FINISTERRE HEIGHTS HOMEOWNERS ASSOCIATION BYLAWS ARTICLE I. MEMBERSHIP A Non-Profit Washington Corporation 1 MEMBERSHIP. Persons owning or purchasing by contract a residential lot in the Planned Residential Development of Finisterre Heights shall be members of FINISTERRE HEIGHTS HOMEOWNERS ASSOCIATION, a Non-Profit Washington Corporation which is referred to herein as the Association. Gibbons Drilling, Inc., the Developer shall be a Class B member in the Association until such time as the Developer relinquishes its membership interest or converts the Class B membership to Class A membership. 2 CLASSES OF MEMBERSHIP. The ASSOCIATION shall be composed of two classes of membership: Class A. Class A members will be all those members other than the Developer. Class A members will be entitled to one (1) vote for each building site in which they hold an interest required for membership under Article VI of the Articles of Incorporation. If more than one person holds such an interest, all such persons shall be members, but the vote with respect to such building site shall be exercised as the persons holding such interest shall determine between themselves, and in no event shall more than one (1) vote be cast with respect to any building site at a membership meeting. Class A members shall have no voting rights so long as there is Class B membership. Class B. The Class B member shall be the Developer, Gibbons Drilling, Inc., a Washington corporation. The Class B member shall have all voting rights until converted to Class A membership. Class B membership may be converted to Class A membership at the option of the Class B member evidenced by written notice to the Secretary of the Association. 3 TRANSFER. Membership shall be transferred automatically as a nonsegregable appurtenance to the parcel to which it relates after the initial membership in the Association. 4 MEMBERS PROPERTY RIGHT IN ASSOCIATION. No member shall have any legal right, title or interest in the property or assets of the Association, and no member shall be entitled to any part thereof in the event of his transfer or termination of membership. 5 MULTIPLE OWNERS OF ONE MEMBERSHIP. The ownership by two or more persons of one membership will not entitle such membership to more than one vote. In cases where the title or interest in land is held as husband and wife, the Application and Certificate of Membership shall be signed by and name both husband and wife. The same principle shall apply if the owners of the land are partners, joint tenants, or tenants in common. All proxies must be in 1
writing, executed by the members themselves, or by their duly authorized attorney in fact, and must be filed with the Secretary of the Association at or before the meeting at which it is proposed to use the proxies. 6 MEMBERSHIP CERTIFICATES. The Board of Directors may authorize the issuance of a Certificate of Membership in a form to be determined by the Board of Directors. ARTICLE II. MEETINGS 1 ANNUAL MEETING. At least one meeting of the members shall be held in each calendar year. Except as otherwise determined by the Board of Directors, meetings of the members shall be held at a designated site. 2 TIME AND PLACE. The regular meeting of the members shall be held at the Utsalady Ladies Aid Home located at 82 East Utsalady on Camano Island, Washington, or at such location designated by the Board, at the hour of 10:00 a.m. on the first Saturday of March of each calendar year. The place, date, and time of the meeting may be changed by the Board provided that thirty (30) days notice of such change is mailed to all members. 3 SPECIAL MEETINGS. Special meetings of the members may be called at any time upon the written request of any two Directors or two-thirds (2/3) of the members then entitled to vote. If more than eighteen (18) months have elapsed without the annual members meeting being held, any member may call a meeting to be held at the registered office of the Association. Such special meeting shall be called not less than ten (10) nor more than fifty (50) days after the receipt of such request, and if the Secretary shall neglect or refuse to issue such call, a Director or the member making such request may do so. 4 NOTICE. Notice of all member meetings stating the time and in general terms the purposes thereof, shall be mailed at least thirty (30) days in advance by the Secretary or person calling such meeting to each member at his address as the same appears on the records of the Association. No other notice of member meetings need be given. If such notice is placed in the United States mail, postage prepaid, and addressed to the members last known address, notice shall be deemed to have been given. Notice of any membership meetings may be waived in writing by any member at any time. In the event of a special meeting being called by any member in accordance with Article II, Item 3, ten (10) days notice shall be sufficient. 5 PROOF OF NOTICE. A record of the service and notice of a member meeting, given in the manner above provided, shall be entered in the Association s minutes, and such entry, if read and approved at the meeting of the members, shall be conclusive on the question of such notice. 6 CONSENT WITHOUT NOTICE. When a majority of the Association members are present in person or by proxy at any meeting, however called or notified, and such a majority of 2
the Association members sign a written consent thereto, and such written consent is made a part of the minutes of such meeting, the proceedings held at such meeting shall be valid, regardless of the manner in which the meeting is called. 7 QUORUM FOR AN ANNUAL OR SPECIAL GENERAL MEETING. If within 15 minutes from the time appointed for an annual or special general meeting a quorum is not present, the meeting shall be terminated if the meeting was convened upon the requisition of members; but in any other case, the meeting shall stand adjourned for a further 15 minutes from the time appointed and, within 30 minutes from the time appointed a quorum is not present for the meeting, the eligible voters present in person or by proxy shall constitute a quorum. 8 RECESSED MEETINGS. Any regular or called meeting of the members may recess from day to day, or from time to time, without further notice, until its business is completed. If for any reason a majority of the Association entitled to vote is not present then any meeting of the members may recess from day to day or from time to time, without further notice until a quorum shall attend. The fact of the recess and the reasons therefore shall be recorded in the Association minutes. When a quorum shall be present, any business may be transacted which might have been transacted at any meeting had the same been held on the day on which the same was originally called. The annual meeting for the election of Directors, however, may be recessed only from day to day. 9 PRESIDING OFFICER. The President, or in his absence, the Vice President, or in the absence of the President and Vice President, a chairman elected by the members present, shall call the meeting to order and shall act as the presiding officer thereof. 10 SECRETARIAL OFFICER. The Secretary of the Association shall act as a secretary at all meetings of the members and of the Board of Directors, and in his absence the presiding officer may appoint any person, not necessarily a member, to act as secretary. 11 ELECTION OF DIRECTORS. At the annual meeting of the members, those entitled to vote shall elect by ballot a Board of Directors as constituted by these Bylaws and the Articles of Incorporation of this Association. 12 STANDING TO VOTE. After elimination of the Class B membership, then each Class A member of record on the books of the Association ten (10) days before such meeting shall be entitled to one vote. Cumulative voting for directors is not allowed. A person holding more than one membership shall not be entitled to more than one vote upon any issue or for any candidate. This paragraph shall not preclude a member from voting as many proxies as may have been properly executed naming such member as a proxy. 13 NOTICE OF CHANGE OF TIME AND PLACE OF ELECTION. The time and place of holding meetings for the election of Directors shall not be changed within thirty (30) days before the day on which the election is to be held, unless notice of such change shall be 3
given to each member ten (10) days before the election is held by letter mailed to his last-known post office address. 14 PARLIAMENTARY PROCEDURE. All meetings shall be governed by and conducted according to the latest edition of Robert s Rules of Order, Revised. ARTICLE III. DIRECTORS 1 NUMBER. 1.1 The Association must have at least 3 and not more than 5 members. 1.2 No person may stand for the Board of Directors or be on the Board of Directors with respect to an Association lot if the Homeowners Association is entitled to register a lien against that Association lot under the CC&R s or Bylaws. 2 QUALIFICATIONS. Any person of lawful age and of good character and reputation shall be eligible for election as a director of this Association. 3 TERM. Each Director shall hold office for three (3) years, or for such period as he may have been appointed, or until his successor shall have been elected and shall qualify. 4 VACANCIES. Whenever any vacancy shall occur among the Directors by death, resignation, removal or otherwise, it shall be filled by appointment by the President. The appointed Director shall hold office for the remainder of any unexpired portion of the term to which he is appointed. 5 BOARD MEETING. Immediately after the election of Directors at the annual meeting of the members the Directors shall meet for the purpose of organization, election of officers, and the transaction of all other business of the Association. 6 TIME AND PLACE OF MEETING. Meetings of the Board of Directors may be held at such time and place as the President may from time to time appoint. 7 NOTICE OF SPECIAL BOARD MEETINGS. Notice of special meetings of the Board of Directors, stating the time and in general terms the purpose or purposes thereof, shall be mailed or telephoned or personally delivered to each Director not later than the day before the day appointed for the meeting. An entry of the service of notice, given in the manner above provided, shall be made in the minutes of the proceedings of the Board of Directors and such entry, if read and approved at a subsequent meeting of the Board of Directors, shall be conclusive on the question of service. If all the Directors shall be present at any Directors meeting, however called or noticed, and sign a written consent thereto which is entered on the record of such meeting, which said waiver shall be filed with the Secretary of the Association and entered on the record of such meeting, any business may be transacted at such meeting and the transactions 4
of such meeting shall be as valid as if it had been transacted at a meeting regularly called or noticed. 8 ADDRESS OF DIRECTORS. Each Director shall register his address with the Secretary, and notices of meetings mailed to such address shall be valid notices thereof. 9 QUORUM. A majority of the whole number of Directors shall constitute a quorum for the transaction of business, and every act or decision of a majority of the Directors present at a meeting at which a quorum is present, made or done when duly assembled, shall be valid as the act of the Board of Directors. 10 NON-PROFIT NATURE OF CORPORATION. This Association is hereby expressly declared to be a non-profit corporation and not a public service corporation. 11 POWERS AND DUTIES. The Board of Directors shall have power, in a nondiscriminatory manner, to: 11.1 Suspend the voting rights of a member and the right to use recreational facilities during any period in which such member shall be in default in the payment of any assessment levied by the Association. Such rights may also be suspended after notice and hearing, for a period not to exceed sixty (60) days for infraction of published rules and regulations or the covenants, conditions and restrictions of Finisterre Heights; 11.2 Exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the membership by other provisions of these Bylaws, or the Articles of Incorporation; 11.3 Issue, or cause an appropriate officer to issue, upon demand by any person, a certificate setting forth whether or not any member s account has been paid. A reasonable charge may be made by the Board for the issuance of these certificates. If a certificate states an account has been paid, such certificate shall be conclusive evidence of such payment; 11.4 Procure and maintain adequate liability and hazard insurance on property owned by the Association; 11.5 Cause any officer or employee having fiscal responsibilities to be bonded, as it may deem appropriate; 11.6 Maintain and pay taxes upon the recreational and common area, if any, and obtain public liability insurance with respect to all Association property. 5
12 AMENDMENT OF BYLAWS. The Board shall have the power to amend these Bylaws by majority vote of the Board of Directors. Provided, that no amendment to the Bylaws shall alter or change the rights, privileges, or duties of the Developer without the Developer s written consent. So long as the Developer owns un-sold lots, any proposed amendments to the Bylaws shall be approved by the Developer. 13 REMOVAL. The members, by a majority vote at any regular or special meeting of the Association at which a quorum is present, may remove any member of the Board of Directors with or without cause. ARTICLE IV. OFFICERS 1 EXECUTIVE OFFICERS. The executive officers of the Association shall be a President, Vice President, a Secretary and a Treasurer; PROVIDED that one person may serve as both Secretary and Treasurer of the Association. 2 QUALIFICATIONS: TERM. All of the officers shall be Directors. They shall be elected by the initial board of directors at their first meeting which shall be deemed the first meeting of the Association after its organization. Thereafter officers shall be elected at the first meeting after the annual election of the Directors, and they shall hold office for one year and until their successors are elected; PROVIDED, however, that the Secretary or the Treasurer may be removed by the Board of Directors at any time with or without cause. 3 REMOVAL. Any officer, employee or agent may be removed by the Board of Directors whenever in their judgement the best interest of the Association will be served thereby. Such removal, however, shall be without prejudice to the contract rights of the persons so removed. 4 STANDARDS. Officers and Directors shall be deemed to stand in a fiduciary relation to the Association and shall discharge the duties of their respective positions in good faith and with that diligence, care and skill which ordinarily prudent men would exercise under similar circumstances in like positions when dealing with their own business affairs. 5 VACANCIES. If the office of President, Vice President, Secretary or Treasurer becomes vacant by reason of death, resignation, removal, or otherwise, the President shall appoint a successor who shall hold the office for the expired term and until his successor is elected. 6 APPOINTIVE SECRETARY AND/OR TREASURER. In special cases the Board may by resolution appoint any qualified person as Secretary and/or Treasurer to act until a suitable person can be found among the membership. ARTICLE V. PRESIDENT 6
1 GENERAL POWERS AND DUTIES. The President shall be the chief executive officer of the Association. The President shall: 1.2 Have general charge of the business of the Association; 1.1 Preside at all meetings of the members and Board of Directors; 1.3 Shall execute, with the Secretary, in the name of the Association, all deeds, bonds, contracts, and other obligations and instruments authorized by the Board of Directors to be executed; and 1.4 With the Secretary shall sign all certificates of the Association. 2 OTHER POWERS AND DUTIES. The President shall also have such other powers and shall perform such other duties as may be assigned to him by the Board of Directors. ARTICLE VI. VICE PRESIDENT 1 GENERAL POWERS AND DUTIES. The Vice President shall be vested with all the powers and shall perform all the duties of the President in case of the absence or disability of the President. 2 OTHER POWERS AND DUTIES. The Vice President shall also have such other powers and shall perform such other duties as may be assigned to him by the Board of Directors. ARTICLE VII. SECRETARY 1 GENERAL POWERS AND DUTIES. The Secretary shall: 1.1 Keep the minutes of all proceedings of the members and of the Board of Directors in books provided for that purpose; 1.2 Give and serve notices of all meetings of the members and of the Board of Directors and otherwise; 1.3 Execute, with the President, and in the name of the Association, all deeds, bonds, contracts and other obligations and instruments authorized by the Board of Directors to be executed, and, with the President, shall sign all certificates of the Association; 1.4 Be the custodian of the corporate seal, if any, of the Association, and when so ordered by the Board of Directors shall affix the seal, if any, to deeds, bonds, contracts, and other obligations and instruments; 7
1.5 Keep and have charge of the minutes of the meetings of the Board of Directors and of the members, the book of certificates, and such other books and papers as the Board of Directors may direct; and 1.6 In general, perform all the duties incident to the office of Secretary, subject to the control of the Board of Directors. 2 OTHER OFFICER MAY ACT. In case of the absence or disability of the Secretary, or his refusal or neglect to act, notices may be given and served by the President, or by the Vice President, or by any person thereunto authorized by the President, or by the Vice President, or by the Board of Directors. 3 COMBINATION OF OFFICES. The Board may by resolution combine the office of secretary and treasurer. ARTICLE VIII. TREASURER 1 GENERAL POWERS AND DUTIES. The Treasurer shall: 1.1 Keep, or cause to be kept, full and accurate accounts of receipts and disbursements, in books to be kept for that purpose; 1.2 Receive and deposit, or cause to be received and deposited, all monies and other valuables of the Association, in the name and to the credit of the Association, in such depositories as may be designated by the Board of Directors; 1.3 Disburse, or cause to be disbursed, the funds of the Association as may be directed by the Board of Directors, taking proper vouchers for such disbursements; 1.4 Render to the President and to the Board of Directors, whenever they may require, accounts of all his transactions as Treasurer and of the financial condition of the Association; and 1.5 In general, perform all the duties of the office of Treasurer, subject to the control of the Board of Directors. ARTICLE IX. DUES, CHARGES, ASSESSMENTS, AND MANNER OF COLLECTION AND ENFORCEMENT 8
1 SOURCE OF FUNDS. The expenses of operating and maintaining the property owned by the Association, or for which the Association is responsible and other property owned or hereafter acquired by the Association, and the costs of any additions thereto authorized by the Association shall be paid for by the Association with funds received by payment of dues and assessments. 2 ASSESSMENT FOR DUES. 2.1 Until January 1st of the year immediately following the sale of the first lot in Finisterre Heights, the maximum annual assessment shall be $240.00. 2.2 From and after January 1st of the year immediately following the conveyance of the first lot, the maximum annual assessment may be increased each year not more than five percent (5%) above the maximum assessment for the previous year without a vote of the members. 2.3 From and after January 1st of the year immediately following the conveyance of the first lot, the maximum annual assessments may be increased above five percent (5%) by the vote or written assent of sixty percent (60%)) of the members at a regular or special meeting called for such a purpose. 2.4 The Board of Directors of the Association may fix the annual assessment at an amount not in excess of the maximum. 3 ADDITIONAL ASSESSMENTS. Any assessments for maintenance, construction, or emergency replacement of damaged or destroyed portions of the roadway system may be levied only by a simple majority vote of those memberships attending a regular annual meeting or at a special meeting of the membership called for the specific purpose of voting on such an assessment. The resolution setting forth the authority for any special assessments shall include the due date and the delinquent date for payment and the terms of payment. 4 BILLING. Assessment will be billed on the first day of December of each year. All regular assessments will be due and payable on January 1 of each year. Assessments not paid by March 1 will be considered delinquent. 5 DELINQUENT ACCOUNTS: FAILURE TO PAY. Any lawful charge due the Association remaining unpaid after sixty (60) days of the due date shall bear interest at the rate of twelve percent (12%) per annum from the due date until paid without prejudice to the right of the Association to terminate service. A re-billing fee of $50 will be charged per statement if dues remain unpaid after 60 days. If water service is terminated, a charge for disconnecting and reconnecting must be paid in addition to the principal and interest due before service will be resumed. The current disconnect/reconnect charge is $150.00. Unpaid accounts may be leaned and foreclosed upon in Island County Superior Court. In addition to any unpaid levy amounts, 9
the debtor shall also be responsible for the payment of all costs of collection together with reasonable attorney fees. 6 LOTS HELD BY DEVELOPER. The only lots subject to fees and assessments shall be those lots which have been sold by the Developer. All lots retained by the Developer shall be exempt from dues and assessments until such time as the lots have been sold. Only in the event of a sale, and a subsequent acquisition of the sold lot, shall the Developer s lots (acquired through such reacquisition) be subject to assessments and fees. ARTICLE X. INDEMNIFICATION OF DIRECTORS AND OFFICERS Each director or officer now or hereafter serving the corporation, and each person who at the request of or on behalf of the corporation is now serving or hereafter serves as a director or officer of any other corporation and the respective heirs, executors, and administrators of each of them shall be indemnified by the corporation to the fullest extent provided by law against all costs, expenses, judgements, and liabilities, including attorneys fees, reasonably incurred by or imposed upon him in connection with or resulting from any claim, action, suit, or proceeding, civil or criminal, in which he is or may be made a party by reason of his being or having been such director or officer by reason of any action alleged to have been taken or omitted by him as such director or officer, whether or not he is a director or officer at the time of incurring such costs, expenses, judgements and liabilities, provided that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation. The foregoing rights of indemnification shall not be exclusive of other rights to which such director or officer may be entitled as a matter of law. The Board of Directors may obtain insurance on behalf of any person who is or was a director, officer, employee, or agent against any liability arising out of his status as such, whether or not the corporation would have power to indemnify him against such liability. ARTICLE XI. WATER SYSTEM 1 OWNERSHIP. The water system serving Finisterre Heights is owned and operated by the Finisterre Heights Homeowners Association. 2 CONSERVATION. The Finisterre Heights Water System is required by the Washington State Department of Health to develop and implement a Water System Management Program, which includes water conservation. Prudent use of water by all members is required to avoid over-taxing the system or exceeding the Association s water right. Maintenance or emergency situations may require additional conservation measures. In such situations members will be notified of the restricted usage requirement. 10
3 CROSS CONNECTION CONTROL. A cross connection control program to prevent back flow of possible contaminants from residential plumbing systems entering the water distribution system is required. All existing features requiring cross connection control protection devices and any such features added in the future must be reported to the Association. The Association or its representative shall have the right to install, inspect and maintain cross connection control protection devices as necessary, at member s expense, to comply with Washington State Department of Health regulations and to protect the water supply. 4 ACCESS. The Association or its representative has the right to access all of the lots and the community areas of Finisterre Heighs for the purpose of maintaining the water system and all appurtenances thereof, including termination of service. In case of emergency, said right of access is granted whether or not the member is present. 5 WATER QUALITY REPORT. The Association shall annually provide to each member a report of the system s water quality. ARTICLE XII. GOVERNING DOCUMENTS These BYLAWS along with the ARTICLES OF INCORPORATION and COVENANTS, CONDITIONS AND RESTRICTIONS of Finisterre Heights shall be the governing documents of the Association and its members. Adopted the 2nd day of July, 2014 Original Bylaws adopted May 5, 1995 AMENDMENTS - See Attached Amendment Record: November 2004 November 18, 2004 November 30, 2013 March 1, 2014 July 2, 2014 FINISTERRE HEIGHTS HOMEOWNERS ASSOCIATION By: Mike Wright, Board President 11