust Sales Lot 11
22594-312/1406096.1
other aspect of or activity with respect to the Community or the Property (herein collectively the
"Covered Matters"), against any of the Covered Parties defined in the Community Declaration
and the Supplemental Declaration, such claim or cause of action (a "Dispute") whether such
Dispute is based on contract', tort, or statute, including, without limitation, any dispute described
in the Community Declaration and the Supplemental Declaration, whether such Dispute arises
before or after the recording of this Dead, shall be resolved by binding arbitration in accordance
with the Federal Arbitration Act (9 U.S.C. §1, at seq.) now in effect and as the same may from
time to time be amended, to the exclusion of any different or inconsistent state or local law,
ordinance, regulation, or judicial rule by and pursuant to the rules of Dispute Prevention and
Resolution ("OPR") in effect at the time of the initiation of the arbitration (sometimes the
"Arbitration" or "arbitration") after Grantee shall have first been submitted to the process of
"Negotiation" and "Mediation" defined in the Community Declaration and the Supplemental
Declaration, and not by a court of law; provided, however, any and all disputes relating to
Unresolved Warranty Issues (as the same is or may be defined in the Limited Warranty)shall be
resolved by mediation and arbitration in the manner specified in Grantor's Limited Warranty,
utilizing the mediator and arbitrator selected under the provisions of Grantor's Limited Warranty;
provided further that In the event of an arbitration of a dispute relating to an Unresolved
Warranty Issue (as the same is or may be defined in Grantor's Limited Warranty) under the
terms of Grantor's Limited Warranty the provisions of the Community Declaration and/or
Supplemental Declaration shall apply only to the extent not in conflict with Grantor's Limited
Warranty. Any such claim or cause of action shall be subject to arbitration regardless of
whether the claim is against Grantor, Grantor's real estate broker, agent or attorney, the
architects, engineers, or other design consultants for the Community, the contractor,
subcontractors, sub-subcontractors, material suppliers or other persons involved with the
Community, their officers, directors, agents, servants, employees or representatives, the
managing agent, if any, and their respective officers, directors, agents, servants, employees or
representatives, provided that such person(s) agrees to or has agreed to arbitrate such
disputes; or if such claim or cause of action is filed jointly and severally against other parties, it
shall be subject to arbitration whether or not such other parties are willing to submit to arbitration
as provided in this Deed. Any arbitration shall be conducted in the County in which the Property
is located. No punitive damages shall be awarded in any claim against Grantor or any covered
parties. The arbitrator may not award attorneys' fees, but may award costs, including expert
witness fees, to the prevailing party. No award for damages attributable to emotional distress or
a multiple of actual damages based upon any theory of law may be awarded by the arbitrator in
any claim against Seller or any of the other Covered Parties. Further, no award of
consequential or incidental damages, as defined in the Grantor's Limited Warranty, shall be
awarded. The arbitrator may award equitable relief pursuant to any arbitration instituted to
enforce the Community Declaration and the Supplemental Declaration. The award rendered by
the arbitrator shall be final and a judgment may be entered upon such award,
The Grantor and the Grantee agree that this instrument may be executed in
counterparts, each of which shall be deemed an original, and said counterparts shall together
constitute one and the same agreement, binding all of the parties hereto, notwithstanding all of
the parties are not signatory to the original or the same counterparts. For all purposes,
including, without limitation, recordation, filing and delivery of this instrument, duplicate
unexecuted and unacknowledged pages of the counterparts may be discarded and the
remaining pages assembled as one document.
The Grantor and the Grantee agree that the terms "Grantor' and "Grantee" as
used in this Deed, or any pronouns used in place of such terms, shall include the masculine,
feminine or neuter gander, the singular or plural number, individuals or corporations, and each
Puslani 3/Steel Trust Sales Lot 11
22594-31211406095.1
of their respective heirs, devisees, personal representatives, members, managers, successors,
successors in trust and assigns, according to the context of such terms. If this Deed is signed
by two or more persons or parties as the Grantee, all covenants of the Grantee contained in this
Deed shall be deemed joint and several. Each and every acknowledgment, acceptance,
appointment, agreement and covenant of the Grantee contained in this Deed shall run with the
Property hereby conveyed and shall constitute an equitable servitude and lien on the Property,
and each person or party hereafter acquiring from the Grantee any interest in the Property shall
be deemed to make such acknowledgments, acceptances, appointments, agreements and
covenants by and upon such acquisition.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
9
Pualani 3/Steal Trust Sales Lot 11
22604-312114OW96.1
IN WITNESS WHEREOF, the Grantor and the Grantee have executed this Deed
as of the day and year first above written.
D.R. HORTON -SCHULER HOMES, LLC,
a Delaware limited liability company,
dba D.R. NORTON-SCHULER DIVISION
By VERTICAL CONSTRUCTION CORPORATION,
a Delaware corporation
Its Manager
By
Name: Michael T. Jon
Title: Division Presi of the Hawaii Division
Grantor
CAROLE JOAN STEERS
as Trustee aforesaid
Grantee
10
Pualani 3/Steel Trust Sales Ld 11
22594-312/1406095.1
IN WITNESS WHEREOF, the Grantor and the Grantee have executed this Deed
as of the day and year first above written.
D.R. HORTON -SCHULER HOMES, LLC,
a Delaware limited liability company,
dba D.R. HORTON - SCHULER DIVISION
By VERTICAL CONSTRUCTION CORPORATION,
a Delaware corporation
Its Manager
By
Name: Michael T. Jones
Title: Division President of the Hawaii Division
Grantor
CAROLE JOANOSTEERS
as Trustee aforesaid
Grantee
10
Puslani 3/Steel Trust Sales Lot 11
22594-31211406095.1
STATE OF HAWAII
SS.
CITY AND COUNTY OF HONOLULU
On AM 4 202 before me personally appeared Michael
T. Jones, to me personally known, who, being by me duly sworn or affirmed, did say that such
person(s) executed the foregoing instrument as the free act and deed of such person(s), and if
applicable, in the capacities shown, having been dul uthorized to execute such instrument in
such capacities.
4 (jjt ,Tyke,Tykej% or print name: Cecelia M. Nirei
K-0.�tx
6j* t - -
.4p 'AA N a
r ry Public, State of Hawaii
commission expires: December 27, 2013
%&A
Date of Doe: Undated at time of notarization #Pages:
Name of Notary: Cecelia M. Nirei Notes: Unsigned by Grantee(counterparts)
Doc.Description:
M.
APR 4 2012
Notary Signature Date
First Circuit, State of Hawaii
NOTARY CERTIFICATION
11
Pualan!3/Steel Trust Sales Lot 11
22594-312/1406095.1
STATE OF HAWAII
) 88.
COUNTY OF HAWAII
On 1 c, 23 2211 before me personally appeared CAROLE JOAN
STEERS, to me personally known, who, being by me duly sworn or affirmed, did say that such
person(s) executed the foregoing instrument as the free act and deed of such person(s), and if
applicable, in the capacities shown, having been duly authorized to execute such instrument in
such capacities.
LA,4a
G, Type or print name: M Wg irn E- —tcr4 LV A
T
\j
N03-93 Notary Public, State of Hawaii
My commission expires: Ccb- a--:� '2015
..........
Date of Doe: -:3 1 #Pages:
Name of Notary: Notes:
DOC.
Description: E E N
� •� ���qg��+C-sial}
16
...........
op M N4�
Notary Signature Date
Third Circuit, State of Hawaii
NOTARY CERTIFICATION
12
Puslaril 3/Steal trust Sales Lot 11
22594-312/1406095.1
( a
EXHIBIT A
ALL OF THAT CERTAIN PARCEL OF LAND (BEING A PORTION OF THE LAND DESCRIBED
IN AND COVERED BY ROYAL PATENT NUMBER 6716, LAND COMMISSION AWARD
NUMBER 4887, APANA 2 TO THOMAS SAMS), SITUATE, LYING AND BEING AT
PUAPUAAIKI 1ST, NORTH KONA, ISLAND AND COUNTY OF HAWAII, STATE OF HAWAII,
BEING ALSO A PORTION OF LOT C OF THE CONSOLIDATION OF LOT 1 AND PARCEL 28
AND RESUBDIVISION INTO LOTS A, B AND C, BEING LOT 24 OF "PUALANI ESTATES
SUBDIVISION, PHASE 3", AS SHOWN ON SUBDIVISION MAP PREPARED BY KEVIN K.
KEA, LICENSED PROFESSIONAL LAND SURVEYOR, WITH ACE LAND SURVEYING LLC,
DATED FEBRUARY 22, 2007, AND BEING MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF THIS PARCEL OF LAND, BEING THE
NORTHEAST CORNER OF LOT 23 OF THE PUALANI ESTATES SUBDIVISION PHASE 111,
BEING ALSO THE CUL-DE-SAC OF KIPEHI PLACE, THE COORDINATES OF SAID POINT
OF BEGINNING REFERRED TO GOVERNMENT SURVEY TRIANGULATION STATION
"KAHELO" BEING 1439.67 FEET NORTH AND 5700.77 EAST AND RUNNING BY TRUE
AZIMUTHS MEASURED CLOCKWISE FROM SOUTH:
1. 80° 31' 31" 95.96 FEET ALONG THE NORTH SIDE OF LOT 23;
2, 166" 260F 16.30 FEET ALONG THE EAST SIDE OF LOT 12;
3. 1740 25' 37" 76.86 FEET;
4. 246° 56' 33,09 FEET ALONG THE SOUTH SIDE OF LOT C OF L.C. AW, 8516-B, AP. 3 TO
KAMAIKUI;
5. 238" 51' 30"40,70 FEET;
6. 3340 46' 11" 69.42 FEET ALONG THE WEST SIDE OF LOT 25;
7. 298°38' 25" 13.78 FEET;
THENCE ALONG THE CUL-DE-SAC OF KIPEHI PLACE ON A CURVE TO THE LEFT WITH A
RADIUS OF 45.00 FEET, THE CHORD AZIMUTH AND DISTANCE BEING:
8. 10 25' 13" 41.17 FEET TO THE POINT OF BEGINNING AND CONTAINING AN AREA OF
9,224 SQUARE FEET, MORE OR LESS.
TOGETHER WITH an easement for access across Roadway Lots A, B, C, D and E, inclusive, of
the subdivision map described above, and thereafter Lot 132 of the Pualani Estates Subdivision
Phase 1, as shown on File Plan 2352, to Hawaii Belt Road (Queen Kaahumanu Highway
Extension), a public road, as roadways for access to the Community until such time as the
roadways are dedicated to the County of Hawaii or the State of Hawaii.
TOGETHER ALSO WITH Easement C-1 for access and utility purposes, containing an area of
0.858 acre, more or less, as granted by that certain Grant of Easement effective as of January
14, 2003, recorded in the Bureau of Conveyances, State of Hawaii, as Document No. 2003-
008566, said Easement C-1 being more particularly described therein.
13
Pualani 3/Steel Trust Sales lot 11
22594-31211406095.1
Being a portion of the land conveyed by the following:
LIMITED WARRANTY DEED
Grantor: Pualani Estates, Inc., a Hawaii corporation
Grantee: D.R. HORTON - SCHULER HOMES, LLC, a Delaware limited
liability company, dba D.R. HORTON-SCHULER DIVISION,
Tenant in Severalty
Dated: October 19, 2004
Recorded: Document No. 2004-215171
SUBJECT, HOWEVER,to,
1. Title to all minerals and metallic mines reserved to the State of Hawaii.
2. UNRECORDED GRANT OF EASEMENT, as disclosed by an instrument:
In favor of: Hilo Electric Light Company Limited
Dated: October 1, 1968
Purpose: Utility
The foregoing unrecorded Grant of Easement was set forth in the following Instrument:
Dated: May 17, 1973
Recorded: Book 9167, Page 2
3. AGREEMENT FOR ASSIGNMENT OF RIGHTS TO WATER COMMITMENT UNITS
KEALAKEKUA WATER SOURCE AGREEMENT:
By and Between: Robert Leon Daniel, "Assignor"; and Pualani Development
Company, Hawaii joint venture, "Assignee*
Dated: June 30, 1988
Recorded: Book 22451, Page 332
CONSENT
Consent By: The Water Commission of the County of Hawaii
Dated: - September 27, 1988
Recorded: Book 22451, Page 338
4. Covenants, conditions, restrictions, reservations, agreements, obligations, easements
and other provisions set forth in the:
DECLARATION OF CONDITIONS:
Dated: October 5, 1989
Recorded: Book 23776, Page 653
5. Covenants, conditions, restrictions, reservations, agreements, obligations, easements
and other provisions set forth in the:
14
Pualani 3/Steet Trust Sales Lot 11
22694-31211406095.1
DEED
Dated: October 19,2004
Recorded: Document No. 2004-215171
6. Covenants, conditions, restrictions, reservations, agreements, obligations, easements
and other provisions set forth in the:
PUALANI ESTATES AT KONA DECLARATION OF COVENANTS, CONDITIONS,
RESTRICTIONS AND EASEMENTS
Dated: October 20, 2003
Recorded* Document No. 2003-234864, as amended and/or supplemented
SUPPLEMENTAL DECLARATION OF ANNEXATION AND RESTRICTIVE
COVENANTS FOR PUALANI ESTATES AT KONA (PHASE 3)
Dated'. August 11, 2011
Recorded- Document No. 2011-128768, as amended and/or supplemented
7. Bylaws of Pualan! Estates at Kona Community Association, as the same may be
amended from time to time.
8. Reservations in favor of Grantor and others of those easements as set forth in the
Declaration, for the surrounding use effects therein described and the impacts and
nuisances resulting from the location of the Lot near or adjacent to properties that are
used for or are able to be used for agricultural, farming, animal husbandry or related
uses, and permitting the periodic impact of the premises by various hazards and by
noise, dust, smoke, earthshock, soot, ash, odor, noxious vapors, the presence and/or
transmission of pollutants or other hazardous materials, surface water runoff, or other
adverse environmental conditions created by or attributable to historical, existing and
prospective surrounding agricultural, construction, development and other activities,
which uses, activities and resulting impacts are specifically approved and authorized by
Grantee, as set forth in the Declaration.
9. The obligation of Grantee, at Grantee's cost, to maintain, repair and clean the existing
drainage pattern, drainage facility and concrete facility, if any, on the Lot, except for
drainage facilities and concrete facilities constructed for the benefit of the County of
Hawaii, if any,which facilities shall be maintained by the County of Hawaii.
10. The obligation of Grantee, at Grantee's cost, to properly maintain the Lot to prevent
excess water on the Lot and to avoid the risks of expansion or subsidence of soils, as
set forth in the Declaration.
11. The obligation of Grantee to comply, prior to obtaining a building permit for all buildings
and improvements on the Lot, to obtain written approval of the Design Committee, as set
forth in the Declaration.
12. Reservation of right for Grantor to cancel, designate, grant and convey easements,
including without limitation easements for landscaping, irrigation, maintenance, sewer,
15
PuWani WSteel Trust Sales Lot 11
22594-31211406095.1
and electrical purposes, without the joinder or consent of Grantee or Grantee's
mortgagee, all as set forth in the Declaration.
13. The obligation of Grantee, at Grantee's cost, to properly maintain, repair and replace, as
necessary, all front yard fences constructed by Grantor, if any, as set forth in the
Declaration.
END OF EXHIBIT A
16
Pualani 3/Steel Trust Sales Lot 11
225x94-312J1406096.1
- .f.
R-81 STATE OF HAWAII
BUREAU OF CONVEYANCES
RECORDED
JUN 20,2005 08:01 AM
Doc No(s)2005-120451
��IFI�II�IIIII�IIIII11 IIII�II
REGISTRAR OF CONVEYANCES
99 1 111 26
LAND COURT REGULAR SYSTEM
Return By Mail [X] Pick-Up To:
CARLSMITH BALL LLP '
121 Waianuenue Avenue
P.O. Box 686 TG ACC0V' `355= '°
Hilo,Hawaii 96721-0686
Attention: Steven S.C. Lim
Telephone: (808)935-6644
TITLE OF DOCUMENT:
THE HEIGHTS ON HUALALAI
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
PARTIES TO DOCUMENT:
DECLARANT: INTERNATIONAL DEVELOPMENT PROJECTS LTD.,a Hawaii
corporation, whose address is c/o Robert D. Triantos,P. O. Box 1720,
Kailua-Kona, Hawaii 96745-1720; and
PUALANI ESTATES, INC., a Hawaii corporation,whose address is c/o
Robert D. Triantos, P. O. Box 1720,Kailua-Kona, Hawaii 96745-1720
TAX MAP KEY(S): (3) 7-5-017:34 (This document consists of 99 pages.)
4845-1044-9768.1
THE HEIGHTS ON HUALALAI
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
TABLE CONTENTS
Page
ARTICLE I. RECITALS ......................................................................................................2
Section 1.1 Description of Property........................................................................2
Section 1.2 Land Use Approvals, Restrictions, and Conditions.............................2
Section1.3 Binding Effect......................................................................................3
Section1.4 Exhibits................................................................................................3
Section 1.5 Governing Documents.........................................................................3
Section 1.6 Severability............................................................................... .......4
ARTICLE II. DEFINITIONS.................................................................................................4
Section 2.1 Area of Common Responsibility.........................................................4
Section2.2 Articles.................................................................................................4
Section2.3 Association...........................................................................................5
Section 2.4 Association Easement..........................................................................5
Section 2.5 Base Assessment..................................................................................5
Section 2.6 "Board of Directors" or "Board"..........................................................5
Section 2.7 By-Laws.............
..................................................................................
Section 2.8 Class 'B' Control Period.......................................................................5
Section 2.9 Common Area......................................................................................5
Section 2.10 Common Expenses...............................................................................5
Section 2.11 Community-Wide Standard....................................................
Section 2.12 Covenant to Share Costs......................................................................6
Section2.13 Declarant..............................................................................................6
Section 2.14 Design Guidelines................................................................................6
Section 2.15 "Design Review Committee" or "DRC" ..............................................6
Section2.16 Dwelling...............................................................................................6
Section 2.17 Governing Documents.........................................................................6
Section 2.18 Historical Sites.....................................................................................6
Section 2.19 Improvement........................................................................................6
Section2.20 Lot........................................................................................................6
Section2.21 Member................................................................................................7
4845-1004-8768.1 -i-
TABLE OF CONTENTS
(continued)
Page
Section2.22 Mortgage..............................................................................................7
Section2.23 Ordinance.............................................................................................7
Section2.24 Owner...................................................................................................7
Section2.25 Park......................................................................................................7
Section2.26 Person...................................................................................................7
Section2.27 Project..................................................................................................7
Section2.28 Property................................................................................................8
Section 2.29 "Record," "Recording," "Recorded," or"Recordation" ...8
Section2.30 Reviewer..............................................................................................8
Section 2.31 Rules and Regulations.......................................................................... 8
Section 2.32 Special Assessment..............................................................................8
Section 2.33 Specific Assessment.............................................................................8
Section 2.34 Subdivision Improvements..................................................................8
Section 2.35 Supplemental Declaration....................................................................8
ARTICLE III. USE AND CONDUCT....................................................................................8
Section 3.1 Framework for Regulation...................................................................8
Section 3.2 Rule Making Authority........................................................................9
Section 3.3 Owners'Acknowledgment and Notice to Purchasers........................ 10
ARTICLE IV. COVENANTS AND RESTRICTIONS ........................................................ 10
Section 4.1 Protection of Owners and Others....................................................... 10
(a) Similar Treatment. ................................................................................. 10
(b) Displays. ................................................................................................. 10
(c) Household Composition. ........................................................................ 10
(d) Activities Within Dwellings. ................................................................. 10
(e) Allocation of Burdens and Benefits. ...................................................... 10
(fl Alienation. .............................................................................................. 11
(g) Abridging Existing Rights. .................................................................... I 1
ARTICLE V. CONSTRUCTION AND DESIGN STANDARDS ...................................... I 1
Section5.1 Purpose............................................................................................... 11
Section5.2 General............................................................................................... 11
4845-1004-8768.1 -ii-
TABLE OF CONTENTS
(continued)
Page
Section5.3 Design Review................................................................................... 12
(a) By Declarant. ......................................................................................... 12
(b) By Design Review Committee. .............................................................. 12
(c) Review Fees; Assistance. ....................................................................... 13
Section 5.4 Guidelines and Procedures................................................................. 13
(a) Design Guidelines. ................................................................................. 13
(b) Procedures. ............................................................................................. 14
Section 5.5 No Waiver of Future Approvals ........................................................ 16
Section5.6 Variances............................................................................................ 16
Section 5.7 Limitation of Liability........................................................................ 17
Section 5.8 Certificate of Architectural Compliance............................................ 17
Section 5.9 Notice to Comply............................................................................... 17
Section 5.10 Disruption of Historical Sites............................................................. 18
Section 5.11 Construction of Improvements.......................................................... 18
Section 5.12 Prohibition Against Second Dwelling Unit....................................... 19
ARTICLE VI. MAINTENANCE AND REPAIR................................................................. 19
Section 6.1 Maintenance of Lots.......................................................................... 19
Section 6.2 Responsibility for Repair and Replacement ......................................20
ARTICLE VII. THE COMMUNITY ASSOCIATION..........................................................20
Section 7.1 Organization....................
Section7.2 Function.............................................................................................21
Section 7.3 Membership............................................................................... ..21
Section7.4 Voting................................................................................................21
(a) Class "A". ...............................................................................................21
(b) Class "B". ...............................................................................................21
(c) Exercise of Voting Rights. .....................................................................21
(d) Additional Classes of Membership. .......................................................22
Section 7.5 Acceptance and Control of Association Property..............................22
Section 7.6 Maintenance of Area of Common Responsibility.............................22
Section 7.7 Insurance............................................................................................24
4845-1004-8768.1 -iii-
TABLE OF CONTENTS
(continued)
Page
(a) Required Coverages. ..............................................................................24
(b) Policy Requirements. .............................................................................24
(c) Restoring Damaged Improvements. .......................................................26
Section 7.8 Compliance and Enforcement............................................................27
Section 7.9 Implied Rights: Board Authority.......................................................29
Section 7.10 Indemnification of Officers,Directors and Others............................29
Section 7.11 Safety and Security............................................................................29
Section 7.12 Provision of Services .........................................................................30
Section 7.13 Relationships with Other Properties..................................................30
Section 7.14 Dedication of Road Lots....................................................................30
Section 7.15 Budgeting and Allocating Common Expenses..................................31
Section 7.16 Budgeting for Reserves......................................................................32
Section 7.17 Special Assessments..........................................................................32
Section 7.18 Specific Assessments.........................................................................32
Section.7.19 Authority to Assess Owners; Time of Payment.................................33
Section 7.20 Obligation for Assessments...............................................................33
(a) Personal Obligation. ...............................................................................33
(b) Declarant's Option to Fund Budget Deficits. .........................................34
Section 7.21 Lien for Assessments.........................................................................34
Section 7.22 Exempt Property................................................................................35
Section 7.23 Capitalization of Association.............................................................35
Section 7.24 Community Enhancement Fee...........................................................35
(a) Authority. ...............................................................................................35
(b) Fee Limit. ...............................................................................................35
(c) Purpose.....................................................................................................35
(d) Exempt Transfers. ..................................................................................36
ARTICLE VIII. ANNEXATION.............................................................................................36
Section 8.1 Annexation by Declarant...................................................................36
Section 8.2 Annexation by the Association..........................................................37
Section 8.3 Additional Covenants and Easements................................................37
4845-1064-8768.1 -iv-
TABLE OF CONTENTS
(continued)
Page
Section 8.4 Effect of Filing Supplemental Declaration........................................37
ARTICLE IX. ADDITIONAL RIGHTS RESERVED TO DECLARANT..........................37
Section 9.1 Withdrawal of Property......................................................................37
Section 9.2 Marketing and Sales Activities..........................................................38
Section 9.3 Right to Develop................................................................................38
Section 9.4 Right to Approve Additional Covenants............................................38
Section 9.5 Right to Approve Changes in Project Standards................................38
Section 9.6 Right to Transfer or Assign Declarant Rights....................................38
Section 9.7 Exclusive Rights To Use Name of Development..............................38
Section 9.8 Right to Notice of Design or Construction Claims............................39
Section 9.9 Termination of Rights........................................................................39
ARTICLE X. EASEMENTS................................................................................................39
Section 10.1 Easements in Common Area..............................................................39
Section 10.2 Easements of Encroachment..............................................................40
Section 10.3 Easements for Utilities, etc.......................................................... ..40
(a) Installation and Maintenance...................................................................40
(b) Specific Easements..................................................................................40
(c) Minimal Interference ...............................................................................40
Section 10.4 Easements to Serve Additional Property...........................................41
Section 10.5 Easements for Maintenance,Emergency and Enforcement ..............41
Section 10.6 Easement to Inspect and Right to Correct..........................................41
Section 10.7 Easements for Historical Sites...........................................................41
Section 10.8 Easement for Maintenance of Lots....................................................42
Section 10.9 Easement for Drainage.......................................................................43
Section 10.10 Association Easement........................................................................43
ARTICLE XI. THE PARK....................................................................................................43
Section11.1 Creation..............................................................................................43
Section 11.2 Construction and Maintenance ..........................................................43
Section 11.3 Restrictions on Use............................................................................44
Section 11.4 Limitations on Liability.....................................................................44
4845-1004-8768.1 _V
TABLE OF CONTENTS
(continued)
Page
ARTICLE XII. WASTEWATER DISPOSAL .......................................................................44
Section 12.1 Connection Required Prior to Occupancy.........................................44
ARTICLE XIII. PARTY WALLS AND OTHER SHARED STRUCTURES........................44
Section 13.1 General Rules of Law to Apply.........................................................44
Section 13.2 Maintenance: Damage and Destruction.............................................45
ARTICLE XIV. DISPUTE RESOLUTION AND LIMITATION ON LITIGATION............45
Section 14.1 Agreement to Encourage Resolution of Disputes Without
Litigation............................................................................................45
Section 14.2 Dispute Resolution Procedures..........................................................46
(a) Notice. ....................................................................................................46
(b) Negotiation. ............................................................................................46
(c) Mediation. ..............................................................................................46
(d) Settlement. .............................................................................................47
(e) Mandatory Arbitration. ..........................................................................47
Section 14.3 Initiation of Litigation by Association...............................................48
ARTICLE XV. MORTGAGE PROVISIONS........................................................................48
Section 15.1 Notices of Action...............................................................................48
Section 15.2 Other Provisions for First Lien Holders.............................................49
Section15.3 No Priority.........................................................................................49
Section 15.4 Notice to Association.........................................................................49
ARTICLE XVI. CHANGES IN THE COMMUNITY.............................................................49
Section 16.1 Changes in Ownership of Lots...........................................................49
Section 16.2 Changes in Common Area................................................................. 50
(a) Condemnation. ...................... ................................................................50
(b) Partition. ..................................................................................................50
(c) Transfer or Dedication of Common Area................................................50
ARTICLE XVII. DISCLOSURES.............................................................................................50
Section 17.1 Ongoing Construction and Sales Activities.......................................50
Section 17.2 Expansion and/or Modification..........................................................51
Section 17.3 Hazardous Materials..........................................................................51
4845-1004-8768.1 -vi-
TABLE OF CONTENTS
(continued)
Page
Section 17.4 Impacts on Lot...................................................................................52
Section 17.5 View Impairment...............................................................................52
Section 17.6 Roadways...........................................................................................52
Section 17.7 Wells and Irrigation Systems.............................................................53
ARTICLE XVIII. AMENDMENT OF DECLARATION..........................................................53
Section 18.1 By Declarant...................................................................................... 53
Section18.2 By Members....................................................................................... 53
Section 18.3 Validity and Effective Date ............................................................... 54
Section 18.4 Limitations on Amendments..............................................................54
ARTICLE XIX. MISCELLANEOUS......................................................................................54
Section 19.1 Laws of Hawaii;Non-Waiver............................................................54
Section 19.2 Joint and Several Liability.................................................................54
Section 19.3 Interpretation......................................................................................54
Section19.4 Captions.............................................................................................55
Section 19.5 Word Usage ....................................................................................... 55
Section 19.6 Notice, Information, or Material.......................................................0 55
Section 19.7 Limited Liability................................................................................55
Section19.8 Exhibits..............................................................................................55
4845-1064-8768.1 -vii-
THE HEIGHTS ON HUALALAI
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
THIS DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS ("Declaration")is made this-hday of June,2005,by International
Development Projects Ltd.,a Hawaii corporation,whose address is c/o Robert D. Triantos, P.O.
Box 1720,Kailua-Kona, Hawaii 96745-1702,and Pualani Estates, Inc.,a Hawaii corporation,
whose address is c/o Robert D. Triantos, P. O. Box 1720, Kailua-Kona, Hawaii 96745-1720
(hereinafter collectively referred to as "Declarant").
ARTICLE I. RECITALS
Section 1.1 Description of Property.
(a) The land to which this Declaration applies is the land described in Exhibit
A attached hereto and made a part hereof and any additional property which is made a part of
The Heights on Hualalai(the "Project") in the future by Recording one or more Supplemental
Declarations (hereinafter the "Property").
(b) No property,except that described in Exhibit A and hereby made subject
to this Declaration and except that specifically annexed as provided herein, shall be deemed
subject to this Declaration, whether or not shown on any subdivision map or file plan filed by
Declarant or described or referred to in any document executed and Recorded by Declarant. No
designation of any parcel, lot or other area on any map or plan Recorded by Declarant as a
common area, road, street, school or park or as any other type of parcel, lot or area shall be
deemed to be a dedication or commitment or representation that such parcel, lot or area is or will
be used, devoted to, or restricted to such use,except with respect to parcels, lots or areas
specifically described in Exhibit A, or specifically later annexed as provided herein, and so
designated on a subdivision map or file plan for such use; nor shall any Owner,or the public,or
any public body or agency or any other person,corporation or entity acquire any interest or
rights therein by reason of such designation or filing, except as provided herein.Nothing in this
Declaration or in any amendment to this Declaration,or in any Recorded or unrecorded
subdivision map or file plan,nor in any picture, drawing,brochure or other representation of a
scheme of development, shall be deemed to be a representation, warranty or commitment that
Declarant will commit or subject(or be construed as requiring Declarant to commit or subject)to
this Declaration any real property situated in North Kona other than that described in Exhibit A
or any amendment thereto.
Section 1.2 Land Use Approyals, Restrictions,and Conditions.
(a) The Property that is submitted to this Declaration is subject to various land
use approvals,restrictions, and conditions imposed by the County of Hawaii, through Zoning
Ordinance Nos. 95-99, 95-100 and 99-51,the State Land Use Commission's Order dated
September 13, 1989, in Docket No.A88-632, and such other conditions that have been imposed
or may be imposed throughout the course of development of the Property. These conditions and
approvals impose significant obligations and restrictions on the Association,Declarant, and the
Owners.
4845-1004-8768.1 2.
(b) This document does not and is not intended to create a condominium
under Hawaii law.
Section 1.3 Bindine Effect.
(a) All property described in Exhibit A,and any additional property which is
made a part of the Project in the future by Recording one or more Supplemental Declarations,
shall be owned, conveyed,and used subject to all of the provisions of this Declaration,which
shall run with the title to such property. This Declaration shall be binding upon all Persons
having any right, title, or interest in any portion of the Project,their heirs, successors, successors-
in-title,and assigns.
(b) This Declaration,as it may be amended, shall remain in effect and shall be
enforceable by Declarant,the Association,any Owner, and their respective legal representatives,
heirs, successors, and assigns, for a term of twenty (20)years from the date it is Recorded. After
such time,this Declaration shall be extended automatically for successive periods often(10)
years each, unless an instrument signed by a majority of the then Owners has been Recorded
within the year preceding any extension, agreeing to terminate this Declaration. In the latter case,
it shall terminate as of the date specified in such instrument. Notwithstanding this, if any
provision of this Declaration would be unlawful,void, or voidable by reason of any Hawaii law
restricting the period of time that covenants on land may be enforced, such provision shall expire
21 years after the death of the last survivor of the now living descendants of Elizabeth 11, Queen
of England.Nothing in this Section shall be construed to permit termination of any casement
created in this Declaration without the consent of the holder of such easement.
Section 1.4 Exhibits.
The following documents, as they may be amended from time to time, attached
hereto as Exhibits A through E, are hereby made a part of this Declaration:
Exhibit A. Land
Exhibit B . Articles of Incorporation of the Association
Exhibit C . By-Laws of the Association
Exhibit D_ initial Rules and Regulations
Exhibit E. Design Guidelines described in Article V
Section 1.5 GoverninE Documents.
(a) The Project's Governing Documents consist of the following, as they may
be amended from time to time:
(1) This Declaration and such Recorded Supplemental Declarations;
(2) The Articles of Incorporation and Bylaws of the Association;
4845-1004-8768.1 3.
(3) Rules and Regulations of the Project;
(4) Design Guidelines and;
(5) Resolutions of the Board of Directors.
(b) Nothing in this Section shall preclude any Supplemental Declaration or
other Recorded covenants applicable to any portion of the Project from containing additional
restrictions or provisions which are more restrictive than those of this Declaration and,in such
case, the more restrictive provision shall control.
(c) The Association may, from time to time and subject to the provisions of
this Declaration, adopt, amend, and repeal the Rules and Regulations. The Rules and Regulations
are to be certified by the Secretary of the Association. A copy of the Rules and Regulations shall
be filed in and available at all times at the office of the Association and duplicate copies shall be
delivered to each Owner upon the Owner's acquisition of a Lot.A copy of each new rule or of
any amendment of an existing rule and/or regulation and notice of repeal of any rule and/or
regulation shall be given to each Owner when the same becomes effective. The initial Rules and
Regulations are attached hereto as Exhibit D. Failure to deliver to any Owner a copy of any rule
and/or regulation, amendment of a rule and/or regulation, or notice of repeal of a rule and/or
regulation shall not render such rule and/or regulation, amendment,or repeal invalid.
(d) The Governing Documents apply to all Owners and occupants of property
within the Project, as well as to their respective tenants, guests, and invitees.Any lease on a Lot
shall provide that the tenant and all occupants of the leased Lot are bound by and obligated to
comply with the Governing Documents.
Section 1.6 Severability.
If any court or government commission,board, or agency having jurisdiction
should determine by final judgment, order, or decree that any provision of this Declaration is
invalid, or invalid as applied in a particular instance, such determination shall in no way affect
the validity or application of other provisions of this Declaration, which shall remain in full force
and effect according to their terms.
ARTICLE II. DEFINITIONS
Unless the context otherwise specifies or requires, the following capitalized terms
used in this Declaration shall have the following meanings:
Section 2.1 "Area of Common Responsibility" shall mean the Common Areas,
together with such other areas, if any, for which the Association has or assumes responsibility
pursuant to the terms of this Declaration, any Supplemental Declarations, and/or other applicable
covenants,contracts,or agreements.
Section 2.2 "Articles" shall mean the Articles of Incorporation of the Association filed
to or to be filed pursuant to Chapter 414D of the Hawaii Revised Statutes, as amended. A copy
of the initial Articles is attached to this Declaration as Exhibit B.
4845-1004-8768.1 4.
Section 2.3 "Association" shall mean The Heights on Hualalai Community
Association, Inc., a non-profit Hawaii corporation,and its successors and assigns.
Section 2.4 "Association Easement" shall mean those easements in favor of the
Association that are within the Project,and that are shown on the final County-approved
subdivision map for the Project, as the same may be amended from time to time, including,
without limitation, all Historical Sites,
Section 2.5 "Base Assessment" shall mean assessments levied on all Lots subject to
assessment under Article VII to fund Common Expenses for the general benefit of all Lots, as
determined in accordance with Section 7.15.
Section 2.6 "Board of Directors" or"Board" shall mean the Board of Directors of
the Association.
Section 2.7 "B„,Y Laws" shall mean the Bylaws of the Association, as they may be
amended. A copy of the initial By-Laws is attached to this Declaration as Exhibit C.
Section 2.8 "Class 'B' Control Period" shall mean the time period during which the
Class B Member is entitled to appoint a majority of the members of the Board as provided in the
By-Laws. The Class "B" Control Period shall terminate on the first to occur of the following:
(a) when ninety percent(90%)of the total number of Lots in the Project have
certificates of occupancy issued thereon and have been conveyed to Class "A" Members; or
(b) December 31, 2050; or
(c) when, in its discretion,the Class 'B" Member so determines.
Section 2.9 "Common Area" shall mean all real and personal property,including
easements,which the Association owns, leases, or otherwise holds possessory or use rights in for
the common use and enjoyment of the Owners including,without limitation,the Association
Easements.
Section 2.10 "Common Expenses" shall mean the actual and estimated expenses
incurred, or anticipated to be incurred, by the Association for the general benefit of all Owners,
including any reasonable reserve, as the Board may find necessary and appropriate pursuant to
the Governing Documents. Common Expenses shall not include any expenses incurred during
the Class "B" Control Period for initial development or other original construction costs unless
Members representing a majority of the total Class "A" vote of the Association approve.
Payments due under leases of capital improvements such as street lights shall not be considered
an initial development or original construction cost.
Section 2.11 "Community-Wide Standard" shall mean the standard of conduct,
maintenance, or other activity generally prevailing at the Project, or the minimum standards
established pursuant to the Design Guidelines, Rules and Regulations, and Board resolutions,
whichever is the highest standard. Declarant shall initially establish such standard,which may
4845-1004-8768.1 5.
contain both objective and subjective elements. The Community-Wide Standard may evolve as
development progresses and as the needs and desires within the Project change.
Section 2.12 "Covenant to Share Costs" shall mean a Recorded Declaration of
Easements and Covenant to Share Costs which creates certain easements for the benefit of the
Association and the present and future owners of the subject real property. It obligates the
Association and such owners to share the costs of maintaining property described in the
Covenant to Share Costs.
Section 2.13 "Declarant" shall mean INTERNATIONAL DEVELOPMENT
PROJECTS LTD., a Hawaii corporation,and PUALANI ESTATES,INC., a Hawaii
corporation, or any successor, successor-in-title, or assign who takes title to any portion of the
Property for the purpose of development and/or sale and who is designated as Declarant in a
Recorded instrument executed by both International Development Projects, Ltd. and PuaIani
Estates, Inc.
Section 214 "Design Guidelines" shall mean the architectural,design, and
construction guidelines and review procedures adopted pursuant to Article V, as they may be
amended.
Section 2.15 "Design Review Committee" or "DRC" shall mean The Heights on
Hualalai Design Review Committee established or to be established pursuant to Article V hereof
to review plans and specifications for the construction and use of Improvements within the
Project, and to approve or disapprove the same in accordance with Declaration and the Design
Guidelines.
Section 2.16 "Dwelling" shall mean a single family dwelling located on a Lot.
Section 2.17 "Governing Documents" shall be a collective term referring to this
Declaration and any applicable Supplemental Declaration,the Articles, the By-Laws, the Rules
and Regulations,the Design Guidelines, and the Resolutions of the Board of Directors, as they
may be amended.
Section 2.18 "Historical Sites" shall mean burial grounds and other historically and/or
archaeologically significant sites that are identified and/or existing within the Project.
Section 2.19 "Improvement" shall mean any thing or device placed on a Lot within the
Project that may affect the appearance or use of such Lot, including,but not limited to,any
building, outbuilding, garage, shed,deck, landscaping, road, driveway,excavation, fill, grading,
parking area, fence, retaining wall or other wall, tanks,reservoir, pipes, lines, meters,drainage,
appurtenances,cables,conduit,utility,hedge,windbreak,pole,marker,sign, mailbox, newspaper
box or other delivery receptacle, planted tree,or any other structure or improvement of any type
or kind.
Section 2.20 "Lot" shall mean a portion of the Project,whether improved or
unimproved,which may be independently owned and is intended for development, use, and
occupancy as a Dwelling. The term shall refer to the land which is part of the Lot as well as any
Improvements thereon.
4845-1004-8768.1 6.
To the extent permitted by Hawaii law, and subject to the express written consent
of Declarant, two or more contiguous Lots may be consolidated and treated as a single Lot for
the purposes of architectural control pursuant to Article V and the Design Guidelines,
assessments and voting rights,provided that:
(a) the Lots to be consolidated are owned by the same Owner;
(b) only one Dwelling has been or will be constructed on the consolidated
Lots;
(c) the Owner of the consolidated Lots executes all documents necessary and
required;
(d) the Owner shall pay all costs related to the consolidation of the Lots; and
(e) if a Dwelling exists on the consolidated Lots, or construction has
commenced on a Dwelling on the consolidated Lots,the Lots may not be subdivided or
otherwise designated as separate Lots without the express written consent of Declarant.
Section 2.21 "Member" shall mean a Person or Persons entitled to membership in the
Association pursuant to Section 7,4.
Section 2.22 "Mort2aQe" shall mean a mortgage, a deed of trust, a deed to secure debt,
or any other form of security instrument affecting title to any Lot. The term "Mortgagee" shall
refer to a beneficiary or holder of a Mortgage.
Section 2.23 "Ordinance" shall mean all ordinances applicable to the development and
operation of the Project.
Section 2.24 "Owner" shall mean one or more persons, including natural persons,
corporations,partnerships, trustee,or any other legal entities,who hold the record title to any
Lot,but excluding in all cases any party holding an interest merely as security for the
performance of an obligation. If a Lot is sold under a Recorded contract of sale,and the contract
specifically so provides,the purchaser(rather than the fee Owner)will be considered the Owner.
If a Lot is subject to a Recorded lease with a term of twenty(20) or more years from its
commencement date, the Person or Persons having the right of occupancy to such Lot,will be
considered an Owner of such Lot during the term of the lease.
Section 2.25 "Park" shall mean Lot 28 of the Project, containing approximately 34,445
square feet, located on the northern end of the Project along Hualalai Road. The Park shall be
part of the Common Area and shall be maintained by the Association as a private park for the use
and benefit of Owners.
Section 2.26 "Person" shall mean a natural person, a corporation,a partnership, or any
other legal entity.
Section 2.27 "Project" shall mean the subdivision, consisting of twenty-seven (27)
residential Lots (two of which contain existing residences), eight(8) road lots, and one (1)park
4845-1004-8768.1 7.
lot to be developed on the real property described in Exhibit A,together with such additional
property as is subjected to this Declaration in accordance with Article VIII.
Section 2.28 "Pro e " shall mean all real property described in Exhibit A together
with such additional property as is subjected to this Declaration in accordance with Article VIII.
Section 2.29 "Record," "Recording," "Recorded," or"Recordation" shall mean,
with respect to any document,the recordation or filing of such document in the public records of
the State of Hawaii, including,but not limited to, the Bureau of Conveyances and/or the Office
of the Assistant Registrar of the Land Court, or such other place as may be designated as the
official location for recording deeds,plats,and similar documents affecting title to real estate.
Section 2.30 "Reviewer" shall mean the entity having jurisdiction over the matters
contained in Article V as provided in that Article.
Section 2.31 "Rules and Regulations" shall mean the Rules and Regulations of the
Project, as they may be adopted, amended, and repealed as provided in Section 3.2. The initial
Rules and Regulations are attached hereto as Exhibit D.
Section 2.32 "Special Assessment" shall mean an assessment levied in accordance with
Section 7.17.
Section 2.33 "Specific Assessment" shall mean an assessment levied in accordance
with Section 7.18.
Section 2.34 "Subdivision Improvements" shall mean the Improvements constructed
by Declarant within the Project, including, but not limited to, berms, swales, drainage facilities,
parks, sidewalks, streets, trees, landscaping, fencing, irrigation facilities, lighting, utility lines,
curbing,paving, and adjacent amenities.
Section 2.35 "Supplemental Declaration" shall mean an instrument Recorded pursuant
to Article VIII which subjects additional property to this Declaration and/or imposes additional
restrictions and obligations on the land described in such instrument.
ARTICLE III. USE AND CONDUCT
Section 3.1 Framework for Regulation.
The Governing Documents establish,as part of the general plan of development
for the Project, a framework of affirmative and negative covenants, easements, and restrictions
which govern the Project. Within that framework,the Board and the Members must have the
ability to respond to unforeseen problems and changes in circumstances, conditions,needs,
desires, trends and tecimology. Therefore, this Article establishes procedures for modifying and
expanding the initial Rules and Regulations set forth in Exhibit D.
4845-1004-9768.1 8.
Section 3.2 Rule Making Authority.
(a) Subject to the terms of this Article and the Board's duty to exercise
business judgment and reasonableness on behalf of the Association and its Members,the Board
may modify, cancel,limit, create exceptions to, or expand the Rules and Regulations and to
impose reasonable fees for the use of the facilities of the Association. The Board shall mail
notice to all Owners concerning any proposed action at least five business days prior to the
Board meeting at which such action is to be considered.
Such action shall become effective, after compliance with subsection (c)below,
unless Members representing more than fifty percent (50%) of the total Class "A" votes in the
Association and the Class "B" Member, if any, disapprove. The Board shall have no obligation to
call a meeting of the Members to consider disapproval except upon receipt of a petition of the
Members as required for special meetings in the By-Laws. Upon such petition of the Members
prior to the effective date of any Board action under this Section,the proposed action shall not
become effective until after such meeting is held, and then subject to the outcome of such
meeting.
(b) Alternatively, Members,representing more than fifty percent(50%) of the
total Class "A" votes in the Association at an Association meeting duly called for such purpose,
may vote to adopt rules which modify, cancel, limit, create exceptions to, or expand the Rules
and Regulations then in effect. Such action shall require approval of the Class "B" Member, if
any.
(c) Prior to any action taken under this Section becoming effective,the Board
shall send a copy of the new rule or explanation of any changes to the Rules and Regulations to
each Owner. The effective date shall be not less than thirty(30)days following distribution to
Owners. The Association shall provide,without cost, a copy of the Rules and Regulations then in
effect to any requesting Member or Mortgagee.
(d) No action taken under this Article shall have the effect of modifying,
repealing, or expanding the Design Guidelines or any provision of this Declaration other than the
initial Rules and Regulations set forth in Exhibit E. In the event of a conflict between the Design
Guidelines and the Rules and Regulations,the Design Guidelines shall control.
(e) No action taken under this Article shall have the effect of unreasonably
impeding Declarant's right to develop the Project.
(f) No action taken under this Article shall have the effect of interfering with
the use or operation of any Private Amenity.
(g) The procedures required under this Section shall not apply to the
enactment and enforcement of administrative rules and regulations governing use of the
Common Area unless the Board chooses in its discretion to submit to such procedures. Examples
of such administrative rules and regulations shall include, but not be limited to,hours of
operation of a recreational facility, speed limits on private roads, and the method of allocating or
reserving use of a facility(if permitted)by particular individuals at particular times.
4845-1064-8768.1 9.
Section 3.3 Owners'Acknowledgment and Notice to Purchasers.
All Owners are given notice that use of their Lots and the Common Area is
limited by the Rules and Regulations as amended, expanded,and otherwise modified from time
to time. Each Owner,by acceptance of a deed, acknowledges and agrees that the use and
enjoyment and marketability of his/her Lot can be affected by this provision and that the Rules
and Regulations may change from time to time. All purchases of Lots are on notice that the
Association may have adopted changes. Copies of the current Rules and Regulations may be
obtained from the Association.
ARTICLE IV. COVENANTS AND RESTRICTIONS
Section 4.1 Protection of Owners and Others.
The limitations contained in this Section shall only limit rulemaking authority
exercised under Section 3.2;they shall not apply to the Declaration, any amendments to the
Declaration adopted in accordance with Article XVIII, or the initial Rules and Regulations set
forth in Exhibit D. Rules and Regulations adopted pursuant to the rulemaking authority granted
by Section 3.2 shall comply with the limitations contained in Section 3.2 and the following
provisions:
(a) Similar Treatment. Similarly situated Owners shall be treated similarly.
(b) Displays. Owners'rights to display religious and holiday signs, symbols,
and decorations inside structures on their Lots of the kinds normally displayed in dwellings
located in single-family residential neighborhoods shall not be abridged, except that the
Association may adopt time, place, and manner restrictions with respect to displays visible from
outside the Dwelling.
No rules shall regulate the content of political signs; however, rules may regulate
the time, place and manner of posting such signs(including design criteria).
(c) Household Composition. No rule shall interfere with Owners' freedom to
determine the composition of their households, except that the Association shall have the power
to require that all occupants be members of a single housekeeping unit and to limit the total
number of occupants permitted in each Lot on the basis of the size and facilities of the Lot and
its fair use of the Common Area.
(d) Activities Within Dwellings. No rule shall interfere with the activities
carried on within the confines of Dwellings, except that the Association may prohibit activities
not normally associated with property restricted to residential use, and it may restrict or prohibit
any activities that create monetary costs for the Association or other Owners,that create a danger
to the health or safety of occupants of other Lots,that generate excessive noise or traffic,that
create unsightly conditions visible outside the Dwelling, or that create an unreasonable source of
annoyance.
(c) Allocation of Burdens and Benefits. No rule shall alter the allocation of
financial burdens among the various Lots or rights to use the Common Area to the detriment of
4845-1004-8768.1 10.
any Owner over that Owner's objection expressed in writing to the Association.Nothing in this
provision shall prevent the Association from changing the Common Area available, from
adopting generally applicable rules for use of Common Area, or from denying use privileges to
those who are delinquent in paying assessments, abuse the Common Area, or violate the
Governing Documents. This provision does not affect the right to increase the amount of
assessments as provided in Article VII.
(f) Alienation. No rule shall prohibit leasing or transfer of any Lot,or require
consent of the Association or Board for leasing or transfer of any Lot;provided, the Association
or the Board may require a minimum lease term of not less than sixty(60) days. The Association
may require that Owners use lease forms approved by the Association.
(g) Abridging Existing Rights. No rule shall require an Owner to dispose of
personal property that was in or on a Lot prior to the adoption of such rule if such personal
property was in compliance with all rules previously in force. This exemption shall apply only
during the period of such Owner's ownership of the Lot and shall not apply to subsequent
Owners who take title to the Lot after adoption of the rule.
ARTICLE V. CONSTRUCTION AND DESIGN STANDARDS
Section 5.1 Purpose.
The purpose of the construction and design standard set forth in this Article are to
(a) insure the best and most appropriate development and improvement of each Lot; (b)protect
the Owners of Lots against improper use and development of any other Lot which might
depreciate the value of the Project as a whole; (c)preserve as far as practicable the natural beauty
of each Lot and the Project as a whole; and(d) guard against the erection of structures which are
poorly designed or proportioned, or structures built of improper or unsuitable materials.
Section 5.2 General.
No structure or thing shall be placed, erected,or installed upon any Lot, and no
Improvements or other work(including staking, clearing,excavation, grading and other site
work,exterior alterations of existing improvements,or planting or removal of landscaping)shall
take place within the Project, except in compliance with this Article V and the Design
Guidelines. Two of the Lots within the Project contain existing residences that were constructed
prior to the commencement of the Project. These residences are "grandfathered"to the extent that
they differ from the requirements set forth in this Article V and the Design Guidelines.
However, all new or additional Improvements or other work on these Lots, or removal or
replacement of all or any portion of these existing structures must be done strictly in compliance
with this Article V and the Design Guidelines.
No approval shall be required to repaint the exterior of a structure in accordance
with the originally approved color scheme or to rebuild in accordance with originally approved
plans and specifications. Any Owner may remodel, paint, or redecorate the interior of any
Improvement on the Owner's Lot without approval. However,modifications to the interior of
screened porches,patios, landscaping and similar portions of a Lot visible from outside the
structure shall be subject to approval.
4945-1004-8768.1 11.
All Dwellings constructed on any portion of the Project shall be designed by and
built in accordance with the plans and specifications of a licensed architect unless Declarant or
its designee otherwise approves in its sole discretion. Any two or more Lots that may be
consolidated under the terms of the Declaration shall be deemed to constitute one Lot.
This Article shall not apply to the activities of Declarant and/or assignees of
Declarant's interest under the Declaration, nor to activities of the Association during the Class
"B" Control Period.
Section 5.3 Design Review.
(a) By Declarant. Each Owner,by accepting a deed or other instrument
conveying any interest in any portion of the Project,acknowledges that,as the developer of the
Project and as an Owner of portions of the Project,Declarant has a substantial interest in
ensuring that the Improvements within the Project enhance Declarant's reputation as a
community developer and do not impair Declarant's ability to market, sell,or lease its property.
Therefore, each Owner agrees that no activity within the scope of this Article shall be
commenced on such Owner's Lot unless and until Declarant or its designee has given its prior
written approval for such activity, which approval may be granted or withheld in Declarant's or
its designee's sole discretion.
In reviewing and acting upon any request for approval, Declarant or its designee
shall be acting solely in Declarant's interest and shall owe no duty to any other Person.
Declarant's rights reserved under this Article shall continue so long as Declarant owns any
portion of the Project or any real property adjacent to the Project,unless earlier terminated in a
written instrument executed and Recorded by Declarant.
Declarant may, in its sole discretion, designate one or more Persons from time to
time to act on its behalf in reviewing applications hereunder.
Declarant may from time to time, but shall not be obligated to, delegate all or a
portion of its reserved rights under this Article to (i) a Design Review Committee appointed by
the Board of Directors,or(ii) a committee comprised of architects, engineers, or other persons
who may or may not be Members of the Association. Any such delegation shall be in writing
specifying the scope of responsibilities delegated. It shall be subject to(i)Declarant's right to
revoke such delegation at any time and reassume jurisdiction over the matters previously
delegated and (ii) Declarant's right to veto any decision which Declarant determines, in its sole
discretion,to be inappropriate or inadvisable for any reason. So long as Declarant has any rights
under this Article, the jurisdiction of the foregoing entities shall be limited to such matters as
Declarant specifically delegates to it.
(b) By Design Review Committee. Upon delegation by Declarant or upon
expiration or termination of Declarant's rights under this Article,the Association, acting through
the DRC, shall assume jurisdiction over architectural matters. The DRC shall consist of five
members. Each member shall hold office until such time as the member resigns, has been
removed, or has had a successor appointed. Members shall serve staggered two year terms. There
is no limit as to the number of consecutive terms that can be served by any member. The DRC is
4845-1004-8768.1 12.
required to have one member be a licensed design professional in the field of architecture and
one member be a licensed design professional in the field of landscape architecture.
Upon delegation by Declarant, all members of the DRC shall initially be
appointed by Declarant on behalf of the Association. Upon expiration or termination of
Declarant's rights under this Article, all members of the DRC shall be appointed by the Board.
Members of the DRC need not be members of the Association.
The DRC may contract and/or assign some of the DRC 's administrative duties,
but not authority, to any qualified design professional as needed.
Unless and until such time as Declarant delegates all or a portion of its reserved
rights to the DRC or Declarant' s rights under this Article terminate,the Association shall have
no jurisdiction over architectural matters.
(c) Review Fees; Assistance. For purposes of this Article,the entity having
jurisdiction in a particular case shall be referred to as the "Reviewer." The Reviewer may
establish and charge reasonable fees for the initial review of submissions and may require such
fees to be paid in full by the Owner prior to commencement of review of any submission. if the
initial fees collected are insufficient to cover the actual costs incurred in the review process,the
Reviewer may recover from the Owner the actual costs incurred in having any submission
reviewed by architects, landscape architects, engineers,or other professionals. Declarant and the
Association may employ landscape architects, engineers,or other persons as deemed necessary
to perform the review. The Board may include the compensation of such persons in the
Association's annual operating budget.
Section 5.4 Guidelines and Procedures.
(a) Design Guidelines. The initial Design Guidelines are attached hereto as
Exhibit E. The Design Guidelines are intended to provide guidance to Owners regarding matters
of particular concern to the Reviewer in considering submissions. The Design Guidelines are not
the exclusive basis for the Reviewer's decisions, and compliance with the Design Guidelines
does not guarantee approval of any submission.
Declarant shall have sole and full authority to amend the Design Guidelines as
long as it owns any portion of or has a right to expand the Project pursuant to Section 8.1,unless
Declarant specifically delegates the power to amend the Design Guidelines.Upon termination or
delegation of Declarant's right to amend,the DRC shall have the authority to amend the Design
Guidelines with the Board's consent.
Any amendments to the Design Guidelines shall be prospective only and shall not
apply to require modifications to or removal of structures previously approved once the approved
construction or modification has commenced. There shall be no limitation on the scope of
amendments to the Design Guidelines,and such amendments may remove requirements
previously imposed or otherwise make the Design Guidelines less restrictive.
The Reviewer shall make the Design Guidelines available to Owners who seek to
engage in development or construction within the Project. The Recorded version of the Design
4845-1004-8768.1 13.
Guidelines,as it may unilaterally be amended from time to time, shall control in the event of any
dispute as to which version of the Design Guidelines was in effect at any particular time.
(b) Procedures. Except as otherwise specifically provided in the Design
Guidelines, no activities shall commence on any portion of the Project until the final submission
required by the Design Guidelines has been submitted to and approved by the Reviewer. Such
submission shall include plans and specifications showing site layout, structural design, exterior
elevations, exterior materials and colors, landscaping, drainage,exterior lighting, irrigation, and
other features of proposed construction,as applicable. The DRC and the Reviewer may require
the submission of such additional information as may be reasonably necessary to consider any
submission.
In reviewing each submission,the Reviewer may consider any factors it deems
relevant, including,without limitation,harmony of external design with surrounding structures
and environment. The Reviewer shall have the sole discretion to make final, conclusive, and
binding determinations on matters of aesthetic judgment and such determinations shall not be
subject to review so long as made in good faith and in accordance with the procedures set forth
herein.
The design review process shall take place in four(4) steps: (i)a Pre-Design
Conference; (ii) Preliminary Design Review; (iii)Final Design Review; and(iv) construction
monitoring. The Reviewer shall provide design review according to the following schedule:
Pre-Design Conference: Meeting scheduled within fourteen(14)
working days of receipt of pre-design
conference request form.
Preliminary Design Review: Application documents to be submitted fourteen
(14) working days prior to the next scheduled
meeting of the Reviewer.
Written comments from the meeting with the
Reviewer provided to Owner within seven (7)
working days, subject to Declarant's veto right
pursuant to this Section.
If a second review meeting is necessary to
review corrected and/or new materials,the
Owner shall submit such corrected and/or new
materials five (S)working days prior to the next
regularly scheduled meeting of the Reviewer.
Final Design Review: Application documents to be submitted fourteen
(14) working days prior to the next scheduled
meeting of the Reviewer, and within one year of
preliminary design approval.
4845-1004-8768.1 14.
Written comments from the meeting with the
Reviewer and/or written notice of final design
approval provided to Owner within seven(7)
working days, subject to Declarant' s veto right
pursuant to this Section.
If a second review meeting is necessary to
review refinements,revisions and/or new
materials, the Owner shall submit such
materials five (5) working days prior to the next
regularly scheduled meeting of the Reviewer.
Any subsequent construction, landscaping or
other changes that differ from the approved
final design documents must first be submitted
in writing to the Reviewer for review and
approval.
Construction Monitoring: Owner applies to the County of Hawaii for all
applicable building and use permits. Any
adjustments to the final approved plans required
by the County of Hawaii must be resubmitted to
the Reviewer for review prior to the
commencement of construction.
Site observation with the builder prior to any
site disturbance, and within seven(7)working
days of receipt of written request.
Framing observation within seven(7)working
days of receipt of written request.
Final observation within seven (7) working
days of receipt of written request and prior to
request for a Certificate of Occupancy from the
County of Hawaii. Notice of Completion
issued by the Reviewer within seven(7)
working days of observation.
The DRC and Reviewer will make a reasonable effort to comply with the design
review schedule. However,the DRC and Reviewer shall not be liable for any delays that are
caused by circumstances beyond their control.
Until expiration of Declarant's rights to amend the Design Guidelines under this
Article,Declarant shall have the right to veto the approval by the DRC of any submission within
the scope of matters delegated to the DRC by Declarant. The DRC shall notify Declarant in
writing within three (3) business days after the DRC has approved any submission. The notice
4845-1004-8768.1 15.
shall be accompanied by a copy of the submission and any additional information which
Declarant may require. Declarant shall have fourteen (14) days after receipt of such notice to
veto any such action, in its sole discretion,by written notice to the DRC. The Reviewer shall
notify the applicant in writing of the final determination on any submission within five (5) days
after the earlier of: (i)receipt of notice of Declarant's veto or waiver thereof or(ii)expiration of
the fourteen(14)day period for exercise of Declarant's veto.
In the event that the Reviewer fails to respond in a timely manner, approval shall
be deemed to have been given, subject to Declarant's right to veto pursuant to this Section.
However,no approval,whether expressly granted or deemed granted,shall be inconsistent with
the Design Guidelines unless a written variance has been granted pursuant to Section 5.6.Notice
shall be deemed to have been given at the time the envelope containing the response is deposited
with the U.S. Postal Service. Personal delivery of such written notice shall,however, be
sufficient and shall be deemed to have been given at the time of delivery to the applicant.
If construction does not commence on the Project for which plans have been
approved within one(1)year after the date of approval of the final submission required by the
Design Guidelines, such approval shall be deemed withdrawn and it shall be necessary for the
Owner to resubmit for approval before commencing any activities. Once construction is
commenced, it shall be diligently pursued to completion. All work shall be completed within
twenty-four(24)months of commencement unless otherwise specified in the notice of approval
or unless the Reviewer grants an extension in writing, which it shall not be obligated to do. If
approved work is not completed within the required time, it shall be considered nonconforming
and shall be subject to enforcement action by the Association, Declarant,or any aggrieved
Owner.
The Reviewer may, by resolution,exempt certain activities from the submission
and approval requirements of this Article, provided such activities are undertaken in strict
compliance with the requirements of such resolution.
Section 5.5 No Waiver of Future Approvals.
Each Owner acknowledges that the Persons reviewing submissions under this
Article will change from time to time and that opinions on aesthetic matters,as well as
interpretation and application of the Design Guidelines,may vary accordingly. In addition, each
Owner acknowledges that it may not always be possible to identify objectionable features until
work is completed,in which case it may be unreasonable to require changes to the Improvements
involved, but the Reviewer may refuse to approve similar proposals in the future. Approval of
submissions or plans, or in connection with any other matter requiring approval, shall not be
deemed to constitute a waiver of the right to withhold approval as to any similar submissions,
plans,or other matters subsequently or additionally submitted for approval.
Section 5.6 Variances.
The Reviewer may authorize variances from compliance with any of its
guidelines and procedures when circumstances such as topography,natural obstructions,
hardship,or aesthetic or environmental considerations require, but only in accordance with duly
4845-1004-8768.1 16.
adopted rules and regulations.No variance shall (a)be effective unless in writing; (b)be contrary
to this Declaration; or(c) estop the Reviewer from denying a variance in other circumstances.
For purposes of this Section,the inability to obtain approval of any governmental agency,the
issuance of any permit,or the terms of any financing shall not be considered a hardship
warranting a variance.
Section 5.7 Limitation of Liability.
The standards and procedures established by this Article are intended as a
mechanism for maintaining and enhancing the overall aesthetics of the Project;they do not create
any duty to any Person. Review and approval of any submission pursuant to this Article is made
on the basis of aesthetic considerations only, and the Reviewer shall not bear any responsibility
for ensuring the structural integrity or soundness of approved construction or modifications, nor
for ensuring compliance with building codes and other governmental requirements,nor for
ensuring that all Dwellings are of comparable quality,value or size, of similar design,or
aesthetically pleasing or otherwise acceptable to neighboring property owners.
Declarant, the Association,the Board, any committee,or member of any of the
foregoing shall not be held liable for soil conditions, drainage, or other general site work; any
defects in plans revised or approved hereunder; any loss or damage arising out of the action,
inaction, integrity, financial condition, or quality of work of any contractor or its subcontractors,
employees, or agents; or any injury,damages, or loss arising out of the manner or quality or
other circumstances of approved construction on or modifications to any Lot. In all matters, the
Board,the DRC, and the members of each shall be defended and indemnified by the Association
as provided in Section 7.10.
Section 5.8 Certificate of Architectural Compliance.
Any Owner may request that the Reviewer issue a certificate of architectural
compliance certifying that there are no known violations of this Article or the Design Guidelines.
The Association shall either grant or deny such request within thirty(30) days after receipt of a
written request and may charge a reasonable administrative fee for issuing such certificates.
Issuance of such a certificate shall estop the Association from taking enforcement action with
respect to any condition as to which the Association had notice as of the date of such certificate.
Section 5.9 Notice to Comply.
When as a result of a construction observation or final inspection,the Reviewer
finds (i) changes and/or alterations that have not been approved;or(ii)that construction work
was done not in compliance with the approved final design documents, the Reviewer shall issue
a Notice to Comply to the Lot Owner within three (3) working days of the observation
inspection. Such Notice shall describe with reasonable particularity the nature of the non-
compliance and a timetable for compliance.
Upon receipt of the Notice to Comply,the Lot Owner shall remedy the non-
compliance within a minimum of thirty(30)days or such other time period set forth in the.
Notice to Comply. Failure to remedy the non-compliance within the time period-provided in the
Notice to Comply may result in enforcement action against the Lot Owner. including all rights
4845-1004-8768.1 17.
and remedies contained within this Declaration and the Design Guidelines including, but not
limited to, fines and removal or modification of the Improvement with the costs for such
modification or removal to be assessed against such Owner's Lot.
Section 5.10 Disruption of Historical Sites.
Declarant has conducted a survey of the Property in a reasonable effort to identify
all Historical Sites on the Property. However, some Historical Sites, or remains such as artifacts,
shell,bone, or charcoal deposits,human burials,rock or coral alignments,paving or walks,may
exist on the Property that have not been identified ("Undiscovered Sites"). Historical Sites may
be located on Lots as well as under Lots in portions of lava tubes and caves. Such Historical
Sites may impact the manner in which an Owner may improve his/her Lot.
In the event an Owner discovers the existence of an Undiscovered Site after
commencing construction of an Improvement,the Owner shall cease construction and notify the
Association immediately of the existence and location of the Undiscovered Site or remains. The
Owner shall then grant the Association,its agents, employees, and any governmental officials
and inspectors access to the site to conduct any required evaluation, testing, data recovery,
preservation, and mitigation that may be required by Ordinance, Special Management Area
Permit, the State of Hawaii Department of Land and Natural Resources regulations as of the date
this Declaration is Recorded, or Hawaii law. Subsequent work shall proceed upon an
archaeological clearance from the Planning Department of the County of Hawaii when it finds
that sufficient mitigative measures have been taken.Neither the Association nor Declarant give
any warranty,or make any representation,that all Historical Sites that exist within the Project
have been discovered. Undiscovered Sites may affect the manner in which Lots within the
Project may be developed.Neither the Association nor Declarant shall have any liability for any
damages, increased construction costs, or delays caused by the existence of, or the discovery of a
Historical Site.
Notwithstanding any other provision of this Declaration,this Section may not be
amended or modified without the consent of the Planning Department of the County of Hawaii.
Section 5.11 Construction of Improvements.
Declarant has a legitimate interest in assuring that all construction undertaken
within the Project is of the highest quality. Construction of Improvements should be conducted
expeditiously with the least possible disruption to adjacent and neighboring Lots and properties
so the property values within the Project may,at all times,be protected and maintained at the
highest possible levels. Construction of any and all Improvements within the Project must be
undertaken only by builders who are duly licensed by the State of Hawaii as general contractors.
Prior to commencement of construction of Improvements on a Lot, the Owner of the Lot, and/or
the Owner's general contractor, shall secure and maintain adequate public liability, builder's risk
insurance, and performance and payment bonds with face amounts equal to at least one hundred
percent(100%) of the cost of construction,and the Owner shall be named as an additional
insured on such policies. Prior to commencing construction, a copy of the policy or certificate
thereof shall be delivered to Declarant.
4845-1004-8768.1 18.
No Improvement built by any Owner on the Owner's Lot shall encroach upon any
adjoining Lot. Declarant shall not be responsible for any encroachment of any such Improvement
upon an adjoining Lot. The Reviewer may require that an Owner conduct a survey to ensure that
any Improvement constructed on the Owner's Lot will not encroach upon any adjoining Property.
An Owner shall indemnify,defend, and hold Declarant,the Association, their agents and
employees, harmless from and against any and all claims, losses, expenses, damages, liabilities,
or injuries suffered by reason of any acts,omissions,or alleged acts or omissions arising out of
an Owner's performance or nonperformance of the Owner's obligations under this Section,
including,but not limited to,the encroachment of any Improvement upon any adjoining Lot,
including,but not limited to, any judgment, award, settlement,reasonable attorney's fees and
other costs,or expenses incurred in connection with the defense of any actual or threatened
action, proceeding,or claim.
Each Owner shall maintain the Owner's Lot in a neat and orderly condition
before, during, and after any construction on the Lot and take all reasonable dust control
measures, including watering the Lot and/or erecting dust screens,to alleviate the generation of
dust. Each Owner shall be responsible for landscaping his/her Lot. In addition, Owners shall not
allow trash and debris to accumulate anywhere on the Lot. Owners shall not store any
construction materials on the Lot,except during the period that construction is actually occurring
on the Lot. Owners shall keep roadways, easements, and other property within the Project clear
of trash and materials related to construction on the Lots.
Declarant may construct Subdivision Improvements within the Project.
Preservation of Subdivision Improvements contributes substantially to property values in the
Project. Construction and other activities conducted by an Owner shall not result in any damage
to or alteration of any Subdivision Improvements. If any damage shall occur, the Owner
responsible for such damage shall promptly repair such damage. Each Owner agrees to
indemnify and hold harmless Declarant, the Association,their agents and employees, and other
Owners of Lots in the Project from and against any and all claims, damages,expenses (including
reasonable attorneys'fees and court costs), and liabilities of any nature whatsoever asserted
against, or incurred by the same, in connection with any damage to or alteration of Subdivision
Improvements caused by such Owner, the Owner's employees, agents,or independent
contractors.
Section 5.12 Prohibition AEainst Second Dwelling Unit.
The construction of an ohana dwelling or second dwelling unit on a Lot is
expressly prohibited.
ARTICLE VI. MAINTENANCE AND REPAIR
Section 6.1 Maintenance of Lots.
Subject to the rights and obligations of the Association set forth in this
Declaration, each Owner shall maintain the Owner's Lot and all landscaping and Improvements
on the Lot in a manner consistent with the Governing Documents,the Community-Wide
Standard and all applicable covenants,unless such maintenance responsibility is otherwise
4845-1004-8768.1 19.
assumed by or assigned to the Association pursuant to any Supplemental Declaration or other
declaration of covenants applicable to such Lot. This Section shall not be interpreted as giving
the Owner the right to prune,trim,cut or remove any tree, plant or other vegetation from the
Association Easement.
Section 6.2 Responsibility-for Repair and Replacement.
Unless otherwise specifically provided in the Governing Documents, or in other
instruments creating and assigning maintenance responsibility, responsibility for maintenance
shall include responsibility for repair and replacement, as necessary, to maintain the Property to a
level consistent with the Community-Wide Standard.
By virtue of taking title to a Lot, each Owner covenants and agrees with all other
Owners and with the Association to carry property insurance for the full replacement cost of all
insurable improvements on the Owner's Lot, less a reasonable deductible,unless the Association
carries such insurance(which they may but are not obligated to do hereunder). If the Association
assumes responsibility for obtaining any insurance coverage on behalf of Owners,premiums for
such insurance shall be levied as a Specific Assessment against the benefitted Lot and the
Owner.
Each Owner further covenants and agrees that in the event of damage to or
destruction of structures on or comprising the Owner's Lot,the Owner shall proceed promptly to
repair or to reconstruct in a manner consistent with the original construction or such- -flan—
and specifications as are approved in accordance with Article V. Alternatively, the
clear the Lot and maintain it in a neat and attractive, landscaped condition consisten
Community-Wide Standard. The Owner shall pay any costs not covered by insuranc
ARTICLE VII. THE COMMUNITY ASSOCIATION
Section 7.1 Organization.
The Association is organized under the Hawaii Revised Statutes as a HE
profit corporation without stock. The Association is charged with the duties and vested
powers prescribed by law, subject to the limitations and provisions of the Governing Dl,P%.uaai%.aaaa.
Neither the Articles nor By-Laws shall,for any reason, be amended or otherwise changed so as
to be inconsistent with this Declaration. if there should exist any ambiguity in any provision of
the Articles or By-Laws, then such provision shall be construed, to the extent possible, so as to
be consistent with the provisions of this Declaration.
4845-1004-8768.1 20.
Section 7.2 Function.
The Association is the entity responsible for management,maintenance,
operation, and control of the Area of Common Responsibility. The Association also is the
primary entity responsible for enforcement of the Governing Documents. The Association shall
perform its functions in accordance with the Governing Documents and Hawaii law.
Section 7.3 Membership.
Every Owner shall be a Member of the Association. There shall be only one
membership per Lot. if a Lot is owned by more than one Person,all co-Owners shall share the
privileges of such membership, subject to reasonable Board regulation and the restrictions on
voting set forth in Section 7.4(c) and in the By-Laws,and all such co-Owners shall be jointly
and severally obligated to perform the responsibilities of Owners. The membership rights of an
Owner which is not a natural person may be exercised by any officer, director,partner,member,
trustee, or by the individual designated from time to time by the Owner in a written instrument
provided to the Secretary of the Association.
Section 7.4 Voting.
The Association shall have two classes of membership,Class "A" and Class "B."
(a) Class "A". Class "A" Members shall be all Owners except the Class "B"
Member, if any. Class "A" Members shall have one equal vote for each Lot in which they hold
the interest required for membership under Section 7.3 except that there shall be only one vote
per Lot. No vote shall be exercised for any property which is exempt from assessment under
Section 7.22. All Class "A" votes shall be cast as provided in Section 7.4(c).
(b) Class "B". The sole Class "B" Member shall be Declarant. The Class "B"
Member may appoint a majority of the members of the Board of Directors during the Class "B"
Control Period, as specified in the By-Laws. Additional rights of the Class "B" Member are
specified in the relevant sections of the Governing Documents.After termination of the Class
"B" Control Period,the Class "B" Member shall have the right to disapprove actions of the
Board and committees as provided in the By-Laws.
The Class"B"membership shall terminate upon the earlier of:
(i) two years after expiration of the Class 'B" Control Period pursuant
to the By-Laws; or
(ii) when, in its discretion, Declarant so determines and declares in a
Recorded instrument.
Upon termination of the Class "B" membership,Declarant shall be a Class "A"
Member entitled to Class "A" votes for each Lot it owns.
(c) Exercise of Voting Rights. Except as provided herein, during the Class
"B" Control Period the vote for each Lot owned by a Class "A" Member shall be exercised by
4845-1004-8768.1 21.
such Class "A" Member. In any situation where a Member is entitled personally to exercise the
vote for the Member's Lot, and there is more than one Owner of such Lot, the vote for such Lot
shall be exercised as the co-Owners determine among themselves and advise the Secretary of the
Association in writing prior to the vote being taken. Absent such advice, the Lot's vote shall be
suspended if more than one Person seeks to exercise it.
(d) Additional Classes of Membership. In recognition of the different
character and intended use of the Property subject to such Supplemental Declaration, Declarant
may, by Supplemental Declaration, create additional classes of membership for the Owners of
Lots within any Property made subject to this Declaration pursuant to Article VIII. These
classes shall have such rights,privileges, and obligations as specified in such Supplemental
Declaration.
Section 7.5 Acceptance and Control of Association Property.
The Association may acquire, hold, lease (as lessor or lessee), operate, and
dispose of tangible and intangible personal property and real property. The Association may
enter into leases, licenses,or operating agreements for portions of the Common Area, for such
consideration or no consideration as the Board deems appropriate, to permit use of such portions
of the Common Area by community organizations and by others, whether nonprofit or for profit,
for the provision of goods or services for the general benefit or convenience of Owners,
occupants, and residents of the Project.
Declarant and its designees may convey to the Association, and the Association
shall accept,personal property and fee title, leasehold,or other property interests in any real
property,improved or unimproved, described in Exhibit A. Upon Declarant's written request,
the Association shall reconvey to Declarant any unimproved portions of the Common Area
Declarant originally conveyed to the Association for no consideration,to the extent conveyed by
Declarant in error or needed by Declarant to make minor adjustments in property lines.
The Association shall be responsible for management,operation,and control of
the Common Area, subject to any covenants and restrictions set forth in the deed or other
instrument transferring such property to the Association. The Board may adopt such reasonable
rules regulating use of the Common Area as it deems appropriate.
Section 7.6 Maintenance of Area of Common Responsibility.
The Association shall maintain, in accordance with the Community-Wide
Standard,the Area of Common Responsibility, which shall include, but need not be limited to:
(a) all portions of and structures situated on the Common Area;
(b) Road Lots A, B,F and H within the Project unless and until any such road
lot is dedicated to, and accepted by,the County of Hawaii;
(c) landscaping within public rights-of-way within or abutting the Project;
4845-1004-8768.1 22.
(d) such portions of any additional property included within the Area of
Common Responsibility as may be dictated by this Declaration, any Supplemental Declaration,
the Covenant to Share Costs, or any contract or agreement for maintenance thereof entered into
by the Association;
(e) all Historical Sites as described in Section 5.9, including any sites located
on individual Lots;
(f) all portions of and all structures,equipment, landscaping,trees,plants and
other Improvements situated on the Association Easement with the exception of any structures,
equipment,landscaping,trees,plants and other Improvements installed or constructed on the
Association Easement by an Owner;
(g) all portions of and structures situated on the Park; and
(h) any Property and facilities Declarant owns and makes available,on a
temporary or permanent basis, for the primary use and enjoyment of the Association and its
Members. Such Property and facilities shall be identified by written notice from Declarant to the
Association and will remain part of the Area of Common Responsibility maintained by the
Association until such time as Declarant revokes such privilege of use and enjoyment by written
notice to the Association.
The Association may maintain other property which it does not own,including,
without limitation,undeveloped Lots and property dedicated to the public, if the Board of
Directors determines that such maintenance is necessary or desirable to maintain the
Community-Wide Standard.
The Association shall not be liable for any damage or injury occurring on or
arising out of the condition of property which it does not own except to the extent that it has been
grossly negligent in the performance of its maintenance responsibilities.
The Association shall maintain the facilities and equipment within the Area of
Common Responsibility in continuous operation,except for any periods necessary,as
determined in the Board's sole discretion,to perform required maintenance or repairs, unless
Members representing seventy five percent(75%) of the Class "A" votes in the Association and
the Class "B" Member, if any,agree in writing to discontinue such operation.
Except as provided above, the Area of Common Responsibility shall not be
reduced except with Declarant' s prior written approval as long as Declarant owns any property
described in Exhibits A of this Declaration.
The costs associated with maintenance,repair, and replacement of the Area of
Common Responsibility shall be a Common Expense; provided,the Association may seek
reimbursement from the owner(s)of, or other Persons responsible for, certain portions of the
Area of Common Responsibility pursuant to this Declaration,the Covenant to Share Costs, other
Recorded covenants, or agreements with the owner(s)thereof.
4845-1004-8758.1 23.
Section 7.7 Insurance.
(a) Required Coverages. The Association shall obtain and continue in effect
the following types of insurance,if reasonably available,or if not reasonably available, the most
nearly equivalent coverages as are reasonably available:
(i) Blanket property insurance covering "risks of direct physical loss"
on a "special form" basis(or comparable coverage by whatever name denominated)for all
insurable improvements on the Common Area and within the Area of Common Responsibility to
the extent that Association has assumed responsibility in the event of a casualty, regardless of
ownership. If such coverage is not generally available at reasonable cost,then "broad form"
coverage may be substituted. All property insurance policies obtained by the Association shall
have policy limits sufficient to cover the full replacement cost of the insured improvements
under current building ordinances and codes;
(ii) Commercial general liability insurance on the Area of Common
Responsibility, insuring the Association and its Members for damage or injury caused by the
negligence of the Association or any of its Members,employees, agents, or contractors while
acting on its behalf. If generally available at reasonable cost, such coverage (including primary
and any umbrella coverage) shall have a limit of at least$1,000,000.00 per occurrence with
respect to bodily injury,personal injury, and property damage;provided, should additional
coverage and higher limits be available at reasonable cost which a reasonably prudent person
would obtain, the Association shall obtain such additional coverages or limits;
(iii) Workers compensation insurance and employers liability
insurance, if and to the extent required by law;
(iv) Directors and officers liability coverage;
(v) Commercial crime insurance, including fidelity insurance covering
all Persons responsible for handling Association funds in an amount determined in the Board's
business judgment but not less than an amount equal to one-quarter of the annual Base
Assessments on all Lots plus reserves on hand. Fidelity insurance policies shall contain a waiver
of all defenses based upon the exclusion of Persons serving without compensation;and
(vi) Such additional insurance as the Board, in the exercise of its
business judgment, determines advisable.
Premiums for all insurance on the Area of Common Responsibility shall be
Common Expenses.
(b) Policy Requirements. The Association shall arrange for an annual review
of the sufficiency of its insurance coverage by one or more qualified Persons, at least one of
whom must be familiar with insurable replacement costs in the Kailua-Kona area. All
Association policies shall provide for a certificate of insurance to be furnished to the Association
and,upon request, to each Member insured.
4845-1004-8768.E 24.
The policies may contain a reasonable deductible, and the amount thereof shall
not be subtracted from the face amount of the Policy in determining whether the Policy limits
satisfy the requirements of Section 7.7(a). In the event of an insured loss,the deductible shall be
treated as a Common Expense. However, if the Board reasonably determines, after notice and an
opportunity to be heard in accordance with the By-Laws,that the loss is the result of the
negligence or willful misconduct of one or more Owners,their guests, invitees, or lessees,then
the Board may assess the full amount of such deductible against such Owner(s) and their Lots as
a Specific Assessment.
All insurance coverage obtained by the Board shall:
(i) be written with a company authorized to do business in Hawaii
which satisfies the requirements of the Federal National Mortgage Association, or such other
secondary mortgage market agencies or federal agencies as the Board deems appropriate;
(ii) be written in the Association's name as trustee for the benefitted
parties. Policies on the Common Areas shall be for the benefit of the Association and its
Members;
(iii) not be brought into contribution with insurance purchased by
Owners, occupants, or their Mortgagees individually;
(iv) contain an inflation guard endorsement;
(v) include an agreed amount endorsement,if the policy contains a co-
insurance clause;
(vi) provide that each Owner is an insured person under the policy with
respect to liability arising out of such Owner's interest in the Common Area as a Member in the
Association(provided,this provision shall not be construed as giving an Owner any interest in
the Common Area other than that of a Member);
(vii) provide a waiver of subrogation under the policy against any
Owner or household member of a Owner;
(viii) include an endorsement precluding cancellation, invalidation,
suspension, or non-renewal by the insurer on account of any one or more individual Owners, or
on account of any curable defect or violation without prior written demand to the Association to
cure the defect or violation and allowance of a reasonable time to cure; and
(ix) include an endorsement precluding cancellation, invalidation, or
condition to recovery under the policy on account of any act or omission of any one or more
individual Owners,unless such Owner is acting within the scope of its authority on behalf of the
Association.
In addition, the Board shall use reasonable efforts to secure insurance policies
which list the Owners as additional insureds and provide:
4845-1004-8768.1 25.
(i) a waiver of subrogation as to any claims against the Association's
Board,officers, employees,and its manager, the Owners and their tenants, servants,agents, and
guests;
(ii) a waiver of the insurer's rights to repair and reconstruct instead of
paying cash;
(iii) an endorsement excluding Owners'individual policies from
consideration under any"other insurance" clause;
(iv) an endorsement requiring at least thirty(3 0)days' prior written
notice to the Association of any cancellation, substantial modification,or non-renewal;
(v) a cross liability provision;and
(vi) a provision vesting in the Board exclusive authority to adjust
losses;provided, no Mortgagee having an interest in such losses may be prohibited from
participating in the settlement negotiations, if any, related to the loss.
(c) RestoringDamaged d Improvements. In the event of damage to, or
destruction of, Common Area or other property which the Association is obligated to insure,the
Board or its duly authorized agent shall file and adjust all insurance claims and obtain reliable
and detailed estimates of the cost of repairing or restoring the property to substantially the
condition in which it existed prior to the damage,allowing for changes or improvements
necessitated by changes in applicable building codes.
Damaged Improvements on the Common Area shall be repaired or reconstructed
unless the Members representing at least seventy five percent(75%) of the total Class "A"votes
in the Association, and the Class "B" Member,if any, decide within sixty(60)days after the loss
not to repair or reconstruct. If either the insurance proceeds or estimates of the loss, or both,are
not available to the Association within such 60-day period, then the period shall be extended
until such funds or information are available. However, such extension shall not exceed sixty
(60)additional days.No Mortgagee shall have the right to participate in the determination of
whether the damage or destruction to the Common Area shall be repaired or reconstructed.
If a decision is made not to restore the damaged Improvements,and no alternative
improvements are authorized,the affected Property shall be cleared of all debris and ruins and
thereafter shall be maintained by the Association in a neat and attractive, landscaped condition
consistent with the Community-Wide Standard.
Any insurance proceeds remaining after paying the costs of repair or
reconstruction, or after such settlement as is necessary and appropriate, shall be retained by the
Association for the benefit of its Members and placed in a capital improvements account. This is
a covenant for the benefit of Mortgagees and may be enforced by the Mortgagee of any affected
Lot.
4845-1004-8768.1 26.
If insurance proceeds are insufficient to cover the costs of repair or
reconstruction,the Board may, without a vote of the Members, levy Special Assessments to
cover the shortfall against the Owners.
Section 7.8 Com liance and Enforcement.
(a) Every Owner and occupant of a Lot shall comply with the Governing
Documents. The Board may impose sanctions for violation of the Governing Documents after
notice and a hearing in accordance with the procedures set forth in the By-Laws. Such sanctions
may include, without limitation:
(i) imposing reasonable monetary fines which shall constitute a lien
upon the violator's Lot. (In the event that any occupant, guest, or invitee of a Lot violates the
Governing Documents and a fine is imposed,the fine shall first be assessed against the violator;
provided,if the fine is not paid by the violator within the time period set by the Board, the
Owner shall pay the fine upon notice from the Board);
(ii) suspending an Owner's right to vote;
(iii) suspending any Person's right to use any recreational facilities
within the Common Area; provided, nothing herein shall authorize the Board to limit ingress or
egress to or from a Lot;
(iv) suspending any services provided by the Association to an Owner
or the Owner's Lot if the Owner is more than thirty (30)days delinquent in paying any
assessment or other charge owed to the Association;
(v) exercising self-help or taking action to abate any violation of the
Governing Documents in a non-emergency situation;
(vi) requiring an Owner,at its own expense,to remove any structure or
Improvement on such Owner's Lot in violation of the Governing Documents and to restore the
Lot to its previous condition and,upon failure of the Owner to do so,the Board or its designee
shall have the right to enter the property,remove the violation and restore the property to
substantially the same condition as previously existed and any such action shall not be deemed a
trespass;
(vii) without liability to any Person, precluding any contractor,
subcontractor, agent,employee or other invitee of an Owner who fails to comply with the terms
and provisions of Article V and the Design Guidelines from continuing or performing any
further activities in the Project; and damages or both.
(viii) levying Specific Assessments to cover costs incurred by the
Association to bring a Lot into compliance with the Governing Documents.
(b) In addition,the Board may take the following enforcement procedures to
ensure compliance with the Governing Documents without the necessity of compliance with the
procedures set forth in the By-Laws:
4845-1004-8768.1 27.
(i) exercising self-help in any emergency situation(specifically
including, but not limited to, the towing of vehicles that are in violation of parking rules and
regulations); or
(ii) bringing suit at law or in equity to enjoin any violation or to
recover monetary damages or both.
In addition to any other enforcement rights, if an Owner fails properly to perform
the Owner's maintenance responsibility,the Association may Record a notice of violation or
perform such maintenance responsibilities and assess all costs incurred by the Association
against the Lot and the Owner as a Specific Assessment. Except in an emergency situation,the
Association shall provide the Owner reasonable notice and an opportunity to cure the problem
within a thirty (30)day period after receipt of such notice,prior to taking such enforcement
action.
All remedies set forth in the Governing Documents shall be cumulative of any
remedies available at law or in equity. In any action to enforce the Governing Documents against
an Owner,if the Association prevails, it shall be entitled to recover from such Owner all costs,
including, without limitation, attorneys fees and court costs, reasonably incurred in such action.
(c) The decision to pursue enforcement action in any particular case shall be
left to the Board's discretion, except that the Board shall not be arbitrary or capricious in taking
enforcement action. Without limiting the generality of the foregoing sentence,the Board may
determine that,under the circumstances of a particular case:
(i) the Association's position is not strong enough to justify taking any
or further action;
(ii) the covenant, restriction or rule being enforced is, or is likely to be
construed as, inconsistent with applicable law;
(iii) although a technical violation may exist or may have
occurred,it is not of such a material nature as to be objectionable to a reasonable person or to
justify expending the Association's resources; or
(iv) that it is not in the Association's best interests,based upon
hardship, expense,or other reasonable criteria, to pursue enforcement action.
Such a decision shall not be construed a waiver of the Association's right to
enforce such provision at a later time under other circumstances or preclude the Association from
enforcing any other covenant, restriction or rule.
(d) The Association, by contract or other agreement, may enforce applicable
County Ordinances, if applicable,and permit Hawaii County to enforce Ordinances within the
Project for the benefit of the Association and its Members.
4845-1004-8768.1 28.
Section 7.9 Implied Riehts: Board Authority.
The Association may exercise any right or privilege given to it expressly by the
Governing Documents, or reasonably implied from or reasonably necessary to effectuate any
such right or privilege. Except as otherwise specifically provided in the Governing Documents,
or by law, all rights and powers of the Association may be exercised by the Board without a vote
of the membership.
The Board may institute, defend, settle,or intervene on behalf of the Association
in mediation,binding or non-binding arbitration, litigation,or administrative proceedings in
matters pertaining to the Area of Common Responsibility, enforcement of the Governing
Documents,or any other civil claim or action. However, the Governing Documents shall not be
construed as creating any independent legal duty to institute litigation on behalf of or in the name
of the Association or its members.
In exercising the Association's rights and powers, making decisions on the
Association's behalf, and conducting the Association's affairs, Board members shall be subject
to, and their actions shall be judged in accordance with,the standards set forth in the By-Laws.
Section 7.10 Indemnification of Officers,Directors and Others.
Subject to Hawaii law,the Association shall indemnify every officer,director,and
committee member against all damages and expenses, including counsel fees, reasonably
incurred in connection with any action, suit, or other proceeding (including settlement of any suit
or proceeding,if approved by the then Board of Directors)to which he or she may be a party by
reason of being or having been an officer,director, or committee member,except that such
obligation to indemnify shall be limited to those actions for which liability is limited under this
Section,the Articles, and Hawaii law.
The officers, directors, and committee members shall not be liable for any mistake
of judgment, negligent or otherwise, except for their own individual willful misfeasance,
malfeasance, misconduct, or bad faith. The officers and directors shall have no personal liability
with respect to any contract or other commitment made or action taken in good faith on behalf of
the Association(except to the extent that such officers or directors may also be Members of the
Association).
The Association shall indemnify and forever hold each such officer,director, and
committee member harmless from any and all liability to others on account of any such contract,
commitment or action. This right to indemnification shall not be exclusive of any other rights to
which any present or former officer, director, or committee member may be entitled. As a
Common Expense,the Association shall maintain adequate general liability and officers'and
directors'liability insurance to fund this obligation, if such insurance is reasonably available.
Section 7.11 Safety and Security.
All Owners and occupants of a Lot, and their respective guests and invitees, shall
be responsible for their own personal safety and the security of their property in the Project. The
Association may,but shall not be obligated to,maintain or support certain activities within the
4845-1004-8768.1 29.
Project designed to enhance the level of safety or security which each Person provides for
himself and his property. Neither the Association nor Declarant shall in any way be considered
insurers or guarantors of safety or security within the Project,nor shall either be held liable for
any loss or damage by reason of failure to provide adequate security or ineffectiveness of
security measures undertaken.
No representation or warranty is made that any systems or measures, including
any mechanism or system for limiting access to the Project,cannot be compromised or
circumvented, nor that any such systems or security measures undertaken will in all cases
prevent loss or provide the detection or protection for which the system is designed or intended.
Each Owner acknowledges and understands that the Owner shall be responsible for informing
the Owner's tenants and all occupants of the Owner's Lot that the Association, its Board and
committees, and Declarant are not insurers or guarantors of security or safety and that each
Person within the Project assumes all risks of personal injury and loss or damage to property,
including Lots and the contents of Lots,resulting from acts of third parties.
Section 7.12 Provision of Services.
The Association may provide, or provide for,amenities, services and/or facilities
for the Members and/or their Lots,and shall be authorized to enter into and terminate contracts
or agreements with other entities,including Declarant or Persons affiliated with Declarant, to
provide such services and facilities. The Board may charge use or service fees for any such
amenities, services and/or facilities provided at the option of an Owner, or may include the costs
thereof in the Association's budget as a Common Expense and assess it as part of the Base
Assessment if provided to all Lots. By way of example, such services and facilities might include
landscape maintenance,pest control service, security, caretaker, utilities, and similar amenities,
services and/or facilities.
Nothing in this Section shall be construed as a representation by Declarant or the
Association as to what, if any, services shall be provided. In addition,the Board shall be
permitted to modify or cancel existing contracts for services in its discretion,unless the provision
of such services is otherwise required by the Governing Documents.Non-use of services
provided to all Owners or Lots as a Common Expense shall not exempt any Owner from the
obligation to pay assessments for such services.
Section 7.13 Relationships with Other Properties.
The Association may enter into contractual agreements or covenants to share
costs with any neighboring property to contribute funds for,among other things, shared or
mutually beneficial property or services and/or a higher level of Common Area maintenance.
Section 7.14 Dedication of Road Lots.
As a condition of approval for the development of the Project, Road Lots A,B,F
and H shall be dedicated by Declarant to the County of Hawaii as public roadways. Road Lot A
will connect to the roadway system for the adjoining Pualani Estates subdivision which,when
completed by the developer of that subdivision,will then serve as a connector between Queen
Kaahumanu Highway and Hualalai Road. Road Lots B and H will serve as a connector between
4845-1004-8768.1 30.
adjoining lands. Road Lot F will provide additional right-of-way along Hualalai Road. All
roadways within the Project may become future thoroughfares connecting to adjoining
properties.
Section 7.15 Budgeting and Allocating Common Expenses.
All assessments, fees, income and profits received or collected by the Association
shall be maintained in one or more separate accounts at a savings and loan association or bank
selected by the Board. The Board shall determine whether the account will be federally insured
or interest bearing.
At least sixty(60) days before the beginning of each fiscal year,the Board shall
prepare a budget of the estimated Common Expenses for the coming year, including any
contributions to be made to a reserve fund pursuant to Section 7.16. The budget shall also reflect
the sources and estimated amounts of funds to cover such expenses, which may include any
surplus to be applied from prior years, any income expected from sources other than assessments
levied against the Lots, and the amount to be generated through the levy of Base Assessments
and Special Assessments against the Lots, as authorized in Section 7.17.
The Association is authorized to levy Base Assessments equally against all Lots
subject to assessment to fund the Common Expenses. In determining the Base Assessment rate
per Lot,the Board may consider any assessment income expected to be generated from any
additional Lots reasonably anticipated to become subject to assessment during the fiscal year.
Declarant may, but shall not be obligated to,reduce the Base Assessment for any
fiscal year by payment of a subsidy(in addition to any amounts paid by Declarant under Section
7.20(b),which may be either a contribution,an advance against future assessments due from
Declarant, or a loan, in DecIarant's discretion. Any such subsidy shall be disclosed as a line item
in the income portion of the budget. Payment of such subsidy in any year shall not obligate
Declarant to continue payment of such subsidy in future years,unless otherwise provided in a
written agreement between the Association and Declarant.
The Board shall send a copy of the final budget,together with notice of the
amount of the Base Assessment to be levied pursuant to such budget,to each Owner at least
thirty(30) days prior to the effective date of such budget. The budget shall automatically become
effective unless disapproved at a meeting by Members representing at least seventy five percent
(75%)of the total Class "A" votes in the Association and by the Class "B" Member, if such
exists. There shall be no obligation to call a meeting for the purpose of considering the budget
except on petition of the Members as provided for special meetings in the By-Laws.Any such
petition must be presented to the Board within ten(10) days after delivery of the budget and
notice of any assessment.
If any proposed budget is disapproved or the Board fails for any reason to
determine the budget for any year,then the budget most recently in effect shall continue in effect
until a new budget is determined.
4845-1004-8768.1 31.
The Board may revise the budget and adjust the Base Assessment from time to
time during the year, subject to the notice requirements and the right of the Members to
disapprove the revised budget as set forth above.
Section 7.16 Budaetins for Reserves.
The Board shall prepare and review at least annually a reserve budget for the Area
of Common Responsibility. The budget shall take into account the number and nature of
replaceable assets, the expected life of each asset, and the expected repair or replacement cost.
The Board shall include in the Common Expense budget adopted pursuant to Section 7.15 a
capital contribution to fund the reserve budget in an amount sufficient to meet the projected need
with respect both to amount and timing by annual contributions over the budget period.
Section 7.17 Special Assessments.
In addition to other authorized assessments,the Association may levy Special
Assessments to cover unbudgeted expenses or expenses in excess of those budgeted. Any such
Special Assessment for Common Expenses may be levied against the entire membership. Except
as otherwise specifically provided in this Declaration, any Special Assessment shall require the
affirmative vote or written consent of Members representing more than fifty percent(50%)of the
total votes allocated to Lots which will be subject to such Special Assessment, and the
affirmative vote or written consent of the Class "B" Member, if such exists. Special Assessments
shall be payable in such manner and at such times as determined by the Board,and may be
payable in installments extending beyond the fiscal year in which the Special Assessment is
approved.
Section 7.18 Specific Assessments.
The Association shall have the power to levy Specific Assessments against a
particular Lot as follows:
(a) to cover the cost(including overhead and administrative costs)of
providing any special services to an Owner at his/her request,pursuant to any menu of special
services which may be offered by the Association(which might include the items identified in
Section 7.12). Specific Assessments for special services may be levied in advance of the
provision of the requested service;
(b) to cover costs of maintenance of any turf installed on an Owner's Lot by
Declarant during the period between the close of escrow and the commencement of construction
by the Owner. Such maintenance shall include the maintenance of any temporary irrigation
system, general lawn maintenance (cutting, fertilizing, weed control,etc.), and payments to the
utility provider of water.
(c) to cover costs of correcting deficiencies resulting from an Owner's failure
to comply with the Governing Documents, or costs incurred as a consequence of any conduct by
the Owner or occupants of the Lot, their agents, contractors, employees, licensees, invitees, or
guests in violation of the Governing Documents;provided,the Board shall give the Lot Owner
4845-1004-8768.1 32.
prior written notice and an opportunity for a hearing, in accordance with the By-Laws,before
levying any Specific Assessment under this subsection (c).
Section 7.19 Authority to Assess Owners; Time of Payment.
Declarant hereby establishes and the Association is hereby authorized to levy
assessments as provided for in this Article and elsewhere in the Governing Documents. The
obligation to pay assessments shall commence as to each Lot on the first day of the month
following: (a)the month in which the Lot is made subject to this Declaration,or(b)the month in
which the Board first determines a budget and levies assessments pursuant to this Article,
whichever is later. The first annual Base Assessment, if any, levied on each Lot shall be adjusted
according to the number of months remaining in the fiscal year at the time assessments
commence on the Lot.
Assessments shall be paid in such manner and on such dates as the Board may
establish. The Board may require advance payment of assessments at closing of the transfer of
title to a Lot and impose special requirements for Owners with a history of delinquent payment.
If the Board so elects,assessments may be paid in two or more installments. Unless the Board
otherwise provides,the Base Assessment shall be due and payable in advance on the first day of
each fiscal year. If any Owner is delinquent in paying any assessments or other charges levied on
his Lot,the Board may require the outstanding balance on all assessments to be paid in full
immediately.
Section 7.20 Oblieation for Assessments.
(a) Personal Obligation. Each Owner, by accepting a deed or entering into a
Recorded contract of sale for any portion of the Project, is deemed to covenant and agree to pay
all assessments authorized in the Governing Documents. All assessments,together with interest
(computed from its due date at a rate equal to the higher of (i)the prime rate of interest
announced from time to time by Citibank N.A.,or its successors, plus two percent (2%),per
annum,or(ii)ten percent (10%)per annum, subject to the limitations of Hawaii law), late
charges as determined by Board resolution, costs,and reasonable attorneys' fees, shall be the
personal obligation of each Owner and a lien upon each Lot until paid in full. Upon a transfer of
title to a Lot,the grantee shall be jointly and severally liable for any assessments and other
charges due at the time of conveyance.
Failure of the Board to fix assessment amounts or rates or to deliver or mail each
Owner an assessment notice shall not be deemed a waiver,modification,or a release of any
Owner from the obligation to pay assessments. In such event,each Owner shall continue to pay
Base Assessments on the same basis as during the last year for which an assessment was made, if
any,until a new assessment is levied,at which time the Association may retroactively assess any
shortfalls in collections.
No Owner is exempt from liability for assessments by non-use of Common Area,
abandonment of the Owner's Lot, or any other means. The obligation to pay assessments is a
separate and independent covenant on the part of each Owner. No diminution or abatement of
assessments or set-off shall be claimed or allowed for any alleged failure of the Association or
4845-1004-8768.1 33.
Board to take some action or perform some function required of it, or for inconvenience or
discomfort arising from the making of repairs or improvements,or from any other action it takes.
Upon written request,the Association shall furnish to any Owner liable for any
type of assessment a certificate in writing signed by an Association officer setting forth whether
such assessment has been paid. Such certificate shall be conclusive evidence of payment. The
Association may require the advance payment of a reasonable processing fee for the issuance of
such certificate.
(b) Declarant's Option to Fund-Budget Deficits. During the Class "B" Control
Period,Declarant may satisfy its obligation for assessments on Lots which it owns either by
paying such assessments in the same manner as any other Owner or by paying the difference
between the amount of assessments levied on all other Lots subject to assessment and the amount
of actual expenditures by the Association during the fiscal year. Unless Declarant otherwise
notifies the Board in writing at least sixty(60) days before the beginning of each fiscal year,
Declarant shall be deemed to have elected to continue paying on the same basis as during the
immediately preceding fiscal year.
Regardless of Declarant's election, Declarant's obligations hereunder may be
satisfied in the form of cash or by "in kind" contributions of services or materials,or by a
combination of these. After termination of the Class "B" Control Period,Declarant shall pay
assessments on its unsold Lots in the same manner as any other Owner.
Section 7.21 Lien for Assessments.
The Association shall have a lien against each Lot to secure payment of
delinquent assessments, as well as interest, late charges(subject to the limitations of Hawaii
law), and costs of collection(including court costs and attorneys fees). Such lien shall be
superior to all other liens,except(a)the liens of all taxes, bonds,assessments,and other levies
which by law would be superior, and(b)the lien or charge of any Recorded first Mortgage
(meaning any Recorded Mortgage with first priority over other Mortgages)made in good faith
and for value. Such lien,when delinquent, may be enforced by suit,judgment, and judicial or
nonjudicial foreclosure.
The Association may bid for the Lot at the foreclosure sale and acquire, hold,
lease, mortgage, and convey the Lot. While a Lot is owned by the Association following
foreclosure: (a)no right to vote shall be exercised on its behalf,(b)no assessment shall be levied
on it;and(c)each other Lot shall be charged, in addition to its usual assessment, its pro rata
share of the assessment that would have been charged such Lot had it not been acquired by the
Association. The Association may sue for unpaid assessments and other charges authorized
hereunder without foreclosing or waiving the lien securing the same.
Sale or transfer of any Lot shall not affect the assessment lien or relieve such Lot
from the lien for any subsequent assessments. However,the sale or transfer of any Lot pursuant
to foreclosure of the first Mortgage shall extinguish the lien as to any installments of such
assessments due prior to the Mortgagee's foreclosure. The subsequent Owner to the foreclosed
Lot shall not be personally liable for assessments on such Lot due prior to such acquisition of
4845-1404-8768.1 34.
title. Such unpaid assessments shall be deemed to be Common Expenses collectible from Owners
of all Lots subject to assessment under Section 7.19, including such acquirer, its successors, and
assigns.
Section 7.22 Exempt Property.
The following Property shall be exempt from payment of Base Assessments and
Special Assessments:
(a) All Common Area and such portions of the Property owned by Declarant
as are included in the Area of Common Responsibility; and
(b) Any Property dedicated to and accepted by any governmental authority or
public utility.
In addition, Declarant and/or the Association shall have the right,but not the
obligation,to grant exemptions to certain Persons qualifying for tax exempt status under Section
501(c)of the Internal Revenue Code so long as such Persons own Property subject to this
Declaration for purposes listed in Section 501(c).
Section 7.23 Capitalization of Association.
Upon acquisition of record title to a Lot by the first Owner thereof other than
Declarant, a contribution shall be made by or on behalf of the purchaser to the working capital of
the Association in the amount of$500.00. This amount shall be in addition to, not in lieu of,the
annual Base Assessment and shall not be considered an advance payment of such assessment.
This amount shall be deposited into the purchase and sales escrow and disbursed therefrom at
closing to the Association for use in covering operating expenses and other expenses incurred by
the Association pursuant to this Declaration and the By-Laws. In its sole discretion,the Board of
Directors may increase the amount of this fee.
Section 7.24 Community_Enhancement Fee.
(a) Authority. On behalf of the Association,the Board shall have the
authority to establish and collect a transfer fee from the transferring Owner upon each transfer of
title to a Lot in the Project, which fee shall be payable to the Association at the closing of the
transfer and shall be secured by the Association's lien for assessments under Section 7.21.
Owner shall notify the Secretary of the Association of a pending title transfer at least seven(7)
days prior to the transfer. Such notice shall include the name of the buyer, the date of title
transfer, and other information as the Board may require.
(b) Fee Limit. The initial amount of the transfer fee shall be$500.00. In its
sole discretion,the Board of Directors may increase the amount of this fee.
(c) Purpose. All transfer fees which the Association collects shall be
deposited into the Association's accounts and used to supplement the funds collected by
assessments in such manner as the Board deems beneficial for the Project. By way of example
4845-1004-8768.1 35.
and not limitation, such transfer fees might be used to assist the Association or one or more tax-
exempt entities in funding:
(i) preservation and maintenance of the Park or other portions of the
Area of Common Responsibility;
(ii) enhancement or development of new Improvements in the Area of
Common Responsibility;and
(iii) the creation of additional reserves to cover unanticipated
expenses of the Association.
(d) Exempt Transfers. Notwithstanding the above, no transfer fee shall be
levied upon transfer of title to a Lot:
(i) by or to Declarant;
(ii) among co-Owners of a Lot:
(iii) to the Owner's estate, surviving spouse, or child upon the death of
the Owner;
(iv) to an entity wholly owned or controlled by the grantor; provided,
however, that the transfer fee shall become due upon any subsequent transfer of an ownership
interest in such entity; or
(v) to an institutional lender pursuant to a Mortgage or upon
foreclosure of a Mortgage.
ARTICLE VIII. ANNEXATION
The Declaration reserves various rights to Declarant in order to facilitate the
smooth and orderly development of the Project including,but not limited to,the following:
Section$.1 Annexation by Declarant.
Declarant may from time to time annex additional property to the Project, which
additional property shall then be subject to the provisions of this Declaration,by Recording a
Supplemental Declaration describing the additional property to be annexed. A Supplemental
Declaration Recorded pursuant to this Section shall not require the consent of any Person except
the owner of such property,if other than Declarant. Declarant's right to annex additional property
to the Project pursuant to this Section shall expire forty(40) years after this Declaration is
Recorded. Nothing in this Declaration shall be construed to require Declarant or any successor to
annex additional property to the Project.
4845-1004-8768.1 36.
Section 8.2 Annexation by the Association.
The Association may also annex additional property to the Project, which
additional property shall be subject to the provisions of this Declaration by Recording a
Supplemental Declaration describing the additional property to be annexed. Any such
Supplemental Declaration shall require the affirmative vote of Members representing more than
fifty percent(50%) of the Class "A" votes of the Association represented at a meeting duly called
for such purpose, and the consent of the owner of the property. In addition, so long as Declarant
owns Property subject to this Declaration or which may become subject to this Declaration in
accordance with Section 8.1, Declarant's consent shall be necessary. The Supplemental
Declaration shall be signed by the President and Secretary of the Association, by the owner of
the property and by Declarant, if Declarant's consent is necessary.
Section 8.3 Additional Covenants and Easements.
Declarant may subject any portion of the Project to additional covenants and
easements, including covenants obligating the Association to maintain and insure such Property
and easements which encumber Association property. Such additional covenants and easements
may be set forth either in a Supplemental Declaration subjecting such Property to this
Declaration or in a separate Supplemental Declaration referencing Property previously subjected
to this Declaration. If the Property is owned by someone other than Declarant,then the consent
of the Owner(s) shall be necessary and shall be evidenced by their execution of the Supplemental
Declaration. Any such Supplemental Declaration may supplement, create exceptions to, or
otherwise modify the terms of this Declaration as it applies to the subject Property in order to
reflect the different character and intended use of such Property.
Section 8.4 Effect of Filing Supplemental Declaration.
A Supplemental Declaration shall be effective upon Recording unless otherwise
specified in such Supplemental Declaration. On the effective date of the Supplemental
Declaration, any additional property subjected to this Declaration shall be assigned voting rights
in the Association and assessment liability in accordance with the provisions of this Declaration.
ARTICLE IX. ADDITIONAL RIGHTS RESERVED TO DECLARANT
Section 9.1 Withdrawal of Property.
Declarant reserves the right to amend this Declaration, so long as it has a right to
annex additional property pursuant to Section 8.1, for the purpose of removing any portion of the
Project which has not yet been improved with structures from the coverage of this Declaration,
provided such withdrawal does not reduce the total number of Lots then subject to the
Declaration by more than thirty three percent(33%). Such amendment shall not require the
consent of any Person other than the Owner(s)of the Property to be withdrawn, if not Declarant.
If the Property is Common Area,the Association shall consent to such withdrawal.
4845-1004-8768.1 37.
Section 9.2 Marketing and Sales Activities.
Declarant may construct and maintain upon portions of the Common Area such
facilities and activities as, in Declarant's sole opinion,may be reasonably required,convenient,
or incidental to the construction or sale of Lots, including business offices, signs, model units,
and sales offices. The design of such facilities shall be consistent with the Community-Wide
Standard. Declarant shall have easements for access to and use of such facilities at no charge.
Section 9.3 Right to Develop.
Declarant and its employees, agents and designees shall have a right of access and
use and an easement over and upon all of the Common Area for the purpose of making,
constructing and installing such improvements to the Common Area as it deems appropriate in
its sole discretion.
Section 9.4 Right to Approve Additional Covenants.
No Person shall Record any declaration of covenants, conditions, and restrictions,
or declaration of condominium or similar instrument affecting any portion of the Project without
Declarant's review and written consent.Any attempted Recordation without such consent shall
result in such instrument being void and of no force and effect unless subsequently approved by
written consent signed and Recorded by Declarant.
Section 9.5 Ri ht to Anyrove Changes in Project Standards.
No amendment to or modification of any Rules and Regulations or Design
Guidelines shall be effective without prior notice to and the written approval of Declarant so
long as Declarant owns Property subject to this Declaration or which may become subject to this
Declaration in accordance with Section 8.1.
Section 9.6 Right to Transfer or Assign Declarant Rights.
Any or all of Declarant's special rights and obligations set forth in this Declaration
or the By-Laws may be transferred in whole or in part to other Persons; provided, the transfer
shall not reduce an obligation nor enlarge a right beyond that which Declarant has under this
Declaration or the By-Laws. No such transfer or assignment shall be effective unless it is in a
written instrument Declarant signs and Records. The foregoing sentence shall not preclude
Declarant from permitting other Persons to exercise, on a one-time or limited basis,any right
reserved to Declarant in this Declaration where Declarant does not intend to transfer such right in
its entirety,and in such case it shall not be necessary to Record any written assignment unless
necessary to evidence Declarant's consent to such exercise.
Section 9.7 Exclusive Rights To Use Name of Development.
No Person shall use the name "The Heights on Hualalai" or any logo, depiction,
or derivative of such name in any printed or promotional material without Declarant's prior
written consent. However, Owners may use the name "The Heights on Hualalai" in printed or
promotional matter where such term is used solely to specify that particular property is located
4845-1004-8768.1 38.
within the Project,and the Association and other entities related to Declarant shall be entitled to
use the words "The Heights on Hualalai" in its name.
Section 9.8 Right to Notice of Design or Construction Claims.
No Person shall retain an expert for the purpose of inspecting the design or
construction of any structures or Improvements within the Project in connection with or in
anticipation of any potential or pending claim,demand, or litigation involving such design or
construction unless Declarant has been first notified in writing and given an opportunity to meet
with the Owner of the Lot to discuss the Owner's concerns and conduct its own inspection.
Section 9.9 Termination of Rights.
The rights contained in this Article shall not terminate until the earlier of(a)forty
(40) years from the date this Declaration is Recorded,or(b)Recording by Declarant of a written
statement that all sales activity has ceased.
ARTICLE X. EASEMENTS
Section 10.1 Easements in Common Area.
Declarant grants to each Owner a nonexclusive right and easement of use, access,
and enjoyment in and to the Common Area, subject to:
(a) The Governing Documents and any other applicable covenants;
(b) Any restrictions or limitations contained in any deed conveying such
Property to the Association; and
(c) The Board's right to:
(i) adopt rules regulating use and enjoyment of the Common Area,
including rules limiting the number of guests who may use the Common Area;
(ii) suspend the right of an Owner to use recreational facilities within
the Common Area(A) for any period during which any charge against such Owner's Lot remains
delinquent,and(B)for a period not to exceed thirty (30)days for a single violation., or for a
longer period in the case of any continuing violation, of the Governing Documents after notice
and a hearing pursuant to the By-Laws;
(iii) dedicate or transfer all or any part of the Common Area, subject to
such approval requirements as may be set forth in this Declaration; and
(iv) mortgage,pledge,or hypothecate any or all of its real or personal
property as security for money borrowed or debts incurred.
Any Owner may extend the Owner's right of use and enjoyment to the members
of the Owner's family, lessees, and guests, as applicable, subject to reasonable regulation by the
4845-1004-8768.1 39.
Board. An Owner who leases the Owner's Lot shall be deemed to have assigned all such rights to
the lessee of such Lot for the period of the lease.
Section 10.2 Easements of Encroachment.
Declarant grants reciprocal appurtenant easements of encroachment, and for
maintenance and use of any permitted encroachment,between each Lot and any adjacent
Common Area due to the unintentional placement or settling or shifting of the Improvements
constructed,reconstructed, or altered thereon (in accordance with the terms of these restrictions)
to a distance of not more than one foot,as measured from any point on the common boundary
along a line perpendicular to such boundary. However, in no event shall an easement for
encroachment exist if such encroachment occurred due to willful and knowing conduct on the
part of, or with the knowledge and consent of,the Person claiming the benefit of such easement.
Section 10.3 Easements for Utilities, etc.
(a) Installation and Maintenance. Declarant reserves for itself, so long as
Declarant owns any property described in Exhibit A of this Declaration, and grants to the
Association and all utility providers(including, but not limited to, privately owned and operated
utilities),perpetual non-exclusive easements throughout the Project(but not through a structure)
to the extent reasonably necessary for the purpose of:
(i) installing utilities and infrastructure to serve the Project,cable and
other systems for sending and receiving data and/or other electronic signals, security and similar
systems, walkways, pathways and trails, drainage systems, street lights and signage on property
which Declarant owns or within public rights-of-way or easements reserved for such purpose on
Recorded plats;
(ii) inspecting,maintaining, repairing, and replacing the utilities,
infrastructure,and other Improvements described in Section 10.3(a)(i);and
(iii) access to read utility meters.
(b) Specific Easements. Declarant also reserves for itself the non-exclusive
right and power to grant and Record such specific easements as may be necessary, in Declarant's
sole discretion, in connection with the orderly development of any property described in Exhibit
A. The Owner of any property to be burdened by any easement granted pursuant to this
subsection (b) shall be given written notice in advance of the grant. The location of the easement
shall be subject to the written approval of the owner of the burdened property, which approval
shall not unreasonably be withheld, delayed,or conditioned.
(c) Minimal Interference. All work associated with the exercise of the
easements described in subsections (a)and(b)of this Section shall be performed in such a
manner as to minimize interference with the use and enjoyment of the property burdened by the
easement. Upon completion of the work,the Person exercising the easement shall restore the
property, to the extent reasonably possible, to its condition prior to the commencement of the
work. Exercise of these easements shall not extend to permitting entry into the structures on any
4845-1004-8768.1 40.
Lot,nor shall it unreasonably interfere with the use of any Lot and, except in an emergency,
entry onto any Lot shall be made only after reasonable notice to the Owner or occupant.
Section 10.4 Easements to Serve Additional Property.
Declarant hereby reserves for itself and its duly authorized agents, successors,
assigns,and mortgagees, an easement over the Common Area for the purposes of enjoyment,
use, access, and development of any additional property that may be annexed to the Project
pursuant to Section 8.1 or any adjoining property that is or may be owned by Declarant,whether
or not such property is made subject to this Declaration. This easement includes,but is not
limited to, a right of ingress and egress over the Common Area for construction of roads and for
connecting and installing utilities on such property.
Declarant agrees that it and its successors or assigns shall be responsible for any
damage caused to the Common Area as a result of its respective actions in connection with
development of such property. Declarant further agrees that if the easement is exercised for
permanent access to such property and such property or any portion thereof benefitting from
such easement is not made subject to this Declaration, Declarant,its successors,or assigns shall
enter into a reasonable agreement with the Association to share the cost of any maintenance
which the Association provides to or along any roadway providing access to such property.
Section 10.5 Easements for Maintenance Emeracricy and Enforcement.
Declarant grants to the Association casements over the Project as necessary to
enable the Association to fulfill its maintenance responsibilities under Section 7.6. The
Association shall also have the right,but not the obligation,to enter upon any Lot for emergency,
security, and safety reasons, to perform maintenance and to inspect for the purpose of ensuring
compliance with and enforce the Governing Documents. Such right may be exercised by any
member of the Board and its duly authorized agents and assignees, and all emergency personnel
in the performance of their duties. Except in an emergency situation, entry shall only be during
reasonable hours and after notice to the Owner.
Section 10.6 Easement to Inspect and Right to Correct.
Declarant reserves for itself and others it may designate the right to inspect,
monitor, test,redesign,and correct any structure, Improvement,or condition which may exist on
any portion of the Property within the Project, including Lots, and a perpetual, nonexclusive
easement of access throughout the Project to the extent reasonably necessary to exercise such
right. Except in an emergency, entry onto a Lot shall be only after reasonable notice to the
Owner and no entry into a Dwelling shall be permitted without the Owner's consent.
Section 10.7 Easements for Historical Sites.
Declarant reserves for itself and the Association a nonexclusive,perpetual
easement over the Common Areas and Lots to (a)travel to and from any Historical Sites, and(b)
inspect, evaluate,perform data recovery,maintain and preserve the Historical Sites identified on
the Property from time to time. Such easement shall affect only such portions of the Common
Area and Lots as Declarant or the Association, as the case may be, deems reasonably necessary
4845-1004-8768.1 41.
for such purposes. Declarant further reserves for itself and the Association the right to grant
nonexclusive easements over the Common Areas and Lots to (a) travel to and from such
Historical Sites, (b)inspect,evaluate,perform data recovery,maintain and preserve such
Historical Sites, and/or(c)perform traditional,cultural and/or religious practices at such
Historical Sites,to any Person who is or may be entitled under Hawaii law to exercise any such
rights. Such easements shall affect only such portions of the Common Areas and Lots as
Declarant or the Association, as the case may be, deems reasonably for such purposes and may
be subject to such reasonable terms, conditions and restrictions that Declarant or the Association
may impose consistent with Hawaii law. Some Historical Sites have been identified, however,
others may exist that have yet to be discovered. The Historical Sites that have yet to be
discovered may be located on Lots or in lava tubes or caves beneath Lots. The Declarant reserves
for itself and the Association the right to grant additional easements or modify existing
easements under this Section for additional Historical Sites that are discovered and to comply
with Hawaii Iaw, or the requirements of any governmental or quasi governmental entity that has
jurisdiction over matters involving such Historical Sites.
Due to the sensitive nature of this type of easement, the potential exists for
conflict between Persons using easements pursuant to this Section and Owners. In order to avoid
or eliminate any potential conflicts that may arise, an environment of mutual respect between
Persons using the easements and Owners must prevail. Owners should exercise caution to avoid
disruption of Historical Sites and should take no action to prevent or hinder access to Historical
Sites. Persons utilizing easements pursuant to this Section should do so in a careful, considerate
and conscientious manner and take reasonable steps to avoid disturbing Owners. Neither the
Association nor Declarant shall have any liability for any damages, increased construction costs,
or delays caused by the existence of, or the discovery of, a Historical Site or the designation or
use of an easement related to such Historical Site.
Section 10.8 Easement for Maintenance of Lots.
Declarant reserves for itself and the Association,an easement of ingress and
egress over such portions of Lots necessary for the purpose of removing, replacing,installing,
and maintaining trees,plants, and other vegetation on such Lots. Declarant and the Association
shall have the right to exercise this easement over the entire area of a Lot until the Owner of such
Lot completes construction of a Dwelling on the Lot.
The activities undertaken pursuant to this Section may include,but not be limited
to, grading of Lots and the removal, replacement,installation, and maintenance of trees, plants
and other vegetation. Any costs incurred by the Association under this Section shall be a
Common Expense. No tree,plant,or other vegetation installed pursuant to this Section,including
but not limited to,trees,plants,and other vegetation,shall be modified,pruned, cut, or removed
without the approval of Declarant.
Except as otherwise provided by the Governing Documents,after an Owner has
completed construction of a Dwelling on his/her Lot the right to exercise this easement shall be
limited to the Association Easements. Declarant and the Association shall have the right,but not
the obligation, to undertake any,or all,of the activities described in this Section.
4845-1004-8768.1 42.
Section 10.9 Easement for Drainage.
The Property is burdened with a perpetual and nonexclusive easement over,
through, and across the Property as necessary to accommodate drainage from or across property
adjacent to the Lot in its currently existing and natural pattern and flow. Each Owner assumes all
liability for damage to persons or property caused by interference with the natural flow of
drainage from, over,through, or across the Lot in connection with Owner's activities on all or
any part of the Lot, and agrees to indemnify,defend, and hold harmless Declarant and the
Association from and against any liability,claim,demand,action, or suit arising out of, or in
connection with, any such interference with drainage.
Section 10.10 Association Easement.
Declarant reserves for itself, so long as Declarant owns any property described in
Exhibit A of this Declaration, and grants to the Association and its successors,assigns, and
designees, the nonexclusive right and easement to the portion of each Lot that is designated as
Association Easement for the purposes of installing,maintaining and repairing utilities,widening
roads, installing structures and Improvements, installing and maintaining landscaping,and any
other reasonable purpose as may be determined in the discretion of Declarant or the Association
as the case may be.
No Owner may remove, damage, or destroy any Improvement, structure,
landscaping,plants, or trees that are within the Association Easement unless given express,
written consent by the Board of Directors.Any Owner that constructs any Improvement or
installs any landscaping on a portion of his/her Lot that is designated as Association Easement
shall be required, upon notice from the Board,to remove such Improvement or landscaping at
his/her expense and restore the Association Easement to substantially the same condition as it
existed prior to the construction or installation of such Improvement or landscaping. In the event
an Owner fails to take such action as required by the Board,the Association shall have the right
to remove such landscaping or Improvement and restore the Association Easement. The costs for
such action may be levied against such Owner's Lot as a Specific Assessment.
ARTICLE XI. THE PARK
Section 11.1 Creation.
As a condition of the development of the Property, Lot 28, comprising
approximately 34,445 square feet and located on the northern end of the Project adjacent to
Hualalai Road, shall be developed and maintained as a private park for the use and benefit of
Owners.
Section 11,2 Construction and Maintenance.
At its expense, Declarant shall construct all Improvements required at the Park by
the County of Hawaii. The Association shall thereafter assume the maintenance responsibility for
the Park. The costs and expenses of such maintenance shall be funded by the Association as an
Area of Common Responsibility. The Park shall be maintained in a manner consistent with the
Community-Wide Standard.
4845-1004-8768.1 43.
Section 11.3 Restrictions on Use.
To the extent permitted by Hawaii law,Declarant and/or the Association may
impose reasonable restrictions on the use of the Park including, but not limited to, rules and
regulations affecting activities and hours of usage.
Section 11,4 Limitations on Liability.
Except as otherwise provided by Hawaii law neither Declarant nor the
Association may:
(a) extend any assurance that the premises are safe for any purpose;
(b) confer upon any person the legal status of an invitee or licensee to whom a
duty of care is owed;
(c) assume responsibility for, or incur liability for, any injury to person or
property caused by an act or omission or commission of such persons; or
(d) assume responsibility for,or incur liability for,any injury to person or
persons who enter the premises in response to an injured recreational user.
ARTICLE XII. WASTEWATER DISPOSAL
Section 12.1 Connection Required Prior to Occupancy.
Each Lot shall be connected to the County of Hawaii public sewer system prior to
occupancy of the Lot. Each Owner is responsible for the costs of connecting the Owner's
dwelling to the sewer lateral at the Lot boundary line, including construction of the sewer Iine
from the dwelling to the sewer lateral and payment of County sewer connection fees. Prior to
making the connection,each Owner shall contact the State of Hawaii Department of Health and
the County of Hawaii Department of Environmental Management to obtain sewer connection
approval. The connection shall be done by a licensed contractor of each Owner's choice. Unless
otherwise approved by the State Department of Health and the County Department of
Environmental Management,no individual wastewater system,cesspool or septic system shall be
allowed on any Lot.
ARTICLE XIII. PARTY WALLS AND OTHER SHARED STRUCTURES
Section 13.1 General Rules of Law to Apply.
Any wall, fence, driveway, or similar structure built as a part of the original
construction on the Lots which serves and/or separates any two adjoining Lots shall constitute a
party structure. To the extent not inconsistent with the provisions of this Section,the general
rules of law regarding party walls and liability for property damage due to negligence or willful
acts or omissions shall apply thereto. Any dispute arising concerning a party structure shall be
handled in accordance with the provisions of Article XIV.
4845-1004-8768.1 44.
Section 13.2 Maintenance: Damage and Destruction.
The cost of reasonable repair and maintenance of a party structure shall be shared
equally by the Owners who make use of the party structure. If a party structure is destroyed or
damaged by fire or other casualty,then to the extent that such damage is not covered by
insurance and repaired out of the proceeds of insurance, any Owner who used the structure may
restore it. If other Owners thereafter use the structure, they shall contribute to the restoration cost
in equal proportions. However, such contribution will not prejudice the right to call for a larger
contribution from the other users under any rule of law regarding liability for negligent or willful
acts or omissions. The right of any Owner to contribution from any other Owner under this
Section shall be appurtenant to the land and shall pass to such Owner's successors-in-title.
ARTICLE XIV. DISPUTE RESOLUTION AND LIMITATION ON LITIGATION
Section 14.1 Agreement to Encouraze Resolution of Disputes Without Litip-ation.
(a) Declarant, the Association and its officers, directors, and committee
members; all Persons subject to this Declaration; and any Person not otherwise subject to this
Declaration who agrees to submit to this Article(collectively, "Bound Parties"), agree that it is in
the best interest of all concerned to encourage the amicable resolution of disputes involving the
Community without the emotional and financial costs of litigation. Accordingly,each Bound
Party agrees not to file suit in any court with respect to a Claim described in subsection (b),
unless and until it has first submitted such Claim to the alterative dispute resolution procedures
set forth in Section 14.2 in a good faith effort to resolve such Claim.
(b) As used in this Article,the term "Claim" shall refer to any claim,
grievance, or dispute arising out of or relating to:
(i) the interpretation, application, or enforcement of the Governing
Documents;
(ii) the rights, obligations,and duties of any Bound Party under the
Governing Documents; or
(iii) the design or construction of Improvements within the
Community, other than matters of aesthetic judgment under Article V, which shall not be subject
to review;
The following shall not be considered"Claims" unless all parties to the matter
otherwise agree to submit the matter to the procedures set forth in Section 14.2:
(i) any suit by the Association to collect assessments or other amounts
due from any Owner;
(ii) any suit by the Association to obtain a temporary restraining order
(or emergency equitable relief)and such ancillary relief as a court of competent jurisdiction may
deem necessary in order to maintain the status quo and preserve the Association's ability to
enforce the provisions of this Declaration;
4845-1004-8768,1 45.
(iii) any suit between Owners, which does not include Declarant or the
Association as a party, if such suit asserts a Claim which would constitute a cause of action
independent of the Governing Documents;
(iv) any suit in which any indispensable party is not a Bound
Party;or
(v) any suit as to which any applicable statute of limitations would
expire within one hundred eighty(180)days of giving the Notice required by Section 17.2(a)
unless the party or parties against whom the Claim is made agree to toll the statute of limitations
as to such Claim for such period as may reasonably be necessary to comply with this Article.
Section 14.2 Dispute Resolution Procedures.
(a) Notice. The Bound Party asserting a Claim("Claimant")against another
Bound Party ("Respondent")shall give written notice to each Respondent and to the Board
stating plainly and concisely:
(i) the nature of the Claim,including the Persons involved and the
Respondent's role in the Claim;
(ii) the legal basis of the Claim (i.e.,the specific authority out of which
the Claim arises),
(iii) the Claimant's proposed resolution or remedy; and
(iv) the Claimant's desire to meet with the Respondent to
discuss in good faith ways to resolve the Claim.
(b) Negotiation. The Claimant and Respondent shall make every reasonable
effort to meet in person and confer for the purpose of resolving the Claim by good faith
negotiation. If requested in writing,accompanied by a copy of the Notice,the Board may appoint
a representative to assist the parties in negotiating a resolution of the Claim.
(c) Mediation. If the parties have not resolved the Claim through negotiation
within thirty(30)days of the date of the notice described in Section 17.2(a)(or within such other
period as the parties may agree upon),the Claimant shall have thirty(30) additional days to
submit the Claim to mediation with an entity designated by the Association (if the Association is
not a party to the Claim) or to an independent agency providing dispute resolution services in the
Kailua-Kona area.
If the Claimant does not submit the Claim to mediation within such time, or does
not appear for the mediation when scheduled,the Claimant shall be deemed to have waived the
Claim, and the Respondent shall be relieved of any and all liability to the Claimant(but not third
parties)on account of such Claim.
4845-1004-8768.1 46.
If the Parties do not settle the Claim within thirty(30)days after submission of
the matter to mediation,or within such time as determined reasonable by the mediator, the
mediator shall issue a notice of termination of the mediation proceedings indicating that the
parties are at an impasse and the date that mediation was terminated. The Claimant shall
thereafter be entitled to file suit or to initiate administrative proceedings on the Claim, as
appropriate.
Each Party shall bear its own costs of the mediation,including attorneys fees, and
each Party shall share equally all fees charged by the mediator.
(d) Settlement. Any settlement of the Claim through negotiation or mediation
shall be documented in writing and signed by the parties. If any party thereafter fails to abide by
the terms of such agreement,then any other party may file suit or initiate administrative
proceedings to enforce such agreement without the need to again comply with the procedures set
forth in this Section. in such event,the party taking action to enforce the agreement or award
shall, upon prevailing,be entitled to recover from the non-complying party (or if more than one
non-complying party,from all such parties in equal proportions) all costs incurred in enforcing
such agreement or award, including, without limitation, attorneys'fees and court costs.
(e) Mandatory Arbitration. Any parties that have failed to reach the
settlement of a Claim through negotiation and mediation as provided by this Article may submit
the Claim to arbitration. The party, or parties,that desire to submit a Claim to arbitration shall
promptly so notify the other party in writing. Any Claim submitted for arbitration shall be
submitted to arbitration to Dispute Prevention and Resolution, Inc. ("DPRI") or such other
dispute resolution agency as the parties to the dispute may mutually select. Claims involving
$25,000 or less shall be heard by a single arbitrator. Claims involving more than$25,000 or
nonmonetary issues shall be heard by a panel of three arbitrators. The arbitrator(s)shall be
selected and the arbitration conducted in accordance with the commercial arbitration rules then
in effect for DPRI unless otherwise agreed by the parties. The decision of the arbitrator, if the
Claim is heard by a single arbitrator, or a majority of the arbitrators, if the Claim is heard by a
three arbitrator panel, shall be final,conclusive and binding on the parties to the arbitration. All
proper costs and expenses of the arbitration including,without limitation, witness fees,attorney's
fees, and the fees of the arbitrator(s)shall be allocated among the parties in such amounts as the
arbitrator, if the Claim is heard before a single arbitrator,or a majority of the arbitrators, if the
Claim is heard before a three arbitrator panel, shall determine at the time of the award. In the
event of the failure, inability, or refusal of any arbitrator to act,a new arbitrator shall be
appointed in such arbitrator's stead by DPRJ. The arbitration award shall be binding in all aspects
and shall be subject to the provisions of Chapter 658A, Hawaii Revised Statutes, as the same be
amended from time to time. In the resolution of any dispute or controversy as set forth in this
Section, each party hereby irrevocably waives the right to a jury trial and any right and claim to
exemplary or punitive damages in any jurisdiction. Any documents of assignment, lease, or
conveyance of any Lot or other interest in the Project shall be deemed to incorporate the
provisions for arbitration of disputes set forth in this Section, as if the same were fully set forth
in any such document. Any person who is injured by reason of the fact that a dispute, subject to
the terms of this arbitration provision, is resolved other than by arbitration,may recover as
damages the cost and expense incurred by reason of the fact that the dispute was not submitted to
4845-1004-8768.1 47.
arbitration for resolution. Any arbitration proceedings under this Section will be submitted to
arbitration in Honolulu, Hawaii.
Section 14.3 Initiation of Litigation by Association.
In addition to compliance with the foregoing alternative dispute resolution
procedures, if applicable,the Association shall not initiate any judicial or administrative
proceeding unless, prior to initiation of the proceedings, seventy five percent (75%) of the total
Class "A" votes in the Association are cast in favor of commencing such proceeding.
Notwithstanding the foregoing,no such approval shall be required for actions or proceedings:
(a) initiated during the Class "B" Control Period;
(b) initiated to enforce the provisions of this Declaration, including collection
of assessments and foreclosure of liens;
(c) initiated to challenge ad valorem taxation or condemnation proceedings;
(d) initiated against any contractor,vendor, or supplier of goods or services
arising out of a contract for services or supplies; or
(e) to defend claims filed against the Association or to assert counterclaims in
proceedings instituted against it.
This Section shall not be amended unless seventy five percent (75%) of the total
Class "A" votes in the Association are cast in favor of such amendment.
ARTICLE XV. MORTGAGE PROVISIONS
The following provisions are for the benefit of holders, insurers, and guarantors of
first Mortgages on lots in the Project.
Section 15.1 Notices of Action.
An institutional holder, insurer, or guarantor of a first Mortgage which provides a
written request to the Association (such request to state the name and address of such holder,
insurer,or guarantor and the street address of the Lot to which its Mortgage relates,thereby
becoming an "Eligible Holder"), will be entitled to timely written notice of any:
(a) Condemnation loss or any casualty loss which affects a material portion of
the Project or which affects any Lot on which there is a first Mortgage held, insured, or
guaranteed by such Eligible Holder;
(b) Delinquency in the payment of assessments or charges owed by a Lot
subject to the Mortgage of such Eligible Holder,where such delinquency,has continued for a
period of sixty(60)days, or any other violation of the Governing Documents relating to such Lot
or the Owner or Occupant which is not cured within sixty(60) days;
4845-1004-8768.1 48.
(c) Lapse, cancellation, or material modification of any insurance policy
maintained by the Association;and
(d) Proposed action which would require the consent of a specified percentage
of Eligible Holders.
Section 15.2 Other Provisions for First Lien Holders.
To the extent not inconsistent with Hawaii law:
(a) Any restoration or repair of the Project after a partial condemnation or
damage due to an insurable hazard shall be performed substantially in accordance with this
Declaration and the original plans and specifications unless the approval is obtained of the
Eligible Holders of first Mortgages on Lots to which more than fifty percent(50%)of the votes
of Lots subject to Mortgages held by such Eligible Holders are allocated.
(b) Any election to terminate the Association after substantial destruction or a
substantial taking in condemnation shall require the approval of the Eligible Holders of first
Mortgages on Lots to which more than fifty percent(50%) of the votes of Lots subject to
Mortgages held by such Eligible Holders are allocated,to such election to terminate.
Section 15.3 No Priori!X.
No provision of this Declaration or the By-Laws gives or shall be construed as
giving any Owner or other party priority over any rights of the first Mortgagee of any Lot in the
case of distribution to such Owner of insurance proceeds or condemnation awards for losses to or
a taking of the Common Area.
Section 15.4 Notice to Association.
Upon request,each Owner shall be obligated to furnish to the Association the
name and address of the holder of any Mortgage encumbering such Owner's Lot.
ARTICLE XVI. CHANGES IN THE COMMUNITY
Communities such as the Project are dynamic and constantly evolving as
circumstances,technology,needs and desires, and laws change; as the residents age and change
over time; and as the surrounding community changes. The Project and its Governing
Documents must be able to adapt to these changes while protecting the things that make the
Project unique.
Section 16.1 Chances in Ownership of Lots.
Any Owner desiring to sell or otherwise transfer title to the Owner's Lot shall give
the Board at least seven (7) days'prior written notice of the name and address of the purchaser or
transferee,the date of such transfer of title,and such other information as the Board may
reasonably require. The transferor shall continue to be jointly and severally responsible with the
4845-1004-8768.1 49.
transferee for all obligations of the Owner of the Lot, including assessment obligations,until the
date upon which such notice is received by the Board, notwithstanding the transfer of title.
Section 16.2 Changes in Common Area.
(a) Condemnation. If any part of the Common Area shall be taken (or
conveyed in lieu of and under threat of condemnation by the Board acting on the written
direction of Members representing at least sixty seven percent(67%)of the total Class "A"votes
in the Association and of Declarant,as long as Declarant owns any Property subject to the
Declaration or which may be made subject to the Declaration in accordance with Section 8.1)by
any authority having the power of condemnation or eminent domain, each Owner shall be
entitled to written notice of such taking or conveyance prior to disbursement of any
condemnation award or proceeds from such conveyance. Such award or proceeds shall be
payable to the Association to be disbursed as follows:
(i) If the taking or conveyance involves a portion of the Common
Area on which Improvements have been constructed, the Association shall restore or replace
such Improvements on the remaining land included in the Common Area to the extent available,
unless within sixty(60) days after such taking Declarant, so long as Declarant owns any Property
subject to the Declaration or which may be made subject to the Declaration in accordance with
Section 8.1,and Members representing at least seventy five percent(75%)of the total Class "A"
vote of the Association shall otherwise agree. Any such construction shall be in accordance with
plans approved by the Board. The provisions of Section 7.7(c)regarding funds for restoring
Improvements shall apply;or
(ii) If the taking or conveyance does not involve any Improvements on
the Common Area, or if a decision is made not to repair or restore,or if net funds remain after
any such restoration or replacement is complete,then such award or net funds shall be disbursed
to the Association and used for such purposes as the Board shall determine.
(b) Partition. Except as permitted in this Declaration, the Common Area shall
remain undivided, and no Person shall bring any action for partition of any portion of the
Common Area without the written consent of all Owners and Mortgagees. This Section shall not
prohibit the Board from acquiring and disposing of tangible personal property nor from acquiring
and disposing of real property which may or may not be subject to this Declaration.
(c) Transfer or Dedication of Common Area. The Association may dedicate
portions of the Common Area to Hawaii County, Hawaii, or to any other local, state, or federal
governmental or quasi-governmental entity.
ARTICLE XVII. DISCLOSURES
Section 17.1 Ongoing Construction and Sales Activities.
Construction activity by Declarant or other Lot Owners may continue within the
Project,as well as on properties adjacent to and in the vicinity of the Project. Such construction
activity may result in the transmission, discharge, or emission of surface water runoff,smoke,
noise, dust, odors, noxious vapors, chemicals,vibrations, and other annoyances, as well as pose
4845-1004-8768.1 50.
certain risks of injury to an Owner and the Owner's guests and visitors, and may limit the
Owner's access to portions of the Project. Additionally, Declarant's sales activities, including the
use of signs and sales displays and activities, will continue in the Project until the sale of the last
lot in the Project. All sales display and activities will be consistent with the community-wide
standard.
Declarant shall have an easement over and upon each Owner's Lot and over the
Project for the transmission, discharge,or emission of surface water runoff, smoke,noise, dust,
noxious vapors, odors, chemicals, vibrations, or other substances or nuisances over the Project
which are created by or result from such construction activities. Declarant may do such things as
may be reasonably required in connection with such construction activities, including,but not
limited to, grading; excavation; depositing fill material; installing drainage systems; and
installing water, electrical, gas, telephone,and/or television cable lines.
Section 17.2 Expansion and/or Modification.
Declarant may consider the development of additional properties in addition to
the Property. Declarant does not represent,promise, or warrant that any other property will be
developed. Declarant has the right, pursuant to this Declaration, to add, modify, or eliminate Lots
and Common Areas (and,if any, facilities thereon)to, on, or from the Property generally,and no
representation,warranty, or assurance has been made(a) that any such Lots or Common Areas or
facilities will or will not be added, modified,or eliminated, or(b) as to the financial or other
impact on the Association which may assess charges against the Owners in the Project.
Section 17.3 Hazardous Materials.
Each Owner assumes all risks of Hazardous Materials(as used herein,the term
"Hazardous Materials" means all substances identified, listed,or defined as a "hazardous
substance" under any federal, state or local environmental laws or otherwise regulated as a
dangerous,hazardous,toxic,or carcinogenic substance) existing on,about,around,under, over,
or within the Owner's Lot,including all risks of: (a)any and all enforcement, clean up, or other
governmental or regulatory actions instituted or threatened pursuant to any Hazardous Materials
Law affecting the Lot; (b)all claims made or threatened by any third party against an Owner or
Declarant relating to damage,contribution, compensation, loss,or injury resulting from any
Hazardous Materials, and(c)having sole responsibility for,and defending,indemnifying, and
holding harmless Declarant and its partners, officers, directors, employees, agents, successors,
and assigns (each of said parties herein called an "Indemnitee"), from and against all claims,
demands, actions, lawsuits,proceedings, fines,penalties,damages,liabilities,judgments, awards,
expenses, and costs(including attorneys' fees and costs)which may arise out of or may directly
or indirectly be attributable to the use, generation,manufacture, treatment, handling, refining,
production, storage release, discharge, disposal, or presence of any Hazardous Materials on,
about, around, over, or within the Lot or the Project. This indemnification shall not apply to
claims,demands,actions,losses, damages,liabilities,costs,and expenses caused by any
Indemnitee's proven gross negligence,willful misconduct, or violation of applicable laws,
established by a final, nonappealable judgment of a court of competent jurisdiction. This
provision shall not apply to any institutional lender, investor,or federal housing agency
4845-1004-8768.1 51.
(including any successors or assigns)who holds a Mortgage covering the Lot or who takes title
to the Lot upon foreclosure or by way of deed in lieu of foreclosure or otherwise.
Section 17.4 Impacts on Lot.
Each Lot, and the Improvements thereon, may be affected periodically by various
hazards and by noise, dust, smoke, earthshock, soot, ash,odor,noxious vapors, transmission of
pollutants or other hazardous materials, surface water runoff,or other adverse environmental
conditions created by or attributable to surrounding construction,development,pasture,and
other non-residential uses and activities,including,but not limited to:
(a) fertilization and pest and weed control;
(b) cattle and other livestock grazing; and
(c) real estate development and other changes in use (due to zoning changes
or other governmental authorization or otherwise), construction,grading, improvement and
maintenance of adjacent and surrounding properties,including roadways.
Section 17.5 View Impairment.
The activities conducted on the Property pursuant to Article V, Article VIII,and
Article X may diminish or impair views within the Property. Therefore,views within the Project
are not protected, and any negative impact to any Owner's view caused by such activities shall
not provide a basis for any claim or right of action. Neither Declarant nor the Association shall
have any obligation to prune or thin landscaping, or trees and shall have the right, in their sole
and absolute discretion,to add Improvements, landscaping, and trees from time to time. In
addition, Declarant and/or the Association may, in their sole discretion, change the location,
configuration, size and elevation of Improvements, trees, and landscaping from time to time.
Any such additions or changes may diminish or obstruct views from the Lots.Any express or
implied easements for view purposes or for the passage of light and air are hereby expressly
disclaimed. However, Declarant will use its reasonable efforts to insure that any development on
adjoining Lots will be done in such a manner so as to minimize(as determined by Declarant in
its sole discretion) the impact that the development will have on the view planes of
Improvements already constructed (or approved for construction)on adjoining Lots.
Section 17.6 Roadways.
As a condition of approval for the development of the Project,Declarant shall
dedicate Road Lots A, B, F and H within the Project to the County of Hawaii as public
roadways. Declarant reserves the right to dedicate any and all other roadways and rights therein
within the Project to the County of Hawaii or to any applicable governmental agency. Road Lot
A will be connected to the roadway system for the adjoining Pualani Estates subdivision which,
when completed by the developer of that subdivision, will then serve as a connector between
Queen Kaahumanu Highway and Hualalai Road. Road Lots B and H will serve as a connector
between adjoining lands. Road Lot F will provide additional right-of-way along Hualalai Road.
All roadways within the Project may become future thoroughfares connecting to adjoining
properties.
4845-1004-8768.1 52.
In addition,certain Owners shall be required to share use and maintenance of the
respective Road Lots which provide access to their Lots. The Owners of Lots 17 and 18 shall be
jointly responsible for the repair and maintenance of Road Lot C. The Owners of Lots 19,20, 21
and 22 shall be jointly responsible for the repair and maintenance of Road Lot D. The Owners of
Lots 23,24,25, 26 and 27 shall be jointly responsible for the repair and maintenance of Road
Lot E. The Owners of Lots 8, 9, 10 and I 1 shall be jointly responsible for the repair and
maintenance of Road Lot G. Road Lot D shall also be subject to an easement for ingress and
egress in favor of the County of Hawaii for access to Lot 2 of the subdivision.
Section 17.7 Wells and Irrigation_Systems.
No Owner or Member may construct, drill, install, or maintain any sprinkler or
irrigation systems or wells of any type which draw upon water from lakes,creeks, streams,
rivers,ponds, wetlands,canals, or other ground or surface waters within the Project,except that
Declarant and the Association shall have the right to draw water from such sources.
ARTICLE XVIII. AMENDMENT OF DECLARATION
Any restrictions,covenants, conditions, and provisions of this Declaration may,
from time to time,be amended or modified by Declarant or by the Members, as set forth below.
The amendment shall be Recorded,and a copy of the recorded amendment shall be distributed to
all Members of the Association.
Section 18.1 By Declarant.
In addition to specific amendment rights granted elsewhere in this Declaration,
until termination of the Class "B" membership, Declarant may, unless otherwise prohibited by
Hawaii law,unilaterally amend this Declaration for any purpose. Thereafter, so long as Declarant
owns any property described in Exhibit A, Declarant may unilaterally amend this Declaration if
such amendment is necessary(a)to bring any provision into compliance with any applicable
governmental statute,rule, regulation, or judicial determination; (b)to enable any reputable title
insurance company to issue title insurance coverage on the Lots; (c)to enable any institutional or
governmental lender, purchaser, insurer or guarantor of mortgage loans, including, for example,
the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, to
make, purchase, insure, or guarantee mortgage loans on the Lots; or(d)to satisfy the
requirements of any local, state, or federal governmental agency.
Section 18.2 By Members.
Except as otherwise specifically provided in this Declaration,this Declaration
may be amended only by the affirmative vote or written consent,or any combination thereof,of
Members representing seventy Eve percent(75%) of the total Class "A" votes in the Association,
including seventy five percent(75%)of the Class "A" votes held by Members other than
Declarant, and Declarant's consent, so long as Declarant owns any property subject to this
Declaration or which may become subject to this Declaration in accordance with Section 8.1.
4845-1004-8768.1 53.
Notwithstanding the above,the percentage of votes necessary to amend a specific
clause shall not be less than the prescribed percentage of affirmative votes required for action to
be taken under that clause.
Section 18.3 Validity and Effective Date.
No amendment may remove,revoke, or modify any right or privilege of Declarant
or the Class "B" Member without written consent of Declarant or the Class "B" Member,
respectively(or the assignee of such right or privilege).
Section 18.4 Limitations on Amendments.
If an Owner consents to any amendment to this Declaration or the By-Laws, it
will be conclusively presumed that such Owner has the authority to so consent, and no contrary
provision in any Mortgage or contract between the Owner and a third party will affect the
validity of such amendment.
Any amendment shall become effective upon Recording, unless a later effective
date is specified in the amendment. Any procedural challenge to an amendment must be made
within six months of its Recordation or such amendment shall be presumed to have been validly
adopted. In no event shall a change of conditions or circumstances operate to amend any
provisions of this Declaration.
ARTICLE XIX. MISCELLANEOUS
Section 19.1 Laws of Hawaii; Non-Waiver.
The provisions hereof shall be construed and enforced under the laws of the State
of Hawaii. Failure to enforce any provision hereof shall not constitute a waiver of the right to
enforce said provision or any other provision hereof. No acceptance of any assessment paid by
any Owner shall be deemed to be a waiver of any breach by such Owner of any provision of this
Declaration or a waiver of any rights of any person entitled to enforce this Declaration.
Section 19.2 Joint and Several Liability.
If an Owner consists of more than one Person, all of the obligations of the Owner
under this Declaration shall constitute the joint and several obligation of all such Persons.
Section 19.3 InteEpretation.
The provisions of this Declaration shall be liberally construed to effectuate their
purpose of creating a uniform plan for the development of the Project. The headings of
paragraphs and articles are inserted only for ease of reference and shall not define or limit the
scope or intent of any provision of this Declaration.
4845-1004-8768.1 54.
Section 19.4 Captions.
The captions and headings in this instrument are for convenience only and shall
not be considered in construing any provisions of this Declaration.
Section 19.5 Word Usaae.
The use of the masculine gender herein shall be deemed to include the feminine
and neuter genders and the use of the singular shall be deemed to include the plural, whenever
the text so requires.
Section 19.6 Notice,Information, or Material.
Any notice, information, or material required to be given hereunder shall be
deemed furnished or delivered to a party at the time a copy thereof is deposited in the mail,
postage or charges prepaid, addressed to the party, and in any event, when such party actually
receives such notice, information,or material.
Any notice, information, or material delivered or furnished to the name and
address of a Member as last shown on the books of the Association shall be deemed to be the
proper delivery or furnishing of such notice, information, or material. If notice of a meeting is
given as provided for above,nonreceipt of actual notice by any Member shall in no way
invalidate the meeting or any proceedings taken or any business done at the meeting. Any
Member may waive notice of any meeting either prior to or at or after the meeting, with the same
effect as though notice of the meeting had been given to the Member. The presence of any
Member at a meeting shall be the equivalent of a waiver by that Member of notice of the
meeting.
Notices, information, and material required to be given hereunder to Declarant
shall be addressed to Declarant at c/o Robert D. Triantos, P. 0. Box 1720, Kailua-Kona,Hawaii
96745-1720. Notices, information, and material required to be given hereunder to the
Association or the Board shall be addressed to such entity in care of the Association at the office
of the Association.
Section 19.7 Limited Liability.
Neither Declarant,the Association, the Board,nor any member, agent,officer, or
employee of any of the same, shall be liable to any party for any action or for any failure to act
with respect to any matter if the action taken or failure to act.
Section 19.8 Exhibits.
Exhibits A,B, C,D and E attached to this Declaration are incorporated by this
reference, and amendment of such exhibits shall be governed by this Article. Any other exhibits
are for informational purposes and may be amended as provided therein or in the provisions of
this Declaration which refer to such exhibits.
4845-1004-8768.1 55.
IN WITNESS WHEREOF, the Declarant has entered into this Declaration as of
the date first written above.
DECLARANT:
INTERNATIONAL DEVELOPMENT
PROJECT D., a Hawaii corporation
By:
Robert D.Tri ntos
Its Assistant Secretary
PUALANI ESTATES,INC.,
a Hawaii tion
C
D = -
By:
R041 D. Triajdtos ,
Its Assistant Secretary -
4845-1004-8768.1 56.
STATE OF HAWAII
)SS.
COUNTY OF HAWAII
On this day of June, 2005, before me personally appeared ROBERT D. TRIANTOS,to
me personally known,who,being by me duly sworn or affirmed,did say that such person
executed the foregoing instrument as the free act and deed of such person,and if applicable in
the capacities shown, having been duly authorized to execute such instrument in such capacities.
Name: DELNA R.Y. KO- MO
Notary Public, State of Hawaii
My commission expires:
4845-1004-8768.1 57.
EXHIBIT A
PROPERTY
All of that certain parcel of land(being portion(s) of the land(s) described in and covered by
Royal Patent Number 7819, Land Commission Award Number 8559-13,Apana 8 to William C.
Lunalilo(Certificate of Boundaries No. 15 9)) situate,lying and being at Puapuaanui 1 st,District
of North Kona, Island and County of Hawaii, State of Hawaii, being LOT 1, and thus bounded
and described:
Beginning at the southeast corner of this parcel of land,on the westerly side of Hualalai Road,
the coordinates of said point of beginning referred to Government Survey Triangulation Station
"KAHELO"being 889.34 feet north and 8,151.24 feet east and running by azimuths measured
clockwise from True South:
1. 570 04' 57.96 feet along Lot 2(County of Hawaii
Subdivision No. 7510), along
the remainder of R.P. 7819, L.C.Aw.
8559-B, Apana 8 to William C.
Lunalilo;
2. 380 04' 46.25 feet along Lot 2 (County of Hawaii
Subdivision No. 7510), along the
remainder of R.P. 7819, L.C.Aw.
8559-B,Apana 8 to William C.
Lunalilo;
3. 650 22' 40" 8.35 feet along Lot 2(County of Hawaii
Subdivision No. 7510), along the
remainder of R.P. 7819, L.C.Aw.
8559-B,Apana 8 to William C.
Lunalilo;
4. 820 38' 34.55 feet along Lot 2 (County of Hawaii
Subdivision No. 7510),along the
remainder of R.P. 7819,L.C.Aw.
8559-B, Apana 8 to William C.
Lunalilo;
5. 3520 38' 80.06 feet along Lot 2 (County of Hawaii
Subdivision No. 7510), along the
remainder of R.P. 7819, L.C.Aw.
8559-B,Apana 8 to William C.
Lunalilo;
Thence along middle of stonewall, along R.P. 4475, L.C.Aw. 7713, Apana 43 to V. Kamamalu
(Certificate of Boundaries No. 168) for the next sixteen (16)courses,the direct azimuths and
distances between points being:
4845-1004-8758.1
6. 630 04' 10" 114.39 feet;
7. 68° 39' 20" 61.48 feet;
8. 740 34' 10" 40.09 feet;
9. 73° 16' 34.05 feet;
10. 480 01' 34" 28.85 feet;
11. 520 26' 43" 12.98 feet;
12. 610 06' 58.10 feet;
13. 520 36' 54" 116.58 feet;
14. 520 57' 53" 137.34 feet;
15. 620 11' 24" 18.03 feet;
16. 770 26' 30" 34.90 feet;
17. 700 20' 20" 112.63 feet;
18. 3310 54' 57" 20.14 feet;
19. 590 23' 52" 14.14 feet;
20. 450 47' 51" 12.53 feet;
21. 55° 58' 24" 90.87 feet;
22. 1440 11' 11" 109.10 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B,Apana 8 to
William C. Lunalilo;
23. 145° 27' 18" 99.09 feet along the remainder of R.P.
7819,L.C.Aw. 8559-13, Apana 8 to
William C. Lunalilo;
24. 1610 39' 47" 77.11 feet along the remainder of R.P.
7819, L.C.Aw. 8559-13, Apana 8 to
William C. Lunalilo;
25. 1720 33' 16" 76.75 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
4845-1004-8768.1 2.
26. 83° 59' 11.21 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
27. 173° 59' 07" 401.86 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B,Apana 8 to
William C. Lunalilo;
28. 2630 59' 07" 22.00 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B,Apana 8 to
William C. Lunalilo;
29. 1730 59' 07" 60.94 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
30. 217° 01' 42" 70.32 feet along the remainder of R.P.
7819,L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
31. 1730 59' 07" 121.45 feet along the remainder of R.P.
7819,L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
32. 2620 42' 374.78 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B,Apana 8 to
William C. Lunalilo;
33. 352° 31' 351.80 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B,Apana 8 to
William C. Lunalilo;
34. 2460 18' 42" 221.98 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
35. 1900 27' 20" 167.56 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
36. 75° 44' 45" 33.02 feet along the remainder of R.P.
7819, L.C.Aw. 8559-B, Apana 8 to
William C. Lunalilo;
37. 1930 09' 50" 524.26 feet along the remainder of R.P.
7819, L.C.Aw. 8559-13,Apana 8 to
William C. Lunalilo;
4845-1004-8768.1 3.
38. 187° 37' 70.30 feet along the remainder of R.P.
7819, L.C.Aw. 8559-13, Apana 8 to
William C. Lunalilo;
39. 3480 13' 10" 74.67 feet along the westerly side of
Hualalai Road;
40. 3550 19' 50" 67.56 feet along the westerly side of
Hualalai Road;
41. 00 59' 15" 70.81 feet along the westerly side of
Hualalai Road;
42. 352° 08' 10" 37.49 feet along the westerly side of
Hualalai Road;
43. 336° 30' 45" 24.74 feet along the westerly side of
Hualalai Road;
44. 3270 54' 87.28 feet along the westerly side of
Hualalai Road;
45. 3310 47' 15" 41.06 feet along the westerly side of
Hualalai Road;
46. 3250 09' 28.49 feet along the westerly side of
Hualalai Road;
47. 3160 07' 40" 47.77 feet along the westerly side of
Hualalai Road;
48. 3220 21' 30" 44.27 feet along the westerly side of
Hualalai Road;
49. 3280 52' 30" 42.37 feet along the westerly side of
Hualalai Road;
50. 3380 08' 87.65 feet along the westerly side of
Hualalai Road;
51. 3550 36' 47.03 feet along the westerly side of
Hualalai Road;
52. 70 42' 30" 20.07 feet along the westerly side of
Hualalai Road;
53. 140 43' 20" 47.14 feet along the westerly side of
Hualalai Road;
4845-1004-8768.1 4.
54. 180 39' 15" 26.70 feet along the westerly side of
Hualalai Road;
55. 20 53' 45" 10.02 feet along the westerly side of
Hualalai Road;
56. 3280 21' 20.93 feet along the westerly side of
Hualalai Road;
57. 3350 36' 10" 133.42 feet along the westerly side of
Hualalai Road;
58. 3270 04' 8.01 feet along the westerly side of
Hualalai Road to the point of
beginning and containing an area of
16.779 acres, more or less.
Being the premises acquired by Warranty Deed
GRANTOR INTERNATIONAL DEVELOPMENT PROJECTS, LTD., a Hawaii
corporation, and PUALANI ESTATES, INC., a Hawaii corporation
GRANTEE INTERNATIONAL DEVELOPMENT PROJECTS, LTD., a Hawaii
corporation, and PUALANI ESTATES, INC.,a Hawaii corporation
DATED November 11, 2004
RECORDED Document No.2004-238247
SUBJECT, HOWEVER, TO THE FOLLOWING:
a. Reservation in favor of the State of Hawaii of all mineral and metallic
mines.
b. Unrecorded GRANT OF EASEMENT by FRANK GOUVEIA to
HAWAII ELECTRIC LIGHT COMPANY, INC., dated October 1, 1958,
as mentioned in instrument recorded in Liber 9167 at Page 2.
C. The terms and provisions,including the failure to comply with any
covenants, conditions and reservations,contained in the following:
INSTRUMENT: AGREEMENT
DATED: August 4, 1988
RECORDED: Liber 22270 Page 308
PARTIES: TED L. DANIELL and MELISSA C. DANIELL;
and the PLANNING DEPARTMENT of the County
of Hawaii.
d. AGREEMENT FOR ASSIGNMENT OF RIGHTS TO WATER
COMMITMENT UNITS KEALAKEKUA WATER SOURCE
4845-1004-8768.1 5.
AGREEMENT dated June 30, 1988, recorded in Liber 22451 at Page 332,
by and between ROBERT LEON DANIELL, and PUALANI
DEVELOPMENT COMPANY,a Hawaii joint venture.
e. The terms and provisions, including the failure to comply with any
covenants, conditions and reservations,contained in the following:
INSTRUMENT : DECLARATION
DATED October 5, 1989
RECORDED Liber 23776 Page 653
f. GRANT
TO SCHULER HOMES, INC., a Delaware corporation
DATED October 19,2001
RECORDED Document No. 2001-176109
GRANTING a perpetual and nonexclusive easement for utility
purposes
g. The terms and provisions, including the failure to comply with any
covenants, conditions and reservations,contained in the following:
INSTRUMENT: PAIR SHARE AND DEVELOPMENT
AGREEMENT
DATED: March 4, 2004
RECORDED: Document No. 2004-168319
PARTIES: INTERNATIONAL DEVELOPMENT
PROPERTIES, INC. a Hawaii corporation,
PUALANI ESTATES, INC., a Hawaii corporation,
and ULUWEHI PROPERTIES, LLC,a Hawaii
limited liability company
h. A nonexclusive easement for roadway and utility purposes in favor of
Julian F. Gouveia and wife, as mentioned in instrument dated May 30,
1984,recorded in Liber 17933 at Page 71, said easement being more
particularly described therein.
i. GRANT
TO ULUWEHI PROPERTIES LLC
DATED March 22, 2004
RECORDED Document No. 2004-197425
GRANTING an easement for roadway and utility purposes over
Easement "A-5", more particularly described in
Exhibit A attached thereto and made a part thereof
4845-1004-8768.1 6.
j. GRANT
TO HAWAII ELECTRIC LIGHT COMPANY,INC.
and VERIZON HAWAII, INC.,now known as
HAWAIIAN TELCOM, INC.
DATED September 24, 2004
RECORDED Document No. 2004-217763
GRANTING a perpetual right and easement for utility
purposes
k. The terms and provisions, including the failure to comply with any
covenants,conditions and reservations, contained in the following:
INSTRUMENT : NOTICE OF PROHIBITION AGAINST SECOND
DWELLING UNIT
DATED December 7,2004
RECORDED Document No. 2004-251048
1. Any and all easements shown and/or designated on Subdivision Map dated
December 10, 2004, approved by the County of Hawaii Planning
Department on February 18, 2005 (Subdivision No. 7921),prepared by
Ross Tanaka, Licensed Professional Land Surveyor, as the same may be
revised from time to time.
M. Claims arising out of customary and traditional rights and practices,
including without limitation those exercised for subsistence, cultural,
religious, access or gathering purposes,as provided for in the Hawaii
Constitution or the Hawaii Revised Statutes.
[End of Exhibit A]
4845-1004-8768.1 7.
EXHIBIT B
DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
STATE OF HAWAII
In the Matter of the Incorporation )
of ) HRS §414D-32
THE HEIGHTS ON HUALALAI )
COMMUNITY ASSOCIATION, )
INC. )
ARTICLES OF INCORPORATION
-of-
THE HEIGHTS ON HUALALAI COMMUNITY ASSOCIATION, INC.
Steven S.C. Lim,Esq.
CARLSMITH BALL LLP
121 Waianuenue Avenue
Hilo,Hawaii 96720
Attorney for THE HEIGHTS ON HUALALAI
COMMUNITY ASSOCIATION, INC.
4822-0403-3536.1.
DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
STATE OF HAWAII
In the Matter of the Incorporation )
-of- )
THE HEIGHTS ON HUALALAI }
COMMUNNITY ASSOCIATION,)
INC. )
ARTICLES OF INCORPORATION
-of-
THE HEIGHTS ON HUALALAI COMMUNITY ASSOCIATION, INC.
The undersigned, desiring to form a nonprofit corporation in accordance with
the laws of the State of Hawaii and to obtain the rights and benefits conferred by said laws
upon nonprofit corporations, does hereby execute the following Articles of Incorporation.
I.
NAME
The name of the Association shall be The Heights on Hualalai Community
Association, Inc.
II.
MAILING ADDRESS
The mailing address of the Association shall be ,
Kailua-Kona, Hawaii 96740.
III.
INITIAL REGISTERED OFFICES INITIAL REGISTERED AGENT
The name of the Association's initial registered agent in the State of Hawaii is
Robert D. Triantos, Esq. The street address of the Association's initial registered office is
Kailua-Kona,Hawaii 96740.
4822-0403-3536.1.
IV.
INCORPORATOR
The name and address of the incorporator is:
Name Address
Steven S.C. Lim,Esq. 121 Waianuenue Avenue
Hilo, Hawaii 96720
V.
PERIOD OF DURATION
The period of the Association's duration is perpetual.
V1.
DEFINITIONS
All capitalized terms used herein which are not defined shall have the same
meaning as set forth in the Recorded The Heights on Hualalai Declaration of Covenants,
Conditions and Restrictions as may be amended from time to time(the"Declaration").
VII.
PURPOSES
This Association shall be a nonprofit corporation within the meaning of
Chapter 414D of the Hawaii Revised Statutes. The Association is and is intended to be a
homeowner's association as that term is defined in Internal Revenue Service Code 528 and
the corresponding provisions of any subsequent tax laws.
The Association is organized for the following specific purposes and powers:
(a) To be and constitute the Association to which reference is made in the
Declaration,to perform all obligations and duties of the Association, and to exercise all rights
and powers of the Association,as specified therein,in the Bylaws, and as provided by law;
(b) To provide an entity for the furtherance of the interests of the Owners of
real property subject to the Declaration; and
(c) To have and exercise all of the powers conferred by law on nonprofit
corporations.
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VIII.
POWERS
The powers of the Association shall include and be governed by the following
provisions:
(a) The Association shall have all of the common law and statutory powers
conferred upon nonprofit corporations under Hawaii law and all of the powers necessary or
desirable to perform the obligations and duties and to exercise the rights and powers set out in
these Articles,the Bylaws, or the Declaration, including,without limitation,the power:
i) to fix, collect, and enforce payment, by any lawful
means,of assessments and other charges to be levied against the Lots and/or Apartments;
ii) to manage, control, operate, maintain, repair, and
improve the property subject to the Declaration and any other property for which the
Association, pursuant to the Declaration, other covenants, easements or contracts, has a right
or duty to provide such services;
iii) to make rules and regulations and to enforce covenants,
conditions, or restrictions affecting any property to the extent the Association may be
authorized to do so under the Declaration or Bylaws;
iv) to engage in activities which will actively foster,
promote, and advance the common interests of Owners of Lots and/or Apartments subject to
the Declaration;
v) to buy or otherwise acquire, sell, dedicate for public use,
or otherwise dispose of, mortgage, or otherwise encumber, exchange, lease, own, hold, use,
operate, and otherwise deal in and with real, personal,and mixed property of all kinds and any
right or interest therein for any purpose of the Association, subject to such limitations as may
be set forth in the Declaration or Bylaws;
vi) to borrow money for any purpose, subject to such
limitations as may be contained in the Declaration or Bylaws;
vii) to enter into, make, perform, or enforce contracts of
every kind and description, and to do all other acts necessary, appropriate, or advisable in
carrying out any purpose of the Association, with or in association with any other association,
corporation, or other entity or agency,public or private;
viii) to act as agent, trustee, or other representative of other
corporations, firms, or individuals, and as such to advance the business or ownership interests
in such corporations, firms, or individuals;
ix) to adopt, alter, and amend or repeal the Bylaws as may
be necessary or desirable for the proper management of the affairs of the Association;
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provided,however, such Bylaws may not be inconsistent with or contrary to any provisions of
the Declaration;
X) to provide any and all supplemental municipal services
to the real property subject to the Declaration as the Board of Directors may determine
necessary or proper;and
xi) to sue and be sued.
The foregoing enumeration of powers shall not limit or restrict in any manner
the exercise of other rights and powers which may now or hereafter be permitted by law; the
powers specified in each of the paragraphs of this Article are independent powers, not to be
restricted by reference to or inference from the terms of any other paragraph of this Article.
(b) The Association shall make no distribution of income to its Members,
directors, or officers.
IX.
MEMBERS
The Association shall have Members. The authorized number and
qualifications of Members of the Association, the different classes of membership, if any, the
property, voting and other rights and privileges of the Members, and their liabilities to dues
and assessments and the method of collection thereof, shall be as set forth in the Declaration
and Bylaws.
X.
BOARD OF DIRECTORS
The business and affairs of the Assocation shall be managed by the Board of
Directors, which shall consist of not less than three (3) members and may be increased in
accordance with the Bylaws. The Members of the Board of Directors shall be elected or
appointed at such times, in such manner and for such terms as may be prescribed by the
Bylaws.
XI.
APPOINTMENT OF DIRECTORS
The number of Directors constituting the initial Board of Directors shall be
three (3).
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The following Persons shall act as the initial Directors of the Association until
their successors are duly elected or appointed as provided for in the Bylaws:
Name Address
The method of election, removal, and filling of vacancies on the Board and the
terms of office of Directors shall be as set forth in the Bylaws.
Subject to the terms of the Bylaws, the Board may delegate its operating
authority to such corporations, individuals, and committees as it, in its discretion, may
determine.
XII.
DIRECTOR CONFLICT OF INTEREST
No contract or other transaction between the Association and one or more of its
Directors or any other corporation, firm, association or entity in which one or more of its
directors are directors or officers, or are financially interested, shall be either void or voidable
because of the relationship or interest or because the Director or Directors are present at the
meeting of the Board of Directors or a committee thereof which authorizes, approves or
ratifies the contract or transaction or because the vote of the interested Director or Directors
are counted for that purpose, if-
(a)
f(a) The material facts of the transaction and the Director's relationship or
interest is disclosed or known to the Board of Directors or committee which authorizes,
approves or ratifies the contract or transaction by a vote or consent sufficient for the purpose
without counting the votes or consents of the interested Director or Directors; or
(b) The material facts of the transaction and the Director's relationship or
interest is disclosed or known to the Members and they authorize, approve or ratify the
contract or transaction by vote or written consent; or
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(c) The contract or transaction is fair and reasonable to the Association at the
time it is entered into.
If a majority of the Directors who have no direct or indirect interest in the
transaction vote to authorize, approve or ratify the transaction,a quorum is present.
XIII.
INDEMNIFICATION OF
OFFICERS DIRECTORS EMPLOYEES AND AGENTS
(a) As used in this Article, unless the context otherwise requires:
"Agent" means any Person who is or was a Director, Officer, employee or
other agent of the Association, or is or was serving at the request of the Association as a
director, officer,partner,trustee, employee or agent of another foreign or domestic business or
nonprofit corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or was a director, officer, employee or agent of a foreign or domestic corporation
which was a predecessor corporation of the Association or of another enterprise at the request
of the predecessor corporation.
"Expenses" include, without limitation, attorney's fees and any expenses of a
completed action or proceeding,whether civil,criminal, administrative or investigative.
(b) The Association shall have power to indemnify any Person who was or is a
party or is threatened to be made a party to any proceeding (other than an action by or in the
right of the Association or where the Person was found liable on the basis of his or her
improper receipt of a personal benefit) by reason of the fact that the Person is or was an agent
of the Association against expenses (including reasonable attorneys' fees and expenses),
judgments, fines, settlements and other amounts actually and reasonably incurred in
connection with such proceeding if the Person acted in good faith and in a manner the Person
reasonably believed to be (1) in or not opposed to the best interests of the Association if the
Person was acting in an official capacity; or (2) in all other cases, at a minimum, did not
oppose the Association's best interests; and, with respect to any criminal proceeding, had no
reasonable cause to believe the conduct of the Person was unlawful. A director's conduct
with respect to an employee benefit plan for a purpose the director reasonably believed to be
in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the
requirements of subparagraph (2) hereof. The termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative of the Person's failure to meet the standard of conduct described herein.
(c) The Association shall have power to indemnify any Person who was or is a
party or is threatened to be made a party to any threatened,pending or completed action by or
in the right of the Association to procure a judgment in its favor by reason of the fact that the
Person is or was an agent of the Association against expenses (including reasonable attorneys'
fees and expenses) actually and reasonably incurred by the Person in connection with the
defense or settlement of such action if the Person acted in good faith and in a manner the
Person reasonably believed to be in or not opposed to the best interests of the Association.
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No indemnification shall be made in respect of any claim, issue or matter as to which the
Person shall have been adjudged to be liable for negligence or misconduct in the performance
of the Person's duty to the Association unless and only to the extent that the court in which
the action or suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all circumstances of the case, the Person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
(d) To the extent that an agent has been successful on the merits or otherwise
in defense of a proceeding referred to in subsection(b)or(c),or in defense of any claim, issue
or matter therein, the agent shall be indemnified by the Association against expenses
(including reasonable attorneys' fees and expenses) actually and reasonably incurred by the
agent in connection therewith.
(e) Any indemnification under subsection (b) or (c) of this Article shall be
made by the Association only as authorized in the specific case upon a determination that
indemnification of the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in subsection (b) or (c). The determination shall be
made by (1) the Board of Directors by a majority vote of a quorum consisting of Directors
who were not at the time parties to the proceeding; or (2) majority vote of a committee duly
designated by the Board consisting of two or more Directors not at the time parties of the
proceeding, if a quorum is not obtainable; or (3) independent legal counsel selected by(1) or
(2);or (4) the full Board of Directors if a quorum cannot be obtained under(1)or a committee
appointed under (2); or (5) the Members; or (6) the court in which the proceeding is or was
pending upon application made by the agent.
(f) Expenses incurred in defending any proceeding may be paid by the
Association in advance of the final disposition of the proceeding upon (1) receipt of a written
affirmation of the Person's good faith belief that he, she or it has met the applicable standard
of conduct under subsection(b) or(c) of this Article; (2)receipt of a written undertaking by or
on behalf of the Person to repay such amount if it shall ultimately be detennined that the
Person did not meet the applicable standard of conduct; and (3) the Association making a
determination that the facts then known would not preclude indemnification.
(g) The indemnification provided by this Article is not exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement, vote of the
Members or disinterested Directors or otherwise, both as to action in a Person's official
capacity and as to action in another capacity while holding office, and shall continue as to a
Person who has ceased to be an agent and shall inure to the benefit of the heirs and personal
representatives of such a Person.
(h) The Association shall have the power to purchase and maintain insurance
on behalf of any agent of the Association against any liability asserted against or incurred by
the agent in any such capacity or arising out of the agent's status as such, whether or not the
Association would have the power to indemnify him against such liability under the
provisions of this Article. Any such insurance may be procured from any insurance company
designated by the Board of Directors, including any insurance company in which the
Association shall have any equity or other interest through stock ownership or otherwise.
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(i) This Article does not apply to any proceeding against any investment
manager or other fiduciary of an employee benefit plan in such Person's capacity, though
such Person may also be an agent of the employer corporation as defined in subsection (a).
Nothing contained in this Article shall limit any right to indemnification to which a trustee,
investment manager or other fiduciary may be entitled by contract or otherwise.
XIV.
DISSOLUTION
In the event that the Association as a corporate entity is dissolved, then unless
otherwise provided for by the Association, a nonprofit, unincorporated association shall
forthwith and without further action or notice be formed to succeed to all the rights and duties
of the Association hereunder. The affairs of such unincorporated Association shall be
governed by the laws of the State of Hawaii and, to the extent not inconsistent therewith, by
the Declaration and the Articles and Bylaws of the Association as if they were created for the
purpose of governing the affairs of an unincorporated association.
XV.
BYLAWS
The initial Bylaws of the Association shall be adopted by the Board of
Directors. The Bylaws may be altered, amended or repealed, and new Bylaws may be
adopted,in the manner provided for in the Bylaws.
I certify, under the penalties of Section 414D-12 of the Hawaii Revised
Statutes,that I have read the above statements and that the same are true and correct.
Witness my hand this day of ,20
Incorporator
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EXHIBIT C
BYLAWS
OF
THE HEIGHTS ON HUALALAI COMMUNITY ASSOCIATION,INC.
ARTICLE I.
PURPOSES;NONPROFIT CHARACTER
SECTION 1.1 Purposes. The purposes of the Association shall be as
specifically set forth in Article VII of the Articles of Incorporation.
SECTION 1.2 Nonprofit Character. The Association shall be a nonprofit
corporation. The Association shall not authorize or issue shares of stock. No dividend shall
be paid and no part of the income or earnings which may be derived from its operations, in
pursuance of the purposes of the Association, shall be distributed to or inure to the benefit of
any Member, Director or Officer of the Association, or any private individual, but shall be
used to promote the purposes of the Association.
ARTICLE 11.
DEFINITIONS
All capitalized terms used herein which are not defined shall have the same
meaning as set forth in The Heights on Hualalai Declaration of Covenants, Conditions and
Restrictions as may be amended from time to time (the"Declaration").
ARTICLE III.
PRINCIPAL OFFICE; PLACE OF MEETINGS; SEAL
SECTION 3.1 Principal Office. The principal office of the Association shall
be maintained at such place within or without the State of Hawaii, and the Association may
have such other offices within or without the State of Hawaii, as the Board of Directors shall
determine.
SECTION 3.2 Place of Meetings. All meetings of the Members and of the
Board of Directors shall be held at the principal office of the Association, unless some other
place is stated in the call. Any meeting, regular or special, of either the Board of Directors or
of the Members may be held by conference telephone or similar communication equipment as
long as all Directors or all Members participating in the meeting can hear one another, and all
such Directors or Members shall be deemed to be present in person at the meeting.
4822-6463-3536.1.
SECTION 3.3 Seal. The Association may have a corporate seal as the Board
of Directors shall determine.
ARTICLE IV.
MEMBERS
SECTION 4.1 Members. The Association shall have two classes of
membership consisting of Class "A" and Class "B," as more fully set forth in the Declaration.
The provisions of the Declaration pertaining to membership are incorporated herein by this
reference.
SECTION 4.2 Annual Meeting. The annual meeting of the Members shall be
held on such day within ninety (90) days following the close of each fiscal year as the Board
of Directors shall designate, or, if the Board of Directors shall not have designated such day
by the end of the second month following the close of the fiscal year,the annual meeting shall
be held on the first Monday of April in each year, if not a legal holiday, and if a legal holiday,
on the next calendar day following.
SECTION 4.3 Regular Meetings. The Members may establish regular
meetings to be held in such places and at such times as the Members may from time to time
by vote determine, and when such meeting or meetings shall be so determined, no further
notice thereof shall be required.
SECTION 4.4 Special Meetings. Special meetings of the Members may be
held at any time upon the call of the President or any two (2) Directors, or upon the call of
twenty-five percent (25%) of all of the Class "A" Members. Upon receipt of such call or
written request,the Secretary shall send out notices of the meeting to all Members in the same
manner as for annual meetings of the Members.
SECTION 4.5 Notice of Meetings. Subject to Section 4.3 above, notice
setting forth the time and place of the annual and any special meetings and the general nature
of the business to be considered thereat shall be given by the Secretary, or by the person or
one of the persons calling the meeting, to each Member. Such notice shall be given to each
such Member by advising him or her of the meeting by telegram or by personally delivering
written notice thereof to him or her, in each case not less than forty-eight (48) hours prior to
the time set for the meeting, or by mailing written notice thereof, postage prepaid, addressed
to him or her at his or her residence or usual place of business at least ten (10) nor more than
sixty (60) days prior to the time set for the meeting. Nonreceipt by a Member of notice of a
meeting mailed to such Member by first class or certified mail shall not invalidate any
business done at the meeting while a quorum is present.
SECTION 4.6 Waiver of Notice.
(a) Any Member may waive notice of any meeting of Members in writing
signed by himself or herself or his or her duly authorized proxy or attorney-in-fact either prior
to, at or after the meeting.
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(b) The presence or representation at any meeting of any Member shall be
the equivalent of the waiver of the giving of notice of such meeting to such Member,unless
the Member,at the beginning of the meeting, objects to holding the meeting or transacting
business at the meeting.
SECTION 4.7 Quorum. At any meeting of the Members of which proper
notice has been given, a majority of Class "A" Members present in person or by proxy
(provided that not more than three-fourths (75%) of the votes present are by proxy) shall
constitute a quorum, and the concurring vote of a majority of the Members constituting a
quorum shall be valid and binding upon the Association, except as otherwise provided by law,
these Bylaws or the Articles of Incorporation.
SECTION 4.8 Voting; Proxies. The voting rights of the Members shall be as
set forth in the Declaration and in these Bylaws, and such voting rights provisions are
specifically incorporated by reference. The authority given by a Member to any person to
represent such Member at meetings of the Members shall be in writing specifying the Lot or
Apartment for which it is given, signed by such Member, dated and shall be filed with the
Secretary prior to the meeting for which it is to be effective. No proxy shall be valid after
eleven(11) months from the date of such proxy,unless otherwise provided in such proxy.
SECTION 4.9 Adjournment. Any meeting of the Members,whether annual or
special, may be adjourned from time to time, whether a quorum be present or not, without
notice other than the announcement at the meeting, unless a new record date is or must be
fixed under Hawaii Revised Statutes § 414D-107, in which event notice of the adjourned
meeting shall be given to the Members of record as of the new record date. Such adjournment
may be to such time and to such place as shall be determined by a majority of the Members
present. At any such adjourned meeting at which a quorum shall be present, any business
may be transacted which might have been transacted by a quorum at the original meeting as
originally called.
SECTION 4.10 Action by Members Without a Meeting. Any action required
or permitted to be taken at a meeting of the Members may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by eighty percent (80%) of
the Class "A" Members with respect to the subject matter thereof and filed with the records of
the meetings of the Members. Such consent shall have the same effect as a vote of the
Members at a meeting and may be stated as such in any articles or documents filed with the
Director of the Department of Commerce and Consumer Affairs.
SECTION 4.11 Assessments. Members shall be liable for such assessments
as set forth in the Declaration. The provisions of the Declaration pertaining to assessments
are incorporated herein by this reference.
ARTICLE V.
BOARD OF DIRECTORS
SECTION 5.1 Powers. The Board of Directors shall manage the property and
business of the Association and shall have and may exercise all of the powers of the
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Association except such as are reserved to or may be conferred from time to time by law, the
Declaration, the Articles of Incorporation and any amendments thereto, or the Bylaws upon
the Members of the Association.
SECTION 5.2 Number;Appointment/Election.
(a) There shall be a Board of Directors of the Association, to consist of not
less than three (3) members, all appointed by the Class "B" Member during the Class `B"
Control Period as provided in Section 7.4(b) of the Declaration.
(b) Following the termination of the Class "B" Control Period as provided
in the Declaration, the number of Directors for the ensuing year shall be fixed by the
Members at each annual meeting, and the number so designated shall then be elected by ballot
by the Members to hold office until the next annual meeting and thereafter until their
successors shall be duly elected, and the number of Directors may be decreased or increased
by the Members at any special meeting and, in case the number is increased, the additional
Directors shall be elected by ballot as if elected at an annual meeting. Notwithstanding the
foregoing,the Members may,by vote of a majority of them, determine that the Directors shall
serve on a staggered basis, with one-third (1/3) of the Directors to be elected for a one-year
term, one-third (1/3) for a two-year term, and one-third (1/3) for a three-year term, with one-
third (1/3)of the Board of Directors elected annually thereafter for a three-year term.
SECTION 5.3 Chairman. The Board of Directors may appoint from among its
members a Chairman who shall preside at all meetings, serve during the pleasure of the Board
of Directors, and perform such other duties as may be assigned to him or her by the
Declaration,the Articles of Incorporation,these Bylaws or the Board of Directors.
SECTION 5.4 Annual Meeting. A meeting of the Board of Directors shall be
held at the place of each annual meeting of the Members and immediately following such
meeting. At such annual meeting, the Board of Directors shall elect the Officers of the
Association for the ensuing year.
SECTION 5.5 Regular Meetings. The Board of Directors may establish
regular meetings to be held in such places and at such times as it may from time to time by
vote determine, and no further notice thereof shall be required.
SECTION 5.6 Special Meetings. Special meetings of the Board of Directors
may be called at any time by the President or by any two(2)Directors.
SECTION 5.7 Notice of Meetings. Except as otherwise expressly provided,
reasonable notice of any meeting of the Board of Directors shall be given to each Director
(other than the person or persons calling the meeting and other than the person giving notice
of the meeting) by the Secretary, or by the person or one of the persons calling the meeting,
by advising the Director of the meeting by word of mouth or by telephone or by leaving
written notice thereof with him or her or at his or her residence or usual place of business.
Such written notice shall be mailed not less than ten(10) days prior to the date of the meeting.
Nonreceipt by a Director of any written notice of a meeting mailed to such Director shall not
invalidate any business done at the meeting while a quorum is present.
4822-0403-3536.1. - 4-
SECTION 5.8 Waiver of Notice.
(a) Any Director may, prior to, at the meeting, or subsequent thereto,
waive notice of any meeting in writing, signed by him or her.
(b) The presence at any meeting of any Director shall be the equivalent of a
waiver of the requirement of the giving of notice of said meeting to such Director, unless the
Director, at the beginning of the meeting or prior to the vote on a matter not properly noticed,
objects to the lack of notice and does not thereafter vote or assent to the objected action.
SECTION 5.9 Ouorurn. A majority of the total number of Directors at which
the Board of Directors has been fixed by the Class"B"or Class"A" Members shall constitute
a quorum to transact business, and, in order to be valid, any act or business must receive the
approval of a majority of such quorum. A vacancy or vacancies in the membership of the
Board of Directors shall not affect the validity of any action of the Board of Directors,
provided there is present at the meeting a quorum of all the Directors at which the Board of
Directors has been fixed.
SECTION 5.10 Adjournment. In the absence of a quorum at a meeting duly
called,the President or a majority of the Directors present may adjourn the meeting from time
to time without further notice, and may convene or reconvene the meeting when a quorum
shall be present.
SECTION 5.11 Action by Directors Without_a Meeting. Any action required
or permitted to be taken at a meeting of the Directors may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of the Directors with
respect to the subject matter thereof and filed with the records of the meetings of the Board of
Directors. Such consent shall have the same effect as a unanimous vote of the Board of
Directors and may be stated as such in any articles or documents filed with the Director of the
Department of Commerce and Consumer Affairs.
SECTION 5.12 Permanent Vacancies. If any permanent vacancy shall occur
in the Board of Directors through death, resignation, disqualification, removal or other cause
other than temporary absence, illness or disability,the remaining Directors, by the affirmative
vote of a majority of all remaining members of the Board of Directors, may elect a successor
Director to hold office for the unexpired portion of the term of the Director whose place shall
be vacant or until the Class "B" or Class "A" Members shall appoint or elect a successor
Director.
SECTION 5.13 Temporary Vacancies Substitute Directors. If any temporary
vacancy shall occur in the Board of Directors through the sickness or disability of any
Director, the remaining Directors, whether constituting a majority or a minority of the whole
Board of Directors, may by the affirmative vote of a majority of such remaining Directors
appoint some person as a substitute Director, who shall be a Director during such absence,
sickness or disability and until such Director shall return to duty or the office of such director
shall become permanently vacant.
4822-0403-3536.1. - 5 -
SECTION 5.14 Proxies. Voting by proxy shall not be permitted at any
meeting of the Board of Directors or of any committees, boards or bodies created by the
Board of Directors.
SECTION 5.15 Executive and Other Committees.
(a) The Board of Directors, by resolution adopted by a majority of the
Board of Directors, may designate and appoint an Executive Committee and any other
committees, each of which, to the extent provided in the resolution, the Declaration, the
Articles of Incorporation or these Bylaws, shall have and may exercise all the authority of the
Board of Directors; except that no such committee shall have the authority of the Board of
Directors in reference to:
(1) Authorizing distributions;
(2) Approving or recommending to the Members dissolution,
merger, or the sale, pledge or transfer of all or substantially all of the property and
assets of the Association;
(3) Electing, appointing or removing any member of any such
committee or any Director or Officer of the Association;
(4) Adopting, amending, altering or repealing the Articles of
Incorporation or Bylaws;
(b) The designation and appointment of any such committee and the
delegation thereto of authority shall not operate to relieve the Board of Directors or any
individual Director of any responsibility imposed upon the Board of Directors or the Director
by law.
SECTION 5.16 Compensation. The Board of Directors shall have authority to
fix the compensation of members of the Board of Directors.
SECTION 5.17 Gifts and Contributions. The Board of Directors may accept
on behalf of the Association any contribution, gift, bequest or devise for the general purposes,
or for any special purpose,of the Association.
SECTION 5.18 Procedure, The Board of Directors shall fix its own rules of
procedure which shall not be inconsistent with these Bylaws.
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ARTICLE VI.
OFFICERS AND MANAGEMENT
SECTION 6.1 Appointment, Term, Removal. The Officers of the Association
shall be the President, Vice President, the Secretary, the Treasurer, and in addition thereto,
one or more Assistant Secretaries, one or more Assistant Treasurers and such other Officers,
with such duties, as the Board of Directors shall from time to time determine. The Officers
shall be elected annually by the Board of Directors at the first meeting thereof after the annual
or special meeting of the Members at which the Board of Directors is appointed or elected and
shall hold office at the pleasure of the Board of Directors until the next annual meeting and
thereafter until their respective successors shall be duly elected or appointed and qualified.
Each Officer must be a Director and Member of the Association. Any person may hold more
than one office. The Board of Directors may, in its discretion, from time to time limit or
enlarge the duties and powers of any officer appointed by it.
SECTION 6.2 The President. The President shall be the Chief Executive
Officer of the Association. He or she shall preside at all meetings of the Members and in the
absence of the Chairman of the Board of Directors, or if no Chairman of the Board of
Directors shall have been appointed,the President shall preside at all meetings of the Board of
Directors. He or she may call special meetings of Members at his or her discretion and shall
call annual meetings of Members, as provided by these Bylaws. Subject to the direction and
control of the Board of Directors,the President shall:
(a) be in personal charge of the principal office of the Association;
(b) have the general management, supervision and control of all of the
property, business and affairs of the Association, prescribe the duties of the managers of all
branch offices, and exercise such other powers as the Board of Directors may from time to
time confer upon him or her; and
(c) subject to approval of the Board of Directors, appoint heads of
departments and generally control the engagement, government and discharge of all
employees of the Association,and fix their duties and compensation.
He or she shall at all times keep the Board of Directors fully advised as to all
of the Association's business.
SECTION 6.3 The Vice President or Vice Presidents. The Vice President
shall, in such order as the Board of Directors shall determine, perform all of the duties and
exercise all of the powers of the President provided by these Bylaws or otherwise during the
absence or disability of the President or whenever the office of President shall be vacant, and
shall perform all other duties assigned to him, her or them by the Board of Directors or the
President.
SECTION 6.4 The Secretary. The Secretary shall attend all meetings of the
Members and of the Board of Directors, and shall record the proceedings thereof in the
minute book or books of the Association. He or she shall give notice, in conformity with
these Bylaws, of meetings of Members and, where required, of the Board of Directors. In the
4822-0403-3536.1. -7-
absence of the Chairman of the Board of Directors and of the President and the Vice
President, he or she shall have power to call such meetings and shall preside thereat until a
President Pro Tempore shall be chosen. The Secretary shall perform all other duties incident
to his or her office or which may be assigned to him or her by the Board of Directors or the
President.
SECTION 6.5 The Treasurer. The Treasurer shall have custody of all of the
funds, notes, bonds and other evidences of property of the Association. He or she shall
deposit or cause to be deposited in the name of the Association all monies or other valuable
effects in such banks, trust companies or other depositories as shall from time to time be
designated by the Board of Directors. He or she shall make such disbursements as the regular
course of the business of the Association may require or the Board of Directors may order.
He or she shall perform all other duties incident to his or her office or which may be assigned
to him or her by the President or the Board of Directors.
SECTION 6.6 Assistant Secretary and Assistant Treasurer. The Assistant
Secretary or Assistant Secretaries and Assistant Treasurer or Assistant Treasurers, if elected
or appointed, shall, in such order as the Board of Directors may determine, perform all of the
duties and exercise all of the powers of the Secretary and Treasurer, respectively, during the
absence or disability,and in the event of a vacancy in the office, of the Secretary or Treasurer,
respectively, and shall perform all of the duties assigned to him, her or them by the President,
the Secretary in the case of Assistant Secretaries, the Treasurer in the case of Assistant
Treasurers, or the Board of Directors.
SECTION 6.7 Absence of Officers. In the absence or disability of the
President and Vice President, the duties of the President (other than the calling of meetings of
the Members and the Board of Directors) shall be performed by such persons as may be
designated for such purpose by the Board of Directors. In the absence or disability of the
Secretary and of the Assistant Secretary, or Assistant Secretaries if there be more than one, or
of the Treasurer and the Assistant Treasurer, or Assistant Treasurers if there be more than one,
the duties of the Secretary or of the Treasurer, as the case may be, shall be performed by such
person or persons as may be designated for such purpose by the Board of Directors.
SECTION 6.8 Compensation. The Board of Directors shall have the authority
to fix the compensation, if any, of the Officers, agents and employees.
ARTICLE VII.
REMOVALS
During the Class `B" Control Period, the Class "B" Member may at any time
depose or remove from office any Director, Officer, subordinate Officer, agent or employee,
whenever, in their judgment, the best interests of the Association will be served thereby.
Following the termination of the Class "B" Control Period, the Class "A" Members may at
any time depose or remove from office any Director, Officer, subordinate Officer, agent or
employee, whenever, in their judgment, the best interests of the Association will be served
thereby. The number of votes cast to remove a Director must be sufficient to elect the
Director at a meeting to elect Directors. The Board of Directors may at any time remove from
4822-0403-3536.1. - 8 -
office or discharge from employment any Officer, subordinate Officer, agent or employee
appointed by it or by any person under authority delegated by it,whenever, in their judgment,
the best interests of the Association will be served thereby.
ARTICLE VIII.
AUDIT OF BOOKS
The Board of Directors shall cause a complete audit to be made of the books of
the Association at least once in each fiscal year and more often if required by the Board of
Directors, and shall thereafter make appropriate reports to all Members and the Board of
Directors. The Board of Directors may appoint some person, firm or corporation engaged in
the business of auditing to act as the auditor of the Association.
ARTICLE IX.
EXECUTION OF INSTRUMENTS
SECTION 9.1 Proper Officers. Except as hereinafter provided or as required
by law, all checks, drafts, notes, bonds, acceptances, deeds, leases, contracts, bills of
exchange, orders for the payment of money, licenses, endorsements, powers of attorney,
proxies, waivers, consents, returns, reports, applications, notices, mortgages and other
instruments or writings of any nature, which require execution on behalf of the Association,
shall be signed by(a)the Chairman of the Board and the President or one of such officers and
(b) the Vice President, the Secretary or the Treasurer. The Board of Directors may from time
to time authorize any such documents, instruments or writings to be signed by such Officers,
agents or employees of the Association, or any one of them, in such manner as the Board of
Directors may determine.
SECTION 9.2 Facsimile Si nag tures. The Board of Directors may, from time
to time by resolution, provide for the execution of any corporate instrument or document,
including but not limited to checks, warrants, letters of credit, drafts and other orders for the
payment of money, by a mechanical device or machine or by the use of facsimile signatures
under such terms and conditions as shall be set forth in any such resolution.
SECTION 9.3 Funds. All funds of the Association shall be deposited from
time to time to the credit of the Association in such banks, trust companies or other
depositories as the Board of Directors may select.
ARTICLE X.
CORPORATE BOOKS AND RECORDS; INSPECTION OF SAME AND BYLAWS
SECTION 10.1 Books and Records. The Association shall beep correct and
complete books and records of account of the Association and minutes of the proceedings of
its Members, Board of Directors and any committee having any of the authority of the Board
of Directors, and shall keep at its registered office or principal office in the State a record of
the names and addresses of its Members. All books and records of the Association may be
inspected, upon written demand, by any Member, Member's agent or attorney or any holder,
insurer or guarantor of a first Mortgage on a Lot or Apartment for any proper purpose at any
4522-0403-3536.1. - 9 -
reasonable time. Demand of inspection other than at a meeting shall be made in writing upon
the President,the Secretary or any other officer designated by the Board of Directors.
SECTION 10.2 Insvection of Bylaws. The Association shall keep in its
principal office for the transaction of business a copy of the Bylaws of the Association as
amended or otherwise altered to date, which shall be open to inspection by the Members at all
reasonable times during office hours.
ARTICLE XI.
FISCAL YEAR
The fiscal year of the Association shall be such as may from time to time be
established by resolution by the Board of Directors.
ARTICLE XII.
AMENDMENT TO BYLAWS
SECTION 12.1 By Class "B"Member. During the Class "B" Control Period,
the Class "B" Member may unilaterally amend these Bylaws. Following the termination of
the Class "B" Control Period, the Class "B"Member may unilaterally amend these Bylaws at
any time and from time to time if such amendment is necessary (i) to bring any provision into
compliance with any applicable governmental statute, rule or regulation, or judicial
determination; (ii) to enable any reputable title insurance company to issue title insurance
coverage on the Lots or Apartments; or (iii) to enable any institutional or governmental
lender, purchaser, insurer or guarantor of mortgage loans, including, for example, the Federal
National Mortgage Association or Federal Home Loan Mortgage Corporation, to make,
purchase, insure or guarantee mortgage loans on the Lots or Apartments; provided, however,
that any such amendment shall not adversely affect the title to any Lot or Apartment unless
the Owner shall consent thereto in writing. So long as the Class "B" membership exists, the
Class "B" Member may unilaterally amend these Bylaws for any other purpose, provided the
amendment has no material adverse effect upon any right of any Class"A"Member.
SECTION 12.2 By Members Generally. Except as provided above, these
Bylaws may be amended only by the affirmative vote or written consent, or any combination
thereof, of Members representing fifty-one percent (5I%) of the total Class "A" votes in the
Association, and the consent of the Class "B" Member, if such exists. Notwithstanding the
above, the percentage of votes necessary to amend a specific clause shall not be less than the
prescribed percentage of affirmative votes required for action to be taken under that clause.
SECTION 12.3 Validity and Effective Date of Amendments. Amendments to
these Bylaws shall become effective upon the effective date specified therein. Any
procedural challenge to an amendment must be made within six months of the effective date
specified therein, or such amendment shall be presumed to have been validly adopted. In no
event shall a change of conditions or circumstances operate to amend any provisions of these
Bylaws.
4822-0403-3536.1. - to-
No amendment may remove, revoke or modify any right or privilege of
Declarant or the Class "B" Member without the written consent of Declarant, the Class "B"
Member or the assignee of such right or privilege.
4822-0403-3536.1.
CERTIFICATE OF SECRETARY
I certify that:
1. I am the Secretary of The Heights on Hualalai Community Association,
Inc.
2. The attached Bylaws are the Bylaws of Association adopted by
unanimous written consent of the Board of Directors effective as of , 20
DATED: , 20
Secretary
4822-0403-3536.1. - 12 -
EXHIBIT D
Rules&Regulations
1. General.
The Project shall be used only for residential and related purposes (which may include,
without limitation, a model home, information center and/or a sales office for any real estate
broker retained by Declarant to assist in the sale of property described in Exhibit A, offices for
any property manager retained by the Association, or business offices for Declarant or the
Association) consistent with this Declaration and any Supplemental Declarations.
2. Prohibited Activities.
The following activities are prohibited within the Project unless expressly authorized by,
and then subject to such conditions as may be imposed by, the Board of Directors:
(a) Parking any vehicles on streets or thoroughfares, or parking commercial vehicles
or equipment, mobile homes,recreational vehicles, golf carts, boats and other water craft,
trailers, stored vehicles or inoperable vehicles in places other than enclosed garages;provided,
however,that: (i) construction, service, and delivery vehicles shall be exempt from this provision
during daylight hours for such period of time as is reasonably necessary to provide service or to
make a delivery to a Lot or the Common Area; and (ii) temporary on-street parking for visitors
of any Owner shall be permitted for a period of time not to exceed 24 hours;
(b) Raising,breeding,or keeping animals, livestock, or poultry of any kind. A
reasonable number of dogs, cats, or other usual and common household pets may be permitted in
a Lot; however,those pets which are permitted to roam free,or, in the sole discretion of the
Board, make objectionable noise, endanger the health or safety of, or constitute a nuisance or
inconvenience to the occupants of other Lots, shall be removed upon request of the Board. If the
pet owner fails to honor such request,the Board may remove the pet. Dogs shall be kept on a
leash or otherwise confined in a manner acceptable to the Board whenever outside the Dwelling.
Pets shall be registered, licensed, and inoculated as required by law;
(c) Any activity which emits foul or obnoxious odors outside the Lot or creates noise
or other conditions which tend to disturb the peace or threaten the safety of the occupants of
other Lots;
(d) Any activity which violates local, state, or federal laws or regulations; however,
the Board shall have no obligation to take enforcement action in the event of a violation;
(e) Pursuing hobbies or other activities which tend to cause an unclean,unhealthy, or
untidy condition to exist outside of enclosed structures on the Lot;
(f) Any noxious or offensive activity which, in the reasonable determination of the
Board,tends to cause embarrassment, discomfort, annoyance, or nuisance to persons using the
Common Area or to the occupants of other Lots.
4845-1004-876$.1
(g) Outside burning of trash, leaves,debris, or other materials, except during the
normal course of constructing a Dwelling on a Lot;
(h) Unreasonable use or discharge of any radio, loudspeaker,horn, whistle,bell, or
other sound device so as to be audible to occupants of other Lots, except alarm devices used
exclusively for security purposes;
(i) Use and discharge of firecrackers and other fireworks;
(j) Dumping grass clippings,leaves, or other debris; petroleum products; fertilizers;
or other potentially hazardous or toxic substances in any drainage ditch, stream, pond, or lake,or
elsewhere within the Project,except that fertilizers may be applied to landscaping on Lots
provided care is taken to minimize runoff, and Declarant may dump and bury rocks and trees
removed from a building site on such building site;
(k) Accumulating rubbish,trash, or garbage except between regular garbage pick ups,
and then only in approved containers;
(1) Obstructing or rechanneling drainage flows after location and installation of
drainage swales, storm sewers, or storm drains,except that Declarant and the Association shall
have such right;provided,the exercise of such right shall not materially diminish the value of or
unreasonably interfere with the use of any Lot without the Owner's consent;
(m) Subdivision of a Lot into two or more Lots, or changing the boundary lines of any
Lot after a subdivision plat including such Lot has been approved and Recorded,except that
Declarant shall be permitted to subdivide or replat Lots which it owns;
(n) Use of any Lot for operation of a timesharing, fraction-sharing, or similar
program whereby the right to exclusive use of the Lot rotates among participants in the program
on a fixed or floating time schedule over a period of years, except that Declarant and its assigns
may operate such a program with respect to Lots which it owns;
(o) Discharging firearms; provided, the Board shall have no obligation to take action
to prevent or stop such discharge;
(p) On-site storage of gasoline, heating oil, or other fuels, except that a reasonable
amount of fuel may be stored on each Lot for emergency purposes and operation of lawn mowers
and similar tools or equipment, and the Association shall be permitted to store fuel for operation
of maintenance vehicles, generators, and similar equipment. This provision shall not apply to any
natural gas/propane tank authorized pursuant to Article V.
(q) Any business, trade, garage sale,moving sale, rummage sale, or similar activity,
except that an Owner or occupant residing in a Lot may conduct business activities within the
Lot so long as: (i)the existence or operation of the business activity is not apparent or detectable
by sight, sound, or smell from outside the Lot; (ii)the business activity conforms to all zoning
requirements for the Project; (iii) the business activity does not involve door-to-door solicitation
of residents of the Project; (iv)the business activity does not, in the Board's reasonable
judgment, generate a level of vehicular or pedestrian traffic or a number of vehicles being parked
4845-1004-8768.1 2.
in the Project which is noticeably greater than that which is typical of Lots in which no business
activity is being conducted; and(v) the business activity is consistent with the residential
character of the Project and does not constitute a nuisance,or a hazardous or offensive use,or
threaten the security or safety of other residents of the Project, as may be determined in the sole
discretion of the Board.
The terms "business" and "trade," as used in this provision, shall be construed to have
their ordinary, generally accepted meanings and shall include, without limitation,any
occupation,work, or activity undertaken on an ongoing basis which involves the provision of
goods or services to persons other than the provider's family and for which the provider receives
a fee, compensation,or other form of consideration, regardless of whether: (i) such activity is
engaged in full or part-time, (ii) such activity is intended to or does generate a profit, or(iii) a
license is required.
Notwithstanding the foregoing,the leasing of a Lot shall not be considered a business or
trade within the meaning of this subsection(q). For purposes of this section, "leasing" is defined
as regular, exclusive occupancy of a Lot by any Person,other than the Owner for which the
Owner receives any consideration or benefit, including, but not limited to, a fee, service,gratuity,
or emolument. All leases shall be in writing. The Board may require a minimum lease term.
Notice of any lease,together with such additional information as may be required by the Board,
shall be given to the Board by the Lot Owner within ten(10)days of execution of the lease. The
Owner must make available to the lessee copies of the Declaration and By-Laws.
This subsection (q) shall not apply to any activity conducted by Declarant with respect to
Declarant's development and sale of the Project or its use of any Lots which it owns within
Proj ect;
(r) Capturing, trapping, or killing wildlife within the Project, except in circumstances
posing an imminent threat to the safety of Persons using the Project;
(s) Any activities which materially disturb or destroy the vegetation,wildlife,
wetlands, or air quality within the Project or which use excessive amounts of water or which
result in unreasonable levels of sound or light pollution;
(t) Converting any carport or garage to finished space for use as an apartment or
other integral part of the living area on any Lot without prior approval pursuant to Article V;
(u) Operating motorized vehicles in the Park maintained by the Association;and
(v) Constructing, erecting,placing, or modifying any thing, permanently or
temporarily, on the outside portions of the Lot, whether such portion is improved or unimproved,
except in strict compliance with the provisions of Article V of the Declaration. This shall
include, without limitation, signs, basketball hoops, swing sets, and similar sports and play
equipment;clotheslines; garbage cans; woodpiles; above-ground swimming pools; and hedges,
walls,dog runs,animal pens, or fences of any kind.
Standard TV antennas and satellite dishes which are twenty four(24)inches in diameter
or less shall be permitted at the Project. Such over-the-air reception devices shall comply with all
4845-1004-8768.1 3.
Design Guidelines and other applicable provisions pertaining to the location and manner of
installation; provided, such provisions do not unreasonably increase the costs of installation or
unreasonably delay the installation of such devices. Declarant and/or the Association shall have
the right, without obligation,to erect an aerial, satellite dish, or other apparatus for a master
antenna,cable,or other communication system for the benefit of all or a portion of the Project,
should any master system or systems be utilized by the Association and require such exterior
apparatus.
(w) Constructing any "ohana" dwelling or second dwelling unit, as defined in the
Hawaii County Code,on the Lot.
3. Prohibited Conditions.
The following shall be prohibited at the Project:
(a) Plants, animals,devices, or other things of any sort whose activities or existence
in any way is noxious or dangerous;
(b) Structures, equipment, or other items on the exterior portions of a Lot which have
become rusty,dilapidated, or otherwise fallen into disrepair; and
(c) Sprinkler or irrigation systems or wells of any type which draw upon water from
lakes,creeks,streams, rivers,ponds, wetlands, canals, or other ground or surface waters within
the Project,except that Declarant and the Association shall have the right to draw water from
such sources.
4845-1004-8768.1 4.
EXHIBIT E
THE HEIGHTS ON HUALALAI, KAILUA-KONA, HAWAII
DESIGN GUIDELINES
L Approval Process The Heights on Hualalai Design Review Committee must review
any new construction proposed for The Heights on Hualalai
subdivision. This includes the principle residence, garages,
outbuildings, lanais, trellis structures, fences, appurtenances and
other improvements.
Processing of applications shall be in accordance with Article V,
Section 5.4(b).
All design applications shall be complete pursuant to Article V,
Section 5.4 (b) and shall include, as a minimum:
a) Site plan indicating lot elevation and building
height.
b) Floor plans,indicating floor area.
C) Elevations and sections sufficient to demonstrate
the design intent and impact(three dimensional
illustrations are desirable, but not mandatory).
d) Structural design.
e) Schedule of materials, finishes and colors including
roof, walls,trim,etc.
f) Details of landscaping, external lighting and
irrigation.
g) Location of all outbuildings,lanais,terraces,trellis
structures,appurtenances, and other improvements.
2. Design generally All designs shall comply with the height restrictions that apply
specifically to each lot,limiting finished building pad elevation
and building height. (see separate schedule)
All designs shall be compatible with surrounding houses and
landscape. Two-story dwellings shall be designed so as to
4845-1004-8768.1
minimize the overall mass of the building through articulation of
rooflines and exterior details.
3. Minimum house size The minimum dwelling size shall be 1500 square feet measured to
the external face of walls but not including garages, outbuildings,
lanais, covered terraces,trellises and the like.
4. Setbacks All dwelling setbacks shall comply with all applicable County
zoning codes
5. Roof The total roof area shall have a minimum of 75% sloped at not less
than 12°pitch.
6. Roof Materials Asphalt or fiberglass shingle (minimum standard to be Celotex
Presidential Shake),metal sheet, cement or clay tile, or wood
shake, in non-reflective finish.
7. Materials and finishes Generally all materials, except as otherwise required under
Roofing Material above, shall be complementary to the
surrounding natural and built environment and shall be
predominantly natural or neutral in color.
Submissions shall demonstrate consideration of surrounding
dwellings and landscaping.
8. Car parking Each dwelling shall have a minimum of two cars either under the
main roof or in a separate garage built in a similar architectural
style as the main dwelling. All garages shall have a garage door.
9. Improvements Except as may otherwise be permitted pursuant to Exhibit D,
Clause 2 (v), no hot water system (including roof mounted solar
system), gas tank,clothesline, antenna, workshop, garden shed or
other outbuilding,appurtenance or other improvement shall be
visible from any street within the subdivision.
10. Utilities All utilities shall be underground.
11. Fencing Fencing shall be new and shall complement the house and
surrounding neighborhood. Chain link fences are prohibited.
12. Landscaping Landscaping between the front lot line and the house setback must
be substantially complete, including lawn areas, garden beds, etc,
not more than four(4) months from completion of the house.
Vacant lots shall be maintained in a clean,safe and dust free
condition pursuant to Article V Section, 5.11, and Article VII,
Section 7.11.
4845-1004-8768.1 2.
PAD ELEVATION AND BUILDING HEIGHT RESTRICTIONS
Lot No.: Building Pad Building Height
finished pad elevation) (above finished pad elevation)
01 600 181011
02 600 18' 0"
03 600 18' 0"
04 600 18' 0"
05 600 18' 0"
06 630 18' 0"
07 630 18'0"
08 638 18'0"
09 640 18'0"
10 640 181011
11 670 18' 0"
12 600 18' 0"
13 600 18' 0"
14 600 18' 0"
15 620 18' 0"
16 620 18' 0"
17 656 18'0"
18 656 18'0"
19 688 18'0"
20 688 18' 0"
21 694 18' 0"
22 708 18' 0"
23 702 18' 0"
24 Existing House Existing House
25 Existing House Existing House
26 702 18' 0"
27 710 18' 0"
4845-1004-8768.1 3.