ARTICLE 4: OFFICERS

4.1​ Officers. The officers of the Association shall be a president, secretary, and treasurer. The president and secretary shall be elected from among the members of the Board; other officers may, but need not, be members of the Board. The Board may appoint such other officers, including one or more assistant secretaries and one (I) or more assistant treasurers, as it shall deem desirable, such officers to have such authority and perform such duties as the Board prescribes. Any two (2) or more offices may be held by the same person, except the offices of president and secretary.

4.2 Election and Term of Office. Before the Control Transfer Date, the Declarant shall elect the officers of the Association. After the Control Transfer Date, the Board shall elect the officers of the Association at the first meeting of the Board following each election of new directors. Such officers shall serve until their successors are elected.

4.3 Removal and Vacancies. The Board may remove any officer whenever in its judgment the best interests of the Association will be served and may fill any vacancy in any office arising because of death, resignation, removal, or otherwise for the unexpired portion of the term.

4.4​ Powers and Duties. The officers of the Association shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as may specifically be conferred or imposed by the Board of Directors. The president shall be the chief executive officer of the Association. The treasurer shall have primary responsibility for the preparation of the budget and may delegate all or part of the preparation and notification duties to a finance committee, management agent, or both. The secretary shall be responsible for preparing minutes of meetings of the Association and the Board and for authenticating records of the Association.

4.5 Resignation. Any officer may resign at any time by giving written notice to the Board of Directors, the president, or the secretary. Such resignation shall take effect on the date of the 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.

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4.6​ Agreements. Contracts, Deeds, Leases, Checks, Etc. All agreements, contracts, deeds, leases, checks, and other instruments of the Association shall be executed by at least two (2) officers or by such other person or persons as may be designated by Board resolution, provided that the signature of only one (I) officer or such other person as may be designated by Board resolution shall be required for the payment of routine Association expenses that recur monthly or Association expenses of less than $500.00.

 

4.7 Compensation. Compensation of officers shall be subject to the same limitations as compensation of directors under Section 3.14.

ARTICLE 5: COMMITTEES
 

​5.1 General. The Board may appoint such committees as it deems appropriate to perform such tasks and to serve for such periods as the Board may designate by resolution. Each committee shall operate in accordance with the terms of such resolution. Unless otherwise provided by the Board, committee members shall be eligible Members or residents; provided however, no Member may have more than one (1) representative on a committee at any time. No committee appointed by the Board shall be empowered to take any affirmative action nor to bind the Board or the Association without the consent of the Board.
 

5.2 Architectural Control. Subject to the Declaration, the full Board shall constitute the elected members of the ACC, unless the Board delegates said authority to a committee composed of three (3) or more Members.

 

5.3 Covenants Committee. In addition to any other committees which the Board may establish pursuant to the Declaration, these Bylaws and, specifically, Section 5.1, the Board may appoint a covenants committee consisting of at least three (3) and no more than five (5) Members. Acting in accordance with the provisions of the Declaration, these Bylaws, and resolutions the Board may adopt, the covenants committee, if established, shall be the hearing tribunal of the Association and shall conduct all hearings held pursuant to Section 3.24.

5.4 Committees. In addition to any other committees appointed as provided above, the Members of the Association may elect a Committee to determine the nature and extent of services, if any, to be provided to the development by the Association in addition to those provided to all Members of the Association. A Committee may advise the Board on any other issue, but shall not have the authority to bind the Board or the Association. Such Committees, if elected, shall consist of three (3) to five (5) Members, as determined by the vote of at least a Majority of the Owners of Tracts.
 

Committee members shall be elected for a term of one (I) year or until their successors are elected. Any director elected to the Board of Directors shall be an ex officio member of the Committee. The Committee shall elect a chairperson who shall preside at its meetings and shall be responsible for transmitting any and all communications to the Board.
 

In the conduct of its duties and responsibilities, each Committee shall abide by the meeting, notice and quorum requirements applicable to the Board. Meetings of a Committee shall be open to all Owners of Tracts and their representatives; provided, however, a Committee may act by unanimous written consent in lieu of a meeting.
 

ARTICLE 6: INSURANCE AND CASUALTY LOSSES
 

6.1 Association Insurance.

a. Required Coverages. The Association, acting through its Board or its duly authorized agent, shall obtain and continue in effect such types of insurance as required by Texas law, including the following types of insurance, if reasonably available, or if not reasonably available, the most nearly equivalent coverages as are reasonably available.

     (i)​ Blanket property insurance covering "risks of direct physical loss" on a "special form" basis (or comparable coverage by whatever name denominated) for all insurable improvements on the Common Area, if any, and on other portions of the Area of Common Responsibility to the extent that it has assumed responsibility for maintenance, repair and/or replacement in the event of a casualty. If such coverage is not generally available at reasonable cost, then "broad form" coverage may be substituted. The Association shall have the authority to and interest in insuring any property for which it has maintenance or repair responsibility, regardless of ownership. All property insurance policies obtained by the Association shall have policy limits sufficient to cover the full replacement cost of the insured improvements;

     (ii) Commercial general liability insurance on the Area of Common Responsibility, insuring the Association and its Members for damage or injury caused by the negligence of the Association or any of its Members, employees, agents, or contractors while acting on its behalf. If generally available at reasonable cost, the commercial general liability coverage (including primary and any umbrella coverage) shall have a limit of at least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000.00) in the aggregate with respect to bodily injury, personal injury, and property damage, provided should additional coverage and higher limits be available at reasonable cost which a reasonably prudent person would obtain, the Association shall obtain such additional coverages or limits;
 

   (iii) Workers compensation insurance and employers liability insurance, if and to the extent required by law;
 

   (iv) Directors and officers liability coverage;

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   (v) Fidelity insurance covering all Persons responsible for handling Association funds in an amount determined in the Board's best business judgment but not less than an amount equal to one-sixth ( 1 /6th) of the annual General Assessments on all Tracts plus reserves on hand. Fidelity insurance policies shall contain a waiver of all defenses based upon the exclusion of Persons serving without compensation; and

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    (vi) Such additional insurance as the Board, in its best business judgment, determines advisable, which may include, without limitation, flood insurance.

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In the event that any portion of the Common Area is or shall become located in an area identified by the Federal Emergency Management Agency ("FEMA") as an area having special flood hazards, a "blanket" policy of flood insurance on the Common Area must be maintained in the amount of one hundred percent (100%) of current "replacement cost" of all affected improvements and other insured property or the maximum limit of coverage available, whichever is less.

In addition, the Association may obtain and maintain property insurance on the insurable improvements within the development in such amounts and with such coverages as the Owners may agree upon pursuant to Article 2. Any such policies shall provide for a certificate of insurance to be furnished to the Association and to the Owner of each Tract insured upon request.

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Premiums for all insurance on the Area of Common Responsibility shall be Common Expenses and shall be included in the General Assessment, except that (i) premiums for property insurance obtained on behalf of specially requested members shall be charged to the Owners of Tracts within the benefited special assessment; and

(ii) premiums for insurance on Exclusive Common Areas may be included in the special assessment of the benefited Tracts unless the Board of Directors reasonably determines that other treatment of the premiums is more appropriate. In the event of an insured loss, the deductible shall be treated as a Common Expense and assessed in the same manner as the premiums for the applicable insurance coverage. However, if the Board reasonably determines, after notice and an opportunity to be heard in accordance with these Bylaws, that the loss is the result of the negligence or willful misconduct of one (1) or more Owners, their guests, invitees, or lessees, then the Board may charge the full amount of such deductible against such Owner(s) and their Tracts as a specific assessment against those particular Owner(s) and Tract(s).

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The Association shall have no insurance responsibility for any portion of the Private Amenities.

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b. Policy Requirements. The Association shall arrange for periodic reviews of the sufficiency of insurance coverage by one (1) or more qualified Persons, at least one (I) of whom must be familiar with insurable replacement costs in Franklin County, Texas and/or nearby metropolitan areas. All Association policies shall provide for a certificate of insurance to be furnished to the Association, and to each Member upon

request. The policies may contain a reasonable deductible and the amount thereof shall not be subtracted from the face amount of the policy in determining whether the policy limits satisfy the requirements of Section 6.1(a).
 

All insurance coverage obtained by the Board shall: (i) be written with a company authorized to do business in the State of Texas which satisfies the requirements of the Federal National Mortgage Association, or such other secondary mortgage market agencies or federal agencies as the Board deems appropriate; (ii) be written in the name of the Association as trustee for the benefited parties. Policies on the Common Areas shall be for the benefit of the Association and its Members; (iii) not be brought into contribution with insurance purchased by Owners, occupants, or their Mortgagees individually; (iv) contain an inflation guard endorsement; (v) include an agreed amount endorsement, if the policy contains a co-insurance clause; and (vi) include an endorsement requiring at least thirty (30) Days prior written notice to the Association of any cancellation, substantial modification, or non-renewal.
 

In addition, the Board shall use reasonable efforts to secure insurance policies which list the Owners as additional insureds and provide: (i) a waiver of subrogation as to any claims against the Association's Board, officers, employees, and its manager, the Owners and their tenants, servants, agents, and guests; (ii) a waiver of the insurer's rights to repair and reconstruct instead of paying cash; (iii) an endorsement precluding cancellation, invalidation, suspension, or non-renewal by the insurer on account of any one (1) or more individual Owners, or on account of any curable defect or violation without prior written demand to the Association to cure the defect or violation and allowance of a reasonable time to cure; (iv) an endorsement excluding Owners' individual policies from consideration under any "other insurance" clause; (v) a cross liability provision; and (vi) a provision vesting the Board with the exclusive authority to adjust losses; provided, however, no Mortgagee having an interest in such losses may be prohibited from participating in the settlement negotiations, if any, related to the loss.
 

c. Damage and Destruction. In the event of any insured loss, only the Board or its duly authorized agent may file and adjust insurance claims and obtain reliable and detailed estimates of the cost of repair or reconstruction. Repair or reconstruction, as used in this subsection, means repairing or restoring the property to substantially the condition in which it existed prior to the damage, allowing for changes or improvements necessitated by changes in applicable building codes. Any damage to or destruction of the Common Area shall be repaired or reconstructed unless the Members representing at least sixty-seven percent (67%) of the total votes in the Association, and, during the Development Period, the Declarant, decide within sixty (60) Days after the loss not to repair or reconstruct.
 

If either the insurance proceeds or reliable and detailed estimates of the cost of repair or reconstruction, or both, are not available to the Association within such sixty (60) Day period, then the period shall be extended until such funds or information are available. However, such extension shall not exceed sixty (60) additional Days. No Mortgagee shall have the right to participate in the determination of whether the damage or destruction to the Common Area shall be repaired or reconstructed.
 

If determined in the manner described above that the damage or destruction to the Common Area shall not be repaired or reconstructed and no alternative improvements are authorized, the affected property shall be cleared of all debris and ruins and thereafter shall be maintained by the Association in a neat and attractive, landscaped condition consistent with the Community-Wide Standard. Any insurance proceeds remaining after paying the costs of repair or reconstruction, or after such settlement as is necessary and appropriate, shall be retained by and for the benefit of the Association, and placed in a capital improvements account. This is a covenant for the benefit of Mortgagees and may be enforced by the Mortgagee of any affected Tract.
 

6.2 Owners' Insurance. By virtue of taking title to a Tract, each Owner covenants and agrees with all other Owners and with the Association to carry property insurance for the full replacement cost of all insurable improvements on his or her Tract, less a reasonable deductible, unless either the Association carries such insurance (which they may, but are not obligated to do hereunder). If the Association assumes responsibility for obtaining any insurance coverage on behalf of Owners, the premiums for such insurance shall be levied as a specific assessment against the benefited Tract and the Owner thereof.
 

Each Owner further covenants and agrees that in the event of damage to or destruction of structures on or comprising his or her Tract, the Owner shall proceed promptly to repair or to reconstruct in a manner consistent with the original construction or such other plans and specifications as are approved in accordance with the architectural control provisions of the Declaration. Alternatively, the Owner shall clear the Tract of all debris and ruins and maintain the Tract in a neat and attractive, landscaped condition consistent with the Community-Wide Standard. The Owner shall pay any costs which are not covered by insurance proceeds.

6.3 Limitation of Liability. Notwithstanding the duty of the Association to maintain and repair portions of the Common Area, neither the Association, its Board of Directors, nor any respective officer, director, committee member, employee, agent, contractor (including the management company, if any) of any of the same shall be liable to any Member or the Member's immediate household for any injury or damage sustained in the Area of Common Responsibility, the Common Area or other area maintained by the Association, or for any injury or damage caused by the negligence or misconduct of any Members or their family members, guests, invitees, agents, servants, contractors or lessees, whether such loss occurs in the Common Area or in individual Tracts.
 

Each Owner, by virtue of the acceptance of title to his or her Tract, and each other Person having an interest in or right to use any portion of Sterling Shores subdivision, by virtue of accepting such interest or right to use, shall be bound by this Section and shall be deemed to have automatically waived any and all rights, claims, demands, and causes of action against the Association arising from or connected with any matter for which the liability of the Association has been disclaimed under this Section.
 

ARTICLE 7: BUDGETS AND ASSESSMENTS
 

​7.1 Computation of General Assessment. At least thirty (30) Days before the beginning of each fiscal year, the Board shall adopt a budget covering the estimated Common Expenses during the coming year, which may include a capital contribution to establish a reserve fund in accordance with a budget separately prepared as provided in Section 7.3.
 

General Assessments shall be levied equally against all Tracts subject to assessment and shall be proposed by the Board to be set at a level which is reasonably expected to produce total income for the Association equal to the total budgeted Common Expenses, including reserves. In determining the total funds to be generated through the levy of General Assessments, the Board, in its discretion, may consider other sources of funds available to the Association, including any surplus from prior years and any assessment income expected to be generated from any additional Tracts reasonably anticipated to become subject to assessment during the fiscal year and any income expected to be generated from any Cost Sharing Agreement. Tracts and boat slip licenses owned by the Declarant shall never be subject to assessment.

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In addition to General Assessments, including maintenance charges, the Association may levy special assessments from time to time to cover unbudgeted expenses or expenses in excess of those budgeted. Any such special assessment may be levied against all Tracts and may be enforced in the same manner as the General Assessments.

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Payments by the Declarant in any year shall under no circumstances obligate the Declarant to continue such payments in future years and the treatment of such payment shall be made known to the membership, unless otherwise provided in a written agreement between the Association and the Declarant.

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Budgets. The Board shall send a copy of the adopted budget and notice of the amount of the General Assessment for the following year to each Owner at least thirty (30) days prior to the beginning of the fiscal year for which it is to be effective. Such budget and assessment shall become effective without further action of the Owners unless disapproved at a meeting by Members representing at least sixty-seven percent (67%) of the total votes in the Association and, during the Development Period, by the Declarant. Notwithstanding the foregoing, after the Control Transfer Date, if the budget proposes a change in the amount of the General Assessment from the fiscal year immediately preceding the year in which the budget is to be effective, then the budget and the increase or decrease in the General Assessment must be approved by Members representing at least sixty-seven percent (67%) of the total votes in the Association and, during the Development Period, by the Declarant. Unless approval of the budget by Members is required as set forth herein, there shall be no obligation to call a meeting for the purpose of considering the budget except on petition of the Members as provided for special meetings in Article 2, which petition must be presented to the Board within twenty (20) Days after delivery of the notice of assessments. If such a meeting is requested, assessments pursuant to such proposed budget shall not become effective until after such meeting is held, provided such assessments shall be retroactive to the original effective date of the budget if the budget is not disapproved at such meeting.

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If the proposed budget is not approved or is disapproved as required, or the Board fails for any reason to determine the budget for any year, then until such time as a budget is determined, the budget in effect for the immediately preceding year shall continue for the current year. In such event or if the budget proves inadequate for any reason, the Board may prepare a revised budget for the remainder of the fiscal year. The Board shall send a copy of the revised budget to each Owner at least thirty (30) Days prior to its becoming effective. The revised budget shall be subject to the above procedure in order to become effective.

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7.2 Reserve Budget and Capital Contribution. The Board may annually prepare reserve budgets for general purposes which take into account the number and nature of replaceable assets within the Area of Common Responsibility, the expected life of each asset, and the expected repair or replacement cost. If a reserve budget is prepared, the Board shall set the required capital contribution in an amount sufficient to permit meeting the projected needs of the Association, as shown on the budget, with respect both to amount and timing by annual General Assessments over the budget period.

 

RECORD PRODUCTION AND COPYING POLICY
 

Pursuant to the provisions of Texas Property Code §209.005:
 

Requests for Production of or Access to Books and Records: Books and Records of the Association shall be made available to the extent and in the manner provided by Texas Property Code Section 209.005. Certain Books and Records of the Association shall be confidential and are not subject to disclosure or production as provided by Texas Property Code Section 209.005(k).
 

The Association shall make the books and records of the Association reasonably available for inspection

1. by an owner; or

2. a person designated by the owner as the owner's agent, attorney or certified public accountant.
 

The books and records of the Association do not include an attorney's files related to the property owner's association except in the limited manner provided by Texas Property Code Section 209.005(d).
 

An owner or owner's agent must submit a written request for access or information by certified mail to the Association at the mailing address of the Association or authorized representative found in the most current management certificate filed in the Official Public Records of the County. The written request must identify with sufficient detail the Association books and records requested and the requestor must elect to either (1) inspect the books and records before obtaining copies or (2) have the association forward copies of the requested books and records.
 

The Association shall allow access to or provide copies of its books and records required by law to the extent that the requested books and records are in the possession, custody or control of the Association.

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If access to the records is requested, the Association shall reply to the requestor within ten (10) business days from the date that the written request is received by the Association. In its reply the Association shall give the requestor dates during normal business hours when the records may be reviewed.

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If copies of identified books and records are requested, the Association shall produce the requested books and records within ten (10) business days of the Association's receipt of the written request unless, on or before the tenth (10th) business day, the Association informs the requestor that the Association is unable to provide the requested books and records before the deadline and informs the requestor of a date when the books and records will be sent or made available for inspection. The date shall not be more than fifteen (15) business days after the date that the notice to the requestor is sent.

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All inspections shall take place at a mutually agreed upon time during normal business hours.

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The Association may produce records in hard copy, electronic or other format reasonably available to the Association.

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Costs for Production of Records for Sterling Shores as stated in Title 1, Texas Administrative Code §70.3.

Copy charges.
 

1. Standard paper copy. The charge for standard paper copies reproduced by means of an office machine copier or a computer printer is $0.10 per page or part of a page. Each side that has recorded information is considered a page. In the event that routine copy charges exceed $0.10 as determined by the Board, then the Board is authorized to increase the standard paper copy charge to meet the routine copy charges so that the Association shall not have a shortfall on copies as requested by members.

2. Nonstandard copy.  The charges in this subsection are to cover the materials onto which information is copied and do not reflect any additional charges, including labor (which can be determined in 1 T.A.C. §70.3 as well), that may be associated with a particular request. The Association shall charge for additional labor, materials, software, or the like associated with requests for nonstandard copies. In addition, the Association may decline to provide the nonstandard copies in the form requested if, in the opinion and discretion of the Board, such request would require additional labor and costs beyond what the Association desires. The charges for nonstandard copies are:

a. Diskette--$ 1.00;
b. Magnetic tape--actual cost
c. Data cartridge--actual cost;
d. Tape cartridge--actual cost;
e. Rewritable CD (CD-RW)--$ 1.00;
f.  Non-rewritable CD (CD-R)--$1.00;
g. Digital video disc (DVD)--$3.00;
h. JAZ drive--actual cost;
i. Other electronic media--actual cost;
j. VHS video cassette--$2.50.
k. Audio cassette--$1.00;
l. Oversize paper copy (e.g.: 11 inches by 17 inches, greenbar, bluebar, not including maps and photographs using specialty paper--See 1 T.A.C. §70.9 for Examples of Charges for Copies of Public Information) -- $0.50; Specialty paper (e.g.: Mylar, blueprint, blue-line, map, photographic --actual cost.
 

Labor charge for locating, compiling, manipulating data, and reproducing information.

1, The charge for labor costs incurred in processing a request for public information is FIFTEEN AND NO/100 DOLLARS ($15.00) an hour. The labor charge includes the actual time to locate, compile, manipulate data, and reproduce the requested information. 

2. A labor charge shall not be billed in connection with complying with requests that are for fifty (50) or fewer pages of paper records, unless the documents to be copied are located in:
a. Two or more separate buildings that are not physically connected with each other; or
b. a remote storage facility.
 

​3. A labor charge shall not be recovered for any time spent by an attorney, legal assistant, or any other person who reviews the requested information:

4. When confidential information is mixed with public information in the same page, a labor charge may be recovered for time spent to redact, blackout, or otherwise  obscure  confidential  information  in  order  to  release  the  non-confidential information. A labor charge shall not be made for redacting confidential information for requests of 50 or fewer pages, unless the documents to be copied are located in:

a. Two or more separate buildings that are not physically connected with each other;
or

b. A remote storage facility.

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5.  For purposes of paragraph 2.a of this subsection, two buildings connected by a covered or open sidewalk, an elevated or underground passageway, or a similar facility, are not considered to be separate buildings.
 

Overhead charge.
 

1. Whenever any labor charge is applicable to a request, the Association may include in the charges direct and indirect costs, in addition to the specific labor charge. This overhead charge would cover such costs as depreciation of capital assets, rent, maintenance and repair, utilities, and administrative overhead. If the Association chooses to recover such costs, a charge shall be made in accordance with the methodology described in paragraph (3) of this subsection. Although an exact calculation of costs will vary, the use of a standard charge will avoid complication in calculating such costs and will provide uniformity for charges made statewide.

2. An overhead charge shall not be made for requests for copies of fifty (50) or fewer pages of standard paper records unless the request also qualifies for a labor charge.

3. The overhead charge shall be computed at 20% of the charge made to cover any labor costs associated with a particular request. Example: if one hour of labor is used for a particular request, the formula would be as follows: Labor charge for locating, compiling, and reproducing, $I 5.00 x .20 = $3.00.
 

Remote document retrieval charge. To the extent that the retrieval of documents results in a charge to comply with a request, it is permissible to recover costs of such services for requests that qualify for labor charges under current law.
 

Miscellaneous supplies. The actual cost of miscellaneous supplies, such as labels, boxes, and other supplies used to produce the requested information, may be added to the total charge for public information.
 

Postal and shipping charges. The Association may add any related postal or shipping expenses which are necessary to transmit the reproduced information to the requesting party.
 

Miscellaneous charges: The Association that accepts payment by credit card for copies of public information and that is charged a "transaction fee" by the credit card company may recover that fee.
 

The Association shall have the right to require advance payment of the estimated costs of compilation, production and reproduction of the requested information. If the estimated costs are greater or lesser than the actual costs the Association shall submit a final invoice to the requestor within 30 business days of the date that the information is delivered. If the estimated costs exceed the actual costs the Association shall refund the excess funds to the requestor not later than thirty (30) business days after the final invoice is sent to the owner. If the actual costs exceed the estimated costs, the requestor shall pay the amount due to the Association before the thirtieth (30th> business day from the date that the invoice is sent to the requestor/owner. If not timely paid, the charges may be added to the owner's account as an assessment.

 

RECORDS RETENTION POLICY
 

Pursuant to the provisions of Texas Property Code §209.00S(m)

1. Certificates of Formation/Articles of Incorporation, bylaws, restrictive covenants and all amendments to any of the same shall be retained permanently;

2. Financial books and records of the Association shall be retained for seven (7) years;
3. Account records of current owners shall be retained for five (5) years;

4. Contracts to which the Association is a party shall be retained for

four (4) years after the expiration of the contract term;

5. Minutes of meetings of owners and the Board of Directors of the Association shall be retained for seven (7) years;
6. Tax returns and audit records shall be retained for seven (7) years;
 

PAYMENT PLAN POLICY
 

Pursuant to the Texas Property Code §209.0062 and in order to properly provide for the timely and efficient collection of assessments levied by the Association, the Board shall levy regular and/or special assessments in the manner required by the Association's governing documents, including its Articles of Incorporation/Certificate of Formation and Bylaws, and the restrictive covenants applicable to the Sterling Shores subdivision, all of which are duly recorded in the Official Public Records of Franklin County, Texas.
 

The Board shall establish a due date for the payment of all assessments levied by the Association. The Association shall send written notice of the amount of the assessment and the due date for payment of the assessment to all persons responsible for payment of the same no less than thirty (30) days before the due date.
 

Payment Plans: The notice of assessment shall include information on the availability of Payment Plans as an alternative method of payment for the Assessments.
 

The term of any payment plan shall be three (3) months from the date of the owner's request for a payment plan.

All payment plans must be in writing, signed by one or more owners of the property subject to the assessments, be approved and signed by an officer or agent of the Association and shall provide that the owner pay all future assessments when due in addition to meeting the terms of the payment plan.

No monetary penalties shall accrue on balances while a payment plan is in good standing, but reasonable costs for administering the plan and interest on the account shall continue to accrue.

Interest shall accrue on all unpaid amounts at 18% or maximum allowed by law.

Any qualified owner who wishes payment plan terms other than those set out above shall submit a request for such a plan with information supporting the need for alternate plan and the Board may deny or approve such a plan in the board's discretion.

The Association is not required to enter into a payment plan with an owner who failed to honor the terms of a previous payment plan within two years of the owner's original payment plan default.

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The Board may, in its sole discretion, enter into a payment plan with an owner who has previously defaulted.
 

Except as otherwise authorized by law, payment received by the Association from an owner shall be applied to the owner's debt in the following order of priority:

1. Any delinquent assessment;

2. Any current assessment;

3. Any attorney's fees or third party collection costs incurred by the Association associated solely with assessments or any other charge that could provide the basis for foreclosure;

4. Any attorney's fees incurred by the Association that are not subject to the preceding subpart;

5. Any fines assessed by the Association

​6. Any other amounts owed to the Association.
 

ARTICLE 8: MISCELLANEOUS
 

​8.1 Fiscal Year. The fiscal year of the Association shall be the calendar year unless the Board establishes a different fiscal year by resolution.

8.2 Parliamentary Rules. Except as may be modified by Board resolution, Robert's Rules of Order Newly Revised (current edition) shall govern the conduct of Association proceedings when not in conflict with Texas law, the Certificate of Formation, the Declaration, or these Bylaws.

8.3 Conflicts. If there are conflicts between the provisions of Texas law, the Certificate of Formation, the Declaration, and these Bylaws, the provisions of Texas law, the Declaration, the Certificate of Formation, and the Bylaws (in that order) shall prevail.

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8.4 Books and Records
 

a. Inspection by Members and Mortgagees. The Board shall make available for inspection and copying by any holder, insurer or guarantor of a first Mortgage on a Tract, any Member, or the duly appointed representative of any of the foregoing at any reasonable time and for a purpose reasonably related to his or her interest in a Tract: the Declaration, Bylaws, and Certificate of Formation, any amendments and supplements to the foregoing, the rules of the Association, and the minutes of meetings of the Members, the Board, and committees. The Board shall provide for such inspection to take place at the office of the Association or at such other place within Sterling Shores subdivision as the Board shall designate during normal business hours.
 

b. Delivery of Certain Information to Owner. Within ten (10) Days after receipt of a written request by the Board or its designee from an Owner, the Association shall deliver to the Owner, the Owner's agent, or to a title insurance company or its agent acting on behalf of the Owner, copies of the following, as requested: the Declaration, Bylaws, and Certificate of Formation, any amendments or supplements to the foregoing, the rules of the Association, and a "resale certificate." A "resale certificate" must contain the following: a statement of any right of first refusal or other restraint, if any, contained in the Declaration that restricts the Owner's right to transfer his or her Tract; the frequency and amount of General Assessments; the total of all amounts due and unpaid to the Association that are attributable to the Owner's Tract; capital expenditures, if any, approved by the Association for the current fiscal year; the amount of reserves, if any, for capital expenditures; the Association's current operating budget and balance sheet; the total of any unsatisfied judgments against the Association; the style and case number of any pending lawsuit in which the Association is a defendant;

 

a copy of a certificate of insurance showing the Association's property and liability insurance relating to the Common Areas and common facilities; a description of any conditions on the Owner's Tract that the Board has actual knowledge are in violation of the Governing Documents; a summary or copy of notices received by the Association from any governmental authority regarding health or housing code violations existing on the preparation date of the resale certificate relating to the Owner's Tract or the Area of Common Responsibility; the amount of any administrative transfer fee charged by the Association for a change of ownership of a Tract; the name, mailing address, and telephone number of the Association's managing agent, if any; and a statement indicating that the Governing Documents allow foreclosure of the Association's lien on the Owner's Tract for failure to pay assessments.
 

The Association may charge a reasonable fee to assemble, copy, and deliver the information required by this subsection 8.4(b) and may charge a reasonable fee to prepare and deliver an update of a resale certificate.
 

c. Rules for Inspection. The Board may establish reasonable rules with respect to: (i) notice to be given to the custodian of the records; (ii) hours and days of the week when such an inspection may be made; and (iii) payment of the cost of reproducing copies of documents requested.

d. Inspection by Directors. Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of the Association and the physical properties owned or controlled by the Association. The right of inspection by a director includes the right to make a copy of relevant documents at the expense of the Association.

8.5 Notices.

Except as otherwise provided in the Declaration or these Bylaws, all notices, demands, bills, statements, and other communications under the Declaration or these Bylaws shall be in writing and shall be deemed to have been duly given if delivered personally or if sent by United States mail, first class postage prepaid:

a. if to a Member or Member, at the address which the Member or Member has designated in writing and filed with the secretary or, if no such address has been designated, at the address of the Tract of such Member or Member; or

b. if to the Association, the Board, or the managing agent, at the principal office of the Association or the managing agent or at such other address as shall be designated by notice in writing to the Members pursuant to this Section.
 

If mailed, any notice shall be deemed to be delivered when deposited in the United States mail addressed with postage prepaid. To increase flexibility, any Person, including the Association, may consent to or request in writing additional methods of receiving notice, including but not limited to, facsimile, electronic mail or e-mail.
 

8.6 Indemnification. The Association shall indemnify every officer, director, ACC member and committee member against all damages, liability, and expenses, including attorneys' fees, reasonably incurred in connection with any action, suit, or other proceeding (including settlement of any suit or proceeding, if approved by the then Board of Directors) to which he or she may be a party by reason of being or having been an officer, director, ACC member or committee member, except that such obligation to indemnify shall be limited to those actions for which liability is limited under this Section, the Certificate of Formation and Texas law.

 

The officers, directors, and ACC and other committee members shall not be liable for any mistake of judgment, negligent or otherwise, except for their own individual willful misfeasance, malfeasance, misconduct, or bad faith. The officers, directors and ACC and other committee members shall have no personal liability with respect to any contract or other commitment made or action taken in good faith on behalf of the Association (except to the extent that such officers, directors or ACC or other committee members may also be Members of the Association). The Association shall indemnify and forever hold each such officer, director and ACC and other committee member harmless from any and all liability to others on account of any such contract, commitment or action. This right to indemnification shall not be exclusive of any other rights to which any present or former officer, director, or ACC or other committee member may be entitled. The Association shall, as a Common Expense, maintain adequate general liability and officers' and directors' liability insurance to fund this obligation, if such insurance is reasonably available.
 

8.7 Litigation. Except as provided below, no judicial or administrative proceeding shall be commenced or prosecuted by the Association unless approved by a vote of Members representing seventy-five percent (75%) of the total votes in the Association. A Member representing Tracts owned by Persons other than himself or herself shall not vote in favor of bringing or prosecuting any such proceeding unless authorized to do so by a vote of the Owners holding seventy-five percent (75%) of the total votes attributable to Tracts in the development represented by the Member. This Section shall not apply, however, to (a) actions brought by the Association to enforce the provisions of this Declaration (including, without limitation, the foreclosure of liens);

(b) the imposition and collection of assessments by the Association; (c) proceedings involving challenges to property taxes; (d) counterclaims brought by the Association in proceedings instituted against it; or (e) actions brought by the Association against any contractor, vendor or supplier of goods and services arising out of a contract for services or supplies. This Section shall not be amended unless such amendment is approved by the percentage of votes, and pursuant to the same procedures, necessary to institute proceedings as provided above

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8.8 Amendment.
 

a. By Declarant. Until the Control Transfer Date, the Declarant may unilaterally amend these Bylaws for any purpose. Thereafter, the Declarant may unilaterally amend these Bylaws at any time and from time to time if such amendment is necessary (i) to bring any provision into compliance with any applicable governmental statute, rule, regulation, or judicial determination; (ii) to enable any reputable title insurance company to issue title insurance coverage on the Tracts; (iii) to enable any institutional or governmental lender, purchaser, insurer or guarantor of Mortgage loans, including, for example, the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, to make, purchase, insure or guarantee Mortgage loans on the Tracts; or (iv) to satisfy the requirements of any local, state, or federal governmental agency. However, any such amendment shall not adversely affect the title to any Tract unless the Owner shall consent thereto in writing. In addition, during the Development Period, the Declarant may unilaterally amend these Bylaws for any other purpose, provided the amendment has no material adverse effect upon any right of any Member.

b. By the Board. The Board shall be authorized to amend these Bylaws without the consent of the Members (i) for the purpose of conforming these Bylaws to any mandatory provisions of the Act or other Texas law, and (ii) to correct scriveners' errors and other mistakes of fact, provided that any amendments under this provision have no material adverse effect on the rights of the Members. During the Development Period, any such amendment shall require the consent of the Declarant.
 

c. By Members. Except as provided above, these Bylaws may be amended only by the affirmative vote or written consent, or any combination thereof, of Members representing sixty-seven percent (67%) of the total votes in the Association, and, during the Development Period, the written consent of the Declarant. In addition, any notice requirements to Mortgagees as set forth in the Declaration shall be met, if applicable.

Notwithstanding the above, the percentage of votes necessary to amend a specific clause shall not be less than the prescribed percentage of affirmative votes required for action to be taken under that clause.

d. Validity and Effective Date. In no event shall a change of conditions or circumstances operate to amend any provisions of these Bylaws. No amendment may remove, revoke, or modify any right or privilege of the Declarant without the written consent of the Declarant or the assignee of such right or privilege. If a Member consents to any amendment to the Declaration or these Bylaws, it will be conclusively presumed that such Member has the authority to consent and no contrary provision in any Mortgage or contract between the Member and a third party will affect the validity of such amendment.

 

CERTIFICATION

 

I, the undersigned, do hereby certify:

 

That I am the duly elected and acting President of P. O. A. of STERLING SHORES, Inc. a Texas nonprofit corporation;

 

That the foregoing Bylaws constitute the original Bylaws of the Association, as duly adopted at a meeting of the Board of Directors thereof held effective as of March 28,2017.

 

IN WITNESS WHEREOF, I have hereunto subscribed my name effective as of March 28, 20 I 7 and signed on this the 1st day of June, 2017.

Signature on File - Marcus Smith, President 

 

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ACKNOWLEDGMENT

 

STATE OF TEXAS                            

COUNTY OF Franklin

This instrument was  acknowledged before  me  on  the 1st day  of June, 2017 by Marcus Smith, President of P. O. A. of STERLING

SHORES: Inc.

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Notarized by Kimberly Henderson (signature on file) 

 

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EXHIBIT I DEFINITIONS

 

1. "ACC": The Architectural Control Committee, as described in the Declaration.

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2. "Act": The Texas Residential Property Owners Protection Act, Title 11, Chapter 209 of the Texas Property Code, as such act may be amended

 

3. "Additional Property": All of that certain real property which 1s subject to annexation to the terms of the Declaration.

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4. "Area of Common Responsibility": The Boat Slips or Marina and the Common Area, together with those areas, if any, for which the Association has or assumes responsibility pursuant to the terms of the Declaration, any Supplemental Declaration or other applicable covenant, contract, or agreement. The Area of Common Responsibility shall include any real property and improvements which are designated as areas to be maintained by the Association on a recorded subdivision plat for any portion of Sterling Shores subdivision.

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5. "Certificate of Formation": The Certificate of Formation of P. 0. A. of STERLING SHORES, Inc., as filed with the Secretary of State of the State of Texas.

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6. "Association": P. O. A. of STERLING SHORES, Inc., a Texas nonprofit corporation, and its successors or assigns.

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7. "Board of Directors" or "Board": The body responsible for administration of the Association, selected as provided in the Bylaws and generally serving the same role as the board of directors under Texas corporate law.

 

8. "Boat Slips or Marina". The personal property that is the proposed covered marina for up to 52 boats situated and attached to the bank of Lake Bob Sandlin which licenses shall be owned only by person(s) or entity(ies) that is/are members in good standing with the Association.

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9. "Builder": Any Person who purchases one (I) or more Tracts for the purpose of constructing improvements for later sale to consumers or purchases one (I) or more parcels of land within Sterling Shores subdivision for further subdivision, development, and/or resale in the ordinary course of such Person's business. Any Person occupying or leasing a Tract for residential purposes shall cease to be considered a Builder with respect to such Tract immediately upon occupancy of the Tract for residential purposes, notwithstanding that such Person originally purchased the Tract for the purpose of constructing improvements for later sale to consumers.

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10. "Bylaws": The Bylaws of P. O. A. of STERLING SHORES, Inc., as they may be amended.

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11. "Common Area": All real and personal property, including easements and licenses, which the Association owns, leases or holds possessory or use rights in for the common use and enjoyment of the Owners. The term also shall include the Exclusive Common Area, as defined below.

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12. "Common Expenses": The actual and estimated expenses incurred, or anticipated to be incurred, by the Association for the general benefit of all Owners, including any reasonable reserve, as the Board may find necessary and appropriate pursuant to the Governing Documents.

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13. "Community-Wide Standard": The standard of conduct, maintenance, or other activity generally prevailing throughout Sterling Shores subdivision. Such standard shall initially be established by the Declarant and may be more specifically determined by the Board of Directors and the ACC.

14. "Control Transfer Date:" "Control Transfer Date" shall have the meaning as set forth in the Declaration.

15. "Cost Sharing Agreement": Any agreement, contract or covenant between the Association and an owner or operator of property adjacent to, in the vicinity of, or within Sterling Shores subdivision, including any Private Amenity, for the allocation of expenses that benefit both the Association and the owner or operator of such property.

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16. "Days": Calendar days; provided, however, if the time period by which any action required hereunder must be performed expires on a Saturday, Sunday or legal holiday, then such time period shall be automatically extended to the close of business on the next regular business day.

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17. "Declarant": Lakefront Ranch, LLC., a limited liability company, or any successor, successor-in-title, or assign who takes title to any portion of the property in Sterling Shores subdivision for the purpose of development and/or sale and who is designated as the Declarant in a recorded instrument executed by the immediately preceding Declarant; provided, however, there shall be only one Person entitled to exercise the rights and powers of the Declarant hereunder at any one time.

 

18. "Declaration": Any of certain declarations of covenants, conditions and restrictions, or similar document with another title, pertaining to any portion of Sterling Shores subdivision, which are recorded in the Public Records. Where these Bylaws are inconsistent with or in conflict with the Declaration, the Declaration shall control.

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19. "Development Period": The period of time during which the Declarant owns any property which is subject to a Declaration, or any Private Amenity, or has the unilateral right to subject Additional Property to a Declaration pursuant to the terms thereof. The Declarant may, but shall not be obligated to, unilaterally relinquish its rights under this Declaration and terminate the Development Period by recording a written instrument in the Public records.

 

20. "Exclusive Common Area": A portion of the Common Area intended for the exclusive use or primary benefit of one (1) or more, but less than all, Tracts, as more particularly described in the Declaration.

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21. "General Assessments": Assessments and maintenance charges levied on all Tracts subject to assessment by the Association to fund Common Expenses for the general benefit of all Tracts, as more particularly described in the Declaration.

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22. "Governing Documents": The Declaration of Covenants, Conditions and Restrictions for Sterling Shores (and all amendments and supplements thereto), the Articles of Incorporation for the Association, Certificate of Formation, the Bylaws of the Association, any and all Design or Architectural Guidelines, any and all applicable state statutes governing or applying to the Association and all additional covenants governing any portion of Sterling Shores subdivision or any of the above, as each may be supplemented and amended from time to time.

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23. "Tract":  A portion of Sterling Shores subdivision, whether improved or unimproved, which may be independently owned and conveyed and which is intended for development, use, and occupancy as an attached or detached single family dwelling or commercial unit. The term shall refer to the land which is part of the Tract as well as any improvements thereon. The term shall include within its meaning, by way of illustration but not limitation, single-family detached houses on separately platted Tracts, as well as vacant land intended for development as such, but shall not include Common Area, common property owned by the Association, or property dedicated to the public. In the case of a building within a condominium or other structure containing multiple fee-simple dwellings, each dwelling or commercial unit shall be deemed to be a separate Tract. In the case of a parcel of vacant land or land on which improvements are under construction, the parcel shall be deemed to be a single Tract until such time as a subdivision plat or condominium plat is filed of record on all or a portion of the parcel. Thereafter, the portion encompassed by such plat shall contain the number of Tracts determined as set forth in the preceding paragraph and any portion not encompassed by such plat shall continue to be treated in accordance with this paragraph.

 

24. "Maintenance Fund": An Association fund into which General Assessments are deposited, as may be more particularly described in the Declaration.

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25. "Majority": Those votes, Owners, Members, or other group, as the context may indicate, totaling more than fifty percent (50%) of the total eligible number.

 

26. "Member":       A Person entitled and subject to membership in the Association pursuant to Article 2.

27. "Mortgage": A mortgage, a deed of trust, a deed to secure debt, or any other form of security instrument affecting title to any Tract.

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28. "Mortgagee": A beneficiary or holder of a Mortgage.

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29. "Sterling Shores subdivision":  That certain planned community located in Franklin County, Texas, which is commonly known and referred to as Sterling Shores.

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30. "Owner":  One (1) or more Persons who hold the record title to any Tract, including the Declarant and any Builder but excluding in all cases any party holding an interest merely as security for the performance of an obligation. If a Tract is sold under a recorded land sales contract, and the contract specifically so provides, the purchaser (rather than the fee owner) will be considered the Owner. If a Tract is owned by more than one ( 1) Person, all such Persons shall be jointly and severally obligated to perform the responsibilities of such Owner.

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31. "Person":  A natural person, a corporation, a partnership, a limited liability company, a fiduciary acting on behalf of another person or any other legal entity.

 

32. "Private Amenity": Certain real property and any improvements and facilities thereon located adjacent to, in the vicinity of, or within the Sterling Shores subdivision, designated by the Declarant and which are owned and operated, in whole or in part, by Persons other than the Association for recreational or other purpose. The use of the term "Private Amenity" shall not be construed to imply or require a private club. Private Amenities may be operated on a daily fee, use fee, public, or private basis or otherwise, and may include, any recreational amenities so located and all related and supporting facilities and improvements. Declarant reserves the right to designate additional Private Amenities in its sole discretion.

 

33. "Public Records": The real property records of Franklin County, Texas.

 

34. "Supplemental Declaration": An instrument filed in the Public Records which subjects additional property to a Declaration, designates additional property to become subject to the Declaration, and/or imposes, expressly or by reference, additional restrictions and obligations on the land described in such instrument.