HomeMy WebLinkAboutADM16-0010 Party Wall Agmt.pdf PARTY WALL AND DUPLEX DECLARATION
WHEREAS, Westhaven Partners, LLC, a Colorado limited liability company ("Declarant"), is
the owner in fee simple of the following described real estate,hereinafter"subject property", situate in the
Town of Vail, County of Eagle and State of Colorado,to wit:
Lot 31-A and Lot 31-B, a resubdivision of Lot 31, Glen Lyon Subdivision, according to
the plat thereof recorded in the Office of the Clerk and Recorder of Eagle County,
Colorado on ,2016 as Reception No. (the"Plat").
Lot 31-A has the address of 1240 Westhaven Circle,Vail, Colorado 81657.
Lot 31-B has the address of 1242 Westhaven Circle,Vail, Colorado 81657.
WHEREAS, Declarant has constructed a duplex (the "Building") consisting of two (2) dwelling
units on the subject property; and
WHEREAS, a shared party wall extends vertically between the dwelling units; and
WHEREAS, Declarant wishes to provide for separate ownership of such dwelling units and
appurtenant separately owned property, and for certain other property to be held by the owners of the
dwelling units as tenants-in-common; and
WHEREAS, Declarant wishes to subject the dwelling units and separately owned property to
certain covenants relating to common management of the party wall and other common components of
the Building structure, and to set forth certain easements for the benefit of each of the owners of the
dwelling units and their appurtenances.
NOW THEREFORE, Declarant does hereby publish and declare that the following terms,
covenants, conditions, easements, restrictions, uses, reservations, limitations and obligations shall be
deemed to run with the land described herein, shall be a burden and a benefit to Declarant, its successors
and assigns, and any person acquiring or owning an interest in the real property which is described herein
and improvements built therein,their grantees,personal representatives,heirs, successors and assigns.
1. Division of Real Property into Two Lots. The subject property is, hereby and upon the
recording of the Plat, divided into two parcels (individually, a "Lot" and collectively, the "Lots") each
consisting of the Lot designated with the corresponding letter, together with the dwelling unit and all
improvements thereon and all easements and rights located thereon or appurtenant thereto as provided
herein, as follows:
Lot 31-A
Lot 31-B
such Lots being shown on the Plat.
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2. Description of Lot.
(a) Each Lot shall be inseparable and may be leased, devised or encumbered only as
a residence.
(b) Title to a Lot may be held individually or in any form of concurrent ownership
recognized in the State of Colorado. For the purposes herein, there shall be deemed to be only two
owners, the owner of Lot 31-A and the owner of Lot 31-B (each, an "Owner" and collectively, the
"Owners"). In case of any concurrent ownership of a Lot, each co-owner shall be jointly and severally
liable for performance and observance of all the duties and responsibilities of an"Owner"with respect to
the Lot in which such co-owner owns an interest. The parties, if more than one,having the ownership of
each Lot shall agree among themselves how to share the rights and obligations of such ownership, but all
such parties shall be jointly and severally liable for performance and observance of all of the duties and
obligations of an "Owner" hereunder with respect to the Lot in which they own an interest, and shall
further designate one (1) individual who shall represent all such parties concerning the rights and
obligations pursuant to this Declaration.
(c) Any contract of sale, deed,lease, deed of trust,mortgage,will or other instrument
affecting a Lot may describe it by its Lot number and by reference to the Plat.
(d) Each Lot shall be considered a separate parcel of real property and shall be
separately conveyed, encumbered, assessed and taxed.
(e) No Owner shall bring any action for partition or further subdivision of the Lots.
(f) In the event that both Lots are owned by the same entity, the doctrine of merger
shall not apply.
(g) This is not a condominium project. Neither the subject property nor the Lots
created hereby are subject to the Colorado Common Interest Ownership Act.
3. Landscaping; Drainage.
(a) Each Owner shall be responsible for all landscaping, natural features and general
outdoor improvements on his individual Lot, including irrigation systems, if any, and, except for any
expense or liability caused through the negligence or willful act of the other Owner, or that Owner's
family member, guest, agent, lessee or licensee, which shall be borne solely by such other Owner, each
Owner shall pay all expenses, liabilities and general upkeep responsibilities with respect to such
landscaping, natural features and outdoor improvements located in or on that Owner's Lot. The character
of the landscaping and natural features as initially installed on each Lot shall not be changed and new
landscaping or new natural features must conform to the existing landscaping except as otherwise
mutually agreed in writing by both Owners. All landscaping, natural features and exterior improvements,
including any outdoor furnishings, shall be designed, installed and maintained by each Owner in a first-
class manner, consistent with the high-end resort character of the Building and surrounding properties in
the Town of Vail. The Owner of one Lot shall not unreasonably or substantially adversely affect the
value of the other Lot by poor exterior maintenance and upkeep, and both Owners shall make all
reasonable efforts to preserve a harmonious common appearance of the Lots. No landscaping, trees or
shrubs located on an Owner's Lot shall unreasonably restrict the view corridor of the other Lot, except for
any landscaping,trees or shrubs initially installed on each Lot by the Declarant.
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(b) Drainage. Drainage facilities or improvements located in, on or upon a Lot that
are used solely to drain water from the other Lot shall be owned by the Owner of the Lot benefitted from
such facilities, and all expenses and liabilities for repair and maintenance shall be borne solely by the
Owner of such Lot, who shall have a perpetual easement in and to that part of such other Lot containing
such facilities for purposes of inspection, maintenance, repair and replacement. The Owner of such
drainage facilities shall restore any disturbance to the surface of the other Owner's Lot or any landscaping,
driveway, retaining wall or other improvements whatsoever located therein to a condition as close as
reasonably possible to that which existed immediately prior to commencement of work on such other
Owner's Lot within ten(10) days after completion of the work. No Owner shall alter the grading on such
Owner's Lot if such alteration affects the drainage of waters from another Lot or causes drainage from the
Owner's Lot onto the other Lot except as originally constructed by Declarant.
4. Party Wall.
(a) For purposes of this Declaration,the party wall between the Lots shall be deemed
to include all portions of the vertical dividing wall between the improvements on the Lots. Each Owner
of a separate Lot shall have a perpetual reciprocal easement in and to that part of the subject property
owned by the other Owner and on which the party wall is located, for party wall purposes, including
maintenance, repair, and inspection; neither Owner shall alter or change the party wall in any manner,
interior decoration excepted, and the party wall shall always remain in the same location as when erected.
(b) In the event of damage or destruction to the party wall from any cause, other than
the negligence or willful act of either Owner or such Owner's family member, guest, agent, lessee or
licensee, the Owners shall, at joint expense, repair or rebuild said wall to its previous condition which
specifically includes the previous sound transmission coefficient, and each Owner, and their successors
and assigns shall have the right to the full use of said wall so repaired and rebuilt in accordance with this
Declaration. If the negligence or willful act of an Owner or such Owner's family member, guest, agent,
lessee or licensee shall cause damage to or destruction of said wall, such Owner, as the responsible party,
shall bear the entire cost of repair and reconstruction. To the extent that damage to the party wall is
covered by insurance maintained by one Owner, the full insurance proceeds shall be used and applied to
the extent necessary to repair, restore, or replace the party wall, subject to reimbursement by the other
Owner for that Owner's portion of the costs. Any insurance proceeds not necessary for such repair,
restoration or replacement shall belong solely to the Owner who is the owner of the insurance policy
under which such payment was made. The availability of insurance proceeds or the lack or limit thereof
will not affect or limit an Owner's responsibility or liability for any needed maintenance or repair.
(c) Upon five (5) days' notice (except in the event of an emergency, in which case
only as much notice as is practicable, if any, shall be required), either Owner shall have the right to break
through the party wall for the purpose of repairing or restoring utilities, lines and facilities serving that
Owner's dwelling unit, subject to the obligation to promptly restore said wall to its previous structural
condition, which specifically includes the previous sound transmission coefficient, at such Owner's own
expense and the reimbursement to the other Owner for any damage caused thereby.
(d) Each Owner shall have the right to make use of the party wall for customary
purposes, provided such use shall not impair the structural support or the sound transmission coefficient
of the party wall.
5. Shared Facilities and Utilities.
(a) All common utility or service connections, lines and facilities or other common
equipment and property, if any, to the extent not owned by a third-party utility or service provider, shall
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be owned by the Owners as tenants-in-common and, except for any expenses or liability caused through
the negligence or willful act of any Owner, that Owner's family member, guest, agent, lessee or licensee,
which shall be borne solely by such Owner, all expenses and liabilities concerned with such common
property, including without limitation all costs of maintenance, repair and replacement shall be shared
jointly by the Owners. Expenses for construction and future maintenance, replacement and repair of
future common utility services to the subject property shall be allocated between the Owners of the Lots
as described in Section 8 below.
(b) To the extent feasible or available, the utilities servicing each Lot shall be
separately metered. Where separate meters for measuring costs or expenses for such utility services are
available, the cost of such utility services shall be an individual expense and not a joint expense of the
Owners. Where separate meters for measuring costs or expenses for such utility service are not available,
such cost shall be a joint expense of the Owners, and shall be shared in accordance with the allocation set
forth in Section 8 below. The Owner of Lot 31-A, unless otherwise agreed upon between the Owners, is
hereby designated as the owner to notify the appropriate utility company and inform them of the common
billing address, and who shall receive and distribute any joint utility bills. Notwithstanding the foregoing,
if a utility is separately metered but such service or any portion thereof is for the benefit of both Lots,then
the cost of such service shall be equitably adjusted between the Owners.
6. Alteration,Maintenance and Repair.
(a) If any improvement on Lot 31-A or Lot 31-B is damaged or destroyed, such
damage or destruction shall be promptly repaired and reconstructed. Repair and reconstruction means the
restoration of the improvements to substantially the same condition in which they existed prior to such
damage or destruction. The cost to repair and reconstruct any improvement on Lot 31-A or 31-B shall be
the sole expense of the Owner of said Lot except as modified by the provisions of this Declaration and
without prejudice,however,to the right of any rule of law regarding liability for negligence or willful acts
or omissions.Notwithstanding anything contained above to the contrary, if the negligence or willful act or
omission of any Owner, or that Owner's family member, guest, agent, lessee or licensee, shall cause
damage to, or destruction of any improvement on any Lot, such Owner, as the responsible party, shall
bear the entire costs of repair or reconstruction.
(b) Each Owner shall be solely responsible for all maintenance and repair of the
exterior and interior of that Owner's Lot, including the dwelling unit located thereon and all fixtures and
improvements appurtenant thereto and equipment located in, on or upon the Lot, and serving such Lot
only, including, without limitation, those portions of the Building's foundation immediately underlying
that Owner's dwelling unit. Each Owner shall be solely responsible for the maintenance, repair and
replacement of that portion of the roof to the Building and all gutter systems located on that Owner's Lot,
all of which shall be performed in accordance with the guidelines of any applicable roof warranty and/or
the direction of a roofing contractor approved by the manufacturer of the roof Such maintenance
obligations shall include, without limitation, ice and snow removal to the extent required under the roof
warranty. Notwithstanding the foregoing, if the Owners cannot agree on the timing, cost, or other matter
related to roof replacement, either Owner may, after 60 days prior written notice to the other Owner that
includes a written recommendation from a qualified roofing contractor that the work be performed,
perform such work as the notifying Owner reasonably determines to be necessary to the roof of the entire
Building. The notifying Owner shall initially pay the full costs incurred in exercising this right, but the
other Owner shall repay its share of the cost and expense of such an entire roof replacement as described
in Section 8 below. The amount to be repaid shall be due in five equal annual installments, without
interest, with the first installment due 60 days after the notifying Owner delivers paid invoices and
mechanics' lien waivers for the work to the other Owner, and each other installment annually on the same
date until paid in full.
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(c) All utility or service connections, lines, facilities or other utility equipment and
property located in, on or upon either Lot which is used solely to supply a service or utility to that Lot
shall be owned (to the extent not owned by a third party utility company) by the Owner of the Lot using
such utility or service and all expenses and liabilities for repair and maintenance shall be borne solely by
the Owner of such Lot;provided,however,that each Owner shall have a perpetual easement in and to that
portion of the other Lot as may be useful or necessary for the purposes of access,maintenance,repair and
inspection of such utility or service connections, lines,facilities or other equipment.
(d) No Owner shall make or suffer any exterior or structural change (including a
color scheme change), either permanent or temporary and of any type or nature whatsoever to the exterior
of the Building or that Owner's Lot, even if restricted solely to that Owner's dwelling unit, or construct
any addition, improvement, or any permanent outdoor structure of any type or nature whatsoever upon
that Owner's Lot without first obtaining the prior written approval from the other Owner. The
improvements on both Lots shall have a common color and design scheme, and the entirety of the exterior
of the Building and all improvements on both Lots shall be painted at the same time, with the specific
color and design scheme and timing of any painting to be determined by the Owners of both Lots jointly.
(e) Where the Owner of either Lot, in compliance with the other provisions of this
Declaration, desires to build, renovate, excavate, improve or otherwise alter the structures or
improvements located on that Owner's Lot, and where the Owner has obtained the written consent thereto
of the other Owner as provided in this Section, the Owner of the other Lot shall cooperate to the extent
necessary to enable that Owner to obtain any required building permit, municipal approval or similar
permit, license or approval, at no out of pocket cost to the Owner of the other Lot. Notwithstanding
anything contained herein, no Owner may modify any improvement which would utilize more than the
total or additional zoning density or other zoning rights which are available to such Lot, or which may
become available in the future. Lot 31-A shall be entitled to 57% of such available,but currently unused,
zoning density or rights and Lot 31-B shall be entitled to 43% of any such available, but currently unused
zoning density or rights. Any costs or expenses associated with the required building or similar permit or
other municipal approvals shall be the expense of the Owner applying for said permit or approval and
shall not be a joint expense of the Owners of both Lots.
(f) All repair, maintenance, replacements, or other construction or alterations
performed on either Lot by the Owners shall be (i) performed in a good and workmanlike manner and in
compliance with all applicable laws and with all other provisions of this Declaration, (ii) pursued
diligently to completion, and (iii)performed in a manner so as not to unreasonably interfere with the use
and enjoyment of the Owner of the other Lot. Any major construction or renovation project undertaken
by an Owner to that Owner's Lot, even if restricted solely to that Owner's dwelling unit, shall take place
only between April 15 and November 15 of any given year, and only between the hours of 9 a.m. and 6
p.m. on regular business days. For the purposes of this Section, a "major" construction or renovation
project shall mean a project for which a building permit is required or that will take place over the course
of fifteen (15) or more days, and "pursue diligently" shall include the prompt payment of all fees and
charges, monitoring the progress of all contractors to avoid and/or resolve any work delays, providing all
requested information and data to all contractors and government agencies in a timely manner, and
otherwise taking reasonable actions to ensure the work is completed in an expeditious manner. All
contractors performing work to the Building or either Lot must be licensed and carry such insurance in
the amounts and with the coverages as may be required by Colorado law and/or local industry standards.
(g) In the event that either Lot, or fraction thereof, is taken by eminent domain or in
condemnation, the Owner of that Lot shall receive any sums payable with respect to such taking. In the
event that both Lots, or any fractions thereof, are taken by eminent domain or in condemnation, the
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Owners shall equitably divide any sums payable pursuant to such taking in proportion to the relative
values of the Lots, or fractions thereof,taken with respect to the Lots.
8. Allocation of Expenses. Costs and expenses of alteration,maintenance and repairs to the
Party Wall and all common property,which are to be paid jointly by the Owners as set forth in this
Declaration, shall be allocated in the following proportions:
Lot 31-A 57% Lot 31-B 43%
9. Mechanic's Liens,Indemnification.
(a) Except for items incurred as a common expense as provided for herein, if either
Owner shall cause any material to be furnished to that Owner's Lot or any improvements made thereon or
cause any labor to be performed therein or thereon, the other Owner shall not under any circumstances be
liable for the payment of any expense incurred or for the value of any work done or material furnished; all
such work shall be at the expense of the Owner causing it to be done, and such Owner shall be solely
responsible to contractors, laborers, materialmen and other persons furnishing labor or materials to that
Owner's Lot or any improvements therein or thereon. Nothing herein contained shall authorize either
Owner or any person dealing through, with or under either Owner, to charge the Lot of the other Owner
with any mechanic's lien or other lien or encumbrance whatsoever; and, on the contrary (and notice is
hereby given),the right and power to charge any lien or encumbrance of any kind against the other Owner
or the other Owner's Lot for work done or material furnished to one Owner's Lot is hereby expressly
denied and prohibited.
(b) Except as otherwise provided herein, if because of any act or omission of either
Owner any mechanic's or other lien or order for the payment of money shall be filed against the other
Owner's Lot or any improvements therein or thereon, or against the other Owner (whether or not such
lien or order is valid or enforceable as such), the Owner whose act or omission forms the basis for such
lien or order shall, at that Owner's sole cost and expense, cause the same to be cancelled and discharged
of record or bonded by a surety company reasonably acceptable to the other Owner, within twenty (20)
days after the date of filing thereof, and further shall indemnify and save the other Owner harmless from
and against any and all costs, expenses, claims, losses or damages, including reasonable attorney's fees,
resulting therefrom.
10. Use Restrictions.
(a) The Lots shall be used for residential purposes only as a permitted use, and
conditional and accessory uses shall be as defined by the Town of Vail zoning ordinances (including,
without limitation, home occupations). Neither Owner may apply for any zoning change, variance or
reclassification, for either Lot or the entire subject property,without the prior written consent of the other
Owner. No structures of a temporary character, including trailers or recreational vehicles, shall be used
on any portion of any of the subject property at any time as a residence, either temporarily or
permanently.
(b) No animals of any kind shall be raised, bred or kept on either Lot, except that a
total of three (3) household pets, including dogs, cats or other household pets, may be kept by an Owner
provided that they are not kept,bred or maintained for any commercial purposes and provided further that
they do not unreasonably interfere with the use and enjoyment of the other Lot by its Owner. Any clean-
up required or damage caused by an animal kept by an Owner shall be the responsibility of such Owner
keeping the animal, and each Owner indemnifies the other for any damage or injury to person or property
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caused by any animal kept by an Owner. No animals kept on either Lot shall be left unattended at any
time or suffered or permitted to become a nuisance to the other Owner or surrounding properties.
(c) No advertising signs, billboards, unsightly objects or nuisances shall be erected,
placed or permitted to remain on the subject property, nor shall any Lot be used in any way or for any
purpose which may endanger the health or unreasonably disturb the owner or resident of the adjoining
Lot.
(d) All rubbish, trash or garbage shall be regularly removed from each Lot and shall
not be allowed to accumulate thereon. All such trash removal expenses shall be expenses of each
individual Owner, and are not a joint expense of the Owners.
(e) An Owner shall do no act nor any work that will impair any easement or
hereditament or do any act or allow any condition to exist which will adversely affect the other Lot.
(f) Except for attractive, well-maintained outdoor furnishings as set forth in Section
3,no exterior storage of any personal property shall be permitted on either Lot.
(g) An Owner may lease that Owner's Lot upon such terms and conditions as the
Owner may deem advisable, provided that (i) lessees may not keep any pets on the subject property; (ii)
no "time sharing", "interval ownership" or similar interest, whereby ownership of a Lot is shared by
owners on a time basis shall be established; and(iii) any lease or rental agreement shall be in writing and
made specifically subject to this Declaration and any additional rules or regulations as may be established
by mutual agreement of the Owners from time to time, and(iv) any failure of a lessee to comply with the
terms of this Declaration shall be a default under the lease and the Owner agrees to take reasonable
enforcement measures against such lessee to restore compliance.
(h) Parking of more than four (4) automotive vehicles by either Owner or that
Owner's family member, guest, agent, lessee or licensee on either Owner's Lot outside of the garage
located on that Owner's Lot for more than a forty-eight(48)hour period is expressly prohibited. Parking
of trailers, campers, motor homes, ATVs or recreational vehicles, or any commercial vehicles, on either
Lot is expressly prohibited.
11. Insurance.
(a) Each Owner shall keep that Owner's Lot and all improvements and fixtures
located thereon insured against loss or damage by fire and extended coverage perils (including vandalism
and malicious mischief) for the maximum appreciated replacement value thereof, and covering such other
risks of a similar or dissimilar nature as are or shall hereafter customarily be covered with respect to
similar properties issued by a responsible insurance company or companies authorized to do business in
the State of Colorado. The insurance for each Lot shall provide that the policy cannot be cancelled or
substantially modified unless thirty (30) days' prior written notice is first given to each Owner and each
first mortgagee, if any. The Owners additionally each maintain insurance on the party wall for the
maximum appreciated replacement value thereof. In order to assure that the improvements and fixtures
on each Lot are properly and fully insured, it is recommended that the Owners place their insurance using
a common insurance broker and insurance company.
(b) Each Owner shall provide and keep in force general public liability and property
damage insurance against claims for bodily injury or death or property damage occurring in, on or upon
that Owner's Lot and the improvements thereon, in a limit of not less than One Million Dollars
($1,000,000.00) in respect to bodily injury or death to any number of persons arising out of one accident
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or disaster, or for damage to property, and if higher limits shall at any time be customary to protect
against tort liability, such higher limits shall be carried.
(c) The insurance policies required by this Section to be obtained by the Owners
shall be issued by insurance companies of recognized responsibility licensed to do business in the State of
Colorado which are rated "A" or better (and are in a Financial Size Category of Class VIII or higher) by
Best's Key Rating Guide or which have an equivalent financial rating from a comparable insurance rating
organization. All policies of liability insurance required by this Section shall be issued on an
"occurrence" basis and shall be written as primary policy coverage (or may be satisfied by maintaining a
policy of primary insurance and a policy or policies of excess liability insurance). Neither the issuance of
any insurance policy required under this Section nor the minimum limits of liability specified in this
Section shall be deemed to limit or restrict in any way the insured party's liability under this Declaration.
Each Owner shall deliver to the other Owner certificates evidencing all insurance required to be carried
under this Section upon reasonable request, each containing agreements by the insurers not to cancel or
modify the policies without giving the other Owner (and all first mortgagees of the subject property, if
any) written notice of at least thirty (30) days. Each Owner shall have the right to inspect and copy all
such insurance policies of the other owner and require evidence of the payments of premiums thereon.
(d) Except as set forth in subsection(a) above, nothing provided in this Section shall
prevent the Owners from jointly acquiring a single insurance policy to cover any one or more of the
hazards required in this Section, or as otherwise deemed necessary or desirable by the Owners. Such
premiums shall be apportioned according to the relevant coverage to each Lot.
(e) Insurance coverage on any personal property items stored within the
improvements located on each Lot shall be the responsibility of the Owner thereof. However, nothing
herein shall be construed to require such insurance.
12. Enforcement.
(a) If an Owner, at any time, shall neglect or refuse to perform or pay his share of
any obligation required hereunder (the "Defaulting Owner"), the other Owner may, but shall not be
obligated to, after twenty (20) days' written notice to the Defaulting Owner (unless the circumstances
require immediate action to avoid the imminent threat of harm to persons or property),take such action or
make such payment, or, on behalf of the Defaulting Owner, expend such sum as may be necessary to
perform such obligation, including but not limited to, the payment of any insurance premiums required
hereunder for repair, restoration or maintenance, and such other Owner shall have an easement and right
of entry in and to that part of the Defaulting Owner's Lot as is reasonably necessary for such repair,
restoration or maintenance.
(b) All sums so paid or expended by an Owner, with interest thereon at the rate of
eighteen percent (18%)per annum from the date of such payment or expenditure, shall be payable by the
Owner so failing to perform upon demand of the Defaulting Owner.
(c) All sums so demanded but unpaid by the Defaulting Owner shall constitute a lien
on the Lot of the Defaulting Owner in favor of the other Owner prior to all other liens and encumbrances,
except: (i) liens for taxes and special assessments; and (ii) the lien of any first mortgage or first deed of
trust of record encumbering such Lot. The lien shall attach from the date when the unpaid sum shall
become due and may be foreclosed in like manner as a mortgage on real property. To evidence such a
lien, written notice of the lien shall be prepared, setting forth the amount of the unpaid indebtedness, the
name of the Defaulting Owner, and description of the Lot to which the lien shall attach. Such notice shall
be signed by the Owner in whose favor the lien shall be filed, and the lien shall be recorded in the office
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of the Clerk and Recorder of the County of Eagle. If an Owner incurs costs or expenses in connection
with the collection of sums expended by such Owner, including any costs and expenses of recording a
lien or those of any foreclosure or other collection proceedings,the Defaulting Owner shall be required to
pay such costs and expenses,including reasonable attorney's fees.
(d) The lien provided for herein shall be subordinate to the lien of any first mortgage
or deed of trust, including all additional advances thereon. Sale or transfer of either Lot as the result of
court foreclosure or a mortgage foreclosure through the public trustee, or any proceeding in lieu of
foreclosure, shall extinguish the lien as to payments thereof which become due prior to such sale or
transfer, but shall not relieve any former owner of personal liability therefor. The first mortgagee of such
Lot who acquires title by way of foreclosure or the taking of a deed in lieu thereof shall not, however, be
liable for any past due amounts and/or obligations due hereunder and shall only become liable for future
amounts and/or obligations on the date it becomes the owner of such Lot. No such sale or transfer as
described herein shall relieve such Lot from liability for any amounts or obligations thereafter becoming
due or from the lien thereof. In the event of the sale or transfer of a Lot with respect to which sums shall
be unpaid by a Defaulting Owner, except transfers to a first mortgagee in connection with a foreclosure of
its lien or a deed in lieu thereof,the purchaser or other transferee of an interest in such Lot shall be jointly
and severally liable with the seller or transferor thereof for any such unpaid sums.
(e) Upon written request of any party constituting an Owner, mortgagee,prospective
mortgagee, purchaser or other prospective transferee of a Lot, the non-defaulting Owner shall issue a
written statement setting forth the particulars of amount owed under this Section and/or any non-
monetary default under this Declaration that may exist. Such statement is binding upon the executing
Owner in favor of any person who may rely thereon in good faith. Unless a request for such statement
shall be complied with within fifteen (15) days after receipt thereof, all unpaid sums which become due
prior to the date of making the request shall be subordinated to the lien or other interest of the person
requesting such statement.
(f) Each provision of this Declaration shall be enforceable by any Owner by a
proceeding for a prohibitive or mandatory injunction or by a suit or action to recover damages. If court
proceedings are instituted in connection with the rights of enforcement and remedies provided in this
Declaration, the prevailing party shall be entitled to recover its costs and expenses in connection
therewith,including reasonable attorney's fees.
(g) Each Owner hereby agrees that any and all actions in equity or at law which are
instituted to enforce any provision hereunder shall be brought in and only in the courts of the County of
Eagle, State of Colorado.
(h) Failure to enforce any provision of this Declaration shall not operate as a waiver
of any such provision, the right to enforce such provision thereafter, or of any other provision of this
Declaration.
(i) Any exercise of any right granted hereunder by one Owner with respect to the
other Owner's Lot,including but not limited to,the use of any easement granted herein, shall be exercised
in a manner which shall not unreasonably hinder, impede or impose upon such other Owner's use and
quiet enjoyment of his Lot.
13. Easements.
(a) Easement for Encroachments. Each Lot shall be subject to an easement for
encroachments created by construction, settling and overhang, previously existing or as designed and
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constructed by the Declarant or as a result of any addition or improvement pursuant to this Declaration.
A valid easement for such encroachments and for the maintenance of same, so long as they exist, shall
and does exist. In the event any improvement is partially or totally destroyed, and then rebuilt, the
Owners agree that minor encroachments of parts of an adjacent Lot due to construction shall be permitted
and that a valid easement for said encroachment and the maintenance thereof shall exist so long as the
improvements shall stand.
(b) Easement for Support and Maintenance. Each Lot is subject to a blanket
easement for support and a blanket easement for the maintenance of the dwelling units and other
structures or improvements presently situated, or to be built in the future, on the Lots. The Owner of each
Lot shall be solely responsible for the repair or reconstruction of any structural elements supporting the
improvements on that Owner's Lot. Notwithstanding anything contained above to the contrary, if the
negligence or willful act of any Owner, or that Owner's family member, guest, agent, lessee or licensee,
shall cause damage to, or destruction of any improvement on any Lot, such Owner shall bear the entire
costs of repair or reconstruction. Neither Owner may expand or alter the structural components of the
Building (including the foundation of the Building) in a manner that would alter, weaken, overload or
compromise the structural support for the improvements on either Lot without first obtaining the approval
of the Owner of the other Lot, and if necessary, without reinforcing all applicable structural components
(at the sole expenses of the Owner of making the alterations) so that they are adequate to continue to
support the improvements. Any request for approval of an Owner as set forth above shall include a
presentation of engineering or architectural plans sufficient to demonstrate how all improvements on the
Lots will be adequately supported during and after construction of the the alterations. The Owner seeking
to make the alterations shall bear all risk of loss to both Lots with respect to damage or destruction caused
by alterations to the structural components.
(c) Blanket Utility Easement. There is hereby created a blanket easement upon,
across, over and under the unimproved portion of each of the Lots for the benefit of the Lots and the
structures and improvements situated thereon, including the party wall, for ingress and egress,
installation, replacing, repairing and maintaining all common property and utilities, including, but not
limited to, water, sewer, gas, telephone, cable television and electricity. Said blanket easement includes
future utility services not presently available to the Lots which may reasonably be required in the future.
By virtue of this easement, it shall be expressly permissible for the companies providing utilities to erect
and maintain the necessary equipment on any of the Lots and to affix and maintain electrical and/or
telephone wires, circuits and conduits on, above, across and under the roofs and exterior walls of the
improvements, all in a manner customary for such companies in the area surrounding the subject
property. Notwithstanding the foregoing, all such utility equipment, wires, circuits and conduits will be
placed on the Lot benefited thereby to the extent practicable, will be placed underground if possible, and
to the extent practicable will be placed as close to the Lot line as practicable. Either Owner shall have the
right to relocate within that Owner's Lot any utility at his sole cost and expense.
14. General Provisions.
(a) Notice. Each Owner shall register that Owner's telephone numbers and mailing
and email addresses with the other Owner upon purchase of a Lot. All notices or demands intended to be
served upon Owners shall be effective if delivered by hand delivery, or by certified mail,postage prepaid,
or by a nationally recognized overnight courier service, addressed in the name of the Owner at such
registered mailing address or sent by email to the email address provided by such Owner If an Owner has
not registered such Owner's address or email address with the other Owner, such other Owner may
deliver any notice to the address of the other Owner on record with the Assessor of Eagle County,
Colorado. Notices delivered by hand delivery shall be effective upon receipt; notices sent via overnight
courier shall be deemed received by the recipient one (1) day after deposit with such courier; notices sent
10
by certified mail shall be deemed received by the recipient three (3) business days after posted with the
United States Post Office, and notices sent by email shall be effective upon electronic confirmation of
receipt.
(b) Owner Approval;No Response to Request Deemed Approval. In all cases where
the approval of an Owner is required under this Declaration, such approval shall not be unreasonably
withheld, conditioned or delayed. For the purposes of the foregoing, and by way of example only and not
limitation, a request for additional information associated with any pending request for approval shall not
constitute an unreasonable delay so long as the information requested is pertinent to the subject matter at
hand and the request is made in a timely manner. Additionally, if an Owner submits a request to the
other Owner for consent or approval for any other purpose pursuant to this Declaration, a response to such
request by the other Owner shall not be deemed unreasonably delayed if delivered to the requesting
Owner within thirty (30) days after the delivery of the request to such Owner. If no response to a
submission is received by the requesting Owner within thirty(30) days after the delivery of the request to
the other Owner,then the submission request by the Owner shall be deemed approved.
(c) Amendment or Revocation. This Declaration may be amended or revoked at any
time upon unanimous written approval in recordable form of all Owners. The covenants and restrictions
of this Declaration shall be amended or revoked only by an instrument which specifically refers to this
Declaration and which is signed by each of the then existing Owners. Any amendment and/or revocation
so made must be properly recorded at the Office of the Clerk and Recorder of the County of Eagle, State
of Colorado.
(d) Effect of Provisions of Declaration. Each provision of this Declaration,
including any exhibits hereto, and any agreement, promise, covenant and undertaking to comply with
each provision of this Declaration, and any necessary exemption or reservation or grant of title, estate,
right or interest to effectuate any provision of this Declaration: (i) shall be deemed incorporated in each
deed or other instrument by which any right, title or interest in any portion of Lot 31-A or Lot 31-B is
granted, devised or conveyed, whether or not set forth or referred to in such deed or other instrument; (ii)
shall, by virtue of acceptance of any right, title or interest in any portion of Lot 31-A or 31-B by an
Owner, be deemed accepted, ratified, adopted and declared as a personal covenant of such Owner and, as
a personal covenant, shall be binding on such Owner and his heirs, personal representatives, successors
and assigns and shall be deemed a personal covenant to, with and for the benefit of each Owner of any
portion of either Lot; and (iii) shall be deemed a real covenant by Declarant, for itself, its administrators,
successors and assigns, and also an equitable servitude, running, in each case, as a burden with and upon
the title to each and every portion of Lot 31-A and Lot 31-B.
(e) Severability. Invalidity or unenforceability of any provision of this Declaration
in whole or in part shall not affect the validity or enforceability of any other provision or any valid and
enforceable part of a provision of this Declaration which shall remain in full force and effect.
(f) Captions. The captions and headings in this instrument are for convenience only
and shall not be considered in construing any provisions of this Declaration.
(g) Construction. When necessary for proper construction, the masculine of any
word used in this Declaration shall include the feminine or neuter gender, and the singular the plural, and
vice versa.
(h) Governing Law. This Declaration is made and executed under and in respect to,
and shall be governed and construed by,the laws of the State of Colorado.
11
(i) Arbitration. In the event a dispute of any kind or nature arises under this
Declaration or pertaining to matters related to this Declaration between the Owners of the Lots,the parties
shall first negotiate in good faith in an effort to resolve the dispute. If the dispute is not resolved
following good faith negotiations, then, except for enforcement of monetary claims pursuant to Section
12 above,the Owners shall select a mutually agreeable arbitrator and submit the dispute to such arbitrator
for binding arbitration in Eagle County, Colorado within thirty (30) days under the appropriate
Arbitration Rules of the American Arbitration Association. In the event the parties are unable to agree
upon the arbitrator, the arbitrator shall be appointed in accordance with the rules and procedures of the
American Arbitration Association. Arbitration of any dispute between the Owners under this Declaration
shall proceed even though there may be related disputes involving third parties which cannot be
arbitrated, such as mechanics' lien claims, arising out of transactions involving the Owners. The
arbitration award may be enforced in any court of competent jurisdiction in the State of Colorado, in
accordance with the provisions of the Colorado Uniform Arbitration Act, Rule 109 of the Colorado Rules
of Civil Procedure and/or any other statute or rule permitting an arbitration award to be enforced.
(j) Defect Claims. Any "Defect Claims," as that termed is defined in Exhibit A
hereto, shall be brought and resolved in accordance with the procedures set forth in Exhibit A.
[End of Declaration; Signatures Follow]
12
IN WITNESS WHEREOF, the undersigned being the Declarant herein, has hereunder set
executed this Party Wall and Duplex Declaration as of this day of ,2016.
DECLARANT:
WESTHAVEN PARTNERS, LLC, a Colorado limited liability
company
By:
Name:
Title:
STATE OF COLORADO )
)ss.
COUNTY OF EAGLE )
The foregoing instrument was acknowledged before me this day of
, 2016 by as Manager of WESTHAVEN
PARTNERS,LLC, a Colorado limited liability company.
Witness my hand and official seal.
My Commission Expires: .
[SEAL]
Notary Public
13
JOINDER OF LIENOR
The undersigned, beneficiary under the deed of trust recorded , at Reception
No. in the office of the Clerk and Recorder of Eagle County, Colorado (the
"Deed of Trust"), as such Deed of Trust may be amended and supplemented from time to time, for itself
and its successors and assigns, approves the foregoing Party Wall and Duplex Declaration, affecting all or
a portion of the property encumbered by the Deed of Trust, and agrees that no foreclosure or other
enforcement of any remedy pursuant to the Deed of Trust shall impair, invalidate, supersede or otherwise
affect the covenants, conditions, restrictions and easements established by this Party Wall and Duplex
Declaration.
By:
Name:
Title:
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 20 ,
by as of
,a
WITNESS my hand and official seal.
My commission expires:
[SEAL]
Notary Public
EXHIBIT A
RESOLUTION OF DEFECT CLAIMS
a. IMPORTANT NOTICE: Agreement to Encourage Resolution of Disputes;
Exclusive Procedures; Statutes of Limitation. Declarant, all Owners, and any Person not otherwise
subject to the Declaration but who agree to submit to the procedures set forth in this Article (these
"Procedures"), including all construction professionals, architects, contractors, subcontractors,
developers, builders, builder vendors, engineers, inspectors and others who performed or furnished any
engineering, design, planning, supervision, inspection, construction or observation of the construction of
any improvement to the subject property (each of the foregoing being referred to as a "Party"), hereby
agree to encourage the amicable resolution of disputes involving the improvements to the subject property
and the Lots without the emotional and financial costs of litigation. Accordingly, each Party covenants
and agrees to submit all Defect Claims, as defined below, each alleges to have to the Procedures set forth
herein and not to a court of law. All Parties herby agree to the mandatory mediation and arbitration
of all Defect Claims as set forth in this Article and irrevocably waive any right to trial of any Defect
Claim by jury or otherwise in a court of law.
Each Party agrees that these Procedures shall be the sole and exclusive remedy that each
Party shall have for any Defect Claim. Should any Party commence litigation or any other action
against any Party in violation of the terms of this Article, such Party shall reimburse all costs and
expenses, including attorneys' fees, incurred by the other Party in such litigation or action within ten(10)
days after written demand.
The Parties understand and agree that no Defect Claim may be initiated after the date when
institution of legal or equitable proceedings based on such Defect Claim would be barred by the
applicable statute of limitation or statute of repose.
b. Statement of Clarification Without modifying or restricting the scope of these
Procedures and as a statement of clarification only,the intent of these Procedures is to foster constructive
dialogue between the Parties, to permit corrective measures to be implemented without the necessity of
final settlement documentation, to inform Parties of implications related to certain Defect Claims that
may not otherwise be readily apparent to such Parties,and to assist the Parties in resolving Defect Claims,
if possible, before incurring significant legal and consultant expenses, particularly through the informal
Procedures set forth below.
c. Certain Definitions.
i. Definition of Defect Claim. Any Claim involving(i) the soils of any the
subject property or the presence of radon and/or mold within any Lot or other areas within the Lots or
Building (the "Project"); (ii) land development, design, construction and/or alteration of any of the
improvements within the subject property or either Lot and/or any alleged defect therein; or (iii) any
rights, obligations or duties of any Party under any warranty, whether express, implied or limited,
between Declarant and any Owner, however arising, is referred to herein as a "Defect Claim" and the
alleged defect, the "Alleged Defect." The Owners generally acknowledge, understand and agree that not
every necessary repair or replacement of an improvement within the Building is due to a construction
defect and, similarly, Declarant and other construction and design professionals that are Parties hereunder
generally acknowledge, understand and agree that not every necessary repair or replacement of an
improvement is due to faulty required maintenance of or damage to such improvement. Often, such
repair and replacement issues arise from a combination of issues that may or may not include the original
15
design and construction, the level of inspection and maintenance programs (or lack thereof) and the
existence of other factors such as unusual weather events or conditions, improper use and/or unforeseen
wear and tear. This Article supports a proper evaluation of all factors and encourages a collaborative and
comparative approach to responsibility.
ii. Exclusions. Notwithstanding the foregoing, the following will not be
considered "Defect Claims" unless all parties to the matter otherwise agree to submit the matter to the
Procedures set forth in this Article: (i) any suit or other action by the Declarant or either Owner to act
under or enforce any provisions of this Declaration relating to additions or alteration of improvements by
Owners and/or any restrictive covenants or obligations of this Declaration, including any suit to obtain a
temporary restraining order or injunction (or equivalent emergency equitable relief) or such other
ancillary relief as the court may deem necessary, and (ii) any suit between Owners, which does not
include Declarant as a party
iii. Owner Responsibilities. Each Owner understands and acknowledges the
importance of a regular inspection and maintenance program for the Building and improvements on the
subject property and shall comply with all maintenance manuals and other documents and
recommendations provided to the Owners with respect to the inspection, operation and routine
maintenance of all systems, equipment, and similar items (including, but not limited to, mechanical,
electrical, plumbing, structural and exterior systems and improvements) made part of or serving the
Building or any other improvements on the Lots. Each Owner shall perform such recommended
inspection and maintenance and shall make all necessary repairs and maintenance called for to reasonably
address the results of these inspections and to maintain all improvements on the subject property
consistent with their original quality. Further, each Owner shall cooperate, at no cost or expense to them,
with all inspections that may be undertaken by or at the request of the Declarant on or with respect to the
subject property and any improvement thereon or therein. Each Owner understands, assumes the risk and
agrees that, if such Owner fails to follow the inspection, maintenance and repair requirements and
standards contained in such manuals or materials delivered to them and such failure causes, whether in
whole or in part, damage to the Building, to any improvement within the subject property or to other
property,the resulting damage shall not be deemed to be the result of a design or construction defect.
d. Informal Procedures.
i. Initial Notice. Any Party asserting a Defect Claim ("Claimant") against
another Party ("Respondent") shall give written notice to each Respondent and to the Declarant (if the
Declarant is not the Respondent) stating Claimant's good faith description of: (i)the nature of the Defect
Claim, including the persons involved and the Respondent's role in the Defect Claim, and (ii) the
Claimant's desire to meet with the Respondent to discuss in good faith,ways to resolve the Defect Claim.
In that legal and professional fees are discouraged at this stage of these Procedures,no statement as to the
legal basis of the Defect Claim or of any proposed remedy is necessary.
ii. Right to be Heard; Negotiation. Any Respondent shall have the right to
be heard by the Claimant, and the Claimant shall make itself reasonably available upon the request of
Respondent to meet in person and to confer for the purpose of resolving the Defect Claim by good faith
negotiation. The Parties shall confer and negotiate in good faith toward such resolution for a minimum
period of forty-five (45) days after the date that the Claimant has provided notice to each Respondent
pursuant to Section d.i. above. Notwithstanding such minimum negotiations period, the Parties are
encouraged throughout these Procedures to attempt to resolve any differences between them through
ongoing communications and informal dialogue. Any settlement of the Defect Claim through discussion
16
and negotiation shall be documented in writing and signed by the Parties in the manner described in
Section f.iv. below.
iii. Right to Inspect, Cure and Correct. Any Respondent shall have the right
(without obligation), before the institution by the Claimant of binding arbitration below, to inspect, cure
and correct any improvement or condition within the Project with respect to a Defect Claim, as follows:
[1] In addition to other rights and obligations set forth in this Article, a
Respondent may elect to inspect the Alleged Defect, in which event the Respondent shall complete the
initial inspection and testing within thirty(30) days after the date that the Claimant has provided notice to
each Respondent pursuant to Section d.i. above, and at a mutually agreeable date and time. The
Respondent shall bear all costs of inspection and testing, including any damage caused by the inspection
and testing. Before entering onto the subject property for the inspection, the Respondent shall supply the
Claimant with proof of liability insurance coverage. The Respondent shall, upon request, allow the
inspection to be observed and recorded or photographed. Nothing that occurs during a Respondent's
inspection may be used or introduced as evidence to support a defense of spoliation of evidence by the
Claimant or any potential party in subsequent litigation.
[2] Within sixty (60) days of completion of the initial inspection or testing, the
Respondent may elect to repair some or all of the Alleged Defects by sending a written notice of election
to repair to the Claimant. Notwithstanding any tolling provided by law, the applicable statutes of
limitation and repose on any and all Defect Claims relating to the Alleged Defects shall be tolled(i)from
the completion of the initial inspection and/or testing until (a)Respondent's written notice of election to
repair, or (b)the expiration of sixty (60) days, whichever is sooner; and (ii)from the date of any written
notice of election to repair by Respondent until sixty(60) days after substantial completion of the repairs.
This tolling applies to any and all Defect Claims relating to Alleged Defects for which Claimant has given
written notice pursuant to subparagraph d.i. (regardless of whether Respondent has elected to repair none,
some or all of the Alleged Defects). If the Respondent elects to repair some or all of the Alleged Defects,
then(i) Respondent has the right to do so and the Claimant may not, directly or indirectly, impair,impede
or prohibit the Respondent from making repairs; and (ii) until after the substantial completion of the
repairs the Claimant shall not file or pursue final binding arbitration (but may pursue mediation). With
any notice of election to repair, Respondent shall provide to Claimant a list of the Alleged Defects that
Respondent has elected to repair, a detailed explanation of the repair work to be performed and the
reasonably expected completion date for the repairs. The notice shall also include the name of any
contractors the Respondent intends to employ for the repairs. Claimant shall promptly cooperate with the
Respondent to schedule the repairs and provide reasonable access to the Project (including common
elements and condominium units)for the repairs.
[3] For the purpose of exercising the rights to inspect, cure, correct and repair set
forth above in subparagraphs d.iii.[1] and d.iii.[2], Declarant reserves for itself and its designees, a
perpetual nonexclusive easement of access throughout the subject property (including dwelling units) to
the extent reasonably necessary to exercise such rights.
[4] Within ten (10) days after receipt of the Respondent's notice to repair, a
Claimant may deliver to the Respondent a written objection to the proposed repair if the Claimant
believes in good faith that the proposed repairs will not remedy the Alleged Defect. The Respondent may
elect to modify the proposal in accordance with the Claimant's objection, or may proceed with the scope
of work set forth in the original proposal.
17
[5] If the Respondent fails to send a notice to repair or otherwise strictly comply
with this Section d.iii. within the specified time frames, or if the Respondent does not complete the
repairs within the time set forth in the notice to repair, the Claimant shall be released from the
requirements of this Section d.iii. and may proceed with the formal procedures set forth in Sections f. and
g. below. Notwithstanding the foregoing, if the Respondent notifies the Claimant in writing before the
stated completion date that the repair work will not be completed by the completion date,the Respondent
shall be entitled to one reasonable extension of the completion date.
[6] The Respondent shall notify the Claimant when repairs have been completed.
The Claimant shall have ten (10) days following the completion date to have the work inspected to verify
that the repairs are complete and have satisfactorily resolved the Alleged Defect. A Claimant who
believes in good faith that the repairs made do not resolve the Alleged Defect may proceed with the
formal procedures set forth in Sections f. and g. below.
[7] The specific materials and workmanship related to the repair work performed
by the Respondent shall be warranted against material defects for a period of one(1)year,which warranty
shall be in addition to any express warranties on the original work and shall be subject to the same terms
and conditions of the original express warranty, but which repair work shall not be construed to be an
"improvement"to real property for purposes of C.R.S. § 13-80-104.
[8] Any Alleged Defect discovered after repairs have been completed shall be
subject to the same requirements of these Procedures if the Respondent did not have notice or an
opportunity to repair the new Alleged Defect.
iv. No Requirement for Final Settlement to Begin Repairs; Settlement
Proposal. The informal Procedures set forth in this Section d. are for the purpose of encouraging early
resolution of Defect Claims and no formal written settlement or other agreement shall be required for
inspection and corrective work to occur pursuant to Section d. above. No Party shall be deemed to have
waived any rights or Defect Claims by reason of such corrective work, and the Claimant shall be entitled
to monitor the effectiveness of the corrective measures instituted. Alternatively,if the Respondent desires
a formal settlement agreement before commencing corrective measures or other action to resolve the
subject matter of the Defect Claim,the following Procedures may be employed:
[1] Within thirty (30) days following completion of the inspection process, the
Respondent may give Claimant written notification of its settlement proposal, including, in the case of a
proposal to remedy a Defect Claim, a report of the scope, findings and results of the inspection, the
damage caused by the Alleged Defect and a description of and a timetable for the work necessary to
remedy the Alleged Defect.
[2] Within fifteen(15) days after its receipt of Respondent's settlement proposal,
Claimant shall notify Respondent of its acceptance or rejection thereof. Failure to give such notice shall
be deemed to be a rejection of the proposal.
[3] If the settlement proposal for remedial work is accepted, Claimant and
Respondent shall endeavor to document the settlement proposal in writing within thirty (30) days after
acceptance,which settlement shall be signed by the Parties in the manner described in Section f.iv.below.
v. Effect of Corrective Work. It is acknowledged and agreed by all Parties
and by any guarantors, insurers and/or indemnitors of the Parties that any work conducted pursuant to
Section d. above (a) is in the nature of corrective or repair work and does not constitute nor shall be
18
asserted or construed to be an"improvement"to real property for purposes of C.R.S. § 13-80-104,and(b)
unless part of a written settlement agreement signed by the Claimant and each Respondent, does not
constitute nor shall be asserted or construed to be a voluntary payment or assumption of a voluntary
obligation without insurer consent under any applicable commercial general liability insurance policy.
vi. Broad Construction. The Procedures set forth in this Section d. shall are
designed to encourage the good faith resolution of a Defect Claim or appropriate correction of
improvements and the right of the Respondent to be heard and to inspect and correct shall be ongoing and
construed liberally throughout all of the Procedures set forth herein so as to permit the same, for example
but not limitation, as there arise new issues, legal theories, engineering opinions, developments with
insurers, and other developments and information, even if after the formal dispute resolution procedures
commence as described below. Accordingly, the informal and formal dispute resolution procedures are
anticipated to run concurrently from time to time and the Parties agree to reasonably, timely and in good
faith cooperate with each other to respond to requests, to permit the rights set forth in these Procedures
and to facilitate the processes of these Procedures toward the goal of a successful and voluntary resolution
of Defect Claims.
e. Formal Notice.
i. Formal Notice. At any time following the forty-five (45) day negotiation
period described in Section d.ii. above (or following such longer period as the Parties may agree), the
Claimant may provide written formal notice to each Respondent stating(i)the nature of the Defect Claim,
including if applicable a list of any alleged construction defects and a description, in reasonable detail, of
the type and location of such defects,the damages claimed to have been caused thereby, and Respondent's
role in the Defect Claim, (ii) the legal or contractual basis of the Defect Claim(i.e., the specific authority
out of which the Defect Claim arises), (iii) the date on which the Defect Claim first arose, and (iv) the
specific relief and/or proposed remedy sought. Notwithstanding the foregoing or any contrary provision
herein, the Claimant shall, in addition to complying with these Procedures, follow the alternative dispute
resolution procedures set out in the Construction Defect Action Reform Act, Colo. Rev. Stat. § 13-20-801
et seq., as it may be amended from time to time ("CDARA") with respect to any Defect Claim, and the
initial formal notice required under CDARA may be combined with the formal notice required by this
Section e.
Formal written notice as provided in this Section is required as an express condition to commence
the resolution Procedures set forth in Sections f. and g. and the Sections following,below.
f. Mediation.
i. Following the formal written notice discussed in Section e. above, the
Claimant shall have thirty (30) days to submit the Defect Claim to mediation to an independent agency
providing dispute resolution services in Eagle County,unless otherwise agreed by the Parties. A mediator
shall be selected no later than fifteen (15) days after the Claimant has given notice to the Respondent of
its submittal to mediation and if the Parties are unable to agree on a mediator, one shall be chosen by the
American Arbitration Association. Each Party shall bear its own costs of the mediation, including
attorneys'fees, and each Party shall share equally all charges rendered by the mediator.
ii. If the Claimant does not submit the Defect Claim to mediation within
such time, or does not appear for the mediation when scheduled, the Claimant shall be deemed to have
waived the Defect Claim, and the Respondent shall be released and discharged from any and all liability
19
to Claimant on account of such Defect Claim; provided, nothing herein shall release or discharge
Respondent from any liability to any person other than the Claimant.
iii. If the parties do not settle the Defect Claim within forty-five (45) days
after submission of the matter to mediation, or within such time as determined reasonable by the
mediator,the mediator shall issue a notice of termination of the mediation proceedings indicating that the
parties are at an impasse and the date that mediation was terminated. The Claimant shall thereafter be
entitled to submit the Defect Claim to binding arbitration as provided in Section g. below.
iv. Any settlement of the Defect Claim through mediation or through
negotiation shall be documented in writing and signed by the Parties. If any Party thereafter fails to abide
by the terms of such agreement,then any other Party may file suit or initiate administrative proceedings to
enforce such agreement without the need to again comply with these Procedures. In such event, the Party
taking action to enforce the agreement or award shall, upon prevailing, be entitled to recover from the
non-complying Party (or if more than one non-complying Party, from all such Parties jointly and
severally) all costs incurred in enforcing such agreement or award, including, without limitation,
attorney's fees and court costs.
g. Final and Binding Arbitration. Upon termination of mediation as provided in
Section f.iii. above, if Claimant desires to pursue the Defect Claim, Claimant shall have forty-five (45)
days to deliver an arbitration notice to Respondent(s)and to initiate final,binding arbitration of the Defect
Claim under the auspices of the American Arbitration Association ("AAA") in accordance with the
AAA's Commercial or Construction Industry Arbitration Rules, as appropriate. If any Defect Claim is not
timely submitted to arbitration, or if Claimant fails to appear for the arbitration proceeding, then the
Defect Claim shall be deemed waived and abandoned, and Respondent(s) shall be released and
discharged from any and all liability to Claimant arising out of any such Defect Claim. The following
arbitration procedures shall be applicable to each Defect Claim that is arbitrated:
i. The arbitrator must be a person qualified, with applicable industry
experience and/or legal experience,to consider and resolve the applicable Defect Claim.
ii. No person shall serve as the arbitrator where that person has any
financial or personal interest in the result of the arbitration. Any person designated as an arbitrator shall
immediately disclose in writing to all Parties any circumstance likely to affect the appearance of
impartiality, including any bias or financial or personal interest in the outcome of the arbitration
("Arbitrator Disclosure"). If any Party objects to the service of any arbitrator with fourteen (14) days
after receipt of the Arbitrator's Disclosure, such arbitrator shall be replaced in the same manner in which
that arbitrator was selected.
iii. The arbitration shall be presided over by a single arbitrator.
Notwithstanding any other provision of this Section g., if the Parties are unable to agree upon an arbitrator
to resolve a Defect Claim, they shall request from the AAA a list of qualified arbitrators. Promptly
following their receipt of the list, the Parties shall meet in person or by telephone and shall follow the
AAA procedures of ranking and striking names so as to determine the person who shall serve as the
arbitrator. The cost of the list shall be split equally by the Parties.
iv. The arbitrator shall hold at least one hearing in which the Parties, their
attorneys and expert consultants may participate. The arbitrator shall fix the date, time and place for the
hearing. The arbitration proceedings shall be conducted in Eagle County, Colorado unless otherwise
agreed by the Parties.
20
v. Discovery shall be limited to document disclosures as provided by the
AAA, and no other discovery shall be conducted in the absence of an order of the arbitrator or express
written agreement among all the Parties. The manner, timing and extent of any discovery shall be
committed to the arbitrator's sound discretion, provided that under no circumstances shall the arbitrator
allow more depositions or interrogatories than permitted by the presumptive limitations set forth in
Federal Rules Of Civil Procedure 30(a)(2)(A) and 33(a). The arbitrator shall levy appropriate sanctions,
including an award of reasonable attorneys' fees, against any Party that fails to cooperate in good faith in
discovery agreed to by the Parties or ordered by the arbitrator pursuant to this Section.
vi. The arbitrator may, in his or her reasonable discretion,permit the Parties
to submit pre-hearing briefs,post-hearings briefs and/or proposed findings of fact and conclusions of law.
The arbitrator shall also have authority to establish reasonable terms regarding inspections, destructive
testing and retention of independent consultants,if applicable.
vii. The Parties agree that where any Defect Claim, dispute or other
controversy existing between them is submitted to arbitration, and any other Party may have liability with
respect thereto, all Parties agree that the third parties may be joined as additional Parties in the arbitration,
or if a separate arbitration exists or is separately initiated, to the consolidation of all such arbitrations. By
way of example only and not by limitation, in the event of an Alleged Defect, Declarant would have the
right to join in the arbitration any design professional, contractor, subcontractor or other third party whose
acts or omissions allegedly caused or contributed to the damages alleged by the Claimant.
viii. The arbitration award shall address each specific Defect Claim to be
resolved in the arbitration, provide a summary of the reasons therefore and the relief granted, and be
rendered promptly after the close of the hearing and no later than thirty (30) days from the close of the
hearing, unless otherwise agreed by the Parties. The arbitration award shall be in writing and shall be
signed by the arbitrator.
ix. Any issue about whether a Defect Claim is covered by these Procedures
shall be determined by the arbitrator. Notwithstanding anything to the contrary, if a Party contests the
validity or scope of arbitration in a court of law, the arbitrator or the court shall award reasonable
attorneys' fees and expenses incurred in defending such contests, including those incurred in trial or on
appeal,to the non-contesting Party.
x. The arbitrator shall apply the substantive law of Colorado and may
award injunctive relief or any other remedy available in Colorado.
xi. The award rendered by the arbitrator shall be final and binding, may be
filed with any court of competent jurisdiction in Eagle County, Colorado in accordance with applicable
law and judgment obtained thereon, and execution may issue. If any Party objects to entry of judgment
upon any arbitration award entered pursuant to this Section g.xi., the Party that substantially prevails in
any ensuing dispute concerning the entry of judgment upon such award shall be entitled to all reasonable
attorneys' fees and costs incurred in the enforcement of the award.
xii. The fees and costs of the arbitration, including without limitation the
arbitrator and its consultants, shall be borne equally by the Parties.
xiii. Except as may be required by law or for confirmation of an arbitration
award, neither a Party nor an arbitrator may disclose the existence or contents of any arbitration or
arbitration award without the prior written consent of all Parties to the Defect Claim.
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h. Amendments to these Procedures; Standing to Enforce. Notwithstanding
anything to the contrary contained in this Declaration the terms and provisions of this Exhibit A inure to
the benefit of Declarant, are enforceable by Declarant, and shall not ever be amended or nullified without
the written consent of Declarant and without regard to whether Declarant owns any portion of the subject
property at the time of such amendment. BY TAKING TITLE TO A LOT, EACH OWNER
ACKNOWLEDGES AND AGREES THAT THE TERMS OF THIS EXHIBIT A ARE A
SIGNIFICANT INDUCEMENT TO THE DECLARANT'S WILLINGNESS TO DEVELOP AND SELL
THE LOTS AND THAT IN THE ABSENCE OF THE PROVISIONS CONTAINED IN THIS
ARTICLE, DECLARANT WOULD HAVE BEEN UNABLE AND UNWILLING TO DEVELOP AND
SELL THE LOTS FOR THE PRICES PAID BY THE ORIGINAL PURCHASERS. Any amendment
made without the requisite written consent of Declarant shall be null and void and shall have no effect.
Further, all employees and agents of Declarant and all contractors, subcontractors, architects, engineers
and other development professionals associated with the design or construction of any portion of the
Project(each a"Third Party Beneficiary") are third-party beneficiaries of this Article and of the terms and
conditions contained herein, including without limitation the requirement for binding arbitration, and any
Third Party Beneficiary has standing to enforce the terms and conditions of this Article, including without
limitation to compel binding arbitration.
i. Reformation The Parties agree that reliance upon courts of law and equity can
add significant costs and delays to the process of resolving Defect Claims. Accordingly, they recognize
that an essential part of the Declaration is this Article and its agreement between and among the Parties to
provide for the submission of all Defect Claims to informal negotiation and correction efforts, mediation
and final and binding arbitration. Therefore, if any court or arbitrator concludes that any provision of
these Procedures is void, voidable or otherwise unenforceable, the Parties understand and agree that the
court or arbitrator shall reform each such provision to render it enforceable, but only to the extent
absolutely necessary to render the provision enforceable and only in view of the Parties' express desire
that the merits of all Defect Claims be resolved only by arbitration and,to the greatest extent permitted by
law,in accordance with the principles, limitations and procedures set forth in these Procedures.
j. Notices; Computation of Time. All notices given or required by these
Procedures shall be in writing and shall be deemed given and received (a)when hand delivered to the
intended recipient by whatever means; (b)three business days after the same is deposited in the United
States mail, with adequate postage prepaid and sent by certified mail, return receipt requested, or (c)one
business day after the same is deposited with an overnight courier service of national reputation, with the
delivery charges prepaid. In the event any date called for herein falls on a Saturday, Sunday or legal
holiday for which U.S. mail service is not provided, such date shall be extended to the next business day
following such Saturday, Sunday or holiday.
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