DECLARATION OF COVENANTS AND RESTRICTIONS FOR THE

      SINGLE FAMILY RESIDENCES AT

SPRINGS UNIT II HOMEOWNERS' ASSOCIATION

           LOCKPORT, ILLINOIS

Thomas J. Morrison Attorney at Law

7667 W. 95th Street, #211 Hickory Hills, IL 60457

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DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR THE SINGLE FAMILY RESIDENCES AT KAREN SPRINGS UNIT II HOMEOWNERS' ASSOCIATION LOCKPORT, ILLINOIS

      THIS DECLARATION,     made this           day of              ,  2000,

FIRST NATIONAL BANK OF BLUE ISLAND, a corporation organized and existing under the laws of the State of Illinois, 13057 S. Western Avenue, Blue Island, IL 60457, not personally, but as Trustee, Under Trust Agreement Dated April 30, 1997, known as Trust Number 97045, hereinafter referred to as "Declarant".

WITNESSETH:

WHEREAS, Declarant is the legal title holder to the following described real estate located in the County of Will, State of Illinois:

THE SOUTH 1/2 OF THE EAST 1/2 OF THE SOUTHWEST FRACTIONAL 1/4 OF SECTION 19, TOWNSHIP 36 NORTH, RANGE 11 EAST OF THE THIRD PRINCIPAL MERIDIAN EXCEPTING THEREFROM THAT PART OF THE SOUTHWEST QUARTER OF SECTION 19, TOWNSHIP 36 NORTH, RANGE 11 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER

OF  THE  FRACTIONAL    WEST 1/2 OF  SAID   SOUTHWEST   1/4;   THENCE  NORTH   1

DEGREE 35 MINUTES 21 SECONDS WEST, ALONG THE EAST LINE OF SAID WEST 1/2,844.23 FEET TO THE SOUTHEAST CORNER OF THE NORTH 388.00 FEET OF THE SOUTH 35.00 ACRES OF SAID WEST 1/2; THENCE NORTH 88 DEGREES 13 MINUTES 35 SECONDS EAST, ALONG THE EASTERLY EXTENSION OF THE SOUTH LINE OF SAID NORTH 388.00 FEET, 50.00 FEET TO A POINT ON A LINE THAT IS 50.00 FEET EAST OF AND PARALLEL TO THE EAST LINE OF

AFORESAID   WEST  1/2;  THENCE   SOUTH   1  DEGREE   35  MINUTES   21  SECONDS

EAST, ALONG SAID PARALLEL LINE, 844.23 FEET TO A POINT ON THE SOUTH LINE OF AFORESAID SOUTHWEST 1/4; THENCE SOUTH 88 DEGREES 13 MINUTES 35 SECONDS WEST, ALONG SAID SOUTH LINE,50.00 FEET OF THE POINT OF BEGINNING, ALL IN WILL COUNTY, ILLINOIS.

Commonly known as: Division Street East of Farrell Road, Lockport, IL 60441

P.I.N.

05-19-300-028

which said lots are hereinafter referred to collectively as "KAREN SPRINGS UNIT II"" and

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WHEREAS, Declarant intends to create and implement a uniform plan for the development of said Subdivision as a quality residential community and to create an association which is to be responsible for the maintenance of the common areas and

WHEREAS, Declarant has determined that it is essential for the proper development of said real property that the Subdivision and each of the lots therein be subject to the covenants, easements and restrictions hereinafter set forth,

NOW THEREFORE, FIRST NATIONAL BANK OF BLUE ISLAND, not personally, but as Trustee, Under Trust Agreement Dated April 30, 1997, known as Trust Number 97045, does hereby declare that the real property above described and known as KAREN SPRINGS UNIT II, a Subdivision, and each and every lot therein is, and shall be, held, transferred, sold, conveyed and occupied subject to the covenants and restrictions hereinafter set forth each of which are for the benefit of said property and each owner thereof, and shall run with the land until the year 2020.

ARTICLE 1

GENERAL PURPOSES OF THIS AGREEMENT

The real property above described is subjected to the covenants hereby declared to insure proper use and appropriate development and improvement of KAREN SPRINGS UNIT II and every part thereof; to protect the owners of property therein against such improper use of surrounding lots as may depreciate the value of their property; to guard against the erection thereon of buildings built of improper or unsuitable materials; to insure adequate and reasonable development of said property; to encourage the erection of attractive improvements thereon, with appropriate locations thereof; to prevent haphazard and inharmonious improvements; to secure and maintain proper setbacks from streets, and adequate free spaces between structures to provide for the maintenance of the common areas including the maintenance of insurance thereon; and in general to provide for the various other matters hereinafter set forth, all having as their object the preservation of the attributes of a distinguished residential community.

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ARTICLE II

ARCHITECTURAL REVIEW PROCESS

       Section 1.        Architectural Controls.           No structure or

improvement of any kind shall be commenced, erected, or maintained,

until the construction plans and specifications, showing the nature, kind, shape, height, materials, color scheme, location on lot and approximate cost of such building or other structure, and the grading plan and top of foundation plan of the lot to be built upon shall have been submitted to and approved in writing by the Architectural Review Committee.

The Architectural Review Committee shall have the right to refuse to approve any such construction plans or specifications, grading plan, top of foundation plan, or landscape plan, which are not suitable or desirable, in the opinion of the Committee, for aesthetic or other reasons; in so passing upon such construction plans, the committee shall have the right to take into consideration the suitability of the proposed building or other

structure on the outlook from adjacent or neighboring properties,

and to insure that no builder will construct a model to which the exclusive right to build has been assigned to another builder. It is understood and agreed that the purpose of architectural controls is to secure an attractive harmonious residential development having continuing appeal. The quality of architectural design will

be considered in relation to this principle. Such approval shall not be arbitrarily, capriciously, or unreasonably withheld.

       Section 2.        Architectural       Review     Committee.          The

Architectural Review Committee shall consist of at least three members. The beneficiaries of the Declarant shall have the right to appoint all of the members of the Committee, as long as it owns at least one lot in KAREN SPRINGS UNIT II. the names and addresses of the persons who from time to time comprise the membership of the

Committee shall be submitted by the beneficiaries of the Declarant.

A majority of the Architectural Review Committee shall constitute a quorum to transact business at any meeting. The action of a majority present at a meeting at which a quorum is present shall constitute the action of the Architectural Review Committee.

       Section 3.           Responsibilities of the Architectural Review

Committee. Two complete sets of plans and specifications drawn by a licensed architect and any related material for which the approval of the Architectural Review Committee is required shall approve or disapprove the submitted material as soon as practicable but the Architectural Review Committee's written approval or

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disapproval shall in any event be given within 10 days after all the necessary material has been delivered to the Architectural

Review     committee.        If   the   Architectural      Review    Committee

disapproves of any submitted material, or if the Architectural

Review Committee requires a modification of any kind, it shall,

within said 10 day period, inform the Owner by whom the material was submitted, of the reason for the Architectural Review Committee's disapproval of the Architectural Review Committee's requirement that changes be made, but notwithstanding the obligation of the Architectural Review Committee to state the reason for disapproval or for the modifications. The decisions of the Architectural Review Committee is final. Neither the Declarant or its beneficiaries, nor any member of the Architectural Review Board shall be responsible in any ways for any defects in any construction plans submitted, revised or approved in accordance with the foregoing, nor for any structural defects in any work done according to such construction plans. If the Architectural Review Committee does not approve, or disapprove, or require a

modification, within the aforesaid 10 day period, then at the expiration of said period, the material submitted to the Architectural Review Committee shall be deemed to be fully approved, and the Owner who has submitted the material deemed to have been fully approved by the lapse of time, shall have the right to proceed as if the Architectural Review Committee's written approval has been procured. A copy of each plan and specifications shall be kept on file with the committee.

ARTICLE III

USE RESTRICTIONS AND BUILDING REQUIREMENTS

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Section 1. Single Family Residential Dwellings Only. No lot or building site may be improved, used or occupied for other than private residential purposes and all lots are hereby restricted to single-family use only.

One main dwelling only designed by a licensed architect and designed for occupancy by one family only may be erected on any lot.

Section 2. Minimum Two Car Garage Required. Each residence must have an attached garage which will house a minimum of two

standard sized automobiles and shall be used only by the owners,

occupants or their guests and shall not be used for rental purposes. No garage shall have more than three (3) car spaces.

Detached garages and carports are not permitted.

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Section 3. Dwelling Quality and Size. It is the intention and purpose of these covenants to assure that all dwellings shall be of a quality of design, workmanship and materials approved by

the   Architectural     Review   Committee.      All   dwellings    shall   be

constructed in accordance with the City of Lockport Building Code and Zoning Ordinance and with more restrictive standards that may be required by the Architectural Review Committee.

The floor area of the dwelling, exclusive of attached garages, open terraces, porches, basements and breezeways shall be: at least eighteen hundred (1800) square feet living area for two story residences and sixteen hundred (1600) square feet for ranches and

fifteen   hundred    (1500)   square   feet   excluding    lower   level   for

bilevels.

Section 4. Building location on Lot. All buildings shall meet the City's minimum setback requirements.

       Section     5.      Public    Utility     Easement.          No   dwelling

structure shall be erected in the public utility easement.

or

Section 6. Final Grading of Home Site. Site plans which include the final grading plan, will be designed by a licensed

engineer    as   per   City   of   Lockport    requirements.       The    owner

recognizes and acknowledges his responsibility to grade his home site in accordance with the final engineering grading plan and to construct the tops of the foundation in accordance with the top of foundation plan filed with the City of Lockport. Any deviations from the final engineering grading plan must be approved by the Architectural Review Committee and the City of Lockport prior to

the     commencement  of  construction.      Although    the     Architectural

Review Committee will review the site plan and final engineering grading plan, the owner is fully responsible for water runoff and drainage control of his home site.

Section 7. Elevations and Facades. No two single-family dwellings of identical front elevation, or facade, shall be constructed or located on adjacent lots, nor shall there be constructed or located more than thirty-five (35) percent of single-family dwellings of the same elevation or facade in any block. A change of front elevation or facade shall be deemed to exist when there is a substantial difference in roof line, type and location of windows, and/or kind and arrangement of materials.

Section 8. Home Occupations, Nuisances and Livestock. No noxious or offensive activity shall be carried on, in or upon any premises, nor shall anything be done thereon which may be, or may

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become,    an   annoyance    or   nuisance    to   the   neighborhood.       No

livestock, poultry, or more than two dogs or cats, shall be kept or maintained on any lot.

No burning of refuse shall be permitted outside the dwelling and no homeowner shall accumulate on his home site any litter, junk, refuse or any other unsightly materials. Garbage will be contained in refuse receptacles and protected from view.

Section 9. Fencing. Chain link fencing is prohibited. On those lots that border on the water, stockade fencing is prohibited and only architectural metal or vinyl fences that promote open views through the fencing shall be allowed.

Section 10. Lawn and Landscaping. Front sidewalks must be constructed and front and side yards landscaped and grassed with sod. Rear yards may be seeded, all in conformity with City Code including at least two (2) two inch deciduous shade trees which

must   be  planted   on  the   parkway   as  per   ordinance.      To  insure

completion of these items the sum of $1,500.00 shall be deposited with Declarant upon the closing of the sale of each lot and returned to Buyer upon completion of the sidewalks, sod and seeding. If the work is not completed within three months of occupancy permit, said amount shall be forfeited.

Section 11. Completion 0f Construction. Any construction undertaken on any lot shall be continued with diligence toward the completion thereof and construction of any dwelling shall be completed within six (6) months from any commencement of construction, except that such period may be extended for a reasonable time by reason of act of God, labor disputes, or other matters beyond an owner's control. No structure shall be deemed completed until installation of approved landscaping and hard surface driveway.

      Section   12.    Utility Easements.        In  the  recorded    Plat  of

Subdivision of KAREN SPRINGS UNIT II, Declarant has granted an easement to ILLINOIS BELL TELEPHONE COMPANY, COMMONWEALTH EDISON COMPANY, and NORTHERN ILLINOIS GAS COMPANY and their respective successors and assigns within the area as shown by lines on the plat marked "Utility Easement" to install, lay construct, renew, operate and maintain underground utility pipes and conduits, gas mains and other underground equipment for the purpose of servicing the subdivision with telephone service, gas and electric service; also the right to use the streets for said purposes, the right to enter upon the lots at all times to install, lay, construct, renew, operate and maintain within said easement area said pipes, conduits, gas mains and other underground equipment and finally the

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right to cut down and remove any trees, shrubs or saplings that interfere with any of the aforesaid uses or rights therein granted.

No permanent buildings or trees shall be place on said easement but same may be used for gardens, shrubs, landscaping and other

purposes that do not then or later interfere with said uses or rights therein granted.

ARTICLE IV HOMEOWNERS ' ASSOCIATION AND MAINTENANCENC

Section 1. Each owner shall be a member of the Association.

Member ship shall be appurtenant to and may not be separated from ownership of any lot. The Association shall determine the need for and shall carry out or cause to be performed all maintenance and repair to the water retention areas, entrance islands, signs landscape buffer areas and other common areas associated therewith made necessary and desirable in the discretion of the Association as a result of natural or ordinary wear and deterioration. The obligations of the Association as contained in this Section shall be limited, however, to the extent that there are funds available in the association's account from the assessments collected pursuant to this Article IV. The Association shall be governed by the By-Laws attached hereto as Exhibit "A".

Section 2. The Association shall pay, as agent and on behalf of the Owners and out of the funds furnished to it by them for such

purpose, all taxes and other governmental impositions, if any,

levied upon the Common Area or any part thereof.

Section 3. Any action by the Association which could affect the Owner's easement in the Common Area (mortgage, conveyance or dedication of the Common Area or annexation, merger, consolidation or dissolution of the Association) must have the consent of not less than two-thirds (2/3) of each class of Members.

Section 4. The Declarant, for each Lot owned within the Subdivision, hereby covenants, and each Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed or the conveyance, is deemed to covenant and agree to pay to the Association: (a) annual assessments or such other assessments upon the Property, such assessments, together with such interest thereon and costs of collection thereof, as hereinafter provided, shall be a charge on the land and shall be a continuing lien upon the Lot against which each such assessment is

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made. Each such assessment, together with such interests, costs and reasonable attorney's fees, shall also be the personal obligation of the person who was the Owner of such Assessment Parcel at the time when the assessment fell due. The personal obligation shall not pass to his successors in title unless expressly assumed by them.

Section 5. The Board shall be authorized to fix the annual assessment in the amount sufficient to meet the costs and expenses reasonably determined by the Board.

Section 6. The annual and special assessments must be fixed at a uniform rate for all Lots and shall be collected on an annual or quarterly basis as determined by the Board.

Section 7. Any assessments which are not paid when due shall be delinquent. If the assessment is not paid within thirty (30) days after the due date, the assessment shall bear interest per annum, and the Association may bring an action at law against the Owner personally obligated to pay the same, or foreclose the lien against the respective Lot and interest, costs and reasonable attorney's fees of any such action shall be added to the amount of such assessment. Each Owner, by his acceptance of a deed to a Lot, hereby expressly vests in the Association, or its agents, the right and power to bring all actions against such Owner personally for the collection of such charges as a debt, and to enforce the aforesaid lien by all methods available for the enforcement of such liens, including foreclosure by action brought in the name of the Association in a like manner as a mortgage or deed of trust lien on real property, except that the court shall restrain the defaulting Owner from reacquiring his interest at such judicial sale.

Section 8. The lien of the assessments provided for herein shall be subordinate to the lien of any mortgage now or hereafter placed on the Lot provided, however, that such prior recorded mortgage shall be subject to the lien of all unpaid assessments with respect to such Lot which become due and payable subsequent to the date the holder of said mortgage takes possession of the Lot, accepts a conveyance of any interest in the Lot or has a receiver appointed in a suit to foreclose his lien.

Section 9. The Association shall be responsible for procuring and maintaining comprehensive public liability insurance, including liability for injuries to and death of persons, and property damage, in such limits as it shall deem desirable, and other liability insurance as it may deem desirable, insuring the Association from liability in connection with the ownership and/or

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use of the Common Area. The Association may also obtain such other kinds of insurance as the Association shall from time to time deem prudent.

Section 10. In the case of a taking or condemnation by competent authority of any part of the Common Area, the proceeds awarded in such condemnation shall be paid to the Association and proceeds, together with any Capital Reserves being held for such

.part of the Common Area shall, in discretion of the Board, either

(i) be applied to pay the assessments levied by the Association,

(ii) be distributed to the Owners and their respective mortgagees, as their interest may appear, in accordance with their respective interest in the Common Area or (iii) be used to acquire additional real estate to be used and maintained for the mutual benefit of all Owners. Any acquisition by the Association pursuant to this Section of real estate which shall become Common Area hereunder shall not become effective unless and until a supplement to this Declaration, which refers to this Section and legally described the real estate affected, is executed by the Association and recorded.

Section 11. That should the Homeowner's Association fail to upkeep, repair, and/or maintenance the detention areas, the main entrance island and/or the buffer area under Section 1. above, then in that event the City of Lockport upon giving the Homeowner's Association ten (10) days written notice to either maintain or repair said detention areas, entrance island or landscape buffer areas may make said repair or maintenance and charge each Homeowner the pro-rated share fee for said upkeep and maintenance provided further if a Homeowner after 30 days written notice refuses to pay said cost then that cost together with an additional sum of 10% of said cost shall upon recordation of a notice of lien within 90 days of completion of the work constitute a lien against the Homeowner's lot which may be foreclosed upon by an action brought by or on behalf of the City of Lockport, IL or in the alternative the City

may take court action against said Homeowner for the above mentioned costs.

ARTICLE V GENERAL PROVISIONS

Section 1. Duration. The covenants and restrictions set forth in this Declaration shall run with and bind the land, and shall insure to the benefit of, and be enforceable by the Declarant or the Owner of any property subject to this Declaration, their respective legal representative, heirs, successors or assigns,

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until the year 2020, after which time said covenants shall be automatically extended for successive periods of 10 years unless an instrument signed by the then owners of two-thirds (2/3) of the lots has been recorded agreeing to change said covenants and restrictions in whole or in part: provided, however, that no such agreement of change shall be effective unless made and recorded one year in advance of the effective date of such change, and unless written notice of the proposed agreement is sent to every Owner at least 90 days in advance of any action taken.

Section 2. Notices. Any notice sent or required to be sent to any Owner under the provisions of this Declaration shall be deemed to have been properly given when mailed, postage prepaid, to the last known address of the person who appears as an Owner on the public records at the time of such mailing.

Section 3. Deviations by Agreement wi th Declarant. Declarant hereby reserves the right to enter into agreement with the Owner of any lot or lots or adjoining or adjacent property) to deviate from any or all of the Covenants set forth in Article III, provided there are practical difficulties or particular hardships evidenced by the Owner, and any such deviation (which shall be manifested by an agreement in writing) shall not constitute a waiver of any such covenant as to the remaining real property in KAREN SPRINGS UNIT II.

Section 4. Amendments by Agreement with Declarant. This Declaration may be amended at any time and from time to time upon the execution and recordation of an instrument executed by not less than two-thirds (2/3) of the Owners, provided, that so long as Declarant or its beneficiaries is the Owner of any lot affected by this Declaration, no amendment will be effective without the Declarant's express written consent.

Section 5. Rights reserved to the Declarant. Declarant, or its beneficiaries, reserves the right, to which each owner agrees by acceptance of a deed to his lot, to maintain at such location or locations within the priority as determined by Declarant, at its sole discretion, models, sales offices and sales personnel for the purpose of soliciting and making sales of lots and/or improvements within the property, including additions thereto, and the same shall not be prohibited or abated hereunder as a nuisance or otherwise.

       Section      6.       Modification.           By    recorded      Supplemental

Declaration, developer may modify any of the provisions of this Declaration for the purposes of clarification or otherwise, provided no such modification shall change the substantive

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provisions of the Declaration or materially alter the rights of any Owner established by any such document. The City of Lockport will be notified if modifications are made to this agreement.

      Section 7. Severability. Invalidation of anyone of these

covenants and restrictions by judgment of court order in no way shall affect any provisions, which shall remain in full force and effect.

Section 8. Default provision. Each Owner is bound by and shall comply with the terms of this Declaration and with any and all amendments thereto. A failure by an Owner to comply with this declaration or any amendments, shall constitute a default by such Owner. If a default occurs, the Declarant or its beneficiaries shall have the right to recover damages at law, to procure injunctive relief, to foreclose on any lien rights that they might have, or to avail themselves of any other rights or remedies permitted at law or in equity. In any proceeding commenced by the Declarant or its beneficiaries, based upon or arising out of an alleged default by an Owner, if the Declarant or its beneficiaries prevail, they shall be entitled to recover all expense of the proceeding, including reasonable attorney's fees.

Section 9. Effective Date. This Declaration shall become effective upon its recordation in the office of the Recorder of Deeds, Will County, Illinois.

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IN WITNESS WHEREOF, this Declaration is executed by FIRST NATIONAL BANK OF BLUE ISLAND, AS TRUSTEE, UNDER TRUST AGREEMENT DATED April 30, 1997, AS TRUST NUMBER 97045, AND NOT INDIVIDUALLY, in the exercise of the power and authority conferred upon and

vested in    it  as  such Trustee.      It  is        generally understood and

agreed by every person, firm or corporation hereafter claiming any interest under this instrument that the FIRST NATIONAL BANK OF BLUE ISLAND, as Trustee, as aforesaid, and not individually, has joined in the execution of this Declaration: as Trustee, as aforesaid, and not individually, has caused its corporate seal to be affixed hereunto and has caused its name to be signed to these presents by

its Trust Officer and attested by its Assistant this                    day of

, 2000.

FIRST NATIONAL BANK OF BLUE ISLAND, AS TRUSTEE UNDER TRUST NUMBER 97045 AND NOT INDIVIDUALLY,

BY:

Trust Officer

Attest:

Assistant Secretary

STATE OF ILLINOIS

) ) )

SS.

COUNTY OF COOK

I, the undersigned, a Notary Public in an aforesaid County, in the State aforesaid, DO HEREBY CERTIFY THAT

   as                                       of the   FIRST NATIONAL BANK OF

­

BLUE ISLAND as Trustee under Trust Agreement dated April 30, 1997, and known as Trust No.97045 and not individually, and

as, respectively, appeared before me this day in person and acknowledged that they signed and delivered the aid instrument as their own free and voluntary act, and as the free and voluntary act of the FIRST NATIONAL BANK OF BLUE ISLAND, for the uses and purposes therein set

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forth;   and the said                                     did also then and

there acknowledge that he, as custodian of the corporate seal of the FIRST NATIONAL BANK OF BLUE ISLAND, did affix the said corporate seal to said instrument as his own free and voluntary act, and as the free and voluntary act of the FIRST NATIONAL BANK OF BLUE ISLAND for the uses and purposes therein set forth.

GIVEN under my hand and Notarial Seal this                       day of

                 , 2000.

Notary Public

My Commission Expires:

Prepared by:

Thomas J. Morrison Attorney at Law

7667 w. 95th Street, #211 Hickory Hills, IL 60457

Mail to:

Thomas J. Morrison Attorney at Law

7667 w. 95th Street, #211 Hickory Hills, IL 60457

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MORTGAGEE CONSENT

The undersigned as mortgagee hereby consent to the execution and recording of the foregoing Declaration.

LIBERTY FEDERAL BANK

By:

Attest:

State of Illinois )

County Of Cook                      )

I,                                   a  Notary   Public

County and State do hereby certify that

and                                      respectively, of LIBERTY FEDERAL

BANK, personally known to me to be the same persons whose names are subscribed to the foregoing instrument as such

and respectively, appeared before me this day in person and acknowledged that they signed said instrument as their free and voluntary act, and as the free and voluntary act of said BANK, for the use and purposes therein set forth.

in and for

said

Given under my hand and notorial seal this 2000.

day of

Notary Public

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EXHIBIT "A"

BYLAWS

OF

KAREN SPRINGS UNIT II HOMEOWNERS I ASSOCIATION

ARTICLE I

Purposes and Powers

The Association shall be responsible for the general management and supervision of the Common Area thereof and shall have all of the powers to perform, and shall be responsible to perform, all of the obligations provided in the Declaration.

Further, the Association shall have all powers now or hereafter granted by the General Not for Profit Corporation Act of the State of Illinois which shall be consistent with the purposes specified herein and in the Declaration.

ARTICLE II

Offices

2.01. Registered Office. The Association shall have and continuously maintain in this State a Registered Office and a Registered Agent whose office shall be identical with such Registered Office. The Association may have other offices within or without the State of Illinois as the Board of Directors may from time to time determine.

      2.02.       Principal    Office.     The  principal    office   of  the

Association shall be maintained in Will County, Illinois.

ARTICLE III

Membership

3.01. Voting Members. Every person or entity who is a record owner of a fee or undivided fee interest in any Lot which is subject by covenants of record to assessment by the Association shall be member of the Association. The foregoing is not intended

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to include persons or entities who hold an interest merely as security for the performance of any obligation. Membership shall be appurtenant to and may not be separated from ownership of any Lot which is subject to an assessment by the Association.

Ownership of such Lot shall be the sole qualification of

membership.      Nothing   herein   contained    shall   be  interpreted to

exclude Declarant from membership while it or its successors in interest, if any, owns one or more Assessment Parcels. Voting rights with regard to each Member are set forth in Section 3.02 hereof.

      3.02.       Classes of Membership.

two classes of voting membership:

The Association shall have

Class A. Class A Members shall be all those Owners as defined in Section 3.01, with the exception of the Declarant. Class A Members shall be entitled to one vote for each Assessment

Parcel in which they hold the interest required for membership by Section 3.01. When more than one person holds such interest in any Assessment Parcel, all such persons shall be

Members.     The vote for such Lot      shall be

exercised as they among themselves determine, but in no event shall more than one vote be cast with respect to any Assessment Parcel.

Class B. The Class B Members shall be the beneficiaries of the Declarant. The Class B Member shall be entitled to three (3) votes for each Lot in which

it holds the interest required for membership by Section 3.01; provided that the Class B membership shall cease and be converted to Class A membership on the date which is three (3) years from the recording of the Declaration.

3.03. Meetings.

(a) Quorum: Procedure. Meetings of the Members shall be

held at the principal office of the Association or at such other place in Will County, Illinois as may be designated in any notice of a meeting. The presence at any meeting, in person or by proxy, of a majority of the total votes determined pursuant to Section 3.02 above shall constitute a quorum. Unless otherwise expressly provided herein, any action may be taken at any meeting of the Members at which a quorum is present upon the affirmative vote of the members having a majority of the total votes present at such meeting. Any Member in writing may waive notice of a meeting, or consent to any action of the Association without a meeting.

(b) Initial and annual Meeting. The initial meeting of the Members shall be held at such time as may be designated upon thirty

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(30) days written notice given by the Declarant or its beneficiaries, provided that such initial meeting shall be held no

later   than three     (3)  years   from the    date   the   Declaration    was

recorded. Thereafter, there shall be an annual meeting of the Members on the first Tuesday of April of each succeeding year, at 7:30 o'clock P.M. If the date for the annual meeting of Members is a legal holiday, the meeting will beheld at the same hour on the first day next succeeding such date which is not a legal holiday.

.(c) Special Meetings. Special meetings of the Members may be called at any time for the purpose of considering matters which, by the terms of the Declaration or these Bylaws, require the approval of all or some of the Members, or for any other reasonable purpose.

Said meetings shall be called by written notice, authorized by a majority of the Board or by the members having one-fourth (1/4) of the total votes, and delivered not less than five (5) days prior to the date fixed for said meeting. The notices shall specify the date, time and place of the meeting and the matters to be considered.

3.04. Notice of Meetings. Notices of meetings required to be given herein shall be delivered either personally or by mail to the person entitled to vote thereat, addressed to each such person at the address given by him to the Board for the purpose of service of such notice, or to the Townhouse Unit of the Owner with respect to which such voting right appertains, if no address has been given to the Board. The notices required herein shall state the specific purpose and the nature of the business for which the meeting is called. At any meeting, no business may be transacted other than that specified in the notice.

      3.05.       Proxies.     At   any  meeting    of  Members,    a  Member

entitled to vote may either vote in person or by proxy executed in writing by the member or by his duly authorized attorney-in-fact.

No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy and every proxy must bear the date of execution.

ARTICLE IV

Board 0f Directors

      4.01.       Board     of    Directors.         The    direction      and

administration of the property in accordance with the provisions of

the Declaration shall be vested in the Board of Directors,

consisting of three (3) persons who shall be elected in the manner hereinafter provided. The Members having at least two-thirds (2/3)

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of the total votes may from time to time increase or decrease the number and term of the office of the Board members at any annual meeting, provided that such number shall not be less than three (3) .Each member of the Board with the exception of the Board members initially appointed by the Declarant (or its beneficiaries or designee) shall be one of the Owners (including the Declarant);

provided, however, that in the event an Owner is a corporation,

partnership, individual trustee or beneficiary of such trust, or manager of such legal entity, shall be eligible to serve as a member of the Board and provided further than in the event a member of the Board has entered into a contract to sell his Townhouse Unit and vacates the Townhouse Unit prior to the consummation of that transaction, such member shall no longer be eligible to serve on the Board and his term of office shall be deemed terminated.

4.02. Determination of Board to be Binding. All matters of dispute or disagreement between Owners or with respect to interpretation or application of the provisions of the Declaration or these Bylaws shall be final and binding on the Association and

on all Owners.

       4.03.       Election of Board Members. At the initial meeting

of the Members and at all subsequent annual meetings of the Members, there shall be elected a Board of Directors. In all elections for member of the Board of Directors, no Member shall be entitled to vote on a cumulative voting basis and the candidates receiving the highest number of votes with respect to the number of offices to be filled shall be deemed to be elected. The initial Board of Directors designated by the Declarant pursuant to Section 4.01 hereof shall serve for a period commencing on the date the Declaration is executed and ending upon the qualification of the directors elected at the initial meeting of Members held as provided in Section 3.03(b) hereof. Members of the Board elected

at the initial meeting shall serve until the first annual meeting.

Three (3) Board Members shall be elected at the initial meeting and shall serve for a period of two years. Upon expiration of the terms of office of the Board members so elected at the initial

meeting and thereafter, successors shall be elected for a term of two (2) years each. Notwithstanding the aforesaid election procedure, the Declarant or its designees or beneficiaries may appoint aBoard which will have the same powers and authority as given to the Board generally, as provided hereinafter, and such appointed Board shall function until such time as the initial meeting of the Members is held.

      4.04.       Compensation.    Members of the Board shall receive no

compensation for their services, unless expressly allowed by the Board at the direction of the Members having two-thirds (2/3) of the total votes. However, any director may be reimbursed for

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reasonable expenses incurred in the performance of his duties.

4.05.

Vacancies in Board. Vacancies in the Board, other than as a result of removal pursuant to Paragraph 4.07 hereof, including vacancies due to any increase in the number of persons on the Board, shall be filled by the remaining Members of the Board or by the Members present at the next annual meeting or at a special meeting of the Members called for such purpose.

4.06. Election of Officers. The Board shall elect from among its members a President who shall preside over both its meetings and those of the Members, and who shall be the chief executive officer of the Board and Association, a Secretary who will keep the minutes of all meetings of the Members and of the Board who shall, in general, perform all the duties incident to the office of the Secretary, and a Treasurer to keep the financial records and books of account. All officers shall be elected at each annual meeting of the Board and shall hold office at the pleasure of the Board.

4.07. Removal of Board Members. Any Board member may be removed from office by affirmative vote of the Members having at least two-thirds (2/3) of the total votes, at any special meeting called for the purpose in the manner aforesaid. A successor to fill the unexpired term of a Board member removed may be elected by the Members at the same meeting or any subsequent meeting called for that purpose.

4.08. Meeting of Board. The initial meeting of the Board shall be held immediately following the initial meeting of the members and at the same place. At such meeting, the Board shall elect its officers to serve until the first annual meeting of the Board which shall be held immediately following the first annual meeting of the Members and at the same place. All subsequent annual meetings of the Board shall be held without other notice than required by the Bylaws, immediatelyafter, and at the same place as, the annual meeting of Members. Special meetings of the board shall be held upon call by the President or by a majority of the Board on not less than forty-eight (48) hours notice in writing to each member, delivered personally or by mail or telegram. Any member may in writing waive notice of a meeting, or consent to the holding of a meeting without notice, or consent to any action of the Board without a meeting. A majority of the number of Board

members shall constitute a quorum for the transaction of business.

Unless otherwise expressly provided herein, any action may be taken by the Board upon the affirmative vote of those present at its meetings when a quorum is present.

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4.09. Execution of Documents. All agreements, contracts, deeds, leases, vouchers for payment of expenditures, and other instruments shall be signed by such officer or officers, agent or agents of the Board and in such manner as from time to time shall be determined by written resolution of the Board. In the absence of such determination by the Board, such documents shall be signed by the President and countersigned by the Secretary.

ARTICLE V

Powers of the Board

5.01. General Powers of the Board. Without limiting the general powers which may be provided by law, the Declaration or these Bylaws, the Board shall have the following general powers and duties:

(a) to elect the officers of the Association as hereinabove provided;

(b) to administer the affairs of the Association and the Property;

(c) subject to Section 5.04(b) below, to engage the services of a manager or managing agent who shall manage and operate the Property and the Common Area thereof;

(d) to formulate policies for the administration, management and operation of the Common Area thereof;

(e) to adopt administrative rules and regulations governing the administration, management, operation and use of the Common Area, and to amend such rules and regulations from time to time;

(f) to provide for the maintenance, repair and

replacement of the Common Area and payments therefor, and to approve payment vouchers or to delegate such approval to the officers or the manager or managing agent;

(g) to provide for the designation, hiring and removal of employees and other personnel, including accountants and legal counsel, and to engage or contract for the

services of others, and to make purchases for the maintenance, repair, replacement, administration,

management and operation of the Common Area and to delegate any such powers to the manager or managing agent (and any

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such employees or other personnel as may be the employees of the managing agent);

(h) to estimate the amount of the annual budget, and to provide the manner of assessing and collecting from the Owners of such Assessment Parcels which have been occupied for residential purposes, their respective shares of such estimated expenses, as hereinafter provided;

(i) to dedicate or transfer all or any part of the Common Area to any public agency, authority, or utility for such purposes and subject to such conditions as may be agreed to by the Members. No such dedication or transfer shall be effective unless an instrument signed by Members entitled to case two-thirds (2/3) of the votes of the Class B membership, if any, has been recorded, agreeing to such dedication or transfer. In the event Class B membership has ceased, then two-thirds (2/3) of the votes to the Class A membership shall be required to make such dedication or transfer effective;

(j) to mortgage or sell the Common Area or any portion for such purposes and subject to such conditions as may be agreed to by the Members. No such mortgage or sale

shall be effective unless an instrument signed by Members entitled to cast two-thirds (2/3) of the votes of the Class B membership, if any, has been recorded, agreeing to such mortgage or sale. In the event Class B

membership has ceased, then two-thirds (2/3) of the votes to Class A membership shall be required to make such mortgage or sale effective;

(k) to exercise all other powers and duties vested in or delegated to the Association, and not specifically reserved to the Members by the Articles of Incorporation, the Declaration or these Bylaws;

5.02. Capital Additions and Improvements. The Board's

powers hereinabove enumerated shall be limited in that the Board shall have no authority to make capital improvements to the Common Area (other than for purposes of replacing or restoring portions of

the Common Area, subject to all the provisions of the Declaration)

having a total cost in excess of One Thousand Dollars ($1,000.00), without in each case the prior approval of the Members holding two­thirds (2/3) of the total votes.

5.03.

Tax Relief.

In connection with the Common Area, the

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Board shall have the power to seek relief from or in connection with the assessment or levy of any real property taxes, special assessments and any other special taxes or charges of the State of Illinois or any political subdivision thereof, or any other lawful taxing or assessing body, which are authorized by law to be assessed and levied on real property and the charge all expenses incurred in connections therewith to the maintenance fund.

5.04.

Rules and Regulations; Management.

(a) Rules. The Board may adopt such reasonable rules and regulations as it may deem advisable for the

maintenance, conservation and beautification of the property, and for the health, comfort, safety and general welfare of the Owners and Occupants. Written notice of such rules and regulations shall be given to all Owners and Occupants, and the entire Property shall at all times be maintained subject to such rules and regulations.

(b)

Management.

The Declarant, beneficiaries of

Declarant or the Board shall engage the initial management organization under contracts expiring not

later than ninety (90) days after the date the initial meeting of Members is held. Thereafter, the Board may engage the services of an agent to manage the Property to the extent deemed advisable by the Board. Any

management fees incurred pursuant to this Section 5.04(b) shall be paid from the assessments collected pursuant to Article VI hereof.

(c) Nothing hereinabove contained shall be construed to give the Board authority to conduct an active business for profit on behalf of all the Owners or any of them.

5.05. Liability of the Board of Directors. The members of the Board and the officers of the Association shall not be personally liable to the Owners or others for any mistake of judgment or for any acts or omissions made in good faith by such officers or Board members. The Owners shall indemnify and hold harmless each of the members of the Board and each of the officers against all contractual liability to others arising out of contracts made by the Board or officers on behalf of the Owners unless any such contract shall have been made in bad faith or contrary to the provisions of the Declaration. The liability of any Owner arising out of any such contract made by the Board or

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officers or out of the aforesaid indemnity in favor of the members of the Board or officers, to the extent not covered by insurance, shall be limited to his proportionate share of the total liability

thereunder.

ARTICLE VI

Assessments -Maintenance Fund

6.01. Preparation of Estimated Budget. Each year on or before December 1, the Board will estimate the total amount necessary to pay the cost of wages, materials, taxes, insurance, services and supplies which will be required during the ensuing calendar year for the rendering of all services authorized by the Board, together with a reasonable amount considered by the Board to be necessary for a reserve for contingencies and replacements, and shall, on or before December 15, notify each Owner in writing as to the amount of such estimate ("Estimated Cash Requirement"), with reasonable itemization thereof. The Estimated Cash Requirement shall be assessed equally among all the Owners. On or before January 1 of the ensuing calendar year, and the first of each and every month of said year, each Owner shall be obligated to pay to the Board, or as it may direct, one-twelfth (1/12) of the assessment made pursuant to this Section 6.01. On or before the date of the annual meeting of each calendar year, the Board shall supply to all Owners an itemized accounting of the maintenance expenses for the preceding fiscal year actually incurred and paid, together with a tabulation of the amounts collected from the owners pursuant to assessments made during each year and showing the net amount over or short of the actual expenditures, plus reserves.

The Board shall upon demand at any time furnish a certificate in writing signed by an officer or agent of the Association, setting forth whether the assessments on a specified Lot have been paid.

Such certificates shall be conclusive evidence of payment of any assessment therein. The Estimated Cash Requirements for each year may not be increased without the consent of at least two-thirds

(2/3) of each class of Members at a meeting called for that purpose with at least sixty (60%) percent of Owners or their proxies present. In the event such a quorum is not present, a second meeting shall be called and the quorum shall be reduced to thirty

(30%) percent of the Owners or their proxies present, provided, however that the Board may increase the Estimated Cash Requirement each years without a vote of the Owners in the event such increase

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over the previous year shall not exceed the greater of (i) five (5%) percent of the previous year's Estimated Cash Requirement or (ii) the increase over the previous year in the Consumer Price Index ("Consumer Price Index" shall mean the Consumer's Price Index for Urban Wage Earners and Clerical Workers published by the Bureau of Labor or, if discontinued, a comparable index shall be

utilized) .

6.02. Extraordinary Expenditures. The Board shall build uP and maintain a reasonable reserve ("Capital Reserve") for authorized capital expenditures, contingencies and replacements not originally included in the annual estimate. Extraordinary Expenditures which may become necessary during the year shall be charged first against such reserve. If such reserve proves inadequate for any reason, including non-payment of any Owner's assessment, the Board may, at any time, levya further assessment, which shall be divided pro rata among the remaining installments for such fiscal year and assessed equally among the Owners. The Board shall serve notice of further assessment on all such Owners bya statement in writing giving the amount and reasons therefor,

and such further assessment shall become effective with the monthly maintenance payment which is due more than ten (10) days after the delivery or mailing of such notice of further assessment. All such Owners shall be obligated to pay the adjusted monthly amount. In the event the Board determines that there exists a surplus in the Capital Reserve, the Board shall have the authority to transfer such funds into the operating account to fund any deficit in said

account.

      6.03.       Budget for First Year. When the first Board elected

hereunder (or appointed by the Declarant or its beneficiaries) takes office, it shall determine the Estimated Cash Requirements,

as hereinabove defined, for the period commencing on the first day of the month following the conveyance of the first Lot and ending on December 31 of the calendar year following said conveyance. The initial Estimated Cash Requirement shall be divided among the remaining monthly installments of such calendar year and assessed

equally to all Owners.

6.04. Failure to Prepare Annual Budget. The failure or delay of the Board to prepare or serve the annual or adjusted estimate on an Owner shall not constitute a waiver or release in any manner of such Owner's obligation to pay the maintenance costs and necessary reserves, as herein provided, whenever the same shall be determined, and in the absence of any annual estimate or adjusted estimate, the Owner shall continue to pay the monthly maintenance charge at the then existing monthly rate established

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for the previous period until the monthly maintenance payment which is due more than ten (10) days after such new annual or adjusted estimate shall have been mailed or delivered.

6.05. Books and Records. The Board shall keep full and correct books of account in chronological order of the receipts and expenditures affecting the Common Area, specifying and itemizing the maintenance and repair expenses of the common Area and any other expenses incurred. Such records and the vouchers authorizing the payments shall be available for inspection by any Owner or any representative of an Owner duly authorized in writing at such reasonable time or times during normal business hours as may be requested by the Owner or his representative. Upon ten (10) days notice to the Board, any Owner shall be furnished a statement of his account, setting forth the amount of any unpaid assessments or

other charges due and owing from such Owner.

6.06. Status of Collected Funds. All funds collected hereunder shall be held and expended for the purposes designated herein, and (except for such special assessments as may be levied hereunder against less than all the Owners and for such adjustments as may be required to reflect delinquent or prepaid assessments) shall be deemed to be held in trust for the benefit, use and account of all the Owners, other than the Declarant. All funds not otherwise employed shall be deposited from time to time to the credit of the Association in such banks, trust companies or other

depositories as the Board may select.

6.07. Remedies for Failure to Pay Assessments. Any assessments which are not paid when due shall be delinquent. If the assessment is not paid within thirty (30) days after the due date, the assessment shall bear interest from the due date at the rate of ten (10%) percent per annum, and the Association may bring an action at law against the Owner personally obligated to pay the same, or foreclose the lien against the Assessment Parcel, and interest, costs and reasonable attorney's fees of any such action shall be added to the amount of such assessment. To the extent permitted by any court decision or any statute or law now or hereafter effective, the amount of any delinquent and unpaid charges or assessments, and interest, costs and fees as above provided, shall be and become a lien or charge against the Lot of the Owner involved when payable and may be foreclosed by an action brought in the name of the Board as in the case of foreclosure of liens against the real estate. Unless otherwise provided in the Declaration, the members of the Board and their successors in office, acting on behalf of the other owners, shall have the power to bid in the interest so foreclosed at foreclosure sale, and to acquire and hold, lease, mortgage and convey the same. Any court

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shall be authorized to restrain the defaulting Owner from reacquiring his interest at such foreclosure. The lien of the assessments provided for herein shall be subordinate to the lien of any mortgage now or hereafter placed on the Assessment Parcels provided, however, that such prior recorded mortgage shall be subject to the lien of all unpaid assessments with respect to such Lot which became due and payable subsequent to the date the holder of said mortgage takes possession of the Assessment Parcel, accepts a conveyance of any interest in the Lot or has a receiver appointed

in a suit to foreclose his lien.

6.08. Forcible Entry and Detainer. In addition to the rights and remedies set forth in Section 6.07, if any Owner shall default in the payment, when same shall be due, of the aforesaid charges or assessments and said default shall continue for thirty

(30) days after notice to said Owner by the Board, setting forth the amount of unpaid charges or assessments together with a demand for payment thereof, the Board shall have the right to declare said default a Forcible Detainer of the Lot and shall have the right, on behalf of the other Owners, to enter and take possession of the Townhouse Unit from said defaulting Owner, to put out the Owner, or any Occupant claiming by, through or under the Owner, using such reasonable force as the Board shall deem necessary under circumstances and to exercise any other rights and remedies set forth in the Forcible Entry and Detainer Act, Chapter 57, Illinois

Revised Statues.

      6.09.       Working Capital Fund. Upon the closing of the first

sale of each Lotto a purchaser for value, the purchasing owner shall make a capital contribution to the Association in an amount equal to two months initial assessment. Said amount shall not be refundable to any Owner and shall be held and used by the Association to establish operating and replacement reserves as the

Board deems necessary.

ARTICLE VII

ARTICLE VII

Interim Procedures

Until the initial meeting of the Members, the Declarant (or its beneficiaries or designee) may appoint the Board which shall

have the same powers and authority as given to the Board generally.

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ARTICLE VIII

Amendments

These Bylaws may be amended or modified from time to time in accordance with the same provisions governing amendments to the

Declaration.

ARTICLE IX

Interpretation

In the case of any conflict between the Articles of Incorporation of the Association and these Bylaws, the Articles of Incorporation shall control; and in the case of any conflict between the Declaration and these Bylaws, the Declaration shall

control.

ARTICLE X

Definition of Terms

The terms used in these Bylaws shall have the same definition as set forth in the Declaration to which these Bylaws are attached

to the extent such terms are defined therein.

ARTICLE XI

DisSOlution

Upon dissolution of the Association, any Association assets shall be transferred to a homeowner's association similar in nature or functions or to any appropriate public agency having similar

purposes.

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