Posted:
Brian, following is a porttion of a Declaration (I'm not privy to post a link). I would consider including something similar. Key item related to required notification is "Eligible Holders".
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ARTICLE TWELVE: FIRST MORTGAGEE PROVISIONS
The following provisions are for the benefit of holders, insurers, or guarantors of holders of first mortgages recorded against Lots within The Properties. To the extent applicable, necessary, or proper, the provisions of this ARTICLE TWELVE apply to both this Declaration and to the Articles and Bylaws of the Association.
12.1 Notices of Action. A holder, insurer or guarantor of a first mortgage who has delivered a written request to the Association containing its name, address, the legal description and the address of the Lot encumbered by its mortgage shall be considered an âEligible Holderâ hereunder and shall be entitled to timely written notice of:
(a) any condemnation loss or any casualty loss which affects a material portion of The Properties or which affects any Lot on which there is a first mortgage held, insured, or guaranteed by such Eligible Holder;
(b) any delinquency in the payment of assessments or charges owed by an Owner of a Lot subject to the mortgage of such Eligible Holder, where such delinquency has continued for a period of sixty days; provided however, notwithstanding this provision, any holder of a first mortgage, upon request, is entitled to written notice from the Association of any default in the performance by an Owner of a Lot of any obligation under this Declaration or Articles or Bylaws of the Association which is not cured within sixty days;
(c) any lapse, cancellation, or material modification of any insurance policy or fidelity bond maintained by the Association; or
(d) any proposed action which would require the consent of a specified percentage of Eligible Holders.
12.2 Other Provisions for the Benefit of Eligible Holders. To the extent permitted under Colorado law, the approval of fifty-one percent of the Eligible Holders of mortgages on Lots subject to Eligible Holder mortgages shall be obtained before taking the following actions:
(a) a decision by the Association to establish self-management when professional management had been required previously by an Eligible Holder;
(b) restoration or repair of The Properties (after a hazard damage or partial condemnation) in a manner other than that specified in this Declaration;
(c) any action to terminate the legal status of The Properties after substantial destruction or condemnation occurs.
12.3 Amendment to Documents/Special Approvals.
(a) The consent of Owners who are entitled to cast at least sixty-seven percent of the votes in the Association allocated to each Class of Membership and the approval of at least sixty-seven percent of the Eligible Holders of mortgages recorded against Lots within The Properties subject to Eligible Holder mortgages shall be required to commence any action to terminate the legal status of The Properties for reasons other than substantial destruction or condemnation of The Properties.
(b) The consent of Owners who are entitled to cast at least sixty-seven percent of the votes in the Association allocated to each class of Membership and the approval of at least fifty-one percent of the Eligible Holders of mortgages recorded against a Lot within The Properties subject to Eligible Holder mortgages shall be required to add to or amend any material provisions of this Declaration or the Articles or Bylaws of the Association which establish, provide for, govern, or regulate any of the following:
(i) voting rights;
(ii) assessments, assessment liens, or subordination of such liens;
(iii) reserves for maintenance, repair and replacement of property maintained by the Association;
(iv) responsibility for maintenance and repairs;
(v) reallocation of interests in the property maintained by the Association or the rights to its use;
(vi) boundaries of any Lot;
(vii) expansion or contraction of The Properties or the addition, annexation or withdrawal of property to or from The Properties;
(viii) insurance or fidelity bonds;
(ix) leasing of Dwelling Units;
(x) imposition of any restrictions on an Ownerâs right to sell or transfer his or her Lot or Dwelling Unit;
(xi) any provision that expressly benefits the Eligible Holders.
(c) If the Properties have been or are to be approved by the Federal Housing Administration and/or Veterans Administration, then so long as there are Class B Memberships, the following actions will require the prior approval of the Federal Housing Administration and/or the Veterans Administration; (a) amendment of this Declaration, (b) amendment of the Articles of Incorporation or the Bylaws of the Association, (c) annexation of additional properties to this Declaration, and (d) merger, consolidation, or dissolution of the Association.
12.4 Special FHLMC Provisions. So long as required by the Federal Home Loan Mortgage Corporation, the following requirements apply in addition to and not in lieu of the foregoing: unless at least sixtyâseven percent of the First Mortgages (based on one vote for each first mortgage owned) or Owners who are entitled to cast at least sixty-seven percent of the votes of each Class of Membership have given their prior written approval, the Association is not entitled to take any of the following actions:
(a) by act or omission seek to abandon, partition, subdivide encumber, sell, or transfer the common property owned directly or indirectly, by the Association for the benefit of the Owners. The granting of easements for public utilities or other public purposes consistent with the intended use of the common property by the Association is not a transfer in the meaning of this paragraph;
(b) change the method of determining the obligations, assessments, dues or other charges that may be levied against an Owner;
(c) by act or omission change, waive, or abandon any scheme of regulations or their enforcement pertaining to the architectural design or the exterior appearance of Dwelling Units, the exterior maintenance of Dwelling Units, the maintenance of the common property party walks, common fences and driveways, and the upkeep of lawns and plantings in The Properties;
(d) fail to maintain fire and extended coverage on insurable common property on a current replacement cost basis in an amount at least one hundred percent of the insurable value (based on current replacement cost) ; and
(e) use hazard insurance proceeds for losses to any common property for other than the repair, replacement or reconstruction of such common property.
Should the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation subsequently delete any of their respective requirements which necessitate the provisions of this Paragraph or make any such requirements less stringent, the Board of Directors, without approval of the Owners or First Mortgagees, may cause an amendment to this Paragraph to be recorded to reflect such changes.
12.5 Books and Records. Owners and their mortgagees shall have the right to examine the books and records of the Association at any reasonable time at the office of the Association and upon reasonable notice. Copies are available at reasonable cost.