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Law Offices of Mark F Buckman Mark F. Buckman, Bar No. 192374 717 K Street, Suite 219 Sacramento, CA 95814 Telephone- (916)442-8300 Facsimile-(916) 442-8301

Attorneys for plaintiff George Vilahu

FfLED Superiof Court Qf CaUforyils Sacramento

07/28/2(110

B^ 3 Deputy Case Mumb»i'!

34-201 e"0S083642

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SACRAMENTO

GEORGE VILAHU,

Plaintiff,

V.

STONELAKE MASTER ASSOCIATION, MICHELE MIHALKO, and DOES 1 THROUGH 10, inclusive.

Defendants.

Case No.

COMPLAINT FOR VIOLATION OF DAVIS-STIRLING COMMON INTEREST DEVELOPMENT ACT AND INJUNCTIVE RELIEF

Department Assignments

Case Management 44 Law and Motion 53

Minors Compromise 3£

1 Plaintiff George Vilahu is a resident of Sacramento County, Califomia and at all times

relevant hereto has been a member m good standing ofthe Stonelake Master Association Plaintiffis also

a member of Stonelake Concemed Citizens ("SCC"), a group of Stonelake members that are concemed

about the govemance ofthe Stonelake Commumty. Although plaintiffis an individual, other Stonelake

members support plaintiffs lawsuit against Defendants.

2. Defendant Stonelake Master Association ("SMA") is a nonprofit mutual benefit

corporation with its headquarters in Sacramento County. SMA is the homeowners' association for the

Stonelake Community, a common interest development containing 1,467 single-family homes in Elk

Grove. Notably, all streets in Stonelake are publicly owned and maintained

3, Defendant Michele Mihalko is president of SMA and the chairperson of its board of

-_l_-COMPLAINT

1 directors. The SMA's four other board members are Paul Sidhu, Gina Tosi-Smith, Daniel Allen, and

2 Jeanne Li. All directors reside in Sacramento County.

3 4. Each director is bound by Corporations Code § 7231, which requires that "A director shall

4 perform the duties of a director, including duties as a member of any committee ofthe board upon which

5 the director may serve, in good faith, in a manner such director believes to be in the best interests ofthe

6 corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like

7 position would use under similar circumstances."

8 5. Plaintiff is ignorant of the true names or capacities of the defendants sued herein under

9 the fictitious names Does 1-10, inclusive and sues such defendants pursuant to Code Civ. Proc. § 474.

10 Each ofthe named defendants and the fictitiously named DOE defendants in some manner contributed

11 to the wrongs and damages alleged herein or claims, or may claim, some interest in the subject real

12 property. The names, capacities and relationships and any additional allegations as might later be

13 discovered ofthe named defendants and those defendants referred to as Doe 1 through 10, will be alleged

14 by amendment to this complaint when those names are known and such later information is discovered.

15 6. At all times mentioned in this complaint, each of the defendants was the agent, joint

16 venturer, and/or employee of each ofthe remaining defendants and in doing the things alleged in this

17 complaint, each was acting within the course and scope of such agency, employment and joint venture

18 with the advance knowledge, acquiescence or subsequent ratification of each and every remaining

19 defendant.

20 7 In accordance with Civil Code § 1369 560(3), plaintiff hereby certifies that altemative

21 dispute resolution was not undertaken because preliminary or temporary injunctive relief is necessary.

22 8 This IS NOT an action to enforce the Stonelake Commumty's goveming documents

23 Rather, it is an action to have the Board comply with specified provisions ofthe Davis-Stirling Common

24 Interest Development Act requiring Defendants to hold public meetings and provide proper notice and

25 due process to Stonelake members in the amendment of operating rules for the community

26 9. Defendants are attempting to amend the Stonelake Community's mles which would

27 dramatically increase the SMA's control over the community, invade member's privacy and the privacy

28 of their guests, and limit members' use of public streets. Although Stonelake is not a gated community

-_2_; COMPLAINT

1 and all streets in the community are public, the Board's proposed mles would, among other things: (a)

2 Require all cars in the community to register (even those parked exclusively in garages); (b) Require all

3 ovemight guests that park on the public streets to register with the SMA; (c) Ban all resident parking

4 from the public streets (something not done in Stonelake's 10-year existence). There is no exception for

5 members to park on the public street while dropping their children at the public elementary school, at the

6 public parks, or while attending parties or other events at their neighbors' homes; (d) Require members

7 to register the cars of their weekly babysitters or gardeners to park on the public streets; (e) Tow

8 members' cars from the public streets' and member's driveways after a second infraction ofthe new mles;

9 (f) If members failed to comply, they can be fined, their homes liened, and their homes would be subject

10 to foreclosure by the SMA ^

11 10 Whether or not the mles are well-intentioned or even allowed under Stonelake's

12 goveming documents, the Defendants are legally required to provide members with specific notices about

13 proposed mle changes before any such mles can be validly adopted Similarly, Defendants must comply

14 with the Common Interest Development Open Meeting Act in conducting the SMA's board meetings.

15 11. Plaintiff is also informed and believes that Defendants have attempted to make

16 undisclosed changes to the community's common area mles (affecting the clubhouse facilities) without

17 ever providing the text, purpose, or effect of such mles to the community, in violation of Civil Code §

18 1357.130. As such, plaintiffis unaware ofthe proposed changes, but desires that the Board comply with

19 notice provisions for all such mles

20 12. The SMA mailed members a redlined version ofthe proposed mle changes However,

21 it did not include "a description ofthe purpose and effect ofthe proposed mle change" as required by

22 Civil Code § 1357.130(a) The purposes and effects ofthe myriad mle changes have not been explained

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' After the Elk Grove Police Department told the Board that anyone authorizing a tow from 25 public would be arrested, the Board has apparently dropped this provision; however, Defendants

have not sent out any revised rules to the community. 26

^ Again, plaintiff is not here challenging the proposed rules themselves nor the Board's 27 authority under the governing documents to make such rules. Rather, plaintiff provides the broad

28 nature ofthe Board's proposed rules to demonstrate the need for Defendants to comply with statutory safeguards for members to be informed of and participate in the rules process.

-J_ COMPLAINT

1 to members and members have been confused and ill-informed as a result. The Defendants have made

2 pronouncements regarding the mle changes before any public vote, further confiising the members as to

3 what is, and is not, being discussed as a new mle The entire mailing that the SMA sent to members,

4 including the proposed amended mles, is attached hereto as Exhibit "A."

5 13. As a quasi-governmental entity with control over 1,467 homes. Defendants must comply

6 with the Common hiterest Development Open Meeting Act, Civil Code § 1363.05(a) ("OMA"). The

7 OMA is modeled on the Ralph M. Brown Act and requires, among other things, that (i) all member are

8 allowed to attend and speak at all non-executive board meetings, (ii) board meetings be noticed and

9 agenda published at least 4 days in advance, (iii) the Board may not discuss nor take action on any item

10 not properly on the agenda, and (iv) minutes of board meetings must be made available to members

11 within 30 days. (Civil Code §1363 05(b)(h); (f); (i)(l); and (d) respectively).

12 14. The OMA strictly limits the Board's ability to use executive sessions to enumerated

13 subjects - discussing litigation, third-party contracts, member discipline, personnel matters, or upon

14 member request, payment of that member's assessments. (§ 1363.05(b)) Thus, all other matters must be

15 properly noticed and open to all members. As set forth below. Defendants have violated the OMA.

16 15 When proposing to change the community's mles, the Board must comply with Civil

17 Code § 1357.130(a),"The board of directorsshallprovidewrittennoticeofaproposedmlechangeto the

18 members at least 30 days before making the mle change. The notice shall include the text ofthe proposed

19 mle change and a description ofthe purpose and effect ofthe proposed mle change." As set forth below,

20 Defendants have violated this statute.

21 16. The Defendants have violated the OMA by holding non-public meetings, by failing to

22 provide agendas of board meetings at least 4 days in advance, by taking action on items not properly on

23 the agenda, by failing to make board meeting minutes available to members within 30 days, and other

24 actions and inactions

25 17. The Defendants have violated provisions of the Davis-Stirling Common Interest

26 Development Act by, inter alia: (i) failing to provide SMA members with "a description ofthe purpose

27 and effect ofthe proposed mle change" for the Board's substantial and unprecedented mle changes as to

28 parking and other community regulations (Exhibit "A" hereto); (ii) failing to provide members with the

-_4_-COMPLAINT

1 "text ofthe proposed mle change and a description ofthe purpose and effect ofthe proposed mle change"

2 as to the clubhouse mles changes; (iii) taking action on the proposed mles without a public meeting, as

3 required by Civil Code 1357.130(b); (iv) falsely claiming to have carefully considered all ofthe members

4 comments to the proposed mles, when the Board did not consider member comments as required by Civil

5 Code 1357 130(b); and (v) rejecting and not considering a petition against the Board's proposed mles

6 signed by numerous members ofthe SMA, in violation of Code 1357.130(b)

7 18. Plaintiff, on his behalf and on behalf of the SCC and other members of the Stonelake

8 Community, seeks to have SMA, its president Michele Mihalko, and its Board of Directors comply with

9 the OMA and the Davis-Sterling Act

10 19. It would be wasteful to allow Defendants to continue with their proposed mles without

11 complying with statutory requirements. Similarly, it would be wasteful to allow Defendants to have

12 meetings in violation ofthe OMA because such actions would be invalid, cause confiision in the

13 Stonelake Community, cause the SMA to re-consider all invalid actions, and could result in fiirther

14 litigation. Pecuniary compensation would not compensate plaintiffs and other members ofthe SMA for

15 denial of their rights to information regarding proposed community changes nor for not being allowed

16 to attend board meetings and have their Board act in accordance with law. Moreover, it would harm the

17 broader Stonelake Community to allow the Board to continue conducting its meetings in violation ofthe

18 OMA or to amend operating mles without community notice and comment.

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20 RELIEF DEMANDED

21 Plaintiff Prays for Relief against Defendants as follows-

22 1 For an order temporanly and permanently restraimng and enj oining the Stonelake Master

23 Association, its president Michele Mihalko, and all its Board members, agents, servants and employees,

24 including Ment Property Management, from taking any action related to any mles changes to adopt,

2 5 amend, or repeal any operating mles for the SMA without first fully complying with Civil Code § § 13 5 7

26 andl363.05),

27 2. For an order temporarily and permanently restraimng and enj oining the Stonelake Master

28 Association, its president Michele Mihalko, and all its Board members, agents, servants and employees,

-_5_-COMPLAINT

1 including Merit Property Management, from conducting any non-executive board meeting unless same

2 is in full compliance the Common Interest Development Open Meeting Act, Civil Code § 1363.05;

3 3. For an order temporarily and permanently restraining and enjoining the Stonelake Master

4 Association, its president Michele Mihalko, and all its Board members, agents, servants and employees,

5 including Ment Property Management, from enforcing or otherwise taking any other action with respect

6 to any operating mles that were not passed in full compliance with Civil Code § 1357;

7 4. For an order that any actions taken by the Stonelake Master Association, its president

8 Michele Mihalko, and all its Board members, agents, servants and employees, including Merit Property

9 Management, in violation of the Common Interest Development Open Meeting Act, Civil Code §

10 1363.05 are invalid,

11 5. For an order that any operating mles for the Stonelake Community purported approved

12 by the Stonelake Master Association, its president Michele Mihalko, and all its Board members, agents,

13 servants and employees, including Ment Property Management, in violation ofthe Civil Code § 1357 is

14 invalid,

15 6. For all costs of suit; and

16 7 For such other and further relief as the Court may deem appropriate.

^ " Dated- July 28, 2010 LAW OFFICES OF MARK F. BUCKMAN, , „ Attomeys for plainliff George Vilahu

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By: . Buckman

6-COMPLAINT

Exhibit A

Memorandum

DATE: April 9, 2010

TO: Members of the Stonelake Master Association

FROM: Stonelake Master Association Board of Directors

RE- Proposed Changes to Community Rules and Regulations

Your Board of Directois have been working on proposed changes to your Community Rules and Regulations (including Parking). Enclosed is a redlined copy ofthe proposed changes for your review and comment These changes vvill be on the agenda for approval at the Open Session Boai-d of Directors Meeting on May 13th. The Board will hold a homeowners open forum and heai- comments and/or suggested changes prior to voting on these changes. The meeting will be held at the Stonelake Clubhouse starting at 6:30 PM.

Ifyou have any comments or suggestions legardmg these changes you can email them to Rachel Corona at rcorona(g),meritpm.com, drop (hem off at the Stonelake Clubhouse, mail them to Stonelake Master Association, 101 Parkshore Drive, #100, Folsom, CA 95630 or bring them up at the May 13th meeting.

Please contact Rachel Corona at (916) 608-3068 or email at rcorona(5),nieritpm com if you have any questions.

TME_ S T O N E ^ L A K E . CLUE)

STONELAKE MASTER ASSOCIATION COMMUNITY RULES & REGULATIONS

The Community Rules and Regulations contained in this section are a restatement of the Use Restrictions contained in Article 8 of the CC&Rs, These "Good Neighbor" rules are for the purpose of creating and maintaining a harmonious community for all Stonelake Master Association families. Also included in this section is the Assessment Collection Policy.

Stoncldkc Comiimmlv Rule; and Rceulntions - RevLscd April 2010 v4 l

TABLE OF CONENTS

A PREAMBLE 3

B COMMUNITY RELATIONS

B-l. REGISTRATION 4

B-2 GUESTS 4

B-3 COMMON AREA DAMANGE 4

B-4 NEIGHBORLY CONDUCT 4

B-5 EXTERIOR APPERANCE/SIGNANGE 5

B-6 COMMON AREA SYSTEMS 5

B-7 RESIDENT PARKING 5-6

B-8 GUEST PARKING 6-7

B-9 PARKING ENFORCEMENT / TOWING 7

B-IO CABLE / ANTENNA / SATELLITE DISHES 7

B-l I PETS 8

B-12 SPEED LIMIT 8

B-13 BUSINESS ACTIVITIES 8

B-14 TRASH RECEPTACLES 8

B-15 SPORTS FIXTURES 8

B-16 LANDSCAPING 8-9

B-17 SCREEN DOORS 9

B-18 SHADE SCREENS 9

B-19 HOLIDAY DECORATIONS 9

B-20 ARCHITECTURAL CHANGE AND APROVAL PROCESS 9-10

C ENFORCEMENT

C-1 FINES 11

C-2 DUE PROCESS REQUIREMENTS 11

ENFORCEMENT SCHEDULE 12

VEHCILE INFORMATION FORM 15

stonelake Comiminily Rules and Regulations - Rcviscil AnnI 2010 v4 9

STONELAKE MASTER ASSOCIATION COMMUNITY RULES AND REGULATIONS

A. PREAMBLE

A-1, The authority for the Board of Directors to form and enforce rules and regulations is provided by the Declaration of Covenants, Conditions and Restrictions under Article 4, Section 4.1.6. A copy ofthis Declaration was given to each owner at the time of purchase of their lot.

A-2 The Board of Directors may create a Rules and Regulations Advisory Committee. The duty ofthis committee is to advise the Board of Directors regarding the Rules, the Bylaws and the Declaration of Covenants, Conditions and Restrictions.

A-3. The Manager of the Stonelake Master Association has been instructed by the Board of Directors to require the compliance of all persons on Association properties with the provisions of all Rules, Bylaws and the CC&R'S. In the instance of a person violating the Rules, the Bylaws or the CC&R'S, the Manager has further been instructed to do any ofthe following;

a) Obtain names and addresses of violators and report to the Board of Directors.

b) Remove the persons from the Association premises, if necessary. c) Call upon a law enforcement agency for assistance, d) Call upon residents to assist him/her in his/hei duty. e) In the case of residents' children, make an effort to contact their parents

immediately, prior to making the action called for in (b), (c), and (d) above.

A-4, The Rules as contained herein are issued by the Board of Directors. They are supplemental to the conditions of ownership in the Declaration of Covenants, Conditions and Restrictions, If there is any conflict the provisions ofthe Declaration will prevail.

The Rules are intended as a guide to the conduct and activities of all members, lessees and residents of the Stonelake Master Association and their guests, to the end that everyone living in and using the facilities will enjoy the maximum pleasure without annoyance or interference from others. Strict observance and adherence is urgently requested by the Board of Directors. Policing actions because of violations, should not have to be necessary, but might be required.

Sloiielaky ConimiiniW Rules nnd Kegiilntions - Revised April 2010 v4 T

B. COMMUNITY RELATIONS

B-l. REGISTRATION All members and residents must be registered with the manager,

a) Association member are those individuals owning a lot or unit at the Stonelake Master Association community.

b) Residents are defined as owners and members of their families living on the premises ofthe community or lessees and members of their families living on the premises of Stonelake Master Association.

c) Owners leasing their home retain their voting right in the Association but assign the use of all common facilities ofthe community to the lessee of their home. The lessee assumes the privileges and responsibilities of membership as hereinafter stated, but does not have a voting right the vote belongs only to the owner. Nonresident owners are not permitted to use any common area facilities when so assigned to a lessee except as a guest of a resident.

d) The lease or rental agreement must be in writing and must be for a term of not less then 30 days and be subject to the CC&Rs, Bylaws, and adopted rules. The Owner is responsible to provide a copy ofthe CC&Rs, Bylaws and these adopted rules and regulations to their tenants at their sole cost, The Owner is required to notify management-the Association ofthe names and phone numbers of their tenants and provide a copy ofthe rental agreement. A Rental Infonnation form is available tiirough the Management Companv.

B-2, GUESTS

a) Guests must be accompanied by a host or hostess resident ofthe Association when using the common areas ofthe Association,

b) It is the right and duty of each resident to question the presence of any person who appears to be trespassing and/or advise the Manager regarding the situation.

B-3, COMMON AREA DAMAGE Members, lessees and residents are responsible for payment of all cost of repairs for all damage to the Association's property caused by themselves, members of their families or their guests,

B-4 NEIGHBOROLY CONDUCT

a) All activities, whether individual or gi'oup, shall be conducted at a noise level that is reasonable and not disturbing to other association lesidents. Each owner or resident is responsible for the conduct and behavior of their, childron^-guestsr-and any visiting childien and for any property damage caused by such persons.

b) Vehicles, toys, or bicycles are not allowed to be parked or placed so they block or interfere with pedestrian traffic on the sidewalks. The placement of unattended tricycles, play toys, or other equipment in front yards is prohibited

c) No noxious or offensive activities shall be carried on nor shall anything be done which may be or become an annoyance or nuisance to the residents or which shall in any way interfere with the quiet enjoyment of occupants in the residences.

d) Only usual and customary outdoor patio furniture is allowed on porches and in courtyards BBQ's are not pemiitted to be stored in the front porches or courtyards.

Slonclakc Cominunitv Rules and Rceulnlion.s - Revised .'Xpril 2010 v4 A

B-5 EXTERIOR APPERARANCE/SIGNAGE

a) Signs, advertising er-ethef-devicesy or miscellfmeous paraphomalia-or commercial signs shall not be exposed or attached in any fashion to or on windows, fences and exterior walls or any other areas of buildings or groimds except for one

similai-ovv'norname4dentifieation-,-and one-unobtrusive sign advertising the existence of a security service protecting the lot or condominium. The Architectural Control Committee shall have the power to grant exceptions to this restriction in appropriate cases, NO VENDOR ADVERTISING SIGNS ARE PERMITTED.

b) One sign of reasonable dimensions not to exceed 18"x 30" advertising the home for sale or rent may be displayed in the window of a home, yard area or other areas designated by the association.

c) In order to maintain the uniform aesthetic attractiveness ofthe association and compliance with the CC&Rs no window shall be covered with aluminum foil sheets or materials not specifically designed for use as a window coverings. Temporary, commercially designed window coverings may be placed until drapes or permanent coverings an-ive. However, such permanent coverings shall be in place no longer than six (6) months after thc move m date.not longer the six (6) iiivMiUKi ui^iin.; Juuvt;; lit uuiv ,

d) Any vehicle with a sign displayed on anv part thereof advertising any kind of business must be parked within a garage or signage must be covered from public view,

B-6. COMMON AREA SYSTEMS Common area time clocks, thermostats, and lighting systems are to be adjusted and/or set by authorized personnel only.

B-7, RESIDENT PARKING

a) Garages are solely to be used for the parking and storage of cai-s, boats or similar vehicles. They are not to be used or converted for any type of living or recreational activities. _Garages shall be kept clear so as to permit parking of the number of vehicles for which the garage was designed. If an occupant has more motor vehicles than the garage's capacity will accomniodate then such vehicles shall be parked in the driveway serving the garage. If an occupant has more motor vehicles than thc gaiage and driveway can accommodate, the occupant using the vehicles will pav a fee to tlic Association that is levied for street approved registration, tags, and mahitaining its records for such purposes. Residents must contact thc Management Companv before any strcct parking will be pennitted by the Board of Directors.

b) Garage doors must remain closed except for entering/exiting and when the garage is in use and attended,

c) Residents must keep the driveways clean of any oil or other stains at all times. d) No pai-king is permitted by i csi dents on any stt'eets in the Community^ except

as in cases where prior ai-rangenients are made as provided in Section B-7 a). Residents shall park their motor vehicles only within their respective garages or driveways. Storage of vehicles on any driveway is prohibited. "Storage of

Stonclalic Comiimnit)' Rules nnd Rcgul.ltions - Revised .^pnl 2010 v4 5

Vehicles" is defined as parking a veliicles for a period in excess of 72 hoiu-s. Storage of vehicles on driveways mav occur in the discretion of the Association with a variance upon the owner's written request. Parkmg of any vehicle in a driveway at anv time in such a manner as to encroach into or obstruct traffic along the sidewalk is prohibited.within areas designated for publio paiking by the County of-Sacramento-and- -the Board. Except as ethcrwiso pennitted by tho Boai-d or the Board of-a Sub Associatton, residents of #>e Community shall park their motor vehicles only-Vtdthin their lespoctive garages or caipoits. 1 empornr^' loading and unloading and gue.sl pai'king within private driveways which are adequate for such puipose-is-pemiitted, exoept in oemmoH driveways whero such-use might obstruot access by others.

e) Residents are required to provide a Vehicle Information form identifs'ing all residents and tenant vehicles to be regulai'ly parked within the Association for that particular unit, including any vehicles to be parked in garages The Association may request updates to the Vehicle Information foim from time to time as necessary. The form shall be updated bv residents upon any changes in circtmistances in the use of such vehicles, such as change in ownenship of vehicles, additional vehicles acquired or change in occupancy of the re.sidence. Keeping the Vehicle Information form current is the resident's responsibility. I'ailure to provide a complete vehicle infonnation form may subiect the Owner to possible disciplinary action: Indefinite parking ofanv vehicle in anvstreet or paiking area, or any diivcway, is prohibited "Indsfinite parlcing" means the parking-ef-a veMele-fe-p-a period in excess of sevonty-two (7-2-)-houis, Parking of-any vehicle in a driveway in sueh a manner as to enoroaoh into or obstruot traffio along tho *idewalk is prohibited,

0 No commercial vehicles, as defined by the California Department of Motor Vehicles Commercial Vehicle Registration Act (CVRA"). trailer, camper, tfH-elt? boat, recreational vehicle, or similar equipment or inoperative automobile shall be permitted to remain within the Community unless placed and maintained entirely within a Lot, and obscured from the view of the-adjoining lots, condominiums and streets, such as within-a garages. However, recreational vehicles and trailers are pci-mitted within tlie Community for those activities normally incident and necessary to washing and poli.shing. such as temporary loading and unloading As it pertains io recreational vehicles and trailers, temporary means not to exceed a twenty-four (24) hour period. Use of a motor home or trailer for sleeping or cooking while within the Association is prohibited by guests or residents.

g) All vehicles must display current license plates and all Owners are required to display a resident vehicle identification tag, if issued by the Association,

h) Variances to these uiles are left to the discretion ofthe Board of Directors.

B-8. GUEST PARKING

a) Guests do not need Association approval to paik in garages or driveways. b) Guest parkmg within public streets is permitted provided street parking for guests

should be hmited to tlte area immediately in front ofthe resident's home. Guests of residents who park on the street between the hours of 2:00 AM and 6-00 AM must register the vehicle willi the Association Management Company,

c) If a resident has a guest who will be visiting and parking their vehicle on the street for more than 14 days in a rolling one hundred eight d 80) day period, the resident

Stonclako C ommunilv Rules and Rceulalions • Revised April 2010 v4 g

shall contact the Management Companv to obtain prior approval to avoid violations cited on the guest's vehicle,

d) Variances to these rules are left to the discretion ofthe Board of Directors.

B-9 PARKING ENFORCEMENT / TOWING

a) Any vehicle parked in any manner that obstructs free traffic flow, obstnicts an owner's access to their residence, constitutes a nuisance or creates a safety hazard or IS in violatton of these rules will be towed away at the vehicle owner's expense-Owners should contact the Association Management Company or the appropriate partv as designated by the Association Management Company, who shall be responsible for taking appropiiate action, including, if necessary, calling thc towing company

b) Vehicles parked in violation of these rules shall be subiect to To\\ing Enforcement after two (2) notices have been placed on the vehicle by tlie Association Pai'king violation notices shall remain in effect for a 180 day period. Upon the third violation, vehicles will be towed within a 180 day period.

c) Vehicles paiked in areas that are designated as "no parking" locattons (e.g. red curbed areas. "No Parking areas". Fire lanes, etc.) shall be subject to immediate tow without notice by die Association.

B-»B-10 CABLE/ANTENNA/SATELLITE DISHES Owners are prohibited from installing any antenna on the exterior of a residence for any purpose, except for an 'Authorized Antenna" which may be installed so long as the proposed location for such installation Is reviewed and approved by the Arohiteoturai Control Committee-prior to its installation in order to ensure that the visibility-ef-the-Authorized-Antenna-is minimized with respect to other owners. The Architectural Control Committee may require that the location of the Authorized Antenna be moved, and the Board may impose additional restrictions on installation or use of an Authorized Antenna, so long as such review by the Architectural Control Committee, or such additional restrictions, do not; a) unreasonably delay or prevent installation, maintenance or use of an Authorized Antenna, b) unreasonably increase the cost of installation, maintenance or use of an Authorized Antenna, or c) preclude reception of an acceptable quality signal. The Board may prohibit the installation of an Authorized Antenna if the installation, location or maintenance of such Authorized Antenna unreasonably affects the safety of managers, agents or employees of the Association and other owners, or for any other safety related reason established by the Board. The Board may also prohibit the installation of an Authorized Antenna on property to which owner does not hold fee title or is not entitled to exclusively use under this Master Declaration or a Sub-Association Declaration, or may allow an owner to install an antenna other than an Authorized Antenna subject to the Architectural Guidelines and review and approval by the Architectuial Control Committee. An "Authorized Antenna" means an antenna that is (a) designed to receive direct broadcast satellite service, including direct-to-home satellite service and that is one meter or less in diameter, and (b) that is designed to receive video programming seivice, including multichannel multipoint distribution service, instructional television fixed service, and local multipoint distribution service, and that is one meter or less in diameter, or (c) an antenna that is designed to receive television broadcast signals. Each owner may maintain individual radio or television antennae systems if located entirely within such owner's dwelling and if such system is not visible from other lots, condominiums or the Master Common Area, and provided that such system does not interfere with radio and television reception of other owners within the community. Any exposed cable firom installation of any autiiorized antenna shall be painted to match house color.

Stonelake Conimunilv Rules ,tnd Reculalions - Revised April 2010 v4 y

B-I-OB-l 1. PETS Two normal and customary uncaged household pets may be maintained within a home under the following conditions:

a) Whenever pets are outside of the resident's lot, they must be en leash-er-otherv 'ise under full control ofthe owner, with all dogs being restrained on a leash.

b) Residents must clean up after any mishap performed by their pets. c) Residents shall be responsible for any personal injuty or property damage caused by

their pets. d) Pets emitting excessive noise, or in any manner unduly disturbing other

residents, may be prohibited by order ofthe Board of Directors after a notice and a hearing.

e) Guests are not allowed to bring pets onto Association common landscaping areas,

f) No animals shall be maintained for any commercial purposes.

B-l 02. SPEED LIMIT The maximum speed limit within the confines ofthe Stonelake Master Association is as posted by the County of Sacramento,

B-H-3. BUSINESS ACTIVITIES No business activities of any kind are to be established, maintained, permitted or conducted in any home in violation of local ordinances or the CC&R'S.

B-134. TRASH RECEPTACLES Trash containers shall be stored in an area that is not visible from the streets. Master Common Area or other lots or condominiums promptly after the refuse has been collected, and refuse containers shall under no circumstances be permitted to remain in view for more than a twenty-four (24) hour period.

B-13-5. SPORTS FIXTURES No basketball standards, hoops or backboards or other fixed sports apparatus shall be peimitted to be permanently installed upon any house, garage oi other residential building in the Community. Only portable, temporary basketball backboards with hoops shall be permitted and the same shall be stored out of sight when not in use. Portable, temporary basketball backboard may not be placed in streets or on sidewalks for play.

B-l46. LANDSCAPING Except to the extent that the Declarant or a Merchant Builder may have installed front and side yard landscaping thereon, each Owner of Lot, shall install permanent landscaping within the enclosed portions ofthe Owner's lot within 120 days after the conveyance ofthe lot to the Owner Such landscaping shall include street trees from the back of the sidewalk, and planted an average of one fifteen gallon tree per thirty (30) linear feet of street.

All landscaping in the Community shall be maintained and cared for in a manner consistent with the standards of design and quality as originally established by Declarant and in a condition compai able to that of other well maintained residential areas in the vicinity ofthe Community.

a) All landscaping shall be maintained in a neat and orderly condition.

stonelake Conimiinitv Rules nnd Reculntjoni, - Revised April 2010 v4 0

b) Any weeds or diseased or dead lawn, trees, ground cover or shrubbery shall be removed and replaced.

c) All lawn areas shall be neatly mowed and trimmed.-and4 Trees and shrubs shall be neatly trimmed.

d) Irrigation systems shall be fully maintained in good working condition to ensure continued regular watering of landscape areas, and health and vitality of landscape materials.

B-17 SCREEN DOORS The Association's Aichitectural Control Committee forthwith will not consider an application to install an Exterior Door imless 1) such door is a retractable screen door and 2) the Arcliitectural Control Committee actually approves tlie apphcatton prior to the installation ofthe retractable screen door,

B-18 SHADE SCREENS Shade screens on windows which are located behind the side fence-line or in the backyard and are not visible from tlte street do not require prior approval. Shade screens must contrast from the color ofthe home (stucco) in approved colors beige, black, brown, and grey. Shade screens fbr wandows that are visible from the street such as windows on the front ofthe home or ifthe home has side windows that face a street, like a comer lot must be approved bv the Architectural Control Committee prior to installation.

B-19 HOLIDAY DECORATIONS The acceptable time frame for the winter holiday decoration is from the day after Thanksgiving until January 31 st. All other holiday decorations such as Halloween and Easter decorations must be displayed no more than thu-ty (30) days prior to the day ofthe holiday and must be removed within fifteen (15) davs after the holiday. Seasonal decorations are allowed for that season For example, pumpkins as a fall/autumn dccoiation ai'C permitted until the first day of winter.

D-204g-ARCHITECTUAL GONTROI^CHANGE AND APPROVAL PROCESS

a) The Architectui-al Control Committee and Board of Directors have developed guidelines concerning exterior changes to your home and improvements to your lot. These guidelines conform with the CC&R'S of our Association. The purpose of these guidelines is to provide the required information and forms regarding any exterior changes and modifications ofthe home so the Committee may render its decision.

b) Each homeownei shall commence and complete installation of landscaping within all portions of their lot within 120 days of close of escrow. All visible landscape plans must be approved by the Architectural Control Committee,

c) When applying for approval, please send as much information as you can and include the following specific information:

1. Completed Apphcation Form provided by the Management Company 2. Exact location: use a scale drawing if applicable, 3. State color, size, composition and description. 4 Photo, sketch, copy of an advertisement or facsimile. 6, Two (2) sets of plans.

Stonelake Connnunitv Rules and Reetilnlions - Revised .•\pril 2010 v4 n

Please send all applications for approval to THE MANAGEMENT COMPANYtl-ie Management Company-AT^

T^ici^ «t irxv/UI Vj xilv«

P. O. Box 348600 Saciamento, CA 95834

Attn; Vicki Bohllne

Please remember that you must get approval BEFORE making any changes or additions.

d) Alterations, additions or modifications made to your lot or the exterior surfaces of your home must have prior written approval from the Architectural Control Committee. This includes visible landscaping, solar energy systems, fences, walls, sun screens, decks, lattices, pools, spas, color changes, sheds, any sports apparatus, play structures, etc.

e) Any alterations that do not have prior wi-itten approval by the committee will be removed by the homeowner and the area will be restored to its original condition. Should the homeowner fail to comply, the Association will pursue its legal remedies including, but not limited to having the alteration removed at the ovwiers expense ,

f) In addition, the Board of Directors may also assess fines efnol leas than $10.00 pet day or more than S50.00 pet? day-for non-compliance of Board requests to have non-approved alterations restored to their original condition.

Stonclalce ConimiinUv Rules and RcEulnlions - Revised .April 2010 v4 IQ

C. ENFORCEMENT

C-1 Fines: To ensure compliance with the above mentioned mles, Owners may be- fined according to the enforcement schedule, not less-t-hat $10.00 Hor--mei-e-than--$50.00 per occun-enee-er continuation of violofiona. Fine amounts are to be set by the Board of Dueotors based on the merits of each violation.

C-2 Due Process Requirements: Before the Board imposes any monetary penalties or suspension of membership rights or Common Area use privileges against any member for failui-e to comply with the Declaration, the Bylaws or the Association Rules, the Board must act in good faith and satisfy each ofthe following requirements:

1. The member must be given 15 days prior written notice specifying the nature ofthe damage or violation and stating the time, date and place that the member will have an opportunity to be heard, Nofice may be delivered personally or by mail. Ifthe notice is given by mail, it must be sent by first class or registered mail to the last address ofthe member as shown on the Association records.

2. The member will be given an opportunity to be heard, orally or in writing, hy the Board. Members shall have the opportunity to present witnesses on the Member's behalf and to cross-examine any witnesses that may testify against the member. After the hearing, the Board shall determme whether owner damage or a violation has occurred and, if so, may impose a fine or a "Reimbursement Assessment" which shall become effective not less that five (5) days after the date ofthe hearing or the Board may take such other acfion as may be appropriate.

3. The Boatd may revoke Clubhouse Membership and/or Member Voting privileges for Members with Past Due Assessments. Privileges mav remain suspended until Ovsmer's account is paid m full

4. If tlie BoiU'd imposes discipline on a member, the Board shdl provide the member with written notification of the disciplinary action, by personal deliver or first-class mail, within fifteen (15) days following the action.

Stonelake Conmiunily Rules and Reg\ilations - Revised April 2010 v4 i i

STONELAKE MASTER ASSOCIATION

ENFORCEMENT SCHEDULE

The Boai-d may impose monetary penalties be automatically imposed, in accordance with the (graduated) fine schedule stated below, for each month or for each portion of a month that a violation continues witiiout the need for further hearings on tiie violation.

> First Fine $50 a Second Fine $50 0 Third Fine $50 and revoke voting rights

and clubhouse privileges. g Subsequent Fmes $100 o Legal Action Additional Hearing

All fines, including Special Assessments representing thc attorneys' fees and costs incurred by thc Association in enforcing the Governmg Documents, shall be a charge against tlie Owner ofthe Unil Any and all fines shall be billed to tlie Ownei's account for the Association.

The Association reset ves the right to use any avenue ofthe legal system to enforce the governing Documents against an Owner, including the collection of any fines imposed against an Owner for violating tlic Governing Dociunents.

StonelaVc Communnv Rules and ReRulalions - Rcvispd Apnl 2010 v4 IO

STONELAKE MASTER ASSOCIATION ASSESSMENT COLLECTION POLICY

EFFECTIVE: Aprti 1,2001 In accordance vvith Civil Code Section 1366 (b) and Article 5, ofthe Declaration of Covenants,

Conditions and Restrictions, monthly installments ofthe annual osseasinents levied by the Association pursuant to Ihe-Declai-Qtion shall be ooUooted in twelve (12) equal installments dueand-payable on the tlrstday of-eaoh and every month and shall be delinquent 15 days thereafter

if not paid in ruil.-Ifan-oflsessmenl-is delinquent, the Association shall be entitied to recover tho following sums from the-responsible ovv'ner(s):

1 T-ho-amount of all assessment instnllmonls thon delinquent and-whiehheoome delinqwint during the oolleotion process

S Reas-oftable-cests-incur-i-ed-by-th-e Association in oo 11 e&tifig-tlie-delinquent assessffl&nt4nstallment-.-In order to assure equitable and uniform treatment of all Association members, the Board ot^jifeeter-s-hepeby determifles-that-i'easenable-eest-s-of-eolleetl^H-shall

include, without limitation: A-.any reasonable costs-incurred bythe Association in contracting vyith a third party such as a

management company, accounting liim, or oolleotion agenay for collection services; B7r-eftseBahl&-attorney's fees if, in the discretion ortho-Board of Directors, an attorney is retained to

tH=red-by-the-7Ass0oiationin-eonn@etion-with-ftny court aotioninitiated-te-eelleet dehn^juent-assessinent-installments-

-^ A lale charge not exceeding 10% ofthe delinquent assessment installment or $10.00, vvhichevor is greater.

-4 Interest on all sums specified above;-including the delinquent assessment iftsta+l-m&Htj~FeasGftahle-eest

iays after the-inst-al-lffleftt-b60ome5-du&-a-i sums-until payment is received in full.

ster ond enforce this Assessment Collection Policy either directly or through utilization ofthe services of a property managemant company, colieetion

agency, accounting firm and/or attorney firm. The Association's Board shall be further authorized and empowered to apply the

Asseciation's oolleotion costs and any lato charges reoovered-fiom delinquent owners to the satis-faetion of fees-ineurred with third party contractors retained to assist in the collection

prooeas.

If tho delinquent assessment installment, logether with any late charges, interest and costs incur-red is not paid in full within 15 days from thedue date, a wntten-notiee of default and

Stonelake ConiiTninity R^iles nnd ReEiilnlions - Revised .April 2010 v4 1-3

demand foi payment shall be mailed to tho delinquent owner(a) advising them of the-intentof tho Association to record a "Notice of Delinquent Assessment."

If payment in full is not received wilhin-I5 days of receipt ofthe written-notioe of dofoult and demand for payment, a "Notice of Delinquent Assessment" may be recorded with

unpaid delinquent Qs30.'jsment(s) together with late charges, interest and costs incurred for

If payment in full is not received within 30 days ofthe recording ofthe "Notice of Delinquent Assessment", the Association may initiate ajudicial or nonjudicial foreclosure of tho lien or bring legal actien against (he owner personally obligated to pay the delinquent assessment installment without foreclosure or waiver ofthe lien and/or seouiing the same.

proceedings to prepare and record the "Notice of-Delinquent Assessment", partial payments

ouri-eni-a3sessmfrfit-s-due and propoiatory enferooment foes and costs, must be paid to

payments by or on behalf of this Association, whet-her inadvertentiy or intentionally, shall

remedies may proceed as to any remaining balance duo to this Assooiatiun.-

in-desoendingordefrte interest, late-charges, oollcoti-OH-expensos unless-a-paymont

Tho Board orD-iiecloro ofthis Association (the "Boaid") may Irom time to time-revise irhis policy, either-generally or on a case-by-case basis,-wher0 the Board determines that

ne-such levisions shall increase thc omount of late charges or shorten tho time periods

geveHied-by this-Association and advance notice thereof is given to the members ofthis AgsQoiation.

a-sscssments approved by the Board or-the membership.

Sionelnke Communilv Rule:, and RLguljiioiia -Revised April20l0vt

14

STONELAKE MASTER ASSOCIATION

VEHICLE INFORMATION

Per the Community Guidelines. Residents are required to provide their vehicle vear. make. model and license plate number for all resident and tenant vehicles to be regularly parked within Stonelake for that particular unit, including anv vehicles to be parked In garages.

Owner(s) / Resident Name (s).

Address:

Home Phone: Email Address:

RESIDENT / TENANT VEHICLES

Year: Make: Model; Color: License Plate #

Please complete this form and return it to-

Stonelake Association do Ment Propertv Management

101 Parkshore Drive. #100 Folsom, CA 95630

Phone (916) 608-3068 Fax (9161 608-3067

Stonelake Coinniunil'y Rule^ <iiid Rcpulalioni, - Revised April 2010 v4

15

M!Mni-UOI- | )AV,S v r r K i i D D F . D.xriv

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Nil Charge

STONELAKE MASTER ASSOCIATION - 15 DAY PROPOSED

DELINQUENCY POLICY

Assossmonis are due and payable in fiill on thc iirsl day of oach month All oihcr charges including bul nol limiled to latc fees, interest, collection COSIS and fines are due as tnciin-cd. All abscssitionh, latc fees, interest and colleodon eosl.s are subject to tho Delinqiicnoy Policy

Pnyments received will be applied In the following oitler; Unpaid pnncipal mcludmg abscsEsnicnts and special a-sscssnicnts levied in accordance with the Dcclamnon and Civil Code, lato Iccs, Collection tee's, interest and CC&R's violation fees

A C T I O N T O B E C O M I M E N C E P

3 Lute fee nsiicsscd on past due assessments

A Association .sendf, a i-cmmdcr notice for all outsianding eharges on Ihe accoum. (AssESiiincnls, latc fees, micrcst, collection)

5 An "Intent to l.icn" package IS !>ciil to the owners by ccitifipd mail. Charges incurred fot 4S SSSOO this letter will be levied ngainsi thc dclinciucni aocount This includes.

Dociunents and processing provided m accordance with Civil Code Includmg Account $2? 00 detail, Delinquency Policy, Fine Policy, and a title cheek fee

NOTE Prior to thc recording of a Board aiJthori7cd lien for delinquenl ubicssiments, a homeowner that is dolinquciit ha.s thc right to participate in internal dispute rciolution ("IDR") pursntant to the "meet and confer" program commencing with Califomia Civil Code Seciion 1 6. 810 Prior lo recording a Hen. the Board of Diruetore will approve such actionby amajoiily votcof ihcBoardol Directora

6 ANouccorOelincpicntAsses.smcm Lien will be nied agauist thc dclimiucnt property ond 7S SUitXl charges tbv itspfoccs.stng and lecordmg will be levied against die dclmqucnT accounl

Copy orrecoidod document will be sent to owners or record by certified mail m accordance wilb Civil Code

7 Upon receipt of payment in ftill, a Rclcii-sc of Lien Will be recorded Copies will be sent to S-iO.I)(l all o-wncn of record,

ii n c Board of Diicclors will evaluate available remedies undci law and dctemunc which lo 10'' pursue

A Noiiccof Intent to Koicclo-scoraNoticooflmpendingLawbuit Will bcsont to the As dictated bN thu $25 0(1 owner in accordancewith Califomin Civil Code loquiremonis Delinquent owner will be < alifomia Civil Code liable for payment ol tees and costs Copies w ill be .scut to thc owners of record,

NOTE; Pnor to a Board decision lo initiate a foreclosure for delinquent asse«mcnt,s, a homeowner ihat is delinquent has tho nghl to participate in dispute resolution pursuant to tlic association's "meci and confer" program required in Anielc 5 ot the California Civil Code (commencing with Scclion l.lfil 810) of Chaptci 4 or alicrnativo dispute resolution with a neutial third parly pursuant to Article 2 oflhc Califonua Civil Code ^commcnclng with Section 1369.510) of Chapter 7. Tlic decision lo pursue dispute icsoUilion or a particular lype of altemative dispute lesoluiioii shall be the choice ofthe ownci, except thai binding aibitialion shall nof be available ifthe association intends 10 inniate a judicial foreclosure

9 Account will be refcircd to die Association attorney or collection agent All Upon Uoaid iiciion legal fco.s aiid cn.'-w legal fees and eosLs of collection will bo cluirgcd lo die delmquent owner

10 Interest will be charged on assessments, late fees, and collection fees •>() 1 ?*-i per armuin

11 Copies ot documents to multiple owners of record in accordance with Civil Code: a) Handlmg fee for additional copies and/or notary fees S15 DO cn

*AI1 fees may be subject to change

For ovciniglu payments, mail lo-Mcrit Property Management, Inc I Polaris Way, Suite 100 Ali.so Vicjo, CA 92656 Dale