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Revision 1, September 3, 2016 1

To Members of the Cuerno Verde Owners Association: Membership in the Association is a requisite for every owner of property within Cuerno Verde Pines subdivision. We encourage you to exercise your privileges and to support the Association by fully accepting your obligations as a Member. The purpose of this Handbook is to provide a reference for determining these privileges and obligations and to assist in understanding and achieving our common goal of maintaining Cuerno Verde Pines as a desirable place to live. Within the following pages, Members will find general information about the area and copies of the By-Laws, Covenants, Restrictions, and Resolutions for the Association. We hope you find this material useful. This information is available digitally on the CVOA website: http://www.cuernoverde.org/. Please refer to the website for a list of Directors and their contact information. Custer County Planning and Zoning produces a free Homeowner’s Packet called “Getting Started” that the Association highly recommends. Copies are available at the Planning and Zoning office in the Custer County Courthouse. Board of Directors Cuerno Verde Owners Association Contact Information:

Cuerno Verde Owners Association P.O. Box 116, Westcliffe, CO 81252

Please refer to the CVOA website for current list of Directors and contact information:

http://www.cuernoverde.org/


TABLE OF CONTENTS

General.............................................................................................................. 3 Cuerno Verde Owners Association.................................................................... 3 Preservation of Natural Resources .................................................................... 3 Association Facilities......................................................................................... 4 Clubhouse........................................................................................................... 4 Antelope Park..................................................................................................... 5 Camping............................................................................................................. 5 Government Services......................................................................................... 5 Fire Protection.................................................................................................... 5 Law Enforcement .............................................................................................. 6 Medical Clinic/Ambulance................................................................................ 6 Schools............................................................................................................... 6 Mail.................................................................................................................... 7 Roads.................................................................................................................. 7 Dark Skies.......................................................................................................... 7 Rentals................................................................................................................ 7 Camping............................................................................................................. 7 Building Guidelines and Permits....................................................................... 7 Submission of Plans........................................................................................... 8 County Building Permit .................................................................................... 10 Septic System Permit ........................................................................................ 11 Water Well Permit............................................................................................. 11 Road / Driveway Access Permit........................................................................ 12 Electrical / Plumbing Permits and Inspections................................................. 12 Utilities and Other Services............................................................................... 12 Electric............................................................................................................... 12 Telephone ......................................................................................................... 12 Propane Gas....................................................................................................... 12 By-Laws ........................................................................................................... 13 Protective Covenants....................................................................................... 25 Editorial Notes ................................................................................................ 32 Maps of Subdivision........................................................................................ 33

Filing #1, Northern........................................................................................ 33 Filing #1, Southern........................................................................................ 34 Filing #2......................................................................................................... 35 Filing #3......................................................................................................... 36 Filing #4......................................................................................................... 37 Filing #5......................................................................................................... 38 Filing #6......................................................................................................... 39


GENERAL Cuerno Verde Pines is located in Custer County, Colorado and is situated on the western slope of the Wet Mountain Range as it descends to the Wet Mountain Valley, overlooking the Sangre de Cristo Mountains. The subdivision lies within all or portions of Sections 7 thru 9, 16 thru 21, and 28 thru 30, Range 71 West (R71W), Township 23 South. “The Pines” consists of approximately 3,667 acres which have been platted into 537 tracts of 5 acres or more. All lots have been sold by the developer. More than 225 acres have been dedicated for parks and common areas. Approximately 33 miles of roads were constructed and dedicated to Custer County although some roads were not accepted for maintenance. The Cuerno Verde Clubhouse was completed in the spring of 1976. In August, 1989, the Cuerno Verde Owners Association's Board of Directors assumed responsibility for governing the subdivision. Cuerno Verde is Spanish meaning “greenhorn.” In September 1779, an expedition of Spaniards under Mexican Governor Don Juan Bautista de Anza met and defeated a Comanche Indian war party at the base of a mountain in what is now part of the San Isabel National Forest. The Comanche chief, long considered by the Spaniards a “scourge of this kingdom,” was named Cuerno Verde after the bull elk or deer that are bold when their antlers are growing and still “green.” The deaths of Cuerno Verde and 38 others, including his first-born son and four of his warrior captains, brought an end to large scale Indian raids in an area between Pueblo region on the north and the Indian Pueblos of New Mexico to the south. Cuerno Verde Pines subdivision borrows its name from nearby Greenhorn Mountain (approximately twenty miles to the southeast) named for the Comanche chief. CUERNO VERDE OWNERS ASSOCIATION By purchasing property within Cuerno Verde Pines, you have agreed to abide by the Covenants, conditions and restrictions recorded on the property before you purchased it. As a property owner, you are also a member of the Cuerno Verde Owners Association (CVOA) and therefore, responsible for annual membership dues. Having chosen Cuerno Verde to be your community, we are sure that you will want to contribute to its harmony and prosperity. Our future as a community depends to a great extent on the attitude and cooperation of each of us as neighbors. As we all take pride in Cuerno Verde, each of us will want to maintain our property as an attractive place to live, now and for generations to come. PRESERVATION OF NATURAL RESOURCES The Covenants were established for the protection of the natural environment and to enhance the value, desirability and attractiveness of the subdivision. Central to the Covenants is the preservation of the natural beauty and wildlife. Hunting is NOT allowed and restrictions have been placed on fencing and pets in order to protect wildlife from injury. Owners are


encouraged to be proactive in preservation efforts and to initiate and maintain a habitat that will attract birds and sustain wildlife. Water conservation is most important. A Water Augmentation Plan for Cuerno Verde Pines subdivision was established and decreed by the District Court, Water Division 2, State of Colorado in June 1980. Even though this decree was executed after Filings 1 and 2 were developed and platted, all property owners in Cuerno Verde Pines are subject to the Water Augmentation Plan set forth in the By-Laws, Article X, Water Rights and Conservation. ASSOCIATION FACILITIES Clubhouse: CVOA owns and maintains a clubhouse at the southern end of the subdivision. The clubhouse contains a large kitchen, areas for dining and games, bar, and lounge. The clubhouse is fully equipped (e.g., kitchen appliances, cooking utensils, dishes and glasses, furniture, game tables). Social events organized by the Association’s Social Committee are held at the clubhouse. The clubhouse is available for the exclusive and private use of Members on a reservation basis. Members planning a special event such as a wedding reception, anniversary, or family reunion should consider using the clubhouse. The following conditions apply:

1. Member must be in good standing with dues current.

2. Maximum capacity for any function is 100. If more than 25 are present at a private function and liquor is served, the Board may require a Sheriff Deputy or Posse member be hired at the Member’s expense and remain present during the function.

3. The Member must be present in the clubhouse at all times during preparation, the event and clean-up.

4. Hours of use shall be between 8:00 AM and 9:00 PM. Sleeping or overnight functions

are not permitted.

5. Animals are not allowed in the clubhouse with the exception of certified service animals.

6. Thirty (30) days prior to the event date, the Member must pay a $200.00 deposit per day to make a reservation. The deposit is returned after ensuring the clubhouse has been cleaned and returned to its previous condition. If there is damage or missing items, the Member is responsible for repair or replacement.

7. The clubhouse IS NOT available to any external group or organization, corporation, or commercial purpose.


For reservations or further information, contact a Social Committee member. Contact information is available on the CVOA web site: http://www.cuernoverde.org/

Antelope Park: CVOA owns and maintains approximately 225 acres which have been dedicated for parks and common areas. The largest of these is Antelope Park adjacent to the clubhouse. Antelope Creek flows from the canyon behind the clubhouse through the west side of the park. The canyon is also a common area which offers scenic terrain for hikers and nature lovers. Please refrain from disturbances to the canyon by limiting activity to foot traffic. Motorized vehicles are not allowed within any park or common area. GOVERNMENT SERVICES Emergency 911 Service is available to Custer County. Dialing 911 will connect you with an emergency dispatcher in Westcliffe for Fire, Sheriff, and Ambulance services. Fire Protection: Cuerno Verde Pines is included within the Wet Mountain Fire Protection District (FPD), a volunteer fire fighter department with the nearest station located in Rosita. For information: (719) 783-9245. For Emergency Only: Dial 911. With increased concern about wildfires, the Wet Mountain FPD recommends:

1. Removing all trees and bushes within thirty (30) feet of structures and maintaining

grasses at a height of 4 to 6 inches.

2. Within 70 feet of structures, prune tree limbs to ten (10) feet above the ground, thin shrubs, and maintain grasses and weeds at a height of 4 to 6 inches.

3. Enclose the area under porches and decks to prevent accumulation of debris.

4. Place fireplace ashes in metal containers, cover and dispose of properly.

5. Use fire resistant building materials. Use UL approved fire retardants on highly combustible materials to reduce the chance of sparks causing fires.

6. Provide a water source such as a hose connected to your water heater or pump. Have shovels, rakes and hoes readily available.


7. Place fire extinguishers of adequate size near exits and be familiar with their operation!!

8. Plan adequate access to structures from roads, two ways if possible. Clear steep and narrow driveways.

9. Cooperate with your neighbors and help with fire suppression.

10. Do not burn leaves, debris, trash, rubbish, etc. Burning of refuse is prohibited!

11. Routinely clear twigs, needles and leaves from roofs, gutters, porches and decks.

12. Cooperate with local authorities and report any fire immediately.

13. Know your property location by road name or number and be able to provide an accurate location of the fire you are reporting. The Fire Department and Sheriff's Office recommends all homeowners install a street address sign at the driveway to their property to allow for quick identification and response.

For a nominal fee, property owners can contact the Wet Mountain FPD and have a representative perform a risk assessment and provide recommendations to mitigate fire risk on an owner’s property.

Law Enforcement: Law Enforcement is provided by the Custer County Sheriff’s Department, 702 Rosita Ave, Westcliffe. For information: (719) 783-2270. For Emergency Only: Dial 911. Medical Clinic/Ambulance: Cuerno Verde Pines is included in the Custer County Medical Clinic area of coverage. The clinic is located at 704 Edwards Street, Westcliffe. Ambulance service is provided from the clinic. For information: (719) 783-2380. For Emergency Only: Dial 911. Schools: Custer County Public Schools (District C-1) for kindergarten through 12th grade are located at 709 Main Street, Westcliffe. For information: (719) 783-2291.


Mail: Postal delivery and other services are provided by the US Post Office, 4 Bassick Place, Westcliffe, CO 81252. For information: 783-2453. Roads: All roads in Cuerno Verde were dedicated to Custer County. Some were not completed to County specifications and are not maintained by the County. Snow removal on County maintained roads is provided by Custer County Road and Bridge, 213 North Fourth Street, Westcliffe. For current road maintenance policies, Members should call 783-2281 or consult the Custer County Road and Bridge website: http://www.custercountygov.com/index.php?pg=roadbridge Dark Skies: In 2015, Westcliffe was designated as Colorado’s first International Dark Sky Community. Dark Skies have come to be recognized as a resource worth preserving. Please consider using hooded outdoor lighting. For information: http://www.wetmtndarkskies.org RENTALS Owners may rent the primary residence and if applicable, a guest quarter. The Covenants allow only one single family occupancy per lot. The habitable structure(s) must be rented to one tenant. Owners must ensure that tenants observe all rules and regulations of the Association. CAMPING Cuerno Verde Pines is a residential subdivision intended for permanent family dwellings. The Covenants allow for suitable motor homes, camping trailers, etc. to be used by Members to enjoy camping on their property for up to thirty (30) days per year. However, such motor homes, trailers, etc., cannot remain on the property beyond the aforementioned thirty (30) days. Beyond that period, any motor home, camping trailer, etc. must be concealed from view or stored in a Covenant approved structure or offsite. Dumping of chemical toilets on private or public property is illegal. Waste must be transported to an authorized dump station. (Custer County Ordinance) BUILDING GUIDELINES & PERMITS Cuerno Verde Owners Association Covenant construction standards are in some instances more restrictive than Custer County construction standards. Property owners must submit plans for construction or modifications of ANY STRUCTURE, BUILDING OR OUTSIDE APPURTENANCE, INCLUDING FENCES to the Cuerno Verde Architectural Control Committee before construction.


Submission of Plans: To avoid conflicts with CVOA By-Laws and Covenants, it is suggested Members begin any project by submitting plans to the Architectural Control Committee before applying for a County Building Permit. Submitting the following information with the request will ensure a timely review:

1. Construction drawings of: one private single family dwelling; any other Covenant

allowed structures (attached garage, guest or caretaker quarters, detached garage, barn or shed for horses.) Drawings must show: a. Floor plans, dimensions of each structure, including elevations. b. Construction materials, including colors.

2. Site Plan that shows exact location of the primary residence and any Covenant allowed structures, the water well, and the septic system. Site plans must depict property boundaries and all proposed building/structure’s location measured in “feet” from all property boundaries. Cuerno Verde Owners Association follows Custer County setback minimums at fifty (50) feet from all property lines and building height limits at thirty (30) feet above finished grade. These regulations can be found on the website:

http://www.custercountygov.com/ Planning and Zoning, Section 6, Paragraph 2-3, Pages 51-52

6.2 Required Setbacks No portion of any building or structure shall be located, erected or maintained less than fifty (50) feet from any property line or roadway easement boundary nor less than sixty (60) feet from the edge of the driven surface of a roadway, where a recorded roadway easement does not exist. 6.3 Maximum Building Height The vertical distance from the highest point of the finished grade of the building perimeter to the high point of the building structure must not exceed thirty (30) feet.

3. A construction schedule showing estimated start and completion dates. Construction

must be pursued aggressively and completed within one hundred eighty (180) days. If necessary, submit a request for extension to the Architectural Control Committee.

4. Cuerno Verde Homeowners Association dues must be current.

http://www.custercountygov.com/pdf/Zoning%20Res.pdf


5. New homes constructed in Filings 3 through 6 must install a water well flow meter and provide semiannual (twice a year) meter readings to the Association. Note: Colorado Division of Water Resources highly recommends that new construction within Filings 1 and 2 install a water well flow meter as it may be required in the future. 6. Fencing: a. Aesthetic Fencing i. Must be for decorative uses only, such as boundary markers, driveway entrances, parking area definition, and must have alternating sections with breaks. ii. Must not be detrimental to, nor interfere with wildlife movement.

iii. Must not exceed 48 inches in height. iv. Must be comprised of natural materials (e.g.; wood, stone) and be of

design and color harmonious to the natural surroundings. No stockade or privacy fencing will be allowed as perimeter fencing or where it obstructs adjacent property owners' view.

b. Fencing for Horses i. Total fenced area not to exceed 25% of lot area. ii. Not to exceed 60 inches in height. iii. No barbed wire, electrified wire, or woven wire (e.g., chain link, rabbit fence, chicken wire). 7. Guidelines for Renewable Energy Systems a. Plans for renewable energy systems must be submitted to the Architectural Control Committee for approval. b. Plans must include: i. Manufacturer's certification as an approved renewable energy system including system design and components. ii. Detailed site plan showing renewable energy system location in relation to all structures, water well, septic system, easements, and property lines. iii. If applicable, documentation of renewable energy system's connection to electric utility grid. iv. Per Colorado House Bill 08-1270, Section 38-30-168; HOAs may place aesthetic and auditory provisions that impose reasonable restrictions on the dimensions, location or external appearance of a renewable energy system or energy efficient device to reduce interference with the use and enjoyment of adjoining properties. At its discretion,


the Board may send letters to potentially affected property owners seeking comment on the proposed structure, and will consider those responses in the review process. 8. Generators powered by fossil fuels are excellent as back-up electrical power sources. As the primary power source device, generators are not compatible with noise nuisance regulations. 9. Guidelines for other Structures/Devices

a. Includes only structures/devices required to be allowed by government statute.

b. Refer to Submission of Plans, #2. for site plan requirements. Review for other allowed structures/devices will consider aesthetic factors, including the auditory and visual impact of the structure/device as a nuisance to adjoining properties. At its discretion, the Board may contact potentially affected property owners seeking comment on the proposed structure/device, and will consider those responses in the review process.

c. Final Note: Due to the proximity of Cuerno Verde to the Silver West Airport,

the Owner/Member is required to submit written assurance of compliance with Silver West Airport Authority per limitations of the Silver West Airport Protection Overlay District Regulations:

http://www.custercountygov.com/pdf/Airport Authority Regulations.pdf Submit plans to: Architectural Control Committee, Cuerno Verde Owners Association, P.O. Box 116, Westcliffe, CO 81252. After reviewing the plans, the Architectural Control Committee will recommend approval, conditional approval, or disapproval to the Board of Directors. The Committee will retain the submitted plans or copies for future reference. County Building Permit: Plans approved by the Cuerno Verde Board of Directors should be submitted to the Custer County Planning and Zoning Office. Upon request, permit application forms, instructions and information may be obtained from: Custer County Zoning Office P.O. Box 203 (205 South 6th Street, on north end of County Courthouse) Westcliffe, CO 81252, telephone: 719-783-2669 Note: see Custer County Links on the CVOA website: http://www.cuernoverde.org/ Permit Fees are based on the category of the structure (e.g., new dwelling, additions to existing building, accessory building) and gross floor area.

http://www.custercountygov.com/pdf/Airport%20Authority%20Regulations.pdf

http://www.cuernoverde.org/


Any structure erected, occupied, moved or structurally altered, without the prior purchase of a Zoning Permit will bear a penalty of double the cost of the permit, plus the basic permit fee. A Building Permit Application should be completed and returned to the Planning and Zoning Office with the permit fee, a drawing of the property that shows existing buildings, proposed buildings, well and other water sources, and components of sewage disposal systems. The drawing must show distances from the property lines to buildings, water sources and sewage disposal systems, as well as the access to the property. The Custer County Zoning Resolution requires structures be located a minimum of fifty (50) feet from all property lines, including roadways, and structures be no higher than thirty (30) feet from finished grade. If the permit is for a structure intended for human habitation, a permit for a sewage disposal system or variance must be approved prior to preliminary approval of the Planning and Zoning Permit. Septic System Permit: Prior to receiving a building permit, an Individual Sewage Disposal System (ISDS) Permit, commonly called a Septic System Permit must be applied for and issued by the Custer County Planning and Zoning Office. A soil percolation test must first be performed to determine whether a standard septic system can be installed or a septic system designed by a qualified Engineer (engineered system) is required. The soil percolation test must be performed by a qualified Geologist, Engineer or Technician (licensed contractor) for each septic system. A list of licensed contractors may be obtained, along with the Septic Permit Application form, from the Custer County Planning and Zoning Office. The soil percolation test report, Septic Permit Application, and permit fee should be submitted together to the Zoning Office. All septic systems must be installed by a licensed Custer County septic contractor. Water Well Permit: Application must be made by the property owner or licensed well drilling contractor to the Colorado Division of Water Resources in Denver. Well Permit Fees vary so owners should contact the Division of Water resources for the current application cost. It is highly advisable to drill the water well prior to construction of the residence. Well Permit Applications may be obtained from the drilling contractor and submitted, along with the permit fee, to the Colorado Division of Water Resources, Department of Natural Resource, 1313 Sherman Street, Suite 821, Denver, CO 80203.


Road / Driveway Access Permit: Driveway access to county roads requires a permit, in advance of driveway construction, from the County Road & Bridge Supervisor. Driveway culverts will have a MINIMUM length of thirty (30) feet. The inspector will determine the diameter and length of the culvert needed during the initial inspection. Driveway Access Permit applications may be obtained on line or from Road and Bridge Supervisor, Custer County Road and Bridge, P.O. Box 1669, 213 North Fourth Street, Westcliffe, CO 81252. Phone: (719) 783-2281. Consult website: http://www.custercountygov.com/pdf/DRIVEWAY ACCESS PERMIT.pdf Electrical / Plumbing Permits and Inspections: Any structure that will have electricity or plumbing requires a State permit before construction. Plumbing includes both water and propane. All electrical and plumbing construction is inspected by the State of Colorado, Department of Regulatory Agencies. Questions about methods of construction, permit applications, fees, and inspection requirements should be directed to the website: https://www.colorado.gov/dora/dpo The most efficient way to request an inspection is through the Online Permit System at: https://www.colorado.gov/pacific/dora/DPO_Electrical_Plumbing_Permits UTILITIES Electrical: Sangre De Cristo Electric Association, Inc., 29780 US Highway 24, Buena Vista, Colorado, 81211, toll free: 1-800-933-3823. Telephone: CenturyTel, P.O. Box 6001, Marion, LA 71260, toll free: 1-800-201-4099 for residential service, toll free: 1-800-824-2877 for repairs. Propane Gas: Propane gas suppliers are listed in the Westcliffe telephone directory.

http://www.custercountygov.com/pdf/DRIVEWAY%20ACCESS%20PERMIT.pdf

https://www.colorado.gov/dora/dpo

https://www.colorado.gov/pacific/dora/DPO_Electrical_Plumbing_Permits


BY-LAWS OF CUERNO VERDE OWNERS ASSOCIATION ARTICLE I — NAME AND LOCATION The name Cuerno Verde Owners Association is hereinafter referred to as the “Association.” Meetings of Members and Directors may be held at such places within the State of Colorado as may be designated by the Board of Directors. The Association mailing address is: CVOA, P.O. Box 116, Westcliffe, CO 81252. ARTICLE II — DEFINITIONS Section 1. “Association” shall mean and refer to Cuerno Verde Owners Association, its successors and assigns. Section 2. “Properties” shall mean and refer to that certain real property described in the Declaration of Protective Covenants for Cuerno Verde “The Pines”, a real estate subdivision, and recorded in Custer County, Colorado, April 18, 1973 in Book 167, Page 541, as amended by Amendment to Declaration of Protective Covenants for Cuerno Verde “The Pines” a real estate subdivision recorded December 23, 1974 in Book 170 at Page 487, and as further amended by Amendment to Declaration to Protective Covenants for Cuerno Verde Pines Subdivision, recorded June 23, 1980 in Book 178, Page 271, together with any other real property made subject to the provisions of the Declaration. Section 3. “Common Area” shall mean all real property owned by the Association for the common use and enjoyment of the Owners. Section 4. “Lot” shall mean and refer to any plot of land shown upon any recorded subdivision map of the Properties with the exception of the Common Area. Section 5. “Owner” shall mean and refer to the record owner, whether one or more persons or entities, of the fee simple title to any Lot which is a part of the Properties, including contract sellers, but excluding those having such interest merely as security for the performance of an obligation. Section 6. “Declaration” shall mean and refer to the Declaration of Protective Covenants, as amended, described in Section 2 above, recorded in the Office of the Clerk and Recorder, Custer County, Colorado. Section 7. “Articles” shall mean the Articles of Incorporation of the Association.


Section 8. “Member” shall mean and refer to those persons entitled to membership in the Association as provided in the Declaration and the Articles. ARTICLE III — VOTING RIGHTS As provided in Article IV of the Articles, no member shall be eligible to vote at a meeting of the Association unless all dues and fines are paid and liens satisfied. ARTICLE IV — MEETING OF MEMBERS Section 1. Annual Meetings. The annual meeting of the Members shall be held each year on the Saturday of Labor Day weekend at 11:00 AM. In the event the Board of Directors shall determine there is insufficient business to justify the expense of an annual meeting of Members, then the Board may cancel said meeting without further action. Section 2. Special Meetings. Special meetings of the Members may be called at any time by the President or by the Board of Directors, or upon written request by the Members who are entitled to vote one fifth (1/5) of the voting members. Section 3. Notice of Meetings. Written notice of each meeting of the Members shall be given by, or at the direction of, the secretary or person authorized to call the meeting, by mailing a copy of such notice, postage prepaid, at least ten (10) days before such meeting to each Member entitled to vote thereat, addressed to the Member’s address last appearing on the books of the Association, or supplied by such Member to the Association for the purpose of notice. Such notice shall specify the place, day and hour of the meeting and in the case of a special meeting, the purpose of the meeting. For the purpose of issuing notices, the Board of Directors may establish a record date for determination of membership, in accordance with the laws of Colorado. For additional information, please visit: http://www.cuernoverde.org and http://www.facebook.com/cuernoverde Section 4. Quorum. The presence at the meeting of Members entitled to cast, or of Members holding proxies and entitled to cast, one-tenth (1/10) of the votes of the membership shall constitute a quorum for any action, except as otherwise provided in the Declaration, the Articles of Incorporation, or these By-Laws. If, however, such quorum shall not be present or represented at any meeting, the Members entitled to vote there at shall have to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or be represented. Section 5. Proxies. At all meetings of Members, each Member may vote in person or by proxy. All proxies shall be in writing and filed with the secretary at least twenty-four (24) hours prior to the commencement of the meeting of Members at which such proxy is sought to be utilized. Every proxy shall be revocable and shall automatically cease upon conveyance by the Member


of his/her Lot, and shall also cease upon attendance in person by the Member who previously gave a proxy. No proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless otherwise specifically provided in the proxy. Section 6. Majority Vote. At any meeting of Members at which a quorum is present, the affirmative vote of Members representing one (1) vote more than fifty percent (50%) of the votes present in person or by proxy and entitled to be voted of Members shall be the act of the Members, unless the vote of a greater number is required by law, the Declaration, the Articles of Incorporation, or these By-Laws. ARTICLE V — BOARD OF DIRECTORS: ELECTION: TERM OF OFFICE Section 1. Number. The affairs of this Association shall be managed by a Board of no less than five (5) Directors. Directors must maintain good standing throughout their term. Section 2. Term of Office. Board members will be elected for three (3) year terms and staggered so that no more than two (2) Board members shall be elected in any given year. Section 3. Removal. Any Director may be removed from the Board, with or without cause, by a majority vote of the Members of the Association. In the event of removal of a Director, the successor shall be selected by the remaining Members of the Board and shall serve the unexpired term of the predecessor. Every Director whose removal is voted upon by the Members shall be entitled to speak and be heard prior to the vote for removal. Section 4. Resignations, Vacancies. Any Director may resign at any time by giving written notice to the president or to the secretary of the Association. Such resignation shall become effective at the time specified therein, and acceptance of the resignation shall not be necessary to make the resignation effective. Any vacancy occurring in the Board of Directors owing to resignation or death shall be filled by the affirmative vote of a majority of the Directors then in office, even though less than a quorum. A Director selected to fill a vacancy shall be elected to serve the unexpired term of the predecessor. Section 5. Compensation. No Director shall receive compensation for any service rendered to the Association. However, any Director may be reimbursed for actual expenses incurred in the performance of Association duties. Section 6. Meetings by Telephone. The Directors may hold meetings via teleconference and any action taken by the Board at such a conference call meeting shall have the same force and effect as such action taken at a meeting at which a quorum of the Board was physically present.


Section 7. Action Taken Without a Meeting. The Directors shall have the right to take any action in the absence of a meeting which they could take at a meeting by obtaining the written approval of all the Directors. Any action so approved shall have the same effect as though taken at a meeting of the Directors. Section 8. Election. All Members in good standing are eligible for election to the Board of Directors. Election to the Board of Directors shall be by secret written ballot. At such election, the Members or their proxies may cast, in respect to each vacancy, as many votes as they are entitled to exercise under the provisions of the Articles of Incorporation. The persons receiving the largest number of votes shall be elected. ARTICLE VI — MEETING OF DIRECTORS Section 1. Regular Meetings. Regular meetings of the Board of Directors shall be held from time to time as the Board by vote may determine, without written notice, at such place and hour as may be fixed from time to time by resolution of the Board. Should said meeting fall upon a legal holiday, then that meeting shall be held at the same time on the next day which is not a legal holiday. Meetings will be posted on the Cuerno Verde website and the Cuerno Verde Facebook page. Section 2. Special Meetings. Special meetings of the Board of Directors shall be held when called by the President of the Association, or any two (2) directors, after not less than seventy-two (72) hours notice to each Director. Section 3. Quorum, Majority Vote. The presence, in person or by proxy, at the meeting of the Board of Directors of one-third (1/3) of the Directors (but in no event less than two Directors) shall constitute a quorum, and the vote of a majority of those present and entitled to vote shall be an act of the Board of Directors. If however, such a quorum shall not be present or represented at any meeting, the Directors entitled to vote thereat shall have to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. Section 4. Waiver of Notice. Before, at, or after any meeting of the Board of Directors, any Director may waive, in writing, notice of such meeting and such waiver shall be deemed equivalent to the giving and receipt of such notice. Attendance by a Director at any meeting of the Board shall be a waiver of notice except when a Director attends the meeting for the express purpose of objecting to the transaction of business because the meeting is not lawfully called or convened. ARTICLE VII — POWERS AND DUTIES OF THE BOARD OF DIRECTORS Section 1. Powers. The Board of Directors shall have power to:


(a) adopt and publish rules and regulations governing the use of common areas and facilities owned by the Association, and the personal conduct of the Members, their tenants and their guests thereon, and to establish penalties for the infraction thereof; (b) suspend the voting rights, and right to use of any common recreational facilities, of a Member during any period in which such Member shall be in default in the payments of any assessment levied by the Association; such rights may also be suspended after notice and hearing before the Board, for a period not to exceed sixty (60) days for infraction of published rules and regulations; (c) exercise for the Association all powers, duties and authority vested in or delegated to this Association by these By-Laws, the Declaration, or by law, and not reserved to the membership by other provisions of said documents or the law; (d) declare the office of a Member of the Board of Directors to be vacant in the event such Member shall be absent from three (3) consecutive regular meetings of the Board of Directors; (e) employ a manager, and independent contractors, or such other employees as it deems necessary, and to prescribe their duties. Section 2. Duties. It shall be the duty of the Board of Directors to: (a) cause to be kept a complete record of all its acts and affairs and to present a statement thereof to the Members at the annual meeting of the Members, or at any special meeting when such statement is requested in writing by one-fifth (1/5) of the Members entitled to vote; (b) supervise all officers, agents and employees of this Association, and to see that their duties are properly performed; (c) as more fully provided in the Declaration, to:

(1) fix the amount of the annual assessment; (2) each annual assessment period is January 1 to December 31 of each calendar year; assessments will be mailed in December and are due by January 31 of the assessment year;

(3) foreclose the lien against any property for which assessments are not paid within thirty (30) days after due date or to bring an action at law against the Owner personally obligated to pay the same.

(d) issue, or cause an appropriate officer to issue, upon demand by any person, a certification setting forth whether or not any assessment has been paid. A charge may be made by the Board to the Member for the issuance of these certifications to cover cost. If a certification states an assessment has been paid, such certification shall be conclusive evidence of such payment;


(e) procure and maintain adequate liability and hazard insurance on property owned by the Association; (f) cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate; (g) cause the Common Area to be maintained; (h) cause the payment of taxes on the Common Area owned by the Association; (i) regulate and enforce the terms and conditions of the water augmentation plan as set forth in the certain decree issued by the District Court in and for Water Division No. 2, State of Colorado, Case No. 79CW152, in the Matter of the Application for Water Rights of Cuerno Verde “The Pines”, Inc., in the Antelope Creek, a tributary of Grape Creek, in Custer County, entitled “Findings of Fact, Conclusions of Law and Decree Approving Plan for Augmentation” (hereinafter referred to as the “Water Decree”); (j) assume ownership and control of, and maintain, common areas and equipment within the Properties including common drinking water sources; (k) administration and enforcement of the Declaration; (l) surveillance over property to prevent theft or vandalism; (m) repainting and replacement of signs; (n) surveillance over adjacent development and new county or state laws in order to maintain property owners’ rights and uphold values; and (o) appoint members of the Architectural Control Board. ARTICLE VIII — OFFICERS & THEIR DUTIES Section 1. Enumeration of Officers. The Officers of this Association shall be a President and Vice-President, who shall at all times be Members of the Board of Directors, a Secretary, and a Treasurer, and such other Officers as the Board may from time to time by resolution create. Section 2. Election of Officers. The election of Officers shall take place at the first meeting of the Board of Directors following each annual meeting of the Members. Section 3. Term. The Officers of this Association shall be elected annually by the Board and each shall hold office for one (1) year.


Section 4. Special Appointments. The Board may elect such other Officers as the affairs of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as the Board may, from time to time, determine. Section 5. Resignation and Removal. Any Officer may be removed from office with or without cause by the Board. Any Officer may resign at any time by giving written notice to the Board, the President or the Secretary. Such resignation shall take effect on the date of receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 6. Vacancies. A vacancy in any office may be filled by appointment by the Board. The Officer appointed to such vacancy shall serve the remainder of the term of the Officer replaced. Section 7. Multiple Offices. A person may hold more than one office simultaneously, except that no person shall simultaneously hold the offices of President and Secretary. Section 8. Duties. The duties of the Officers are as follows: President The President shall preside at all meetings of the Board of Directors and of the Members; shall see that orders and resolutions of the Board are carried out; shall sign all leases, mortgages, deeds, and other written instruments, shall co-sign all checks and promissory notes, and shall be the chief executive officer of the Association having general and active control of the affairs of the Association and general supervision of its officers, agents, and employees, subject to any management agreement authorized by the Board of Directors. Vice-President The Vice-President shall act in the place and stead of the President in the event of his/her absence, inability or refusal to act, and shall exercise and discharge such other duties as may be required by the Board or the President. Secretary The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board, its Executive Committee, and the Members; serve proper notice of meetings of the Board and of the Members; keep appropriate current records showing the Members of the


Association together with their addresses, and the names and addresses of their mortgagees, if any, and shall perform such other duties as required by the Board. Treasurer The Treasurer shall receive and deposit in appropriate CVOA bank accounts all monies of the Association and shall disperse such funds as directed by resolution of the Board of Directors; shall sign all checks and promissory notes of the Association; keep proper books of account; and shall prepare an annual budget and statement of income and expenditures to be presented to the membership at its regular and annual meeting and deliver a copy of each to the Members. The Treasurer shall perform all other duties incident to the office of Treasurer, and upon request of the Board shall post a bond satisfactory to the Board conditioned upon faithful performance of his duties. The cost of such bond shall be paid by the Association. ARTICLE IX — ARCHITECTURAL CONTROL Section 1. Review of Plans. Prior to building or erecting any structure (building, deck, fence, wall, canopy, awning, gazebo, pergola, tower, renewable energy system, or other improvement) detailed plans and a construction timeline for the project must be submitted and approved in writing by the Board of Directors. Members must receive approval to erect, alter, move, or remove any structure. No changes or alterations can be made to any structure (such as change of exterior or roof color or material) prior to submitting detailed plans and a project schedule describing proposed changes or alterations to the Architectural Control Committee and receiving Board approval in writing. All submissions must include detailed plans and specifications showing the nature, kind, shape, height, materials, color and location. The project must be in harmony with surrounding structures and topography. Section 2. Architectural Control Committee. The Architectural Control Committee shall be appointed by the Board and shall exercise its best judgment to see that all improvements, construction, landscaping, and alterations on land within the properties conform to and harmonize with existing surroundings and structures. The committee shall consist of three (3) persons or more appointed by the Board of Directors of the Association. Section 3. Procedures. The Architectural Control Committee shall review all submitted requests and plans. The Architectural Control Committee shall recommend approval, conditional approval or disapproval of such requests and plans to the Board of Directors for final determination. In the event the Board of Directors fails to take action within thirty (30) days of the Member's completed submission, approval will not be required, and Article IX will be deemed to have been satisfied.


Section 4. Majority Vote. A majority vote of the Architectural Control Committee is required for approval, conditional approval or disapproval of proposed requests and plans. The Committee decision will be submitted to the Board of Directors for final determination. Section 5. Written Records. The Architectural Control Committee shall maintain written records of all applications received and of all Committee responses. Section 6. No Liability. The Architectural Control Committee shall not be liable in damage to any Member submitting requests for approval or to any person within the Properties by reason of any action, failure to act, approval, disapproval, or failure to approve or disapprove with regard to such requests. ARTICLE X — WATER RIGHTS AND CONSERVATION Section 1. Decree Approving Plan of Augmentation. Pursuant to the June 10, 1980 Findings of Fact, Conclusions of Law, and Decree Approving Plan for Augmentation issued in the District Court in and for Water Division No. 2, State of Colorado, Case No. 79CW152 entitled “In the Matter of the Application for Water Rights of Cuerno Verde “The Pines”, Inc. in Antelope Creek, a Tributary of Grape Creek, in Custer County, (the “Decree”) the Association has certain rights and obligations with respect to the usage of water by Owners. The purpose of this Article VIII is to set forth such rights and obligations, provided, however, in the event of any conflict between the provisions of this Article VIII and the Decree, the provision of the Decree, or any authorized modification thereto approved by the Court, shall control. All Owners and the Association are bound by and subject to the provisions of the Decree, and any authorized modifications thereto approved by the Court. Section 2. Well Water. Well water may be withdrawn from the single unit or multiple unit wells within the Project drilled under authorized permits. All such water may be solely for domestic, in-house purposes and for occasional livestock watering. The phrase “domestic, in-house use” precludes any use of water for purposes outside the house, such as car washing, filling swimming or wading pools, or for irrigation of trees, shrubs or lawns. Section 3. Waste Water. All domestic sewage and waste water from residents in the Project must be disposed of through septic tanks and leaching fields, and non-evapo-transpiration systems. Section 4. Consumptive Use of Water. The consumptive use of water by Owners in the Project is subject to the following formula, set forth in the decree: Q = .0314a + 01b + 0.224c + 0.0074d + e Where: Q = consumptive use in acre feet of water per annum; a = the total number of year-round residences developed; b = the total number of weekend-vacation residences developed;


C = the total number of year-round residences keeping horses on their lots; d = the total number of weekend-vacation residences keeping horses on their lots; e = 0.4 acre feet, in lieu of storage. If the water available in any water year from July 1 through June 30 is not sufficient to replace the project subdivision depletions as calculated by the above formula, the Association shall institute mandatory means for curtailing domestic in-house use of water. Conversely, if the amount of replacement water available exceeds the projected depletions as calculated under the above formula, then the excess in any one year may be sold, leased, or otherwise disposed of by the Association. The Colorado State Engineer may curtail diversion of water through the wells located in the project at any time the consumptive use by the Owners exceeds the net amounts of consumptive use of water available under the Plan for Augmentation set forth in the Decree. Section 5. Annual Reports. On or before January 1 of each year, the Association shall report to the Division Engineer for Water Division No. 2 the name and address of its president, the number of residences then constructed available for occupancy, including a statement of the residences that are occupied year-round, the number which are utilized only for weekends and vacations, and specifying those lots that have horses located on them. Section 6. Water Meters, Semi-Annual Reports. The Owner of each lot must install, at such Owner‘s sole expense, a water meter or other measuring device satisfactory to the Division Engineer for Water Division No. 2. The Association shall supply the Division Engineer with bi-annual readings of such measuring devices on or before January 1 and July 1 of each year, and at such other times as the Division Engineer may by order require. Section 7. Water Usage Restrictions. In the event water consumption within the Project shall actually exceed, or is projected to exceed, the consumption use as determined in accordance with the formula described in Section 4 above, the Board shall impose mandatory water usage restrictions, including, without limiting the generality of the foregoing, limiting the rate, volume, and hours which water may be appropriated from the wells in the Project. The Board shall establish and levy fines upon every Lot and its Owner which violate such restrictions, which fine shall be due and payable in full by the Owners of such Lot upon demand by the Association. Section 8. Fines and Liens. The Board shall establish a schedule of fines for violations of any water usage restrictions, which fines shall be levied against every Owner who violates such restrictions, and shall constitute a lien upon the Lot of such Owner. Unpaid fines shall be subject to interest at the rate established by the Board from time to time and set forth in the schedule of fines. Such interest shall accrue commencing the date such fine is delinquent. The Association shall evidence such lien by recording a notice thereof signed by an officer of the Association in the records of the Custer County, Colorado Clerk and Recorder, setting forth the amount and date of such fine, the rate of interest thereon, the legal description of the Lot upon which the lien is being placed, and the Owner of such Lot. This lien shall always be


subordinate to any prior recorded first deed of trust upon such Lot. The lien maybe foreclosed by the Association in the same manner as a real estate mortgage. Foreclosure of this lien shall not preclude the Association from suing such Owners personally on this debt. Section 9. Enforcement by Court Action. The association may sue any Owner or other person to enforce compliance with the terms of the decree and water usage restrictions imposed by the Association in furtherance of the Decree. Furthermore, any person entitled to enforce the Decree shall be empowered to sue the Association on behalf of the Owners. The terms of the Decree, any modifications thereto approved by the Court, and any protective covenants against the Lots for the purpose of enforcing the Decree, shall be enforced by the Association. ARTICLE XI —INDEMNIFICATION OF DIRECTORS AND OFFICERS The Association shall indemnify every Director and Officer, and his/her heirs, executors and administrators against all loss, costs and expense, including counsel fees, reasonably incurred in connection with any action, suit or proceeding to which such person may be made a party by reason of being or having been a Director or Officer of the Association, except as to matters for which such person shall be finally adjudged in such action, suit or proceeding to be liable for gross negligence or willful misconduct. In the event of a settlement, indemnification shall be provided only in connection with such matters covered by the settlement where the Association is advised by legal counsel that the person to be indemnified has not been guilty of gross negligence or willful misconduct in the performance of his/her duty as such Director or Officer. The foregoing rights shall not be exclusive of other rights to which such Director or Officer may be entitled. All liability, loss, damage, costs and expense incurred if suffered by the Association by reason of, or arising out of, or in connection with the foregoing indemnification provisions shall be treated and handled by the Association as a common expense. Nothing contained in this Article shall, however, be deemed to obligate the Association to indemnify any Member who is, or has been, a Director or Officer of the Association with respect to any duties or obligations assumed, or liabilities incurred, as a Member or Owner of a lot under virtue of the Declaration. ARTICLE XII — BOOKS AND RECORDS The books, records and papers of the Association shall at all times, during reasonable business hours, be subject to inspection by any Member. The Declaration, the Articles of Incorporation and the By-Laws of the Association shall be available for inspection by any member at the principal office of the Association, where copies may be purchased at reasonable cost or viewed on the Cuerno Verde Owners Association Website.


ARTICLE XIII — ASSESSMENTS As more fully provided in the Declaration, each Member is obligated to pay to the Association annual and special assessments which are secured by a continuing lien upon the property against which the assessment is made. Any assessments not paid when due shall be considered delinquent. If the assessment is not paid within thirty (30) days after the due date, the assessment shall bear interest from the date of delinquency at the rate of twelve percent (12%) per annum, and the Association may bring an action of law against the Owner personally obligated to pay the same or foreclose the lien against the property, and interest, costs, and reasonable attorney’s fees of any such action shall be added to the amount of such assessment. No Owner may waive or otherwise escape liability for the assessments provided for herein by nonuse of the common area or abandonment of any lot. ARTICLE XIV — AMENDMENTS, GOVERNING PROVISIONS AND SPECIAL BY-LAWS Section 1. Required Approval. Except as provided below, these By-Laws may be amended, at a regular or special meeting of the Members, by a vote of two-thirds (2/3) of a quorum of Members present in person or by proxy and entitled to vote. Section 2. Governing Provisions. In the case of any conflict between the Articles of Incorporation and these By-Laws, the Articles of Incorporation shall control; and in the case of any conflict between the Declaration of Covenants and the Articles of Incorporation or these By-Laws, the Declaration of Covenants shall control. Section 3, Special By-Laws. Unless authorized by court order, Article X and Article VII, Section 2(i) of these By-Laws may not be altered, amended or repealed. ARTICLE XV — FISCAL YEAR The fiscal year of the Association shall be designated by the Board of Directors as January 1 through December 31.


COVENANTS

AMENDMENT TO DECLARATION OF PROTECTIVE COVENANTS

FOR CUERNO VERDE PINES SUBDIVISION Cuerno Verde “The Pines”, Inc., a Colorado corporation (“Grantor”), is the owner and developer of all the real property within the subdivision named Cuerno Verde Pines, in Custer County, Colorado. The Grantor has recorded the Declaration of Protective Covenants in the records of Custer County on April 18, 1973, in Book 167 at Page 541, and as amended on December 23, 1974, in Book 170 at Page 487. This Amendment to the Declaration applies to the entire subdivision known as Cuerno Verde Pines. Grantor hereby makes and declares the following Amendment to the Declaration previously recorded and shall restrict the uses of such real property through the following restrictive and protective covenants. 1. GENERAL PURPOSES. These covenants are made to create and preserve the subdivision in a desirable, attractive and beneficial condition, suitable in architectural design, materials and appearance; all for the mutual benefit and protection of the owners of lots in the subdivision. 2. USES: Exclusive of one or more plots reserved for commonly owned recreational facilities, each lot in the subdivision shall be used for one single family residence according to plat and covenant restrictions. No structures whatever, other than one private single family dwelling, together with a private garage and servants' quarters or guest facilities, and approved barn or shed for horses, for use in connection with said single family dwelling, shall be erected, placed or permitted to remain on any plot or lot. 3. APPROVAL OF CONSTRUCTION PLANS: No building or other structure shall be constructed erected or maintained on any lot, nor shall any addition thereto or change or alteration therein be made, until the complete plans and specifications- including, but not limited to, the floor, elevation, plot and grading plans, the specifications of principal exterior materials and color schemes, and the location, character and method of utilization of all utilities have been submitted to the Grantor and/or Architectural Control Board and by it or them approved in writing. Each building or other structure shall then be constructed, erected and maintained in strict accordance with the approved plans and specifications. At the time plans and specifications are submitted to Grantor and/or Architectural Control Board for approval, the person or persons submitting such plans and specifications shall also submit to Grantor/Board evidence satisfactory to Grantor Board that the Public Health Department of the State of Colorado or the appropriate official of Custer County, Colorado, or any other appropriate governmental agency, has approved his sanitary sewage disposal system. Sewage shall be disposed of only by and through a septic system of adequate dimensions and capacity and of a

CVOA

Covenants

The Covenants were not changed during the revision of the Handbook.


type approved by the Board of Health of the State of Colorado and/or the County of Custer. No septic tank or field system shall be nearer than fifty (50) feet to any building or plot line, except with the consent of the appropriate health officials of the County and/or State, and no sewage, waste water, trash, garbage or debris shall be emptied, discharged or permitted to drain into any body of water, or water-course, in or adjacent to the subdivision. All toilet facilities must be part of the residence or garage and shall be of a modern flush type and connected with a proper septic tank system. In passing upon all such plans and specifications, Grantor/Board shall take into consideration the suitability of the proposed building or other structure, including the materials of which it is built, to the lot upon which it is to be erected, the harmony of the structure with the surroundings and concept of the subdivision, and the effect of the building or other structure on the outlook from adjacent or neighboring lots. Grantor/Board agrees to use reasonable judgment in passing upon all such plans and specifications, but Grantor/Board shall not be liable to any person or persons for Grantor's/Board‘s decisions in connection with submitted plans and specifications unless it be shown that Grantor/Board acted with malice or wrongful intent. 4. WATER AND SEWER: Each structure designed for occupancy or use by human beings shall connect to an approved domestic water source and approved sewage disposal system. The owner shall, at his expense, install and use a domestic well and septic system. Such well and sewage disposal system must have all necessary public regulatory and governmental permits and approvals. The individual lot owner‘s water supply in all lots in Filings 3, 4, 5 and 6 shall be subject to the terms and conditions of the decree in Case No. 79CW152, in the District Court for Water Division No. 2, Pueblo, Colorado. Before a lot purchaser can construct a well on his property, he must obtain a well permit from the Colorado State Engineer’s Office in Denver, Colorado. Those lot owners obtaining well permits on the subdivision shall use such watering solely for domestic, in-house use in a single-family dwelling and occasional livestock water, and then only as permitted under the plan of augmentation described in the above Decree. Irrigation and all other uses not specifically permitted under the Decree shall be prohibited. Due to the climatic conditions that prevail in Custer County, Colorado, and based upon certain terms and conditions in the water augmentation plan, evapotranspiration sewage effluent disposal systems will not be allowed in this subdivision. Only sand filtration (engineered specifications which preclude evaporation at the surface) or acceptable absorption disposal systems shall be permitted in-the subdivision. Each lot owner must obtain State and, if applicable, County Health Department approval for the installation and use of an on-site sewage disposal system.


If and when a water and/or sanitation district is formed for the purpose of providing central water and/or sewage disposal services, by whatever authorized agency or municipality, the owner hereby consents to and shall cooperate with the formation of such district or districts and shall abide by all the rules, regulations and requirements of such district or districts, including the abandonment of any and all domestic wells and/or septic system or other private facilities installed by the owner and the utilization of facilities provided by the district or districts, as may be required by the district or districts. 5. FENCE: No fence, wall or similar barrier of any kind shall be constructed, erected or maintained on any lot without the prior approval of design and materials by the Grantor/ Board. No fences are to be built which would encroach upon public easements as provided. 6. EASEMENTS: Easements and rights-of-way are hereby reserved as shown or described on the recorded plat of the subdivision and for any public or quasi-public utility service purpose, together with the right of ingress and egress at any time for the purpose of further construction and repair. Unless permission is obtained from individual property owners, trespassing by pedestrians, equestrians, hikers, over-snow or off-road vehicles, etc., on privately property (other than within the easements provided) is prohibited. 7. DRIVEWAYS: No trees may be cut or grading done on any lot without the owner‘s obtaining prior written approval of the Grantor/Board. It is intended that driveways be kept to a minimum and be so located and constructed as to minimize dangerous intersections and retain the natural character of the area. Proper drainage facilities, including culverts, may be designated by the Grantor/Board as a condition for approval hereunder and will be provided by the owner at his expense. Minimum interference with pedestrian and equestrian movements will be observed. 8. SIGNS: No signs, billboards or other advertising structure of any kind shall be erected, constructed or maintained on any lot for any purpose whatsoever, except such signs as have been approved by Granter/Board for identification of residences; also, one sign of not more than eight (8) square feet advertising the property for sale or rent and signs used by the Grantor for selling the subdivision will be allowed. 9. TRASH: No trash, ashes, garbage, debris or other refuse shall be thrown or dumped on any land within the subdivision. There shall be no burning of refuse out of doors. Each property owner shall provide suitable receptacles for the temporary storage and collection of refuse and all such receptacles shall be screened from public view and protected from disturbance. 10. ANIMALS, PETS: No animals or poultry shall be allowed either temporarily or permanently, except the following: horses, dogs, cats and other usual and suitable household pets. A maximum of four (4) horses per five acre plot will be allowed, and four (4) adult dogs


and/or cats per household. The above exceptions are for household enjoyment only and shall not be raised, bred or boarded for any commercial purposes. If horses are kept, facilities shall be kept clean and odor free. To prevent overgrazing, horses shall be kept in a small corral not to exceed 25 percent of the lot size and shall only be allowed to graze occasionally in any remaining native grass area owned and fenced by owner. No stallions are to be kept, except by written permission of the Grantor/Board. 11. ANIMALS, PET CONTROL: Domestic animals may be kept, but shall not be left unattended. Pets shall not be permitted to run at large outside the confines of each owner‘s lot, neither elsewhere in the development nor on adjacent lands. Furthermore, animals must be kept within the “positive control” of their owner at all times. Positive control shall mean that the pet, when on the property of the owner, must be within the sight and earshot of an adult person on the property who is capable of summoning and controlling the pet, and when off the property (within the development or on adjacent lands) must be tethered with a leash no longer within ten (10) feet, one end of which shall be held by a person capable of controlling the pet. No tethered pet shall be left unattended off of the owner’s property. 12. TREES: Living trees naturally existing upon a lot, except to the extent necessary for construction purposes, shall not be cut, trimmed or removed from the properties, except that Grantor/Board may approve some thinning or trimming if it seems desirable. 13. LANDSCAPING: All surface areas disturbed by construction shall be restored promptly to their natural condition and replanted in native grasses; but, if owner desires further landscaping to change the character of the lot, he shall submit landscaping plans to Grantor/Board for approval. 14. SETBACK REQUIREMENTS: No building or structure shall be constructed within 50 feet of the center line of any public street or roadway or property line. The only exception to this shall be fences. The maximum building height shall not exceed 25 feet. All buildings of a principal nature shall also be set back a minimum of 75 feet from the center of any stream bed, whether or not such stream bed be of a permanent or temporary nature. 15. TEMPORARY STRUCTURES: No structure of a temporary or unsuitable character, such as a trailer, basement, tent, shack, garage, barn or other out-building, shall be used on any lot as a family dwelling, either temporarily or permanently. This does not apply to suitable motor homes, camping trailers, etc., which may be permitted on a short term basis of up to one (1) month. However, this covenant shall not restrict a building contractor or Grantor from maintaining a temporary office, trailer office, tool shed, lumber shed and/or sales office for the purpose of selling lots or erecting and selling dwellings.


16. PRINCIPAL DWELLINGS: The principal dwelling shall have a minimum fully enclosed ground floor area devoted to living purposes, exclusive of porches, terraces and garage, of 750 square feet, except that where the said principal dwelling is a one and one-half or two story dwelling, the minimum maybe reduced to 450 square feet of ground floor area, providing that the total living area of the one and one-half or two floors is not less than 750 square feet. All principal dwellings equipped with fireplaces shall have an approved fire screen located within the flue, such approval to be given in writing by the Grantor/Board. 17. CUERNO VERDE OWNERS ASSOCIATION: The purchaser of tracts in the subdivision, upon taking title to property in the subdivision, automatically becomes a member of the Cuerno Verde Owners Association, hereinafter referred to as the “Association”. Purchasers understand and agree, by taking title, that membership in and full support of the Association is an absolute requisite for every purchaser and owner of a tract or tracts in the subdivision. The purposes of the Association are to assume ownership and control of, and responsibility for, the common areas within the subdivision, to provide surveillance over the property, including, but not limited to, maintenance of signs and enforcement of protective covenants, administration of the water augmentation plan, and to attend to such other matters as may be determined necessary by the Association‘s Board of Directors. Purchasers understand and agree that payment of dues to the Association and full cooperation with the Association‘s decisions and policies are requirements concomitant with tract purchase and ownership; that periodic dues and/or fees will be required which must be promptly paid; and that nonpayment of such dues and/or fees will cause a recorded lien for the arrearages of such dues and/or fees to be placed against the defaulting members' tract or tracts. The Association will operate as a non-profit organization. Its books may be examined at any reasonable time by property owners, and copies of rules and Bylaws separate from these protective covenants will be provided to each purchaser upon request. The Association will not create any unreasonable burden, requirements or costs for property owners in the subdivision. Examples of the Association’s responsibilities, for purposes of illustration only, and not as any limitation of the Association‘s rights and duties, include the following: the regulation and enforcement of the terms and conditions of the water augmentation and court decree concerning the water rights obtained by the Subdivider to provide well permits for the subdivision; payment of taxes on community areas; maintenance of community areas and community equipment, such as the clubhouse, tennis courts, barn stables, corral and maintenance of common drinking water sources; enforcement of protective covenants, surveillance over property to prevent theft or vandalism; repainting or replacement of signs; surveillance over adjacent development and new county or state laws in order to maintain property owners' rights and uphold values. The Subdivider may retain control of and responsibility for all or some of the above functions for a period of three (3) years from the date of the first sale, or until thirty percent (30%) of the lots in the entire subdivision are sold, whichever first occurs.


18. COMMERCIAL ACTIVITY: No store, office or other place of business of any kind shall be erected or permitted upon any of the residential lots or any part thereof, and no commercial activity shall be permitted. 19. CONTINUITY OF CONSTRUCTION: All structures commenced in the subdivision shall be prosecuted diligently to completion and shall be completed within 180 calendar days of commencement, subject only to delays caused by inclement weather, Act of God, strike, or unless some other exception is granted in writing by Grantor or its assigns. 20. RESUBDIVISION: No lot may be resubdivided by an owner. 21. NUISANCE AND FIREARMS: No noxious, dangerous or offensive activity shall be carried on within the subdivision; nor shall anything be done or permitted which shall constitute a public nuisance therein. No hunting or discharge of firearms shall be allowed within the subdivision. 22. EFFECT AND DURATION OF COVENANTS: The conditions, restrictions, stipulations, agreements and covenants contained herein shall be for the benefit of and binding upon each tract in the subdivision, and each owner of property therein, his successors, representatives and assigns, and shall continue in full force and effect until January 1, 1999, at which time they shall be automatically extended for five (5) successive terms of ten (10) years each. 23. AMENDMENT: The conditions, restrictions, stipulations, agreements and covenants contained herein shall not be waived, abandoned, terminated or amended except by written consent of the owners of 75% of the privately owned land included within the boundaries of the subdivision. 24. ARCHITECTURAL CONTROL BOARD: Cuerno Verde Owners Association will have a specific committee designated by the Board of Directors as the Architectural Control Board. Each person wishing to erect a structure on his property shall submit his plans and specifications to the Architectural Control Board for approval before commencing construction. 25. ENFORCEMENT: If any person shall violate or threaten to violate any provisions of this instrument, it shall be lawful for the Association or any person or persons owning real property in the subdivision to institute proceedings at law or in equity to enforce the provisions of this instrument, to restrain the person violating or threatening to violate them, and to recover damages, actual and punitive, together with reasonable attorneys' fees, for such violations. 26. SEVERABILITY: Invalidation of any one of the provisions of this instrument by judgment, court order or decree shall in no way affect any of the other provisions, which shall remain in full force and effect.


CUERNO VERDE “THE PINES”, INC., a Colorado corporation By: (signed) Archie L. Wainwright, President ATTEST (signed) Jerry R. Dunn, Secretary STATE OF COLORADO ) CITY AND ) ss. COUNTY OF DENVER ) The foregoing instrument was acknowledged before me this 10th day of June, 1980, by Archie L. Wainwright as President, and Jerry R. Dunn as Secretary, of Cuerno Verde “The Pines”, Inc., a Colorado corporation. Witness my hand and official seal. My commission expires: 9-21-80. (signed) Shirley M. Akins Notary Public STATE OF COLORADO Filed for COUNTY OF CUSTER Reception No. 124184 Recorded June 23, 1980 at 9:00 o'clock AM, Book 178, Pages 271-280 by Hazel Schulze, Deputy, Mary Kattnig, Recorder.


Editorial Notes

This booklet was originally distributed in 1995 and again, with revisions approved by the members at the annual meeting, on September 3, 2016 by the Cuerno Verde Owners Association as a service to its members. Every effort was made to provide accurate information at the time of printing. However, due to the changing nature of much of this information, the Association assumes no responsibility or liability for any errors or omissions. The following comments are provided for clarification: 1. Article I of the By-Laws pertaining to Name and Location designates the principal office of the corporation (Association) as being located in Denver, Colorado. Since the Board of Directors assumed full control of the Association from the developer, Cuerno Verde “The Pines” Inc., in August, 1989, the Association‘s principal address is: Cuerno Verde Owners Association, P.O. Box 116, Westcliffe, CO 81252. 2. Article III of the By-Laws pertaining to Membership and Voting Rights refers to Class A and Class B Members. Class B membership was terminated when the developer turned over the governing of the Association to the Board of Directors. All members of the Association, by virtue of owning property within the subdivision, are Class A members.


Maps

Colorado Common Interest Ownership Act

REQUIRED POLICIES AND WHAT EACH ONE MUST COVER

Hindman Sanchez Community Association Law

The Colorado Common Interest Ownership Act (CCIOA) has required responsible governance policies for many years now. In 2005, the Colorado Legislature passed a bill that amended CCIOA to require associations to adopt policies, procedures, and rules and regulations concerning multiple areas of governance. There are currently nine required policies, each of which is discussed in this article by the Cuerno Verde Owners Association's legal counsel, Hindman Sanchez. In accordance with the required “Adoption of Policies” Policy, all nine policies are posted for Cuerno Verde Owners Association members review at the end of this synopsis.

1. Collection Policy

Collecting assessments is the life blood of community associations. The board of directors has a

fiduciary duty to collect assessments from owners. If the board fails to fulfill its fiduciary

responsibility to ensure assessments are received from all owners in a timely manner, it will, in

many instances, be unable to carry out its other responsibilities in the administration of the

association and the preservation, protection, and enhancement of property values in the

community. The minimum terms that must be contained with the policy (including the updates

as of January 1, 2014) are as follows:

• The due date of assessments;

• The date on which assessments are considered late;

• The amount of any late fees and/or interest that will be charged on late payments;

• The circumstances under which an owner may make a payment plan and the minimum

length of that payment plan, which must be at least six (6) months;

• How payments are applied to owners’ accounts;

• The legal remedies available to the association to collect the unpaid assessments; and

• That a notice must be given to the owner before their account is turned over for collection

efforts.

In addition to the provisions required by statute, the collection policy should also contain a

detailed progression of the steps which should be taken by the manager, treasurer, or other

person who has the primary responsibility for collecting delinquent assessments. Adopting a

policy which provides a systematic, disciplined approach to collecting delinquencies forms the

foundation of a successful program for avoiding financial loss to the association as a result of

owner delinquencies.

2. Covenant Enforcement Policy

Community associations use covenants, rules, and architectural standards/guidelines to maintain,

preserve, enhance, and protect property in the community, as well as to promote harmonious

community living, and preserve the common scheme and design of the community. In order to

achieve this, an association’s covenants must be enforced consistently and uniformly. Many

associations contract with a manager who regularly drives through the community and inspects

the properties. In other communities, these inspections are performed by board members and

committees. All community associations are required to have a policy in place setting forth the

steps to be taken to enforce an association’s covenants. While enforcement of covenants is

different in each community, the anatomy of good covenant enforcement practices should

encompass notice requirements, hearing procedures, and schedule of fines.

3. Conduct of Meetings Policy

Running an association meeting can be stressful. The Colorado Legislature required community

associations to have a Conduct of Meetings policy in order to provide structure and control to

meetings. This policy should address several items, including how long homeowners can speak

about a particular issue, what is inappropriate behavior at a meeting, notice requirements,

proxies, electronic voting, etc. The policy must also be updated to include provisions related to

the board making decisions outside of a meeting. The policy may also outline the proper

purposes for executive session of the board. Proper purposes are set forth in CCIOA as follows:

• Matters pertaining to employees of the association or the managing agent’s contract or

involving the employment, promotion, discipline, or dismissal of an officer, agent, or

employee of the association;

• Consultation with the association’s legal counsel regarding pending or imminent litigation

or matters that are privileged or confidential between attorney and client;

• Investigative proceedings concerning possible or actual criminal misconduct;

• Matters subject to specific constitutional, statutory, or judicially imposed requirements

protecting particular proceedings or matters from public disclosure;

• Any matter the disclosure of which would constitute an unwarranted invasion of

individual privacy; and

• Review of or discussion relating to any written or oral communication from legal counsel.

4. Inspection of Records Policy

Prior to January 1, 2013, community associations in Colorado were required to keep “financial

and all other records” reasonably available for examination and copying by a unit owner and

such owner’s authorized agents. On January 1, 2013, the law changed with a bill (HB 12-1237)

which amended CCIOA to provide an exclusive list of documents considered records of an

association for purposes of inspection by owners. Pursuant to this revised law, in addition to any

records specifically defined in an association’s governing documents, associations must maintain

the following records 1) detailed records of receipts and expenditures; 2) financial statements for

the past three years and tax returns for the past seven years; and 3) financial records sufficiently

detailed to enable the association to comply with C.R.S. §38-33.3-316(8) (i.e. production of a

statement of unpaid assessments).The revised records laws further provide that all records

maintained by an association must be available for examination and copying by a unit owner or

the owner’s authorized agent. As such, owners must be provided access, with limited

exceptions, to the financial records referenced above. The Inspection of Records Policy should

clearly address the following: How Does an Owner Request Information? An association may

require unit owners to submit written requests, describing with reasonable particularity the

records sought, at least ten (10) days prior to inspection or production of the

documents. Examination and copying times can also be limited to normal business hours or the

next regularly scheduled board meeting if the meeting occurs within thirty (30) days after the

request. Most importantly, the policy cannot require owners to demonstrate a proper purpose for

the inspection and cannot request that a purpose be stated. Can you Charge for the Document

Production? Yes. The cost of production does not have to be met by the association. A

reasonable charge may be imposed and can be collected in advance to cover the costs of labor

and materials incurred for the production of requested documents. The policy should clearly

state how the association will calculate charges for production. Remember, board members are

fiduciaries, meaning that they are entrusted to protect the assets of the association and be

accountable.

5. Conflict of Interest Policy

Owners have the right to have the directors be loyal to just the interests of the common interest

community, and not to the self-interests of the directors. Where a conflict arises, a director is

responsible for notifying the board of the conflict and removing himself from participation in any

decisions regarding the subject matter of the conflict. In 2011, the Legislature addressed conflicts

of interest again and passed a bill that required community associations’ conflict of interest

policies to:

• Define when conflict of interests exist;

• Adopt procedures to follow when a conflict of interest exists, including disclosure rules

and when a conflicted board member must recuse themselves from voting; and

• Require a periodic review of conflict of interest policies.

The intent of the statute is to promote open disclosure of conflicts of interest that would benefit

the director separate from his or her interest as an owner.

6. Investment Policy

Every board is faced with the difficult task of raising money and managing association funds

while trying to keep annual assessments low and special assessments to a minimum. Colorado

law requires that community associations have a policy regarding the investment of reserve

funds. The association’s investment policy should address all objectives, delegation, asset mix,

ability and diversification, investment manager accountability, transactions, reporting

requirements, and cash flow requirements. Investment policies should also be developed for a

variety of other reasons, including:

• It is far easier to earn money than it is to raise it. An incremental 3-4 percent of total

return can, over time, make an enormous difference in the association’s financial health;

• Income from investments can reduce the need for special assessments;

• Many associations likely already have an informal investment policy. However, large

sums invested for long periods of time are better invested under a standard investment

policy; and

• A carefully developed investment policy discharges the fiduciary duty and helps protect

board members from investment liability.

7. Adoption of Rules and Policies Policy

Community associations are also required to have a policy which discusses the procedures for

the adoption and amendment of policies, procedures, and rules. This policy should clearly state

the process for adoption and/or amendment of policies. The declaration, articles of

incorporation, and bylaws will generally guide the specifics for governance; however, this

document will supplement those and provide owners with more information about how the

association’s actions are managed.

8. Alternative Dispute Resolution (ADR) Policy

The legislature required that community associations have an Alternative Dispute Resolution

(ADR) Policy, although it does not mandate what needs to be included. CCIOA encourages

community associations to utilize mediation as part of their dispute resolution process. The

declarations for some communities may require mediation, arbitration, or both, for resolving at

least some disputes. Even without mandatory mediation provisions, virtually all Colorado courts

now require parties in a lawsuit to participate in some form of mediation process before going to

trial.

9. Reserve Study Policy

Under Colorado law, community associations are not required to have a reserve

study. Associations are, however, required to have a policy that addresses when a reserve study

is going to be done and how often it will be updated, whether the study is based on a physical

and financial analysis, and whether there is a funding plan for the work recommended by the

study. All community association policies must also be consistent with its governing documents.

CCIOA Required

Responsible Governance Policies

1. Policies for collection of assessments; 2. Board member conduct; 3. Conduct of meetings; 4. Enforcement of covenants; 5. Inspection of records; 6. Investment of reserve funds; 7. Adoption of policies and procedures; 8. Alternative dispute resolution; and 9. Reserve Study

Collection of Assessments and Payment Plan Page 1

Cuerno Verde Owners Association Policy on Collection of Assessments and Fines

Together with Payment Plan Required by C.R.S. 38-33.3-209.5

WHEREAS the Board of Directors of Cuerno Verde Owners Association (CVOA) is charged with the responsibility of collecting assessments for common expenses from Owners; and WHEREAS, from time to time, Owners become delinquent in their payments of these assessments and fail to respond to the demands from the Board to bring their accounts current; and WHEREAS the Board deems it to be in the best interest of CVOA to adopt a uniform and systematic procedure for dealing with delinquent accounts in a timely manner and further believes it to be in the best interest of CVOA to refer these accounts promptly for collection so as to minimalize CVOA’s loss of assessment revenue; NOW THEREFORE, BE IT RESOLVED that the Board of Directors of the Cuerno Verde Owners Association adopts the following policy and practice, effective 30 days after distribution to Owners. This document sets forth CVOA’s policy regarding the collection of assessments pursuant to CVOA’s Covenants and Bylaws and by the Colorado Common Interest Ownership Act. The Board establishes CVOA’s fiscal year, January 1 to December 31, as the Regular assessment period. Payments are due on the last day of January and are delinquent after 30 DAYS. 1. Assessments in General. CVOA has a duty to levy regular and special assessments sufficient to perform its obligations under the governing documents and Colorado law. Regular assessments are levied annually and are payable on January 31 of each fiscal year. 2. Obligation to Pay Assessments. Each assessment or charge is an obligation of the Owner at the time the assessment or other sums are levied. Each assessment or charge is also a lien on the Owner’s property from and after the time CVOA causes a Notice of Delinquent Assessment Lien to be recorded with the County Clerk’s Office. 3. Notice of Assessments. CVOA will give the Owners notice before any increase in the annual assessment or any special assessment. Notice will be sent by first-class mail to addresses on the membership register as of the date of notice. It is the responsibility of each Owner to advise CVOA of any mailing address changes. The Board of Directors may elect, from time to time, to provide periodic statement of assessments and charges, but lack of statements does not relieve the Owners of the obligation to pay the assessments.


4. Designation of Agent. The Board of Directors may designate an agent or agents to collect assessment payments and administer the Collection Policy. The designated agent may be an officer of CVOA, manager, bookkeeper, banking institution, trustee company, law firm, or other appropriate agent. 5. Due Date/Delinquency Date of Assessments. Unless otherwise specified by the Board, an assessment is due on January 31, or in the case of a special assessment, on the first day of the month for which it is due. An assessment, or any portion thereof, is delinquent if it is not received as directed by the Board or its designated agent 30 DAYS after it is due. 6. Charges on Delinquent Amounts. After 30 DAYS past due, an assessment, or any portion thereof, that is delinquent shall incur a late charge of 12% interest per annum assessed monthly, retroactive to the initial delinquency date. Collection charges, if any, will also be added at that time. 7. Return Check Charges. A return check fee, not to exceed $20, shall be assessed against an Owner in the event any check or other instrument attributable to, or payable for the benefit of, the Owner is not honored by the bank or is returned by the bank for any reason whatsoever, including, but not limited to, insufficient funds. 8. Interest and Collection Charges. Any costs and fees incurred in processing and collecting delinquent amounts, including, without limitation, late and interest charges, charges for preparation of delinquency notices or referral to collections, postage and copies, and attorney’s fees and costs shall become an additional charge against the Owner and the Owner’s property and shall be subject to collection pursuant to this Policy. 9. Application of Payment. Payments shall be applied first to the most delinquent assessments, then to late fees. 10. Delinquency Notices. Owners delinquent 30 DAYS will receive a Notice of Delinquent Assessment and Intention to send the account to a designated collection agent within 30 days. Accounts remaining delinquent more than 60 days will have a lien filed against the Owner’s property. If the account is not brought current within 60 days of the due date, it will be turned over to the CVOA’s contracted designated collection agent for collections, according to state and federal fair debt collection laws. These collection procedures will include, but not be limited to, Notice of Intent to Lien, Lien, and Foreclosure proceedings. All other expenses, interest, fees, and charges incurred in the collection of a delinquent assessment shall be the sole responsibility of the property Owner and be payable prior to curing the delinquency status. Before turning over any account to a designated collection agent, the Association must follow the procedures regarding payment plans, attached hereto. 11. Collection of Fines. When fines reach $400.00, they will be turned over to CVOA’s designated collection agent for collection after a 30-day notification of intent to turn over to collections is mailed to the property owner.


12. Address of the Association and the Board of Directors. Owners should make payments to the address as directed by the designated agent. If no address is given, payments, request for payment plans, andwritten correspondence (including responses and changes to mailing address) should be sent to CVOA at the following address:

Cuerno Verde Owners Association PO Box 116 Westcliffe, CO 81252

13. Void Provisions. If any provision of this Policy is determined to be null and void, all other provisions of the Policy shall remain in full force and effect.

Payment Plan Policy (follows)


Cuerno Verde Owners Association Payment Plan Policy

WHEREAS, pursuant to HOA Debt Collection Bill (HB 1276), the Board of Directors of Cuerno Verde Owners Association (CVOA) is required to adopt reasonable guidelines regarding a payment plan policy in which an owner may make partial payments to CVOA for delinquent regular or special assessments or any other amount owed to CVOA. NOW, THEREFORE, BE IT RESOLVED, in order to comply with the procedures set forth by HB 1276 and the Colorado Common Interest Ownership Act, that the following guidelines and procedures are established for the establishment of a payment plan, and is to be known as the “Payment Plan Policy” of CVOA (hereinafter the “Policy”).

1.0 Purpose. The purpose of this Policy is to assist Owners in remedying delinquencies and

remaining current on the payment of amounts owed to CVOA by establishing orderly procedures by which Owners may make partial payments to CVOA for amounts owed without accruing additional penalties.

2.0 Eligibility. To be eligible for a payment plan pursuant to CVOA’s payment plan policy, an Owner must meet the following criteria:

a) The Owner must currently be delinquent in the payment of regular assessments, special

assessments, or any other amounts owed to CVOA;

b) The Owner must not have defaulted on a prior payment plan within the prior two-year period; and

c) The Owner must submit a signed payment plan, as defined below, along with the

Owner’s initial payment to the address designated by CVOA for correspondence.

3.0 Payment-Plan Schedule and Guidelines. CVOA hereby adopts the following payment guidelines and makes the following payment-plan schedule available so that Owners can make partial payments for delinquent amounts owed:

a) Requirements of Payment Plan Request. Within 30 days of the date of the initial letter

informing the Owner of the availability of a payment plan, an Owner must submit a signed acceptance of the payment-plan schedule described below to CVOA.

b) Term. The term of the payment-plan schedule is 6 months, and the Owner must make equal monthly installments.

c) Date of Partial Payments under Plan. The Owner must submit the first monthly

installment payment under the plan contemporaneously with submission of the Owner’s payment-plan agreement, which must be signed by the Owner. The Owner must make all additional monthly installments under the payment plan so that the payments are received


by CVOA no later than the first (1st) day of each month. The Owner may pay off, in full, the balance under the payment plan at any time. All payments must be received by CVOA at the designated mailing address or lock box for all payments. Payments may be made by check or certified funds.

d) Correspondence. Any correspondence to CVOA regarding the amount owed or the

payment plan, or similar correspondence, must be sent to the address designated by CVOA for correspondence.

e) Amounts Coming Due During Plan. Owners are responsible for remaining current on

all assessments and other charges coming due during the duration of the Owner’s payment plan and must, therefore, timely submit payment to CVOA for any amounts coming due during the duration of the Owner’s payment plan.

f) Additional Charges. An Owner’s balance owed to CVOA shall not accrue late fees or

other monetary penalties while the Owner is in compliance with a payment plan under CVOA payment-plan schedule. Owners in a payment plan are responsible for reasonable costs associated with administering the plan.

g) Other Payment Arrangements. At the discretion of the Board of Directors, and only

for good cause demonstrated by an owner, CVOA may accept payment arrangements offered by owners that are different from the above-cited guidelines, provided that the term of payments is no less than six (6) months and no longer than twenty-four (24) months. CVOA’s acceptance of payment arrangements that are different from the approved payment-plan schedule and guidelines hereunder shall neither be construed as a waiver of these guidelines nor authorize an owner to be granted a payment plan that differs from the one herein provided.

4.0 Default. If an Owner fails to timely submit payment in full of any installment payment

(which installment payment must include the principal owed, the administration fees assessed to the plan, and interest charges), or fails to timely pay any amount coming due during the duration of the plan, the Owner will be in default. If an Owner defaults under a payment plan, CVOA may proceed with collection activity without further notice. If CVOA elects to provide a notice of default, the Owner will be responsible for all fees and costs associated with the drafting and sending of the notice. In addition, the Owner is hereby on notice that he/she will be responsible for any and all costs, including attorney’s fees, of any additional collection action that CVOA pursues.

5.0 Board Discretion. Any Owner who is not eligible for a payment plan under CVOA

payment-plan policy may submit a written request to the Board for CVOA to grant the Owner a payment plan. Any request must be directed to the person or entity currently handling the collection of the Owner’s debt (i.e., the Treasurer). The decision to grant or deny a payment plan, and the terms and conditions for any plan, will be at the sole discretion of CVOA’s Board of Directors.

7.0 Definitions. The definitions contained in the Declaration of Covenants and the Bylaws of Cuerno Verde Owners Association, Inc. are hereby incorporated herein by reference.


8.0 Severability and Legal Interpretation. If any provision herein is determined by a court with jurisdiction to be invalid or unenforceable in any respect, the determination shall not affect the validity or enforceability of any other provision, and this Policy shall be enforced as if the provision did not exist. Further, the purpose of this policy is to satisfy the legal requirements of HB 1276 and the Colorado Common Interest Ownership Act. If any provision of this Policy is deemed by a court with jurisdiction to be ambiguous or in contradiction with any law, this Policy and any provision shall be interpreted in a manner that complies with an interpretation that is consistent with the law.

IT IS FURTHER RESOLVED that this Payment Plan Policy is effective upon adoption, to remain in force and effect until revoked, modified, or amended.

Board Member Conduct Page 1

Cuerno Verde Owners Association Policy on Board Member Conduct

C.R.S. 38-33.3-209.5

The Colorado Revised Nonprofit Corporation Act, (CRNCA) imposes upon Directors and Officers obligations regarding their conduct and dealing with conflicts of interest. This policy incorporates those statutory provisions and imposes additional requirements. Standards of Conduct:

A Board member and officer shall discharge his or her duties in good faith, with the care that an ordinarily prudent person would exercise in a like position, and under similar circumstances, and in a manner that he/she reasonably believes to be in the best interests of the CVOA. The duty of care includes the following:

- Board member should have knowledge of the provisions in the CVOA’s Articles of Incorporation, Bylaws, Declaration of Covenants, procedures, regulations, and policies.

- Board members act through the Board as a governing body and have no authority

to make decisions or authorize action without having been given express authority to do so by the Board.

- Board members should attend board and membership meetings and diligently

pursue any duties and tasks they are directed or volunteer to complete.

- Officers are designated certain duties by the CVOA Bylaws and should fulfill those duties and other duties normally associated with that office. Where an officer is uncertain as to authority to act in that capacity, he/she should seek guidance from the Board.

Standards of Behavior: Board members and officers must understand that they are managing a business. Their behavior should be professional. Professional behavior includes courtesy towards CVOA members, CVOA managers, CVOA committee members, and CVOA vendors. Professional behavior includes the avoidance of profanity or other inappropriate language and conduct, whether at meetings or in other places. Professional behavior includes putting the interests of the owners and the CVOA ahead of any personal agenda the director or officer may have. Code of Ethics. In addition to the above, each Director and the Board as a whole shall adhere to the following Code of Ethics:


(a) No Director shall use his/her position for private gain, including for the purpose of enhancement of his/her financial status through the use of certain contractors or suppliers. (b) No contributions will be made to any political parties or political candidates by the Association. (c) No Director shall solicit or accept, directly or indirectly, any gifts, gratuity, favor, entertainment, loan or any other thing of monetary value from a person who is seeking to obtain contractual or other business or financial relations with the Association. (d) No Director shall accept a gift or favor made with the intent of influencing a decision or action on any official matter. (e) No Director shall receive any compensation from the Association for acting as a volunteer. (f) No Director shall willingly misrepresent facts to the members of the community for the sole purpose of advancing a personal cause or influencing the community to place pressure on the Board to advance a personal cause. (g) No Director shall interfere with a contractor engaged by the Association while a contract is in progress. All communications with Association contractors shall go through the Board President or designee or be in accordance with policy. (h) No Director shall harass, threaten, or attempt through any means to control or instill fear in any member, Director or agent of the Association. (i) No promise of anything not approved by the Board as a whole can be made by any Director to any subcontractor, supplier, or contractor during negotiations. Conflicts of Interest:

“Conflicting Interest Transaction” means any relationship, whether contractual, financial, familial, or ownership between a director/officer and the CVOA or a person related to a director/officer and the CVOA or an entity in which the director/officer has an interest and the CVOA. “Conflicts of Interest” shall mean a Conflicting Interest Transaction or other interest in a matter that could result in a director or officer violating their Duty of Care as set forth in the CRNCA. The CVOA will make no loans to any director or officer. Where a board member has a Conflict of Interest, any director or officer who has the relationship that creates the Conflicting Interest Transaction or who has a Conflict of Interest shall disclose to the Board of Directors the material facts as to that relationship or


conflict. Where a director or officer is uncertain as to whether they have a conflict, they should error on the safe side and disclose material facts regarding the relationship. The CVOA shall enter into a Transactions when a board member has identified a conflict of interest only if the following are met:

1. The Transaction is fair to the CVOA, 2. The material facts of the relationship giving rise to the Conflicting Interests

Transaction have been made known to the Board, and 3. The Board, acting in good faith and by majority vote without the participation

of the conflicted director, approves the Transaction. Where a director or officer has a Conflict of Interest, they shall abstain from any vote or decision related to the matter involving the Conflict of Interest. Directors and officers need to be diligent in determining if a conflict exists. Conflicts can be subtle, such as where improvements are being made adjacent to certain lots , one of which is that of a director. This Policy shall be reviewed by the Board periodically.

Conduct of Meetings Page 1

Cuerno Verde Owners Association Policy on Conduct of Meetings Required by C.R.S. 38-33.3-209.5

Meetings of Members:

Annual meetings of members are held primarily to elect members to the Board of Directors but may include other matters that have properly come before membership pursuant to the Declarations of the Bylaws. Special meetings of members may be called pursuant to the Bylaws. Notice:

1. Notice of membership meetings shall be given pursuant to the Bylaws by first class prepaid postage in the U.S. Mail to the member’s address of record with the CVOA. If members change their address, it is critical that they update the address of record by notifying the CVOA Secretary or Treasurer.

2. Notice will be posted on the CVOA webpage: http://www.cuernoverde.org

3. Notice will also be posted at different locations on CVOA property.

If a member desires to receive notice by email in addition to U.S. Mail, the member must request to receive notice by email and must provide the CVOA with their email address. The request should be in writing, and notice to cease email notification should likewise be in writing. Procedures for conduct of membership meetings:

1. Colorado law requires that the election of Board members be by secret written ballot when their positions are contested.

2. Votes are to be counted by a neutral third party or by a committee of volunteers. Volunteers shall be lot/property owners, but not Board members or candidates for Board positions, who are selected in a fair manner by the presiding officer.

3. Members may vote at meetings without attending by appointing a proxy to

vote for them. Proxy forms will be included with the notice of meeting. While other forms can be used, it is recommended that the CVOA form be used to avoid the possibility of the proxy being determined invalid.

4. The CVOA will use a simplified form of Parliamentary Procedure in the

conduct of meetings. Members shall have the opportunity to speak on any topic during the discussion period prior to voting. The Board may place


limitations on the length of time members are allowed to speak and the number of speakers per side.

5. Members shall conduct themselves appropriately. Speaking out when not

authorized or interrupting proceedings will not be permitted. Name calling, use of foul language, or any form of aggressive behavior will not be permitted. If a member cannot properly conduct himself or herself, law enforcement will be contacted to remove the member and/or the meeting will be adjourned.

6. Members or the member's representative in attendance may not record the proceedings by any means or in any fashion.

Meetings of the Board of Directors:

1. Meetings of the Board of Directors are open for attendance by members or their properly designated representatives.

2. At the beginning of each meeting, members in attendance will be given

agendas for the meeting. After the meeting is called to order, and after the routine matters, such as officer/committee reports have been taken care of, members shall have an opportunity during a “Member’s Forum” period to make comments or voice concerns on any matter on the agenda or other matters of concern to them. The Board may limit the length of time any particular member may speak on any one topic and may limit the number of members allowed to speak on any one topic.

3. Owner Input. After a motion and second has been made on any matter to be

discussed, at a time determined by the Board, but prior to a vote by the Directors, Owners, or their designated representatives, present at such time shall be afforded an opportunity to speak on the motion as follows:

a. The Chair will ask those Owners present to indicate by a show of hands who wishes to speak in favor or against the motion. The Chair will then determine a reasonable number of persons who will be permitted to speak in favor of and against the motion and for how long each person will be permitted to speak. The Chair shall also announce the procedure for who shall be permitted to speak if not everyone desiring to speak will be permitted to speak.

b. Following Owner input, the Chair will declare Owner input closed and

there shall be no further Owner participation on the motion at hand unless a majority of the Board of Directors votes to open the discussion to further Owner participation.


4. Members in attendance at Board meetings shall conduct themselves appropriately. Speaking out when not authorized or interrupting proceedings will not be permitted. Name calling, use of foul language, or any form of aggressive behavior will not be permitted. If a member cannot properly conduct himself or herself, law enforcement will be contacted to remove the member and/or the meeting will be adjourned.

5. Members or a member's representative in attendance may not record the

proceedings by any means or in any fashion. Action without a Meeting: Pursuant to C.R.S. 7-128-202, and the Bylaws at Article V, Section 7, the Board is entitled to take action without a meeting. The following procedure will be followed when action is to be taken without a meeting:

- A notice via email will be sent to each Board member by the President, or another Board member authorized to do so by the President, setting forth the action that is proposed to be taken, the time by which a response is to be received from board members, and that the failure of a Board member to respond within the time stated will have the effect that the Board member has abstained from voting and has not called for a meeting.

- Board members shall either vote for the action, vote against the action, abstain

from voting, or fail to respond.

- The proposed action is deemed taken if the affirmative number of votes received within the time to respond equals or exceeds the minimum number of votes required to pass the action at a meeting at which all Board members were present and no Board member has demanded by email within the time for a response that a meeting be held.

- The action taken shall be effective at the expiration of the time period for a

response.

Enforcement of Covenants with Fine Schedule Page 1

Cuerno Verde Owners Association Policy on Enforcement of Covenants and Rules

Required by C.R.S. 38-33.3-209.5 The following policy applies to routine covenant or rules enforcement. It does not apply to collection of assessments, emergency situations, or any situation where the Board determines that deviation from the policy is appropriate. The CVOA manager and members of the Board are not available on the property 24 hours a day. Therefore, they rely on members to report incidents of covenant or rule violation. When any member (including Board members) observes a covenant violation and desires to report it, the report must be in writing and given to the CVOA manager or a member of the Board. At a minimum, the report must contain the following information:

1. Name of violator, if known, or legal property description (lot), if known; 2. Date and time incident was observed; 3. Description of the incident (photographs are preferred); and 4. Name of the member reporting the incident.

If a member/owner is not willing to put the report in writing, the Board will take

the position that the violation was not sufficiently severe enough to warrant enforcement. In taking enforcement action on any violation, the Board must be able to prove that the violation occurred. Whether it can prove the violation will, in most cases, depend on the member observing the incident, photographs if provided, and his or her willingness to come forward.

The Board will keep the name of the member/owner reporting the violation

confidential until and unless it becomes necessary as part of enforcement proceedings for that member to be identified.

When the violation is reported, the Association will take the following actions: 1. Send Courtesy Reminder Letter to owner.

2. After 15 days, send a notice by U.S. mail to the owner of the violating

property and to the resident, if different from the owner. The notice will state the particulars of the violation and request that the violation be corrected within ten days or the Board contacted within that time with an explanation of the owner’s position on the violation.

3. If the violation has been corrected within the ten (10) days, no further action

will be taken.


4. If the violation has not been corrected, or if the owner/member has contested the particulars of the report in writing and requested a hearing in writing, the Board will set the matter for hearing..

5. If the Board determines that the violation has not been corrected, a second

notice after 30 days from the date of the first notice will be sent to the owner and resident, if different from the owner. The notice shall inform the owner of a time and place of a hearing, where the owner may appear before the Board to set forth any defenses or explanations the owner may have.

6. Impartial Decision Maker. Pursuant to Colorado law, the alleged Violator has

the right to be heard before an “Impartial Decision Maker”. An Impartial Decision Maker is defined under Colorado law as "a person or group of persons who have the authority to make a decision regarding the enforcement of the association's covenants, conditions, and restrictions, including architectural requirements, and other rules and regulations of the association and do not have any direct personal or financial interest in the outcome. A decision maker shall not be deemed to have a direct personal or financial interest in the outcome if the decision maker will not, as a result of the outcome, receive any greater benefit or detriment than will the general membership of the association." Unless otherwise disqualified pursuant to the definition of Impartial Decision Maker, the Board may appoint to act as the Impartial Decision Maker the entire Board, specified members of the Board, any other individual or group of individuals

7. After the hearing, the Board shall then consider the circumstances and determine if a fine or other enforcement action is necessary. The owner shall be informed of the Board’s decision subsequent to the hearing by written notice, sent regular U.S. mail within a reasonable time, not to exceed 30 days. Notice shall be deemed received five (5) days after mailing.

8. The nonappearance of an owner at the hearing will not prevent the Board from

considering the violation and determining what enforcement action to take. Time line : Day 1 courtesy reminder, Day 15 first official notice of violation, Day 45 second official notice and date of hearing notice, Day 75 begin fines and/or legal action

9. Fines levied shall be determined according to the following schedule:

Schedule of Fines - Covenant Violations Following violations are subject to fines up to $250.00

- failure to install water meter and submit initial reading - Cov. 4 - failure to submit semiannual water meter readings by due dates (January 1 & July 1) per

occurrence Cov. 4


- erecting/installing sign (excludes contractor during construction or realtor/owner for sale sign) Cov. 8

- failure to install trash receptacle screen (properly store) Cov. 9 - possession of disallowed animals Cov. 10 - horse grazing over twenty-five percent (25 %) of a lot Cov. 10 - storage/parking campers, "fifth wheels", motor homes, travel trailers in open sight for

more than thirty (30) days per year Cov. 15 Following violations are subject to fines up to $500.00

- failure to maintain exterior appearance of structures Cov. 1 - failure to maintain acceptable property appearance/cleanliness Cov. 1 - failure to properly dispose of construction material/debris Cov. 3 - construction/alteration of a driveway without Board approval Cov. 7 - failure to properly dispose of vegetative debris Cov. 9 - conducting a commercial activity Cov. 18

Following violations are subject to fines up to $1000.00

- initiating new construction or modification without Board approval Cov. 3 - deviations from Board approved plans Cov. 3 - initiating earthwork or site alteration without Board approval Cov. 3 - failure to maintain continuity of construction Cov. 19 - erecting/altering a fence without Board approval Cov. 5 - tree removal without Board approval Cov. 12 - tree removal from common areas or private properties Cov. 12 - operating a motor vehicle in common areas Cov. 21

Following violations are subject to fines up to $5000.00

- blasting (explosive or pneumatic) without fifteen (15) days notice for Board approval Cov. 3

- burning of refuse or vegetative debris Cov. 9 - hunting/discharge of firearms within Cuerno Verde subdivision properties Cov. 21

Once a fine is assessed, it is subject to a ten dollar ($10) per day accrual fee.

10. Whether the violation is serious or regular violation will be based on the violation’s impact on the CVOA, to be determined in the sole discretion of the Board.

11. When fines accrue against an owner in the amount of $5000.00 or more, the

Board shall take the position that the imposition of fines is ineffective in accomplishing compliance and will then determine what further enforcement action is necessary.

12. Nothing in this policy requires the Board to assess fines before taking other

forms of enforcement.

13. Any fines assessed shall be added to amounts due by the owner and shall be a lien against the property and enforceable as a lien pursuant to the Declaration and Colorado law.


14. Additional forms of enforcement include the CVOA taking corrective action at the expense of the owner, the filing of a covenant enforcement action in court, and foreclosure on the owner’s property. If legal action is necessary, the owner will be responsible for all attorneys’ fees and costs.

Inspection of Records, Copying of Records Page 1

Cuerno Verde Owners Association Policy on Inspection of Records and Copying of Records

Required by C.R.S. 38-33.3-209.5

A. Information that MUST be disclosed to members:

The following information is available in a binder at the principal office (the Clubhouse) of the CVOA. The information is available for inspection upon reasonable notice:

1. The name of the association.

2. The name of the association’s designated agent or Management Company.

3. A valid physical address and telephone number for both the association and the designated agent or Management Company.

4. The name of the common interest community.

5. The initial date of recording of the declaration.

6. The reception number or book and page for the main document that constitutes the

declaration.

7. The date on which the association’s fiscal year commences.

8. The association’s operating budget for the current fiscal year.

9. A list, by property, of the association’s current assessments, including both regular and special assessments.

10. The association’s annual financial statement, including any amount held in reserve

for the year immediately preceding the current annual disclosure (the year proceeding a new fiscal year).

11. Results of the most recent financial audit or review.

12. List of all the Association’s insurance policies, including, but not limited to, property, general

liability, association director and officer professional liability, and fidelity policies. The list will include company names, policy limits, policy deductibles, additional named insureds, and expiration dates of the policies listed.

13. The association’s bylaws, articles, and rules and regulations.

14. The association’s responsible governance policies. 15. Minutes of the Executive Board and Member meetings. (Except executive session

meeting minutes.)


B. Documents that are maintained by the Association: The following documents are the records of the Association which shall be deemed to be the sole records of the Association for purposes of inspection by Owners.

1. Detailed records of receipts and expenditures affecting the operation and

administration of the CVOA.

2. Records of claims for construction defects and amounts received pursuant to settlement of those claims.

3. Minutes of all meetings of the association’s owners and executive board, a record

of all actions taken by the owners or the executive board without a meeting, and a record of all actions taken by any committee of the executive board. (Excluding executive sessions of the Board.)

4. Written communications among, and the votes cast by, executive board members

that are:

a. Directly related to an action taken by the Board without a meeting, pursuant to section C.R.S. 7-128-202 (sets forth the procedure for taking action without a meeting and

b. Directly related to action taken by the Board without a meeting

pursuant to the CVOA By-Laws.

5. Records of actions taken by the Owners without a meeting.

6. The names of owners in a form that permits preparation of a list of the names of all owners and the physical mailing addresses at which the association communicates with them and shows the number of votes each unit owner is entitled to.

7. The association’s current declaration, covenants, bylaws, articles of incorporation,

rules and regulations, responsible governance policies, and other policies adopted by the Board.

8. Financial statements showing the association’s assets, liabilities, and results of its

operations for the past three (3) years and tax returns of the association for the past seven (7) years.

9. Operating budget for the current fiscal year.

10. A list, by property, of the association’s current assessments, including both regular and special assessments.

11. Results of the most recent financial audit or review.


12. List of all the Association’s insurance policies, including, but not limited to, property, general liability, association director and officer professional liability, and fidelity policies. The list will include company names, policy limits, policy deductibles, additional named insureds, and expiration dates of the policies listed

13. A list of the names, email addresses, and physical mailing addresses of the

association’s current executive board members and officers. 14. The association’s most recent annual report delivered to the secretary of state.

15. Financial records sufficiently detailed to permit the association to comply with

requests for a statement setting forth the amount of unpaid assessments levied against an owner.

16. The association’s most recent reserve study.

17. Current written contracts to which the association is a party and contracts for work

performed for the association within the immediately preceding two (2) years.

18. Records of executive board or committee actions to approve or deny any requests for design or architectural approval from owners.

19. Ballots, proxies, and other records related to voting by owners for one (1) year

after the election, action, or vote to which they relate.

20. Resolutions adopted by the association’s board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members.

21. All written communications within the past three (3) years sent to all owners,

generally as owners.

22. The date on which the association’s fiscal year commences.

C. Examination and copying of records by members: 1. Procedure for examination and copying:

a. Subject to the limitations set forth below, all records maintained by the CVOA

are available for examination and copying by an owner or the owner’s authorized agent. In order to examine or copy records, an owner must submit to the Management Company, if there is one, or to the Board a written request, describing with particularity the records sought. The request must be submitted ten (10) days prior to the date of inspection. Examination and copying must be done during normal business hours or at the next regularly scheduled board meeting, if one is held within thirty (30) days after the request.


b. An Owner requesting examination and copying of records will be charged a

reasonable amount to be paid in advance to cover the costs of labor and material for the copies. The cost will be based on an estimate of the cost to produce and copy the records.

c. Copies requested by an owner may be produced by photocopying or other

means, including copies sent electronically.

d. The association is not obligated to compile or synthesize information for the owner.

2. Use of membership lists:

a. Membership lists, or any part of a membership list, may not be obtained or

used by any person for a purpose unrelated to an owner’s interest as a property owner without the consent of the board.

b. Membership lists, or any part of a membership list, may not be used to solicit

money or property unless the money or property will be used solely to solicit the votes of the owners in an election to be held by association.

c. Membership lists, or any part of a membership list, may not be used for any

commercial purpose.

d. Membership lists, or any part of a membership list, may not be sold or purchased by any person.

3. Inspection. The Association reserves the right to have a third party present to observe during any inspection of record by an Owner or the Owner’s representative.

4. Original. No Owner shall remove any original book or record of the Association

from the place of inspection nor shall any Owner alter, destroy or mark in any manner, any original book or record of the Association.

D. Limitations on examination and copying of records

1. The following records will not be made available for inspection or copying:

a. Architectural drawings, plans, and designs unless the legal owner of the drawings, plans, and designs consents.

b. Contracts, leases, bids, or records related to transactions to purchase or

provide goods or services that are currently in or under negotiation.


c. Communications with legal counsel that are otherwise protected by attorney-client privilege or the attorney-work-product doctrine.

d. Records of which disclosure would be in violation of law.

e. Records of an executive session of the executive board.

f. Records concerning properties other than those of the requesting owners.

g. Personnel, salary, or medical records relating to specific individuals.

h. Personal identification and account information of members, including bank

account information, telephone numbers, email addresses, driver’s license numbers, and social security numbers.

Reserve Fund Investment Page 1

Cuerno Verde Owners Association Reserve Fund Investment Policy

Required by C.R.S. 38-33.3-209.5

In compliance with Colorado Statues, the Board of Directors of the Cuerno Verde Owners Association (CVOA) adopts the following policy for investment of reserve fund:

1. The Board of Directors will determine the amount to be transferred to the reserve fund on an annual basis. This amount will be included in the CVOA annual budget.

2. Reserves may be invested in the following financial instruments that may be recommended by CVOA’s financial advisor and in accordance with CVOA’s financial goals: a. Certificates of deposit, b. Money market deposit accounts or funds, c. US treasury bonds and zero coupon bonds, or d. Municipal bonds.

3. The principal objective for reserve funds is to maintain, repair, and replace those capital items that CVOA is responsible to periodically maintain, repair, or replace. Reserve funds shall be invested to achieve the following goals, in order of priority, as follows:

a. Preservation and safety of principal, b. Liquidity of funds to meet expected and unexpected capital expenses, and c. Maximization of yield.

4. All reserve-fund investment decisions will be subject to the approval of the Board of Directors and should be reviewed on a yearly basis.

5. Any expenditure of CVOA’s reserve funds will require signature of at least two Board Members. 6. CVOA shall maintain adequate fidelity coverage to protect against theft or dishonesty, as stated in

CVOA’s bylaws. 7. CVOA shall maintain monthly reserve fund statements, including detailed accounting of current values

and income and all transactions. 8. In the event of any conflict between this Policy and Procedure and CVOA’s Declarations and Covenants

or Colorado law, CVOA’s Declarations and Covenants and/or Colorado state law shall prevail.

Adoption of Policies Page 1

Cuerno Verde Owners Association Adoption of Policies

Required by C.R.S. 38-33.3-209.5 At a regular meeting of the Board of Directors, held on January 14, 2017, by motion and vote, the Board of Directors adopted the following resolution concerning policies and compliance with the Colorado Common Interest Ownership Act (CCIOA): WHEREAS, Amendment of the Declaration of the Covenants, Conditions, and Restrictions (CCR) authorizes the Cuerno Verde Owners Association, Inc. (CVOA) to govern the affairs of the of the CVOA and to adopt procedures and regulations; and WHEREAS, CCIOA requires Common Interest Communities to adopt certain policies; and WHEREAS, the CVOA Board agrees that polices are beneficial in that they provide information to members concerning management and procedures implemented by the Board. THEREFORE, it is hereby resolved that the following policies, as attached hereto, are enacted as the policies of the CVOA on the effective date set forth below:

1. Policies for collection of assessments; 2. Board member conduct; 3. Conduct of meetings; 4. Enforcement of covenants; 5. Inspection of records; 6. Investment of reserve funds; 7. Adoption of policies and procedures; 8. Alternative dispute resolution; and 9. Reserve Study Policy Scope. The Board of Directors of the Association may, from time to time, need to adopt or amend certain Policies as may be necessary to facilitate the efficient operation of the Association, including the clarification of ambiguous provisions in other documents, or as may be required by law. In order to encourage Owner participation in the development of such Policies and to insure that such Policies are necessary and properly organized, the Board shall follow the following procedures when adopting any Policy. Drafting Procedure. The Board shall consider the following in drafting the Policy:

(a) Whether the governing documents or Colorado law grants the Board the

authority to adopt such a Policy; (b) The need for such Policy based upon the scope and importance of the

issue and whether the governing documents adequately address the issue; and

(c) The immediate and long-term impact and implications of the Policy.

Adoption of Policies Page 2

Notice and Comment. A copy of the proposed Policy shall be provided to all Owners or posted on the Association’s website and Owners shall be allowed a minimum of 10 days to provide comment and/or feedback on the proposed Policy. In addition, the adoption of every Policy shall be listed on the agenda for the Board meeting prior to adoption by the Board and any Owner who wishes to comment on the proposed Policy shall be afforded such opportunity at the meeting in compliance with Colorado law. Emergency. The Board may forego the notice and opportunity to comment in the event the Board determines in its sole discretion that providing notice and opportunity to comment is not practical given the emergency nature of such Policy. Adoption Procedure. After the period for Owner comment expires, the Board may adopt any Policy. Upon adoption of a Policy, the Policy or notice of such Policy (Including the effective date) shall be provided to all Owners by any reasonable method as determined by the sole discretion of the Board, including but not limited to posting on the Association’s website. Policy Book. The Board of Directors shall keep copies of any and all adopted Policies in a book designated as a Policy Book. The Board of Directors may further categorize Policies, Procedures, Rules and Regulations, Resolutions and Guidelines but shall not be required to do so. Definitions. Unless otherwise defined in this Resolution, initially capitalized or terms defined in the Declaration shall have the same meaning herein. Supplement to Law. The provisions of this Resolution shall be in addition to and in supplement of the terms and provisions of the Declaration and the law of the State of Colorado governing the Project. Deviations. The Board may deviate from the procedures set forth in this Resolution if in its sole discretion such deviation is reasonable under the circumstances. Amendment. This Procedure may be amended from time to time by the Board of Directors.

Alternate Dispute Resolution Page 1

Cuerno Verde Owners Association

Policy and Procedure on Alternative Dispute Resolution (ADR)

(Not Covered by the Covenants or By-Laws Between the Association and Owners)

The following resolution has been adopted by CVOA, pursuant to the Colorado law and the Covenants and Bylaws of the CVOA, at a regular meeting of the Board of Directors (“Board”) of CVOA.

RECITALS WHEREAS, Colorado law requires that associations adopt a procedure for addressing disputes arising between associations and Owners; and WHEREAS, the Covenants and Bylaws authorize the CVOA to adopt, amend, and enforce rules and regulations and policies and procedures; and WHEREAS, the CVOA desires to establish reasonable policies and procedures for addressing disputes arising between the CVOA and Owners. NOW, THEREFORE, BE IT RESOLVED, that the CVOA adopts the following Procedure for Addressing Disputes between the Association and Owners:

1. Procedures for Addressing Disputes: In the event of any dispute between the CVOA and an Owner, for which a method, policy or procedure to address such dispute is not provided by the Covenants or By-Laws of the CVOA, the Owner is invited and encouraged to meet with the Board, to resolve the dispute informally and without the need for litigation. If the Owner requests to meet with the Board, the CVOA shall make a reasonable effort to comply with the Owner’s request.

Any settlement or compromise reached as a result of this Policy shall not constitute a precedent for purposes of any other subsequent dispute between the CVOA and any Owner. Nothing in this Policy shall be construed to require any specific form of ADR, such as mediation, or arbitration, or require the parties to meet. In addition, nothing in this Policy shall be construed to require the CVOA to mediate or arbitrate disputes between Owners. Neither the CVOA, nor the Owner waives any right to pursue whatever legal or other remedial actions are available to either party.

Alternate Dispute Resolution Page 2

2. Definitions: Unless otherwise defined in this Resolution, capitalized terms or terms defined in the Declaration shall have the same meaning herein as set forth in the Declaration.

3. Supplement: The provisions of this Resolution shall be in addition to and

shall supplement the terms and provisions of the Declaration, the By-Laws, and the laws of the State of Colorado governing the CVOA.

4. Deviations: The Board may deviate from the procedures set forth in this

Resolution if, in its sole discretion, such deviation is necessary under the circumstances.

5. Amendment: The Board may amend this policy from time to time.

Reserve Fund Study Page 1

Cuerno Verde Owners Association Policy on Reserve Fund Studies

Pursuant to Section 38-33.3-209.5 of the Colorado Common Interest Ownership Act (CCIOA), Cuerno Verde Owners Association (CVOA) is required to adopt policies, procedures and rules and regulations concerning the preparation of reserve studies. This Reserve Fund Study Policy, together with the terms of the Declaration of Cuerno Verde Owners Association and the Bylaws of CVOA, is intended to comply with such requirement.

1. Reserve Study. The Board of Directors (Board) shall conduct a reserve study at such times as in its sole discretion it determines necessary but at least every five years to determine the necessity and amount of reserves required to maintain, repair, replace and restore CVOA properties. The Board shall cause the reserve study to be conducted internally by a committee appointed by the Board which shall obtain such professional assistance as it deems necessary to accomplish the study. The reserve study shall be based on a physical analysis and financial analysis. The reserve study shall be reviewed at least annually to determine if reserves are sufficient. The Board shall, in its discretion, have the authority to and shall make any adjustments deemed necessary to maintain reserves,

2. Fund Designation. Reserve funds for CVOA shall be maintained in a Reserve Fund and shall be used for major capital repairs, replacements, maintenance, care, restoration and improvements.

3. Funding Plan and Sources. The Reserve Fund shall be funded primarily from Common Assessments and the generations of investment income from the Reserve Fund in accordance with such funding plans as are established by the Board.

4. Reserve Fund Investments. The Reserve Fund assets will be invested in accordance with CVOA’s Policy for Investment of Reserve Funds.

5. Supplement. The provisions of this policy shall be in addition to and shall supplement the terms and provisions of the Declaration, the Bylaws, and the laws of the State of Colorado.

6. Deviations. The Board may deviate from the procedures set forth in this policy if, in its sole discretion, such deviation is necessary under the circumstances.

7. Amendment. The Board may amend this policy from time to time.