Bylaws

ARTICLE I — PLAN OF UNIT OWNERSHIP

1. Name and Location. These are the bylaws of the ASSOCIATION OF UNIT OWNERS OF THE ISLAND (hereafter the “Association”). The Island (hereafter the “condominium”) is located in Salishan Hills, Lincoln County, Oregon, and has been submitted to the Oregon Unit Ownership Law by a declaration filed simultaneously herewith (hereafter called “the declaration”). The location of the condominium is more specifically described in the declaration.

2. Principal Office. The principal office of the Association shall be located at 472 Salishan Hills Drive, Salishan Hills, Gleneden Beach, Oregon 97388.

3. Purposes. This Association is formed under the provisions of the Oregon Unit Ownership Law to serve as the means through which the unit owners may take action with regard to the administration, management and operation of the condominium.

4. Applicability of Bylaws and Salishan Hills Declarations. The Association, all unit owners, and all persons using the condominium property shall be subject to these bylaws and to all rules and regulations which may be promulgated hereunder. In addition to the declaration and these bylaws, the Association, all unit owners and all persons using the condominium property are subject to the Plan of Salishan Hills and the Salishan Hills Declaration Subjecting the Island to the Plan of Salishan Hills (all of which are hereinafter collectively called “the Salishan Hills Declarations”) and any rules and regulations promulgated thereunder.

5. Composition of Association. The Association shall be composed of all the unit owners of the condominium, including Salishan Hills, Inc. and its successors and assigns (hereinafter, “the Developer”), and the Association, itself, to the extent any of these own any unit or units of the condominium.

6. Definitions.
[a] Adoption by Reference. The definitions contained in or adopted by the declaration shall be applicable to these bylaws.
[b] Percentage of unit owners. Whenever a percentage of unit owners is specified herein, such percentage means the owners of that percentage in the aggregate of the undivided ownership interests in the general common elements as the percentage of interest in such elements is expressed in the declaration.
[c] Mortgage and Mortgagee. As used herein, the terms “mortgage” and “mortgagee” shall include, respectively, a deed of trust and the beneficiary of a deed of trust.

ARTICLE II — MEETINGS OF ASSOCIATION

1. Place of Meetings. The Association shall hold meetings at Salishan Lodge or such other suitable place convenient to the unit owners as may be designated by the board of directors from time to time.

2. First Organizational Meeting. Within ninety (90) days after the developer has submitted the condominium to unit ownership and adopted these bylaws as owner of all the units, the developer shall call the first meeting of the unit owners to organize the Association. In the event of lack of a quorum at such first organizational meeting, it may be adjourned to the time of the next annual meeting.

3. Annual Meetings. The annual meetings of the Association shall be held in the months of June or July at such hour and on such date as the chairman may designate, or if the chairman should fail to designate such date by the first day of July, then on the last Tuesday in July. The annual meetings shall be for the purpose of electing directors and for the transaction of such other business as may properly come before the meeting.

4. Special Meetings. Special meetings of the Association may be called by the chairman or secretary or by a majority of the board of directors, and must be called by such officers upon receipt of a written request from at least thirty percent (30%) of the unit owners stating the purpose of the meeting. Business transacted at a special meeting shall be confined to the purposes stated in the notice.

5. Notice of Meetings. Notice of all meetings of the Association stating the time and place and the objects for which the meeting is being called shall be given by the chairman or secretary. Such notice shall be in writing and mailed to each unit owner at his address as it appears on the books of the Association and to any first mortgagee requesting such notice not less than ten (10) days nor more than fifty (50) days prior to the date of the meeting. Proof of such mailing shall be given by the affidavit of the person giving the notice. Notice of meeting may be waived by any unit owner before or after meetings. When a meeting is adjourned for less than 30 days, no notice of the adjourned meeting need be given other than by announcement at the meeting at which such adjournment takes place.

6. Voting. Each unit owner shall have a vote equal to his percentage interest in the general common elements of the condominium. The developer shall be entitled to vote as the unit owner of any then existing units retained by the developer, and the board of directors shall be entitled to vote on behalf of any unit which has been acquired by or on behalf of the Association; provided, however, that the board of directors shall not be entitled to vote such units in any election of directors.

7. Proxies. A vote may be cast in person or by proxy. A proxy given by a unit owner to any person who represents such owner at meetings of the Association shall be in writing and signed by such owner, and shall be filed with the secretary. No proxy shall be valid after the meeting for which it was solicited, unless otherwise expressly stated in the proxy, and every proxy shall automatically cease upon sale of the unit by its owner. A unit owner may pledge or assign his voting rights to a mortgagee. In such a case, the mortgagee or its designated representative shall be entitled to receive all notices to which the unit owner is entitled hereunder and to exercise the unit owner’s voting rights from and after the time that the mortgagee shall give written notice of such pledge or assignment to the board of directors. Any first mortgagee may designate a representative to attend all or any meetings of the Association.

8. Fiduciaries and Joint Owners. An executor, administrator, guardian or trustee may vote, in person or by proxy, at any meeting of the Association with respect to any unit owned or held by him in such capacity, whether or not the same shall have been transferred to his name; provided, that he shall satisfy the secretary that he is the executor, administrator, guardian or trustee, holding such unit in such capacity. Whenever any unit is owned by two or more persons jointly, according to the records of the Association, the vote of such unit may be exercised by any one of the owners then present, in the absence of protest by a co-owner. In the event of such protest, no one co-owner shall be entitled to vote without the approval of all co-owners. In the event of disagreement among the co-owners, the vote of such unit shall be disregarded completely in determining the proportion of votes given with respect to such matter.

9. Quorum of Unit Owners. At any meeting of the Association, fifty percent (50%) of the unit owners, computed as provided in Article I, Section 6 (b), present in person or by proxy, shall constitute a quorum. The subsequent joinder of a unit owner in the action taken at a meeting by signing and concurring in the minutes thereof shall constitute the presence of such person for the purpose of determining a quorum. When a quorum is once present to organize a meeting, it cannot be broken by the subsequent withdrawal of a unit owner or owners. If any meeting of members cannot be organized because of a lack of quorum, the members who are present, either in person or by proxy, may adjourn the meeting from time to time until a quorum is present.

10. Majority Vote. The vote of more than fifty percent (50%) of the unit owners, computed as provided in Article I, Section 6 (b), present in person or by proxy, at a meeting at which a quorum is constituted shall be binding upon all unit owners for all purposes except where a higher percentage vote is required by law, by the declaration or by these bylaws.

11. Order of Business. The order of business at annual meetings of the Association shall be:

[a] Calling of the roll and certifying of proxies;

[b] Proof of notice of meeting or waiver of notice;

[c] Reading of minutes of preceding meeting;

[d] Reports of officers;

[e] Reports of committees, if any;

[f] Election of directors;

[g] Unfinished business;

[h] New business, and

[i] Adjournment.

ARTICLE III — BOARD OF DIRECTORS

1. Number and Qualification. The affairs of the Association shall be governed by a board of directors composed of three (3) to five (5) persons, as provided in Sections 2 and 3 of this Article. All directors, other than interim directors appointed by developer, shall be owners or co-owners of units of the condominium. For purposes of this section, the officers of any corporate owner and the partners of any partnership, shall be considered co-owners of any units owned by such corporation or partnership.

2. Interim Directors. Upon the filing of the declaration submitting the condominium to the Oregon Unit Ownership Law, the developer shall appoint an interim board of three (3) directors, who shall be Class A directors and serve until their successors have been elected by the unit owners as hereinafter provided.

3. Election and Term of Office. At the first annual meeting two Class B directors shall be elected to serve for a one year term, thereby increasing the board to five (5) members. At each annual meeting thereafter until sixty percent (60%) of the units in the condominium have been sold and conveyed, successor Class B directors shall be elected for one year terms. At the next annual meeting after sixty percent (60%) of the units have been sold and conveyed, the Class A interim directors shall resign and their successors shall be elected for two year terms. The term of the then existing Class B directors shall be extended for an additional year until the next annual meeting, at which time their successors shall be elected for a two year term. Thereafter, at the expiration of the initial term of office of each respective director, his successor shall be elected to serve for a term of two years, so that the term of not less than one-third of the directors shall expire annually. Directors shall hold office until their respective successors have been elected by the unit owners. Election shall be by plurality.

4. Vacancies. Vacancies in the board of directors caused by any reason other than the removal of a director by a vote of the Association shall be filled by vote of the majority of the remaining directors, even though they may constitute less than a quorum, or by a sole remaining director. Each person so elected shall be a director until a successor is elected to fill the unexpired term at the next annual meeting of the Association or the next special meeting of the Association called for that purpose. Vacancies in Class A interim directors shall be filled by developer.

5. Removal of Directors. At any regular or special meeting of the Association duly called, any one or more of the directors, other than interim directors, may be removed with or without cause by a majority vote of the unit owners present in person or by proxy, and a successor shall be elected at that meeting to fill the vacancy thus created. The notice of any such meeting shall state that such removal is to be considered, and any director whose removal has been proposed shall be given an opportunity to be heard at the meeting.

6. Powers and Duties. The board of directors shall have all of the powers and duties necessary for the administration of the affairs of the Association, except such powers and duties as by law or by the declaration or by these bylaws may not be delegated to the board of directors by the unit owners. The powers and duties to be exercised by the board of directors shall include, but shall not be limited to the following:

[a] Operation, care, upkeep, maintenance and repair of the general and limited common elements.

[b] Determination of the amounts required for operation, maintenance and other affairs of the Association, and the making of such expenditures.

[c] Collection of the common expenses from unit owners.

[d] Employment and dismissal of such personnel as necessary for the efficient maintenance, upkeep and repair of the common elements.

[e] Employment of legal, accounting or other personnel for reasonable compensation to perform such services as may be required for the proper administration of the Association.

[f] Opening of bank accounts on behalf of the Association and designating the signatories required therefore.

[g] Purchasing units of the condominium at foreclosure or other judicial sales in the name of the Association, or its designee, on behalf of all the unit owners as provided in these bylaws.

[h] Selling, leasing, mortgaging, voting the votes appurtenant to (other than for the election of directors), or otherwise dealing with units of the condominium acquired by the Association or its designee on behalf of all the unit owners.

[i] Obtaining insurance or bonds pursuant to the provisions of these bylaws.

[j] Making additions and improvements to, or alterations of, the common elements; provided, however, that no such project may be undertaken by the board if the total cost will exceed the amount of $2500 unless the unit owners have enacted a resolution authorizing the project by a vote of eventy five percent (75%) of the unit owners present in person or by proxy at a meeting at which a quorum is constituted. This limitation shall not be applicable to repairs or maintenance undertaken pursuant to paragraph (a) above.

[k] Enforcement by legal means of the provisions of the Oregon Unit Ownership Law, the declaration, these bylaws and any rules and regulations adopted hereunder.

[l] At the option of the board, collection of assessments against the unit owners pursuant to the Plan of Salishan Hills for forwarding to the Administrator of Salishan Hills.

7. Managing Agent or Manager. On behalf of the Association, the board of directors may employ or contract for a managing agent or a manager at a compensation to be established by the board of directors. The board of directors may delegate to the managing agent or manager such duties and powers as the board of directors may authorize. In the absence of such appointment, the board of directors shall act as manager.

8. Organizational Meetings. Within fourteen (14) days following the annual meeting of the Association or following any meeting at which an election of directors has been held, the board of directors shall hold an organization meeting at such place and time as shall have been fixed by the directors at the meeting at which the election was held.

9. Regular and Special Meetings. Regular meetings of the board of directors may be held at such time and place as shall be determined, from time to time, by a majority of the directors. Special meetings of the board of directors may be called by the chairman and must be called by the secretary at the written request of at least two directors. Notice of any special meeting shall be given to each director, personally or by mail, telephone or telegraph at least seven (7) days prior to the day named for such meeting, and shall state the time, place and purpose of such meeting.

10. Waiver of Notice. Any director may, at any time, waive notice of any meeting of the board of directors in writing, and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a director at any meeting of the board shall constitute a waiver by him of notice of the time and place thereof, except where a director attends the meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. If all of the directors are present at any meeting of the board, no notice shall be required and any business may be transacted at such meeting.

11. Quorum of Board of Directors. At all meetings of the board of directors, a majority of the directors shall constitute a quorum for the transaction of business, and the votes of a majority of the directors present at a meeting at which a quorum is present shall constitute the decision of the board of directors. If at any meeting of the board of directors less than a quorum should be present, a majority of those present may adjourn the meeting from time to time. At any such adjourned meeting at which a quorum is present, any business which might have been transacted at the meeting originally called may be transacted without further notice.

12. Compensation. No director shall receive any compensation from the Association for acting as such.

13. Liability and Indemnification of Directors, Officers, Manager or Managing Agent. The directors and officers shall not be liable to the Association of the unit owners for any mistake of judgment, negligence, or otherwise except for their own willful misconduct or bad faith. The Association shall indemnify and hold harmless each director and officer and the manager or managing agent, if any, against all contractual liability to others arising out of contracts made by the board of directors, officers, manager or managing agent on behalf of the Association unless any such contract shall have been made in bad faith or contrary to the provisions of the declaration or of these bylaws. Each director and officer and the manager or managing agent, if any, shall be indemnified by the Association against all expenses and liabilities, including attorney’s fees, reasonably incurred or imposed upon them in connection with any proceeding to which they may be a party, or which they may become involved, by reason of being or having been a director, officer, manager or managing agent and shall be indemnified upon any reasonable settlement thereof; provided, however, there shall be no indemnity if the director, officer, manager or managing agent is adjudged guilty of willful nonfeasance, misfeasance or malfeasance in the performance of his duties.

14. Fidelity Bonds. The board of directors shall require that any person or entity, including, but not limited to, employees of any professional manager, who handles or is responsible for Association funds shall furnish such fidelity bond as the board deems adequate. The premiums on such bonds shall be paid by the Association.

15. Insurance. The board of directors shall obtain such liability insurance as the board deems necessary to protect the Association, its officers or employees, and the unit owners. In addition, the board of directors, as trustee for the unit owners, shall obtain such property insurance as necessary to protect the entire condominium property. The board of directors, in its discretion, may obtain such other insurance as it deems necessary to protect the interests of the Association or unit owners. The board of directors shall conduct an annual insurance review which shall include an appraisal of all improvements contained in the condominium. No unit owner may engage in any activity which might jeopardize the insurance coverage described herein. Insurance policies obtained hereunder shall be master policies insuring the Association, its officers and directors, the manager or managing agent, if any, and all unit owners and their mortgagees, as their respective interests may appear, and shall include the following provisions, if possible:

[a] Property coverage shall include those risks covered by a standard fire insurance policy with extended coverage endorsement and shall be for the full replacement cost without deduction of depreciation.

[b] Such policy shall contain a waiver of the usual proration clause, elimination of the usual “no other insurance” provision, and waiver of any right of subrogation as against any coinsured.

[c] Such policy shall require the insurance company to give notice of cancellation to the insureds and any mortgagees covered by loss payable clauses.

[d] Such policy shall bear a mortgagee’s clause or a loss-payable clause in favor of any mortgagee or lender requesting the same, but such clause shall not give the mortgagee or lender the right to preempt payment of the insurance proceeds to the Association or to control whether or not the damage is repaired. The insurer shall likewise waive its right to determine whether the damage should be repaired, and loss adjustment and control of the proceeds of the policy should rest in the Association as trustee for the unit owners.

[e] Liability coverage should cover any unit owner for his acts or omissions in connection with the condominium and cover any liability arising out of ownership of any unit of the condominium, and should contain a severability of interest provision so as to cover one unit owner for his liability to another unit owner. Coverage should be in an amount of not less than $1,000,000.

ARTICLE VI — RECORDS AND AUDITS

1. General Records. The board of directors and the managing agent or manager, if any, shall keep detailed records of the actions of the board of directors and the managing agent or manager, minutes of the meetings of the board of directors and minutes of the meetings of the Association. The board of directors shall maintain a list of owners entitled to vote at meetings of the Association and a list of all mortgagees of units.

2. Records of Receipts and Expenditures. The board of directors or its designee shall keep detailed, accurate records in chronological order of the receipts and expenditures affecting the common elements, itemizing the maintenance and repair expenses of the common elements and any other expenses incurred. Such records and the vouchers authorizing the payments shall be available for examination by the unit owners and mortgagees at convenient hours of weekdays.

3. Assessment Roll. The assessment roll shall be maintained in a set of accounting books in which there shall be an account for each unit. Such account shall designate the name and address of the owner or owners, the amount of each assessment against the owners, the dates and amounts in which the assessment comes due, the amounts paid upon the account and the balance due on the assessments.

4. Payment of Vouchers. The treasurer shall pay all vouchers up to $1,000 signed by the chairman, managing agent, manager or other person authorized by the board of directors. Any voucher in excess of $1,000 shall require the signature of the chairman.

5. Reports and Audits. An annual report of the receipts and expenditures of the Association shall be rendered by the board of directors to all unit owners and to all mortgagees of units who have requested the same within 90 days after the end of each fiscal year. From time to time the board of directors, at the expense of the Association, may obtain an audit of the books and records pertaining to the Association and furnish copies thereof to the owners and such mortgagees. At any time any owner or mortgagee may, at his own expense, cause an audit or inspection to be made of the books and records of the Association.

6. Notice of Sale, Mortgage or Lease. Immediately upon the sale, mortgage or lease of any unit, the unit owner shall promptly inform the secretary or manager of the name and address of said vendee, mortgagee or lessee.

ARTICLE VII — MAINTENANCE AND USE OF CONDOMINIUM PROPERTY

1. Maintenance and Repair. Except as otherwise provided herein for damage or destruction caused by casualty:

[a] Units. All maintenance of and repairs to any unit shall be made by the owner of such unit, who shall keep the same in good order, condition and repair and shall do all redecorating, painting and staining which at any time may be necessary to maintain the good appearance and condition of his unit. In addition, each unit owner shall be responsible for the maintenance, repair, or replacement of windows and doors and any forced air furnace, plumbing, heating or air conditioning fixtures, telephones, water heaters, fans, lighting fixtures and lamps, fireplaces, refrigerators, dishwashers, ranges, or other appliances and accessories that may be in or connected with his unit.

[b] Common elements. All maintenance, repairs and replacements to the general and limited common elements shall be made by the Association and shall be charged to all the unit owners as a common expense. Each unit owner, however, shall keep the limited common elements which pertain to his unit in a neat, clean and sanitary condition.

2. Additions, Alterations or Improvements. A unit owner shall not, without first obtaining written consent of the board of directors, make or permit to be made any structural alteration, improvement, or addition in or to his unit, or in or to the exterior of the buildings or any other general or limited common elements. A unit owner shall make no repair or alteration or perform any other work on his unit which would jeopardize the soundness or safety of the property, or reduce the value thereof or impair any easement or hereditament unless the written consent of all unit owners affected is obtained. A unit owner shall not paint or decorate any portion of the exterior of the buildings or other general or limited common elements without first obtaining written consent of the board of directors. All additions, alterations or improvements, whether of a unit by the unit owners or of a common element by the Association, must also be approved by the Design Committee to the extent required by the Salishan Hills Declarations.

3. Damage or Destruction by Casualty of Condominium Property.

[a] In the event of damage or destruction by casualty of condominium property, the damage or destruction shall be repaired, reconstructed or rebuilt unless, within fourteen (14) days of such damage or destruction, the board of directors or more than ten percent (10%) of the unit owners shall have requested a special meeting of the Association. Such special meeting must be held within sixty (60) days of the date of damage or destruction. At the time of such meeting, unless ninety percent (90%) of the unit owners, whether in person, by writing or by proxy, vote not to repair, reconstruct or rebuild the damaged property, the damage or destruction shall be repaired, reconstructed or rebuilt. In the case of substantial damage or destruction, timely written notice thereof shall be given to the unit owners and their mortgagees.

[b] The Association shall be responsible for repairing, reconstructing or rebuilding all such damage or destruction to the common elements and, to the extent of the Association’s insurance coverage, all such damage or destruction to the units. Each unit owner shall be responsible for such repairing, reconstructing or rebuilding of his unit as is not covered by the Association’s insurance.

[c] If, due to the act or neglect of a unit owner, or of a member of his family or his household pet or of a guest or other authorized occupant or visitor of such unit owner, damage shall be caused to the common elements or to a unit owned by others, or maintenance, repairs or replacements shall be required which would otherwise be a common expense, then such unit owner shall pay for such damage and such maintenance, repairs and replacements as may be determined by the Association, to the extent not covered by the Association’s insurance.

[d] In the event the insurance proceeds paid to the Association are not used to repair, reconstruct or rebuild the damaged or destroyed property, the Association shall distribute the proceeds among the unit owners and their mortgagees (as their interests may appear) in the same proportion as their respective undivided interests in the general common elements.

4. Condemnation. In the event of a taking in condemnation by eminent domain of part or all of the common elements, the award made for such taking shall be payable to the Association. If such proceedings are instituted or such acquisition is sought by a condemning authority as to any portion of the property, prompt written notice thereof shall be given to the unit owners and their mortgagees. If seventy-five percent (75%) or more of the unit owners duly and promptly approve the repair or restoration of such common elements, the board of directors shall arrange for the same, which shall be paid out of the proceeds of the award. In the event seventy-five percent (75%) or more of the unit owners do not duly and promptly approve the repair and restoration of such common elements, the board of directors shall disburse the net proceeds of such award to the unit owners and their mortgagees (as their interests may appear) in the same proportions as the respective undivided interests of the unit owners in the general common elements.

5. Restrictions and Requirements Respecting Use of Condominium Property. The following restrictions and requirements are in addition to all other restrictions and requirements contained in the declaration and these bylaws:

[a] Residential Use. No commercial activities of any kind shall be carried on in any unit or in any other portion of the condominium without the consent of the board of directors of the Association or manager, except activities relating to the rental or sale of units. This provision, however, shall not be construed so as to prevent or prohibit a unit owner from maintaining his professional personal library, keeping his personal business or professional records or accounts, handling his personal business or professional telephone calls, or conferring with business or professional associates, clients or customers, in his unit.

[b] Use of Common Elements. The common elements shall be used for the furnishing of services and facilities for which the same are reasonably intended, for the enjoyment of the units. The use, operation, and maintenance of the common elements shall not be obstructed, damaged or unreasonably interfered with by any unit owner.

[c] Offensive or unlawful activities. No noxious or offensive activities shall be carried on in any unit nor shall anything be done or placed upon any unit which interferes with or jeopardizes the enjoyment of other units or the common elements or which is a source of annoyance to residents. Unit occupants shall exercise extreme care not to make noises which may disturb other unit occupants, including the use of musical instruments, radios, televisions and amplifiers. No unlawful use shall be made of the condominium nor any part thereof, and all valid laws, zoning ordinances, and regulations of all governmental bodies having jurisdiction thereof shall be observed.

[d] Animals. No animals or fowls shall be raised, kept or permitted within the condominium or any part thereof, except domestic dogs, cats, or other household pets kept within the unit. No such dogs, cats or pets shall be permitted to run at large nor shall be kept, bred or raised for commercial purposes or in unreasonable numbers. Any inconvenience, damage or unpleasantness caused by such pets shall be the responsibility of the respective owners thereof. All dogs shall be kept on a leash while outside a unit. A unit owner may be required to remove a pet after receipt of two notices in writing from the Board of Directors of violations of any rule, regulation or restriction governing pets within the condominium.

[e] Exterior lighting or noisemaking devices and antennas. Except with the consent of the board of directors of the Association or manager, no exterior lighting or noise making devices shall be installed or maintained on any unit and no antennas or transmitting towers shall be affixed to the general or limited common elements.

[f] Windows, decks, courts and outside walls. In order to preserve the attractive appearance of the condominium the board of directors of the Association or the manager may regulate the nature of items which may be placed in or on windows, decks, courts, and the outside walls so as to be visible from other units, the common elements, or outside the condominium. Garments, rugs, laundry and other similar items may not be hung from windows, facades, decks or courts.

[g] Trailers, campers and boats. Except with the consent of the board of directors of the Association or manager, no trailer, truck camper, motorcycle, boat or boat trailer, or other recreational vehicles shall be parked on any portion of the condominium, except within garages.

[h] Leasing and rental of units. Except with the consent of the board of directors of the Association or the manager, no unit owner may lease or rent less than his entire unit. Other than the foregoing, there is no restriction on the right of any unit owner to lease or rent his unit.

[i] Insurance. Nothing shall be done or kept in any unit or in the common elements which will increase the cost of insurance on the common elements. No owner shall permit anything to be done or kept in his unit or in the common elements which will result in cancellation of insurance on any unit or any part of the common elements.

[j] Garage doors. All garage doors shall remain closed except to permit the entrance and exit of vehicles or access to any garage storage area.

[k] Salishan Hills restrictions. Each unit owner while using his unit or the common elements shall be subject to the restrictions contained in the Salishan Hills Declarations, and any rules and regulations adopted thereunder, each of which shall be enforceable by the board of directors to the same extent as if expressly set forth herein.

[l] Association rules and regulations. In addition, the board of directors from time to time may adopt, modify, or revoke such rules and regulations governing the conduct of persons and the operation and use of the units and common elements as it may deem necessary or appropriate in order to assure the peaceful and orderly use and enjoyment of the condominium property. Such action may be modified by vote of not less than seventy percent (70%) of the unit owners present, in person or by proxy, at any meeting, the notice of which shall have stated that such modification or revocation of rules and regulations will be under consideration. A copy of the rules and regulations, upon adoption, and a copy of each amendment, modification or revocation thereof, shall be delivered by the secretary promptly to each unit owner and shall be binding upon all unit owners and occupants of all units from the date of delivery.

6. Right of entry. A unit owner shall grant the right of entry to the board of directors, managing agent, manager or any other person authorized by the board of directors in the case of any emergency originating in or threatening his unit or other condominium property, whether or not the owner is present at the time. A unit owner shall also permit such persons to enter his unit for the purpose of performing installations, alterations or repairs to any common element and for the purpose of inspection to verify that the unit owner is complying with the restrictions and requirements described in Section 5 of this Article, provided that requests for entry are made in advance and that such entry is at a time convenient to the owner.

7. Easements for Developer. Developer and its agents, successors and assigns shall have an easement over and upon the common elements for the purpose of making repairs to existing structures and carrying out sales and rental activities necessary or convenient for the sale or rental of units, including, without limitation, the right to use the units owned by developer as model units and the right to use a unit as a sales office.

8. Abatement and Enjoining of Violations. The violation of any rule or regulation adopted hereunder or the breach of any bylaw contained herein or of any provision of the declaration shall give the board of directors, acting on behalf of the Association, the right, in addition to any other rights set forth in these bylaws:

[a] to enter the unit in which or as to which such violation exists and to summarily abate and remove, at the expense of the defaulting unit owner, any structure, thing, or condition that may exist therein contrary to the intent and meaning of the provisions hereof, and the board of directors shall not thereby be deemed guilty of any manner of trespass; or

[b] to enjoin, abate, or remedy such thing or condition by appropriate legal proceedings.

ARTICLE VIII — AMENDMENTS TO BYLAWS

1. How proposed. Amendments to the bylaws shall be proposed by either a majority of the board of directors or by thirty percent (30%) of the unit owners. The proposed amendment must be reduced to writing and shall be included in the notice of any meeting at which action is to be taken thereon.

2. Adoption. A resolution adopting a proposed amendment may be proposed by either the board of directors or by the unit owners and may be approved by the unit owners at a meeting called for this purpose. Unit owners not present at the meeting considering such amendment may express their approval in writing or by proxy. Any resolution must be approved by seventy-five percent (75%) of the unit owners, computed as provided in Article I, Section 6 (b), and by developer so long as developer owns any unit in the condominium. Developer’s consent shall not be required after two years after the date of recording of the declaration. Neither Article V, Section 8, nor any other provision of these bylaws which is for the benefit of mortgagees may be amended without the written consent of all mortgagees.

3. Execution and Recording. An amendment shall not be effective until certified by the chairman and secretary of the Association, approved by the Real Estate Commissioner, and recorded as required by law.

ARTICLE IX — MISCELLANEOUS

1. Notices. All notices to the Association or to the board of directors shall be sent care of the managing agent, or if there is no managing agent, to the principal office of the Association or to such other address as the board of directors may hereafter designate from time to time. All notices to any unit owner shall be sent to such address as may have been designated by him from time to time, in writing, to the board of directors, or if no address has been designated, then to the owner’s unit.

2. Waiver. No restriction, condition, obligation, or provision contained in these bylaws shall be deemed to have been abrogated or waived by reason of any failure to enforce the same, irrespective of the number of violations or breaches thereof which may occur.

3. Invalidity; Number; Captions. The invalidity of any part of these bylaws shall not impair or affect in any manner the validity, enforceability or effect of the balance of these bylaws. As used herein, the singular shall include the plural, and the plural the singular. The masculine and neuter shall each include the masculine, feminine and neuter, as the context requires. All captions used herein are intended solely for the convenience of reference and shall in no way limit any of the provisions of these bylaws.

4. Action Without a Meeting. Any action which the Oregon Unit Ownership Law, the declaration or the bylaws require or permit the owners or directors to take at a meeting may be taken without a meeting if a consent in writing setting forth the action so taken is signed by all of the owners or directors entitled to vote on the matter. The consent, which shall have the same effect as a unanimous vote of the owners or directors, shall be filed in the records of minutes of the Association.

5. Conflicts. These bylaws are intended to comply with the Oregon Unit Ownership Law, the declaration and the Salishan Hills Declarations. In case of any irreconcilable conflict, such statute and documents shall control over these bylaws or any rules and regulations adopted hereunder.

DATED, GLENEDEN BEACH, OREGON, THIS 28th day of April, 1979.

AMENDMENT #1

AMENDMENT TO THE BY-LAWS OF THE ISLAND CONDOMINIUM UNIT OWNERS ASSOCIATION

THIS AMENDMENT is made as of this twenty-eighth day of June, 1981, by THE ISLAND CONDOMINIUM UNIT OWNERS ASSOCIATION, an Oregon nonprofit corporation which is the Administrator of The Island Condominium pursuant to the Declaration Submitting The Island to Oregon Unit Ownership Law dated April 28, 1979 and recorded June 29, 1979 in Book 102 of the Records of Deeds of Lincoln County, Oregon, at page 660.

Article VII, paragraph 5, subparagraph 5, subparagraph [h], By-Laws of the Association of Unit Owners of the Island provides that the leasing and rental of units shall be without restriction excepting that no unit owner may lease or rent less than his entire unit. The unit owners of The Island Condominium now wish to amend that section of the By-Laws to read as follows:

“[h] Ownership, use, leasing and rental of units. Each unit shall be occupied and used only by a contract vendee thereof or a record title holder, his family, servants and non-paying guests, or lessee under a lease term of not less than four consecutive weeks, for residential purposes only. No unit may be rented or leased, without the prior written approval of the Board of Directors of the Association, except to a single family lessee for a term of at least four consecutive weeks. Record ownership of a unit may be vested in no more than six persons. Provided, that more than six natural persons may be record owners if they are all blood relatives of the first degree or spouses of same. As used herein, “persons” shall include corporations, general partnerships, trusts, limited partnerships or other entity, but in the event anyone other than a natural person desires to become a record owner of a unit, such shall require the prior approval of the Board of Directors of the Association, except in cases where a lender becomes the owner of a unit by reason of foreclosure of a security instrument or by deed in lieu of the foreclosure thereof. Specifically prohibited by this subparagraph (h) is any form of so-called “time-sharing,” “interval ownership” or “vacation license” wherein any person is granted the right to use a unit for any pre-determined period of less than four consecutive weeks. Whenever a unit is owned in whole or in part by a partnership, corporation, trust or other entity, such an entity shall designate at the closing of the acquisition of its ownership interest no more than three particular families which shall be entitled use of the unit. Only such designated families, their servants and non-paying guests may use such unit. Different families may be so designated as the named user of a unit by written notice to the Association; provided that no more than two such changes may be made in any calendar year.”

NOW, THEREFORE, the By-Laws of The Island Condominium Unit Owners Association is hereby amended to disallow “time sharing” and provide other restrictions as listed above and shall replace Article VII, paragraph 5, subparagraph 5, subparagraph [h] as recorded in Book 102 of the Records of Deeds of Lincoln County, Oregon, at page 660.

AMENDMENT #2

AMENDMENT TO BY-LAWS OF THE ISLAND CONDOMINIUM UNIT OWNERS ASSOCIATION

THIS AMENDMENT is made as of this fifth day of July, 1992, by the ISLAND CONDOMINIUM UNIT OWNERS ASSOCIATION, an Oregon nonprofit corporation which is the Administrator of The Island Condominium pursuant to the Declaration Submitting The Island to Oregon Unit Ownership Law dated April 28, 1979 and recorded June 29, 1979 in Book 102 of the Records of Deeds of Lincoln County, Oregon at page 660.

Article VII, paragraph 5, subparagraph 5, subparagraph [h], By-Laws of the Association of Unit Owners of the Island provides that the leasing and rental of units shall be without restriction excepting that no unit owner may lease or rent less than his entire unit. The unit owners of The Island Condominium now wish to amend that section of the By-Laws to read as follows:

“[h] Ownership, use, leasing and rental of units. Each unit shall be occupied and used only by a contract vendee thereof or a record title holder, his family, servants and non-paying guests, or lessee under a lease term of not less than ninety (90) consecutive days, for residential purposes only. No unit may be rented or leased without prior written approval of the Board of Directors of the Association, except to a single family lessee for a term of at least ninety (90) consecutive days. Record ownership of a unit may be vested in no more than six persons. Provided, that more than six natural persons may be record owners if they are all blood relatives of the first degree or spouses of same. As used herein “persons” shall include corporations, general partnerships, trusts, limited partnerships or other entity, but in the event anyone other than a natural person desires to become a record owner of a unit, such shall require the prior approval of the Board of Directors of the Association, except in cases where a lender becomes the owner of a unit by reason of foreclosure of a security instrument or by deed in lieu of the foreclosure thereof. Specifically prohibited by this subparagraph (h) is any form of so-called “time-sharing,” “interval ownership” or “vacation license” wherein any person is granted the right to use the unit for any pre-determined period of less than ninety (90) consecutive days. Whenever a unit is owned in whole or in part by a partnership, corporation, trust or other entity, such an entity shall designate at the closing of the acquisition of its ownership interest no more than three particular families which shall be entitled use of the unit. Only such designated families, their servants and non-paying guests may use such unit. Different families may be so designated as the named user of a unit by written notice to the Association; provided that no more than two such changes may be made in any calendar year.”

NOW, THEREFORE, the By-Laws of The Island Condominium Unit Owners Association is hereby amended to disallow “leasing and rental of units” for a period of less than ninety (90) consecutive days and provide other restrictions as listed above and shall replace Article VII, paragraph 5, subparagraph 5, subparagraph [h] as recorded in Book 102 of the Records of Deeds of Lincoln County, Oregon, at page 660.

AMENDMENT #3

AMENDMENT TO BYLAWS OF THE ASSOCIATION OF UNIT OWNERS OF THE ISLAND

THIS AMENDMENT TO BYLAWS OF THE ASSOCIATION OF UNIT OWNERS OF THE ISLAND is made this 31st day of January, 1997 by ASSOCIATION OF UNIT OWNERS OF THE ISLAND (the “Association”).

RECITALS

1. Association is a condominium association established pursuant to the Declaration Submitting the Island to Oregon Unit Ownership Law and dated April 28, 1979 and recorded June 29, 1979 in Book 102 of the Records of Lincoln County, Oregon at page 626.

2. The By-Laws of the Association of Unit Owners of the Island were recorded in the records of Lincoln County, Oregon on June 29, 1979 in Book 102, commencing on page 641, and amended by instruments recorded in Book 129, page 1579 and Book 251, page 2355 of the Records of Lincoln County, Oregon (the “By-Laws”).

3. Not less than 75 percent of the owners of units within The Island have voted to amend the Bylaws in certain respects.

NOW, THEREFORE, pursuant to Article VIII of the Bylaws and ORS 100.410, the Bylaws are hereby amended as follows:

1. Principal Office. Article I, Section 2 is hereby amended to read as follows:

“2. Principal Office. The principal office of the Association shall be located at PO Box 246, Gleneden Beach, Oregon 97388, or such other address as may be designated by the Board of Directors from time to time.”

2. Incorporation. The following Section 7 is hereby added to Article I:

“7. Incorporation. Upon approval of the Board of Directors, the Association may be incorporated under the Oregon Nonprofit Corporation Law. In such event, the Articles of Incorporation shall be consistent with the Declaration and these Bylaws, and these Bylaws will constitute the Bylaws of the incorporated association.”

3. Ballot Meetings. The following Section 12 is hereby added to Article II:

“12. Ballot Meetings. At the discretion of the Board of Directors, any matter which might come before the Association at a meeting, including election of directors, may be determined by proxy ballot, rather than at a formal gathering. Ballots shall be sent to all unit owners in the same manner as notice of meetings with a specific deadline for return of ballots. Ballots for such meetings must be properly executed and returned in sufficient quantity to constitute a quorum, and determination of the matter presented shall be based upon the require percentage of ballots returned, unless approval of a specified percentage of all voting rights is required by law, the Declaration or these Bylaws. The vote of a ballot meeting shall be determined by the Board of Directors with 48 hours of the deadline for return of ballots. Within 10 days after the ballots have been counted, each unit owner shall be notified by mail or other delivery of written notice of the results of the ballot meeting or that a quorum of ballots was not returned.”

4. Powers and Duties. The following paragraphs (m) and (n) are hereby added to Article III, Section 6:

“[m] Preparing or causing to be prepared and filed any required income tax returns or forms for the Association.”

“[n] The filing of an Annual Report and any amendment in accordance with ORS 100.250.”

5. Insurance. Article 3, Section 15 is hereby amended to read as follows:

“5 Insurance. The Board of Directors shall obtain the following insurance and fidelity bonds. In addition, the Board of Directors, in its discretion, may obtain such other insurance as it deems necessary to protect the interests of the Association or unit owners. The Board of Directors shall conduct an annual insurance review which, if appropriate, shall include an appraisal of all improvements contained in the condominium.”

“5.1 Types of Insurance. For the benefit of the Association and the unit owners, the Board of Directors shall obtain and maintain at all times, and shall pay for out of the common expense funds, the following insurance:

“5.1.1 Property Damage Insurance

“[a] The Association shall maintain a policy or polices of insurance covering loss or damage from fire, with standard extended coverage and “all risk” endorsements, and such other coverage as the Association may deem desirable.”

“[b] The amount of the coverage shall be for not less than one hundred percent (100%) of the current replacement cost of the units and common elements (exclusive of land, foundation, excavation and other items normally excluded from coverage), subject to a maximum deductible of the lesser of $10,000 or one percent (1%) of the policy amount.”

“[c] The policy or polices shall include all fixtures and building service equipment to the extent that they are part of the common elements and all personal property and supplies belonging to the Association, together with all fixtures, improvements and alterations comprising a part of each unit and refrigerators, air conditioners, cooking ranges, dishwashers and clothes washers and dryers contained within units and owned by the unit owner.”

“[d] Such policy or policies shall name the Association as insured, and shall provide for loss payable in favor of the Association, as a trustee of each unit owner and each such unit owner’s mortgagee, as their interests may appear. The policies shall contain the standard mortgage clause, or equivalent endorsement (without contribution) which is commonly accepted by institutional mortgage investors in Oregon.”

“5.1.2 Liability Insurance.

“[a] The Association shall maintain comprehensive general liability insurance coverage insuring the Declarant, the Association, the Board of Directors, the unit owners and the managing agent, against liability to the public or to the owners of units and of common elements, and their invitees or tenants, incident to the operation, maintenance, ownership or use of the property, including legal liability arising out of lawsuits related to employment contracts of the Association. There may be excluded from such policy or policies coverage of a unit owner (other than as a member of the Association or Board of Directors) for liability arising out of acts or omission of such owner and liability incident to the ownership and/or use of the part of the property as to which such unit owner has the exclusive use or occupancy.”

“[b] Limits of liability under such insurance shall not be less than One Million Dollars ($1,000,000) on a combined single limit basis.”

“[c] Such policy or policies shall be issued on a comprehensive liability basis and shall provide a cross liability endorsement wherein the rights of named insured under the policy or policies shall not be prejudiced as respects his, her or their action against another named insured.”

“5.1.3 Worker’s Compensation Insurance. The Association shall maintain workers’ compensation insurance to the extent necessary to comply with any applicable laws.”

“5.1.4 Fidelity Insurance.

“[a] The Association shall maintain fidelity insurance for all officers, directors, trustees and employees of the Association and all other persons handling or responsible for funds of or administered by the Association. In the event the Association has retained a management agent, such agent shall maintain fidelity insurance for its officers, employees and agents handling or responsible for funds of, or administered on behalf of the Association.

“[b] The total amount of fidelity insurance coverage required shall be based upon the best business judgment of the Board of Directors.”

“[c] Such fidelity insurance shall name the Association as obligee and shall contain waivers by the issuers of the insurance of all defenses based upon the exclusion of persons serving without compensation from the definition of ‘employees’ or similar terms or expressions. The insurance shall provide that it may not be canceled or substantially modified (including cancellation for nonpayment of premium) without at least 10 days’ prior written notice to the Association.”

“5.1.5 Directors’ and Officers’ Liability Insurance. The Association shall maintain a policy of directors’ and officers’ liability insurance with coverage in the amount of not less than One Million Dollars ($1, 000,000), subject to a reasonable deductible.”

“5.1.6 Insurance by Unit Owners. Each unit owner shall be responsible for obtaining, at such owner’s own expense, insurance covering his or her property not insured under Section 5.1.1 above and against his or her liability not covered under Section 5.1.2 above, unless the Association agrees otherwise.”

“5.2 Other Insurance Requirements. Insurance obtained by the Association shall be governed by the following requirements:

“[a] All policies shall be written with the State of Oregon or a company licensed to do business in the State of Oregon which falls into a B general policyholder’s rating or a financial performance index of 6 or better, as designated in Best’s Key Rating Guide, or an A or better rating from Demotech, Inc.”

“[b] Notwithstanding the provisions of Section 5.1 above, there may be named as an insured, on behalf of the Association, the Association’s authorized representative, including any trustee with whom the Association may enter into any Insurance Trust Agreement, or any successor to such trustee. Such insurance trustee shall have exclusive authority to negotiate losses under any property or liability insurance policy. Each unit owner appoints the Association, or any insurance trustee or substitute trustee designated by the Association, as attorney-in-fact for the purpose of purchasing and maintaining such insurance including: the collection and appropriate disposition of the proceeds thereof, the negotiation of losses and execution of releases of liability, the execution of all documents, and the performance of all other acts necessary to accomplish such purchase. The Association or insurance trustee shall receive, hold or otherwise properly dispose of any proceeds of insurance in trust for unit owners and their first mortgage holders, as their interests may appear.”

“[c] All property insurance policies shall contain a ‘Special Condominium Endorsement’ or its equivalent providing for the following: recognition of any Insurance Trust Agreement, a waiver of the right of subrogation against unit owners individually, that the insurance is not prejudiced by any act or neglect of individual unit owners which is not in the control of such owners collectively, and that the policy is primary in the event the unit owner has other insurance covering the same loss.”

“[d] For purposes of this article, insurance policies are unacceptable where (i) under the terms of the insurance carrier’s charter, bylaws or policy, contributions or assessments may be made against the Association or unit owners, or (ii) by the terms of the carrier’s charter, bylaws or policy, loss payments are contingent upon action by the carrier’s Board of Directors, policy holders or members, or (iii) policy includes any limiting clauses (other than insurance conditions) which could prevent the owners from collecting insurance proceeds.

“[e] All policies required by this article shall provide that they may not be canceled or substantially modified without at least 10 days’ prior written notice to the Association and to each holder of a first mortgage which is listed as a scheduled holder of a first mortgage in the insurance policy. Evidence of insurance shall be issued to each unit owner and mortgagee upon request.”

“[f] Each unit owner shall be required to notify the Board of Directors of all improvements made by the owner to his or her unit, the value of which is in excess of Five Hundred Dollars ($500). Nothing in this paragraph shall permit an owner to make improvements without first obtaining the approval of the Board of Directors pursuant to Article VII, Section 2.”

“[g] Any unit owner who obtains individual insurance policies covering any portion of the property other than such owner’s personal property and fixtures shall file a copy of such individual policy or policies with the Association within thirty (30) days after the purchase of such insurance.”

“5.3 Optional Provisions. The Board of Directors shall make every effort to secure insurance policies that will provide for the following:

“[a] To the extent appropriate and available at reasonable cost, the Association shall maintain additional coverage against such other risks as are customary covered with respect to projects similar in construction, location and use, including but not limited to, host liquor liability, contractual and all-written contract insurance, employer’s liability insurance, comprehensive automobile liability insurance, and an endorsement patterned after “use and occupancy” insurance providing relief from monthly assessments while a unit is uninhabitable due to a covered loss.”

“[b] If reasonably available, the insurance policies shall include Inflation Guard Endorsement, and Construction Code Endorsements (such as a Demolition Cost Endorsement, a Contingent Liability from Operation of Building Laws Endorsement, and an Increased Cost of Construction Endorsement).”

“[c] Flood insurance, if the condominium is in a Special Flood Hazard area.”

6. Open Meetings. The following Section 16 is hereby added to Article III:

“16 Open Meetings. All meetings of the Board of Directors shall be open to unit owners. Such meetings may be conducted by telephonic communication, except that if a majority of the units are principal residences of the occupants, then: (a) for other than emergency meetings, notice of each Board of Director’s meeting shall be posted at a place or places on the property at least three (3) days prior to the meeting, or notice shall be provided by a method otherwise reasonably calculated to inform the unit owners of such meeting; and (b) only emergency meetings of the Board of Directors may be conducted by telephonic communication.”

7. Default in Payment of Assessments. Article V, Section 5 is amended to read as follows:

“5. Default in Payment of Assessments. In the event of default by any unit owner in paying any assessments to the Association, including assessed common expenses and any other charge imposed or levied by the Association pursuant to the provisions of the Declaration, these bylaws or the Oregon Condominium Act, such unit owner shall be obligated to pay interest at the rate of twelve percent (12%) per annum on such assessment from the due date thereof, or at such greater rate as may be established by the Board of Directors from time to time, not to exceed the maximum lawful rate, if any. In addition, the defaulting unit owner shall pay a late charge for any assessment not paid within ten (10) days of its due date in the amount of five percent (5%) of the delinquent payment, or such other reasonable late charge as may be established by the Board of Directors from time to time, together with all expenses incurred by the Association in collecting such unpaid assessments, including attorneys’ fees (whether or not suit is instituted, and at trial or any appeal or petition for review therefrom). If the assessment is not paid within thirty (30) days of its due date, the Board of Directors may declare any remaining installments of assessments for the balance of the fiscal year immediately due and payable. The Board of Directors shall have the right and duty to recover for the Association such assessments, together with such charges, interest and expense of the proceedings, including attorneys’ fees, by an action brought against such unit owner or by foreclosure of the lien upon the unit granted by the Oregon Condominium Act. The Board of Directors shall notify the holder of any first mortgage upon a unit of any default not cured within sixty (60) days of the date of default.”

8. Availability of Records. Following Section 7 is hereby added to Article VI:

“7. Availability of Records. During normal business hours or under other reasonable circumstances, the Association shall make available to unit owners, prospective purchasers and lenders, and to holders, insurers, or guarantors of any first mortgage, current copies of the Declaration, Bylaws other rules concerning the condominium, amendments or supplements to such documents and the books, records, financial statements and current operating budget of the Association. Upon written request, the Association shall make such documents, information and records available to such persons for duplication during reasonable hours. The Association may charge a reasonable fee for furnishing copies of such documents, information or records.

9. Maintenance and Repair. Article VII, Section I is hereby amended to read as follows:

“1. Maintenance and Repair. Except as otherwise provided in Section 3 of this Article for damage or destruction caused by casualty:

“[a] By Unit Owner. Except as otherwise provided in paragraph (b) of this section, the owner of each unit, at his or her own expense, shall be responsible for maintenance of and repairs to such unit and shall keep the same in good order, condition, and repair and shall do all redecorating, painting and staining which at any time may be necessary to maintain the good appearance and condition of the unit. Such repairs shall include, without limitation, maintenance, repair or replacement of any forced air furnace, plumbing, heating and/or air conditioning fixtures, telephones, water heaters, fans, lighting fixtures and lamps within the unit, fireplaces, refrigerators, dishwashers, ranges, other appliances and accessories that may be in or connected to the unit, automatic garage door openers and systems, light bulbs in exterior fixtures for the unit, broken seal damage and window screens for windows and sliding glass doors, interior doors and ordinary maintenance of exterior doors other than casualty damage. Further, each unit owner shall be responsible for damage or destruction to the unit or common elements due to the act or neglect of the unit owner or a member of his or her family or household pet or of a guest or other authorized occupant or visitor of such unit owner to the extent provided in Section 3 (c) of this Article.”

“[b] By Association. The Association shall be responsible for all the maintenance, repairs and replacements to the common elements, including without limitation: decks, fences, railings, gutters, downspouts and underground drains leading from downspouts, roofs, siding, gates, garage doors (except automatic garage door openers and systems), exterior chimney and exterior chimney screens, exterior sensor lights, exterior light fixtures (except light bulbs), casualty damage of windows and sliding glass doors (exclusive of broken seal damage and window screens), casualty damage of doors (leading to exterior only), painting (exterior only), and landscaping.

10. Damage or Destruction. The following provision is hereby added at the end of Article VII, Section 3 (b):

“including that portion of the deductible of the Association’s insurance policy reasonably allocable to the unit.”

The following provision is hereby added at the end of Article VII, Section 3(d):

“If the property is removed from condominium ownership, the insurance proceeds together with the proceeds from the sale of the property, shall be distributed to the unit owners and their mortgagees, as their interest may appear, in the manner described in the Oregon Condominium Act.”

11. Condemnation. Article VII, Section 4 is hereby amended to read as follows:

“4. Condemnation. If any portion of the condominium is made the subject matter of any condemnation or eminent domain proceeding or is otherwise sought to be acquired by a condemning authority, notice of the proceeding or proposed acquisition shall promptly be given to each unit owner and to each mortgagee. The Association shall represent the unit owners in any condemnation proceedings or in negotiations, settlements and agreements with the condemning authority for acquisition of any portion of the common elements, and each unit owner appoints the Association to act as his attorney-in-fact for such purposes. All compensation, damages or other proceeds of the taking, other than any award for moving expenses of specific unit owners, shall be payable to the Association and allocated and distributed as provided in this Section 4.

“[a] Complete Taking. If the entire condominium property is taken, or if unit owners holding ninety percent (90%) of the voting power agree that such substantial portion of the condominium has been taken as to make the project obsolete, then the property shall be deemed removed from unit ownership. In such event, any proceeds of the condemnation paid to the Association, together with any other proceeds upon sale of the remaining condominium property, shall be distributed among the unit owners and their mortgagees, as their interests may appear, in accordance with the provisions of the Oregon Condominium Act.”

“[b] Partial Taking. If less than the entire condominium property is taken and the property is not determined to be obsolete as provided in paragraph (a) above, then as soon as practicable the Board of Directors shall, reasonably and in good faith, allocate the award among the units in accordance with the reduction in the value of each unit and its interest in the common elements, compared to the total reduction in value of all units and their interest in the common elements. In the event any unit owner or mortgagee objects to the allocation determined by the Board of Directors, the matter shall be submitted to arbitration in accordance with the rules of the American Arbitration Association. The cost of such determination shall be paid out of the proceeds of the condemnation. Any portion of the award allocated to a unit owner under this paragraph shall be paid first to all mortgagees and holders of liens on the unit owner’s interest in accordance with the existing priorities, and the balance to the unit owner. If any reconstruction or repair is undertaken as a result of the condemnation, the Board of Directors may retain and apply such portion of each unit owner’s share of the award as is necessary to discharge the owner’s liability for any special assessment arising from such reconstruction or repair.”

12. Abatement and Enjoining of Violations. Article VII, Section 8 is amended to read as follows:

“8. Abatement and Enjoining of Violations. The violation of any provision of the Declaration or these bylaws, of any rule or regulation adopted pursuant to these bylaws, or of any decision of the Association made pursuant to such documents, shall give the Board of Directors acting on behalf of the Association, the right, in addition to any other rights set forth in these bylaws, to do any or all of the following after giving notice and an opportunity to be heard:

“[a] to enter the unit in which or as to which such violation exists and to summarily abate and remove, at the expense of the defaulting unit owner, any structure, thing or condition that may exist contrary to the intent and meaning of such provisions, and the Board of Directors shall not thereby be deemed guilty of any manner of trespass, provided, however, that judicial proceedings shall be instituted before any items of construction may be altered or demolished, or

“[b] to enjoin, abate, or remedy such thing or condition by appropriate legal proceedings,

“[c] to levy reasonable fines, or

“[d] to terminate the right to receive utility services paid for out of assessments or the right of access to and use of recreational and service facilities of the Condominium until correction of the violation has occurred.

“The offending unit owner shall be liable to the Association for all costs and attorneys’ fees incurred by the Association, whether or not legal proceedings are instituted and including attorneys’ fees on appeal or petition for review, together with any expense incurred by the Association in remedying the default, damage incurred by the Association or unit owners, or fines so levied. Such sums shall be assessed against the offending unit as an assessment and enforced as provided in Article V. In addition, any aggrieved unit owner may bring an action against such other unit owner or the Association to recover damages or to enjoin, abate, or remedy such thing or condition by appropriate legal proceedings.”

13. Amendments to Bylaws. Article VIII of the Bylaws is hereby amended to read as follows:

ARTICLE VIII
AMENDMENTS TO BYLAWS

“1. How Proposed. Amendments to the bylaws shall be proposed by either a majority of the Board of Directors or by unit owners holding thirty percent (30%) of the voting rights. The proposed amendment must be reduced to writing and shall be included in the notice of any meeting at which action is to be taken thereon or attached to any request for consent to the amendment.

“2. Adoption. A resolution adopting a proposed amendment may be proposed by either the Board of Directors or by the unit owners and may be approved by the unit owners at a meeting called for this purpose or by ballot vote. Unit owners not present at the meeting considering such amendment may express their approval in writing or by proxy. Any resolution must be approved by unit owners holding a majority of the voting rights and by mortgagees to the extent required by the Declaration, except that any amendment relating to age restrictions, pet restrictions, limitations on the number of persons who may occupy units, or limitations on the rental or leasing of units must be approved by unit owners holding seventy-five percent (75%) of the voting rights.

“3. Execution and Recording. An amendment shall not be effective until certified by the chairman and secretary of the Association as being adopted in accordance with these bylaws and the provisions of the Oregon Condominium Act and recorded as required by law.”