SUB-DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF SUN VALLEY P.U.D I SUN VALLEY I-A SUN VALLEY II

ARTICLE VII

ASSESSMENTS

Section 1. Creation of the Lien and Personal Obligations for Assessments.
The Developer covenants, and each Owner of any Residential Lot or Family Dwelling Unit, shall, by acceptance of a deed therefor, or any acquisition of any ownership interest in a Lot or Unit (whether or not so expressed in any such deed or conveyance), be deemed to accept and agree to all the terms and provisions of this Sub~Declaration. Such acceptance or acquisition shall obligate such Owner to pay to the Sub-Association: (1) annual assessments, (2) special assessments and (3) individual assessments, all fixed, established and collected from time to time as hereinafter provided. These assessments, together with interest thereon, late charges, acceleration of unpaid assessment installments and costs of collection (including reasonable attorneys' fees), shall be the personal obligation of the person who was the Owner of such real property at the time when the assessment became due and payable and any transferee or grantee of an interest in the Unit except as expressly stated herein. The liability for assessments may not be avoided by waiver of the use or enjoyment of any common property or any Recreational Facility or by the abandonment of the property against which the assessment was made. In the case of co-ownership of any Property subject to assessment, all of such co-Owners shall be jointly and severally liable for the entire amount of the assessment.

Section 2. Purpose of Annual Assessments.
The annual assessments levied by the Sub-Association shall be used exclusively for the improvement, maintenance, enhancement and operation of the property described in Article IV, Section 1, 2 and 6, and to provide services which the Sub-Association is authorized or required to provide. Such services shall include, but not be limited to, the payment of taxes and insurance, construction of improvements, repair, replacement, payment of the costs to acquire labor, equipment, materials, management and supervision necessary to carry out its authorized functions, and for the payment of principal, interest and any other charges connected with loans made to or assumed by the Sub-Association for the purpose of enabling the Sub-Association to perform its authorized or required functions. The Sub-Association may establish reserve funds to be held in reserve in an interest bearing account or investments as a reserve for (a) major rehabilitation or major repairs, and (b) for emergency and other repairs required as a result of storm, fire, natural disaster or other casualty loss.

Section 3. Initial Assessment.
[This section intentionally left blank and is reserved for future use]

Section 4. Annual Budget of General Expenses.
The SubAssociation shall prepare an annual budget not less than thirty (30) days in advance of the commencement of each fiscal year. Such budget shall project the estimated total expenditures for the services and reserves set forth in Section 2 above for the forthcoming year. Recreational Expenses may only be included in the budget to the extent they relate to Recreational Facilities open to all Owners. No Recreational Expenses relating to any Recreational Facility operated on a membership basis shall be contained in the budget. The Sub-Association shall, at the time it prepares the annual budget, make provision for the amount of the Master Association's annual assessment for this SubAssociation.

Section 5. Types of Property.
Only for purposes of this Article VII all real property of` Owners shall be classified into two groups:

1. Group 1. Group 1 property shall consist of all Units.
2. Group 2. Group 2 property shall consist of all Tracts and Lots.

Section 6. Proportion and Amount of Annual Assessments.
Annual assessments for Group 1 and Group 2 property' Owners shall be determined as follows:

1. Each Group 1 property Owner shall pay an annual assessment equal to his proportionate share of the annual budget. The said proportionate share for each Group 1. property Owner shall be determined by multiplying the total sum required by the annual budget to be raised by assessment by a fraction, the denominator of which shall be the sum of: four times the total number of Units in all Group 1 properties, plus the number of projected Units for Group 2 properties (as provided in Paragraph B of this Section), and the numerator of which is four times the number of Units in the Group 1 properties owned by him.
2. Each Group 2 property Owner shall pay an annual assessment equal to his proportionate share of the annual budget. The said proportionate share for each Group 2 property Owner shall be determined by multiplying the total sum required by the annual budget to be raised by assessment by a fraction, the denominator of which shall be the same as provided in Paragraph A of this Section, and the numerator of which is the number of Units projected for the particular Group 2 property pursuant to the Development Plan. Both the total number of projected units for all Group 2 properties and the number of projected units for any particular Group 2 property shall be determined by the Developer or the SVARC if that responsibility is delegated to it by the Developer, and the determinations of the Developer or the SVARC , as the case may be, in this regard shall be final and conclusive.
3. Annual assessments due the Master Association shall be collected as follows:

   (1) The Sub-Association shall deal directly with the Owners of the Units included within its jurisdiction.

   (2) The Sub-Association shall include in its Budget and remit to the Master Association. the entire amount of the aggregate assessment due with respect to all of the Units owned by all of this Sub- Association's members and for the aggregate amount of any special assessment due with respect to all of the Units owned by all of the Sub-Association's members. The Sub-Association shall budget and collect said Annual Assessment and Special Assessments as common expenses of the Sub-Association, which shall be collected from each of the Sub-Association's members as provided in this Sub-Declaration applicable to the said Sub-Association for common expenses of the said Sub-Association.

   (3) No Assessment, except for Required Services (see Article IV, Section 1) with respect to Common Property, shall be imposed with respect to any property covered by the Sub-Association operating autonomously pursuant to Article VIII, Section 3.

4. The following applies to all properties of Sun Valley P.U.D. including the Properties: If the Developer amends or modifies the Development Plan, including but not limited to adding or deleting property, increasing or decreasing density of projected units, or altering the relative densities of portions of the Sun Valley P.U.D., or if the number of Units to be constructed in any area of the properties is changed by any Developer, the proportionate shares of the annual budget assessment (or any special assessments) each of the Owners may be affected. No Owner shall have any right to object to any such amendment or modification of the Development Plan on the basis that same would affect his proportionate share of the annual budget assessment (or any special assessment) and the decisions of the Company and the Developer in this regard shall be final, conclusive, and unreviewable.

Section 7. Purpose of Special Assessments.
In addition to the annual assessments authorized. by this Article VII, the SubAssociation may levy special assessments for the acquisition of any Common Property, including the payment of any mortgages thereon. The Sub-Association may also levy a special assessment, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, ordinary or emergency repair of, or replacement of, capital improvements upon the Common Property including the necessary fixtures and personal property related thereto and to repay any loan made to the Sub-Association to enable it to perform the duties and functions authorized herein. To the extent that annual assessments are insufficient to fund the services which the Sub-Association is authorized or required to provide, the Sub-Association may levy a special assessment to cover the cost thereof.

Section 8. Proportion and Amount of Special Assessments.
Special assessments for Group 1 and Group 2 property Owners shall be determined by the same proportionate shares provided herein for annual assessments. The total amount of special assessments, in any one year, may not exceed a sum equal to the amount of annual assessment for such year, except in the case of emergency and other repairs required, as a result of storm, fire, natural disaster or other casualty loss. This provision shall be interpreted to mean that the Sub-Association may make in any one year (1) an annual assessment as set forth in Section 6 of this Article, plus (2) an additional special assessment, which additional assessment considered alone, may not exceed the annual assessment, and (3) any extraordinary special assessments in case of any emergencies. Subject to the foregoing provisions and for so long as the Developer controls the Sub-Association and its Budget, the Developer's guarantees the Budget and its contribution shall be limited to any shortfall in meeting the Sub-Association's expenses for the year, payable in cash or in kind (i.e.-administrative services, use of equipment, office space, etc.) from time to time as required.

Section 9. Individual Assessments.
Each Owner of a Family Dwelling Unit or Residential Lot is required to maintain his property, whether improved or unimproved, in a state of good repair at all times. This shall include, but shall not be limited to, periodic painting (or other appropriate refinishing) of all structures, the maintenance of the lawns, shrubbery and trees in a well-groomed and trim condition, and if unimproved, in an orderly and uncluttered condition. Such Owners may be further required to maintain their property in accordance with any other covenants, conditions and restrictions, and Supplemental SubDeclarations to which their deeds or other instruments of conveyance may' be subject (whether reference thereto is made therein or not). In the event of the failure of such Owner(s) to maintain their property as required herein, the Sub-Association, after first giving thirty (30) days' notice to such Owners, may take such steps as are necessary to remedy any defective and/or unsightly conditions to comply with requirements imposed herein. Notwithstanding the foregoing, said thirty (30) day notice requirement may be reduced to ten (10) days if, in the Board of Directors' sole discretion, a safety hazard exists. The Owner(s) of such property shall be assessed for the expense of same. Entry upon such Owners' Property for such purpose shall not constitute a trespass. Assessments may also be levied against such Owners for any damage to Common Property, Residential Common Property, or Recreational Facilities which may be caused by such Owners, their families, lessees, guests or invitees, for negligence or willful misconduct.

Section 10. Installment Payment of Annual Assessments.
Annual assessments shall be paid annually in advance on the first day of each calendar year, or in installments as otherwise established by the Sub-Association, commencing with the date stated in Section 3 of this Article. The date of delinquency for all homeowner association assessments shall be established by the Board of Directors at the time the assessment is levied.

Section 11. Duties of the Board of Directors.
The Board of Directors of the Sub-Association shall prepare an annual budget and fix the amount of the assessment against each of the properties and Sub-Associations as provided hereinabove for each assessment period. It shall also prepare a roster of the properties and assessments applicable thereto which shall be kept in the office of the Sub-Association and shall be open to inspection by any owner. Written notice of the assessment shall thereupon be sent to each Owner. The Sub-Association shall upon demand at any time furnish to any Owner who requests it a certificate in writing signed by an officer of the SubAssociation, setting forth whether said assessment has been paid. Such certificate shall be conclusive evidence of payment of any assessment therein stated to have been paid. The Sub-Association may charge a reasonable fee for this certificate if requested more than once per year by the same Owner.

Section 12. Effect of Non-Payment of Assessment Lien.

1. If any assessment is not paid on or before the past-due date specified in Section 1O of this Article VII, then such assessment and assessments accruing until the lien is satisfied shall be deemed delinquent and shall, together with interest thereon at the maximum rate allowed under law from the due date, late charges and accelerated assessments and the cost of collection (including reasonable attorneys' fees) thereof as hereinafter provided, thereupon become a charge and continuing lien, as provided below, on the land and all improvements thereon against which each such assessment was made. The Board of Directors shall have the authority to waive (either on a case by case basis or prospectively) small amounts of interest and late charges which may become due under this section in order to save bookkeeping costs if the Board finds it in the best interest of the Sub-Association to do so. Late fees for delinquent assessments shall be assessed as follows: (a) If a homeowner's assessment is not paid in full on or before March 1st of any calendar year, the owner will be assessed a $25.00 penalty. (b) If a homeowner's assessment is not paid in full on or before May 1st of any calendar year, the owner will be assessed an additional $25.00 penalty. (c) If a homeowner's assessment is not paid in full on or before May 15th of any calendar year, the past due amounts shall be assigned to the Association's attorney for collection and/or further legal action. The Board of Directors is authorized to waive any and all penalties if in its discretion it believes circumstances warrant such waiver.
2. Assessments shall be personal obligations of the following:

   (1) Each Owner of property shall be personally liable for all assessments made against that property, which liability will survive even after title to the property subject to the assessment has been transferred. Each person acquiring such property shall become personally liable for all unpaid assessments against such property.

   (2) Each member of a Sub-Association shall be severally liable for his prorata share of any Master Association assessment against that Sub-Association. Any member of a Sub-Association may discharge the liability provided in this paragraph by paying such member's prorata share of the assessment directly to the Master Association. The provisions of this paragraph shall not apply unless and until any assessment against a Sub-Association becomes delinquent and the Master Association opts to enforce same against the Sub-Association's members. The term "prorata share," for the purposes of this section only, means the prorata share of any assessment according to the Sub-Declaration applicable to the applicable property.

3. Lands and improvements which are subject to lien for delinquent assessments are:

   (1) Individual properties owned by the members of a SubAssociation which is delinquent in paying assessments. Such lien may be released as provided in paragraph B(2) of this section.

   (2) Individual properties belonging to any Owner who fails to pay an assessment against such properties.

4. Said liens shall be evidenced by a claim of lien filed among the Public Records of Palm Beach County, Florida. They shall be effective from the time of recording; however, the effective date of a lien shall relate back to date the Declaration was recorded, April 9, 1987, and shall have priority over all liens and other interests, except for real property taxes and Institutional Mortgages as expressly provided and as limited herein.

   (1) As to an Institutional Mortgage recorded before the effective date of this provision, Association liens shall be subordinate to the lien of that Institutional Mortgage or other liens recorded prior to the time of the recording of the claim of lien by the Sub-Association.

   (2) As to a first Institutional Mortgage recorded after the effective date of this provision, liability of that first Institutional Mortgagee, its successor or assignee who actually is a subsequent holder of the first mortgage and who acquires title to a unit by foreclosure or by deed in lieu of foreclosure for the unpaid assessments that became due prior to the first Institutional Mortgagee's acquisition of title is limited to the lesser of:

   1. Unpaid assessments which accrued or came due during the six months immediately preceding the acquisition of title and for which payment in full has not been received by the Sub-Association; or,
   2. One percent of the original mortgage debt.

   If acquisition of title occurred as a result of the foreclosure of the first Institutional Mortgage, then the provisions of this sub-paragraph apply only if the first Institutional Mortgagee joined the Sub-Association as a defendant in the foreclosure action; however, joinder of the Sub-Association is not required if, on the date the complaint is filed, the Sub-Association was dissolved or did not maintain an office or agent for service of process at a location which was known to or reasonably discover-able by the first Institutional Mortgagee. The person acquiring title shall pay the amount owed to the Sub-Association within thirty days after transfer of title. Failure to pay the full amount when due shall entitle the Sub-Association to record a claim of lien against the parcel and proceed in the same manner as provided in this section for the collection of unpaid assessments.

5. No portion of the Properties covered by a Sub-Association operating autonomously pursuant to Article VIII, Section 3, shall be subject to any lien in favor of the Master Association, except to secure delinquent assessments for Required Services (see Article IV, Section 1) with respect to Common Property,.

Section 13. Remedies.
If any assessment is not paid when due or within any applicable grace period, or within thirty (30) days, if there is no applicable grace period, the Sub-Association may bring an action at law against any person personally obligated to pay the same and/or an action in equity to foreclose a lien against the subject property. Such foreclosure shall be prosecuted as is provided by law in cases of mortgage and/or lien foreclosures. The Sub-Association may bid at any sale held pursuant to such foreclosure and apply as a cash credit against its bid all sums due the Sub-Association covered. by the lien being enforced. The Board of Directors may settle and compromise said lien if it is in the best interests of the Sub-Association. In any civil action brought hereunder, the Sub-Association shall be entitled to judgment for interest, costs, and reasonable attorneys' fees as provided in this Sub-Declaration if it is the prevailing party.

Section 14. Subordination of the Lien to Mortgages.
Where a person obtains title to property as a result of foreclosure of a first mortgage held by an Institutional Mortgagee or where the Institutional Mortgagee as holder of a first mortgage accepts a deed in lieu of foreclosure of its first mortgage, such acquirer of title and his heirs, successors or assigns, shall not be liable for the lien of any assessment pertaining to the property so acquired which became due prior to the acquisition of title to the limited extent provided in Section 12. Such property shall be free of any lien for such assessment to the limited extent provided in Section 12; provided, however, that the extinguishment of the lien against the property for such assessments if provided by Section 12 shall not relieve the original Owner from his personal liability to the Sub-Association for such unpaid assessments. Any assessment not collected because of the foregoing provisions or otherwise found by the Board of Directors to be uncollectable shall be collectable as additional common expenses from all Members subject to the same type of assessment.

Section 15. Exempt Property.
The following property and persons shall be exempt from assessments under this Sub-Declaration and liens therefor:

1. Utility easements or dedicated public roadways;
2. All Common Property; and
3. Any property used for civic, religious, or charitable purposes, including but not limited to places of worship, parks, libraries, nurseries, and hospitals, which shall be exempt from all annual and special (but not individual) assessments.

Section 16. Annual Statements.
As soon as practical after the close of the fiscal year of the Sub-Association, the SubAssociation shall cause a financial statement to be prepared by its accountants. Such statement shall show the actual assets and liabilities of the Sub-Association at the close of such fiscal year, and the statement of revenues, costs and expenses. Such financial statements shall be available for inspection by any Member of the Sub-Association, and any holder, insurer, or guarantor of any Institutional First Mortgage encumbering any of the Properties, at the offices of the Sub-Association. Any one or more of the foregoing may, at their own expense to be shared as they may see fit among themselves, cause the books and records of the Sub-Association to be examined, and a financial statement to be prepared, by an independent certified public accountant. Such statement shall be made available for examination by anyone contributing to the cost of such audit.