ARTICLE III
HOMEOWNERS' ASSOCIATION
A CALIFORNIA NONPROFIT CORPORATION
3.1. Declarant has, at its cost and expense, formed an incorporated
homeowners' association known as the Canoga Countryhills Homeowners'
Association, a California nonprofit, mutual benefit corporation
(hereinafter referred to as the "Association"), which has the powers,
rights and duties hereinafter set forth:
3.1. There shall be one Membership in the Association for each Lot
in the Project, which Membership shall be appurtenant to each Lot.
3.1.2. All of such Memberships shall initially be the property of
Declarant or its successors in interest, and shall pass automatically to the respective
purchasers of Lots in the Project.
3.1.3. Each Member shall be obligated promptly, fully and faithfully
to comply with the provisions of this Declaration, and the Bylaws of the Association, and
any Rules and Regulations which may from time to time be promulgated by the Board of
Directors.
3.1.4. The Association shall have two (2) classes of voting Member-
ship, as follows:
Class A. Class A Members shall be all Owners with the exception of the
Declarant, and shall be entitled to one (1) vote for each Lot owned. When more
than one person holds an interest in any Lot, all such persons shall be Members,
and the vote for such Lot shall be exercised as they among themselves
determine, but in no event shall more than one (1) vote be cast with respect to
any Lot.
Class B. The Class B Members shall be the Declarant, and shall be
entitled to three (3) votes for each Lot owned in the Project upon which
Declarant is then paying the appropriate regular assessments provided for
hereinbelow. The Class B Membership shall cease and be converted to Class A
(a) The total votes outstanding in the Class A Membership equal the
total votes outstanding in the Class B Membership; or
(b) Not later than the fourth anniversary of the recordation of this
Declaration.
3.1.5. Any provision in the Articles of Incorporation, Bylaws, or this
Declaration (hereinafter the "Governing Instruments") calling for Membership approval of
action to be taken by the Association shall expressly require the vote or written assent of
the prescribed percentage of each class of Membership during the time that there are two
outstanding classes of Members. Any requirement elsewhere in the Governing Instruments
wherein the vote of the Declarant shall be excluded in any such determination, shall be
applicable only if there has been a conversion of Class B to Class A shares and only for so
long as the Declarant holds or directly controls 25% of more of the voting power of the
Association and same shall be read as requiring the vote of the prescribed percentage of
the Class A Members and the vote of the prescribed percentage of the Class A Members
other than the Declarant.
3.1.6. The voting rights attributed to any given Lot in the Project as
provided for herein, shall not vest until the assessments provided for hereinbelow have
been levied by the Association against such Lot.
3.1.7. The Association Membership held by any Owner of a Lot shall
not be transferred, pledged, or alienated in any way, except upon the sale or encumbrance
of such Lot. In the event of such sale or encumbrance, the Membership may only be
transferred, pledged or alienated to a bona fide purchaser of the Lot, or to the Mortgagee
(or third-party purchaser) of such Lot upon a foreclosure sale. Any attempt to make a
prohibited transfer is void, and will not be reflected upon the books and records of the
Association.
3.1.8. Membership is not intended to apply to those persons or
entities who hold an encumbrance or an interest as security for the performance of an
obligation to pay money.
3.1.9. The purpose of the Association is to further and promote the
common interests and welfare of its Members, and to operate, preserve and maintain the
Project.