Section A. The Surf-N-Sand II Condominium, a residential Condominium Project (hereinafter sometimes referred to as the "Condominium", "Project" or "Condominium Project"), located in the Township of AuSable, losco County, Michigan shall be administered by an Association of co-owners which shall be a non-profit corporation (hereinafter sometimes referred to as the "Association"), organized under the applicable laws of the State of Michigan, and responsible for the management, maintenance, operation and administration of the common elements, easements and affairs of the Condominium Project in accordance with the Master Deed, these Bylaws, the Articles of Incorporation, Bylaws and duly adopted Rules and Regulations of the Association, and the laws of the State of Michigan. All co-owners in the Condominium Project and all persons using or entering upon or acquiring any interest in any unit therein or the common elements thereof shall be subject to the provisions and terms set forth in the aforesaid Condominium Documents.
Section B. Membership in the Association and voting by members of the Association shall be in accordance with the following provisions:
(1) Each co-owner shall be a member of the Association and no other person or entity shall be entitled to membership.
(2) The share of a co-owner in the funds and assets of the Association cannot be assigned, pledged or transferred in any manner except as an appurtenance to his unit in the Condominium Project.
(3) Except as limited in these Bylaws, each co-owner shall be entitled to one vote for each unit owned when voting by number and one vote, the value of which shall equal the total of the percentages allocated to the units owned by such co-owner as set forth in Article V of the Master Deed, when voting by value. Voting shall be by value except in those instances when voting is specifically required to be both by number and by value.
(4) No co-owner, other than the Developer, shall be entitled to vote at any meeting of the Association until he has presented evidence of ownership of a unit in the Condominium Project to the Association. Except as otherwise provided in Section F of this Article I, no co-owner, other than the Developer, shall be entitled to vote prior to the First Annual Meeting of members held in accordance with Section F(6) of this Article I. The vote of each co-owner may only be cast by the individual representative designated by such co-owner in the notice required in Section B(5) of this Article or by a proxy given by such individual representative. Developer shall be entitIed to one vote for each unit which it owns and with respect to which it is paying monthly assessments.
(5) Each co-owner shall file a written notice with the Association designating the individual representative who shall vote at meetings of the Association and receive all notices other communications from the Association on behalf of such co-owner. Such notice shall state the name and address of the individual representative designated, the number of each unit owned by the co-owner, and the name and address of each person, firm, corporation, partnership, association, trust or other entity who is the co-owner. Such notice shall be signed and dated by the co-owner. The individual representative designated may by changed by the co-owner at any time by filing a new notice in the manner herein provided.
(6) There shall be an annual meeting of the members of the Association commencing with the First Annual Meeting held as provided in Section F(6) of this Article I. Other meetings may be provided for in the Bylaws of the Association. Notice of time, place and subject matter of all meetings as proved in the Association Bylaws shall be given to each co-owner by mailing the same to each individual representative designated by the respective co-owners.
(7) The presence in person or by proxy of thirty-five (35%) percent in number and in value of the co-owners qualified to vote shall constitute a quorum for holding a meeting of the members of the Association, except for voting on questions specifically required herein to require a greater quorum. The written vote of any person furnished at or prior to any duly called meeting at which such person is not otherwise present in person or by proxy shall be counted in determining the presence of a quorum with respect to the question upon which the vote is cast.
(8) Votes may be cast in person or by written proxy or by a writing sent by certified mail duly signed by the designated voting representative not present at a given meeting in person or by proxy. Proxies and any written votes must be filed with the Secretary of the Association at or before the appointed time of each meeting of the members of the Association. Cumulative voting shall not be permitted.
(9) A majority, except where otherwise provided herein, shall consist of more than fifty (50%) percent in value of those qualified to vote and present in person or by proxy (or written ballot, if applicable) at a given meeting of the members of the Association. Whenever provided specifically herein, a majority may be required to exceed the simple majority hereinabove set forth and may require such majority to be one of both number and value of designated voting representatives present in person or by value of designated voting representatives present in person or by proxy (or by written ballot, if applicable) at a given meeting of the members of the Association.
(10) Other provisions as to voting by members, not inconsistent with the provisions herein contained, may be set forth in the Association Bylaws.
Section C. The Association shall keep detailed books of account showing all expenditures and receipts of administration which shall specify the maintenance and repair expenses of the common elements and any other expenses incurred by or on behalf of the Association and the co-owners. Such accounts as well as all other association records shall be open for inspection by the co-owners and their mortgagees during reasonable working hours. The Association shall prepare and distribute to each co-owner at least annually a financial statement, the contents of which shall be defined by the Association. Any institutional holder of a first mortgage lien on any unit in the Condominium Project shall be entitled to receive, upon request, a copy of such annual financial statement within ninety (90) days following the end of the Association's fiscal year. The costs of any accounting expenses shall be expenses of administration. The Association shall also maintain on file current copies of the Master Deed for the Condominium Project, any amendment thereto and all other Condominium Documents and shall permit all co-owners, prospective purchasers and prospective mortgagees interested in the Condominium Project to inspect the same during reasonable working hours.
Section D. The affairs of the Association shall be governed by a Board of Directors, all of whom shall serve without compensation and who must be members of the Association except for the first Board of Directors, designated in the Articles of Incorporation of the Association and any successors thereto elected prior to the First Annual Meeting of members held pursuant to Section F(6) of this Article I. The number, terms of office, manner of election, removal and replacement, meetings, quorum and voting requirements, and other duties or provision of or relating to directors, not inconsistent with the following, shall be provided by the Association Bylaws.
(1) The Board of Directors shall have all powers and duties necessary for the administration of the affairs of the Association and may do all acts and things as are not prohibited by the condominium Documents or required thereby to be exercised and done by the co-owners. In addition to the foregoing general duties imposed by these Bylaws, or any further duties which may be imposed by resolution of the members of the Association or which may be set forth in the Association Bylaws, the Board of Directors shall be responsible specifically for the following:
(a) To manage and administer the affairs and maintenance of the Condominium Project and the common elements thereof.
(b) To collect assessments from the members of the Association and to use the proceeds thereof for the purposes of the Association.
(c) To carry insurance and collect and allocate the proceeds thereof.
(d) To rebuild improvements after casualty.
(e) To contract for and employ persons, firms, corporations or other agents who shall assist in the management, operation, maintenance and administration of the Condominium Project.
(f) To approve or disapprove proposed purchases or lessees of any unit in the manner specified in these Bylaws.
(g) To acquire, maintain and improve, and to buy, operate, manage, sell, convey, assign, mortgage or lease any real or personal property (including any unit in the Condominium Project and easements, rights-of-way and licenses) on behalf of the Association in furtherance of any of the purposes of the Association, including, by way of example and not as limitation, the lease or purchase of any unit in the Condominium Project for use by a resident manager.
(h) To borrow money and issue evidences of indebtedness in furtherance of any and all of the purposes of the Association, and to secure the same by mortgage, pledge, or other lien on property owned by the Association; provided, however, that any such action shall also be approved by the affirmative vote of more than sixty (60%) percent of all of the members of the Association in number and in value.
(i) To make rules and regulations in accordance with Article VI Section K of these Bylaws.
(j) To establish such committees as it deems necessary, convenient or desirable and to appoint persons thereto for the purpose ot implementing the administration of the Condominium Project and to delegate to such committees any functions or responsibilities which are not by law or the Condominium Documents required to be performed by the Board.
(k) To enforce the provisions of the Condominium Documents.
(1) To make rules and regulations and to enter into agreements with institutional lenders the purposes of which are to obtain mortgage financing for co-owners which is acceptable for purchase by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Government National Mortgage Association and any other agency of the federal government or of the State of Michigan.
(2) The Board of Directors may employ for the Association a professional management agent (which may include the Developer or any person or entity related thereto) at reasonable compensation established by the Board to perform such duties and services as the Board shall authorize, including, but not limited to, the duties listed in Section D(1) of this Article I, as well as any other duties or powers which are not by law or by the Condominium Documents required to be performed by or have the approval of the Board of Directors or the members of the Association. In no event shall the Board be authorized to enter into any contract with a professional management agent, or any other contract providing for services by the Developer, sponsor or builder, in which the maximum term is greater than three (3) years or which is not terminable by the Association upon ninety (90) days' written notice thereof to the other party. In addition, Section 55 of the Act provides as follows:
- (1) A service contract which exists between the association of co-owners and the developer or affiliates of the developer and a management contract with the developer or affiliates of the developer is voidable by the board of directors of the association of co-owners on the transitional control date or within 90 days thereafter, and on 30 days' notice at any time thereafter for cause.
- (2) To the extent that any management contract extends beyond 1 year after the transitional control date, the excess period under the contract may be voided by the board of directors of the association of co-owners by notice to the management agent at least 30 days before the expiration of the 1 year."
(3) All of the actions (including, without limitation, adoption of these Bylaws and any Rules and Regulations for the Association, and any undertakings or contracts entered into with others on behalf of the Association) of the first Board of Directors of the Association named in its Articles of Incorporation or any successors thereto elected before the First Annual Meeting of members shall be binding upon the Association in the same manner as though such actions had been authorized by a Board of Directors duly elected by the members of the Association at the first or any subsequent annual meeting of members so long as such actions are within the scope of the powers and duties which may be exercised by any Board of Directors as provided in the Condominium Documents.
Section E. The Association Bylaws shall provide the designation, number, terms of office, qualifications, manner of election, duties, removal and replacement of the officers of the Association and may contain any other provisions pertinent to officers of the Association in furtherance of the provisions and purposes of the Condominium Documents and not inconsistent therewith. Officers may be compensated but only upon the affirmative vote of more than sixty (60%) percent of all co-owners in number and in value.
Section F. (1) Within one hundred twenty (120) days after conveyance of legal or equitable title to nondeveloper co-owners of thirty-three and one-third (33 1/3%) percent of all units in all phases of development of the Condominium Project or within one (1) year after the initial conveyance of legal or equitable title to a nondeveloper co-owner of a unit in the Condominium Project, whichever occurs first, the Developer shall call a special meeting of members for the purpose of electing three (3) persons from among the nondeveloper co-owners to serve on an Advisory Committee to the first Board of Directors. The purpose of the Advisory Committee shall be to facilitate communication between, and to assist in the transition of control from, the Developer to the co-owners. The members of the Advisory Committee shall serve for one (1) year or until their successors are elected. The Advisory Committee shall cease to exist automatically when a majority of the Board of :Directors of the association is elected by the nondeveloper coowners. The first Board of Directors and the Advisory Committee shall meet with each other at such times as may be requested by the Advisory Committee; provided, however, that there shall be no more than four (4) such meetings per year unless both entities agree.
(2) Within one hundred twenty (120) days after conveyance of legal or equitable title to nondeveloper co-owners of twenty-five (25%) percent of all units in all phases of development of the Condominium Project, the Developer shall call a special meeting of members for the purpose of providing the nondeveloper co-owners with the opportunity to elect at least one (1) director and not less than twenty-five (25%) percent of the Board of Directors.
(3) Within one hundred twenty (120) days after conveyance of legal or equitable title to nondeveloper co-owners of fifty (50%) percent of all units in all phases of development of the Condominium Project, the Developer shall call a special meeting of members for the purpose of providing the nondeveloper co-owners with the opportunity to elect at least one (1) director and not less than thirty-three and one-third (33 1/3%) percent of the Board of Directors.
(4) Within one hundred twenty (120) days after conveyance of legal or equitable title to nondeveloper co-owners of seventy-five (75%) percent of all units in all phases of development of the Condominium Project, the Developer shall call a special meeting of members for the purpose of providing the nondeveloper co-owners with the opportunity to elect the entire Board of Directors; PROVIDED, however, as long as at least ten (10%) percent of all units in all phases of development of the Condominium Project are either owned and heing offered for sale by the Developer or remain to be created, the Developer shall have the right to designate at least one (1) director.
(5) In the event that the percentage of the Board which nondeveloper co-owners have the right to elect pursuant to subparagraphs (2), (3) and (4) of this Section F results in a fractional number of members of the Board of 0.5 or more, such fractional election right shall be rounded up to the nearest whole number, which number shall be the number of members of the Board that the nondeveloper co-owners have the right to elect. The Developer shall have the right to designate the remaining members of the Board. Nothing herein, however, shall be in any way eliminate the Developer's right, pursuant to subparagraph (4) of this Section F, to designate at least one (1) director.
(6) The First Annual Meeting of the members of the Association may be convened only by the Developer and may be called, in Developer's discretion, at any time after conveyance of legal or equitable title to nondeveloper co-owners of fifty (50%) percent of all units in all phases of development of the Condominium Project. In no event, however, shall said First Annual Meeting be held later than one hundred twenty (120) days after conveyance of legal or equitable title to nondeveloper co-owners of seventyfive (75%) percent of all units in all phases of development of the Condominium Project or fifty- four (54) months after the initial conveyance of legal or equitable title to a nondeveloper co-owner of a unit in the Condominium Project, whichever occurs first. The date, time and place of such First Annual Meeting shall be set up by the Board of Directors, and at last fifteen (15) days' written notice thereof shall be given to each coowner. Thereafter, an annual meeting shall be held each year on such date as is specified in the Association Bylaws. The Developer may call additional meetings of members of the Association for informative or other appropriate purposes prior to the First Annual Meeting, and neither such mectings nor the special meetings provided for in this Section F shall be construed as the First Annual Meeting of members.
Section G. Every director and every officer of the association shall be indemnified by the association agairist all expenses and liabilities, including counsel fees, reasonably incurred by or imposed upon him in connection with any proceeding to which he may be a party, or in which he may become involved, by reason of his being or having been a director or officer of the Association, whether or not he is a director or officer at the time such expenses are incurred, except for those cases in which the director or officer is adjudged guilty of willful or wanton misconduct or gross negligence in the performance of his duties; provided that, in the event of any claim for reimbursement or indemnification hereunder based upon a settlement by the director or officer seeking such reimbursement or indemnification, the indemnification herein shall apply only if the Board of Directors (with the director seeking reimbursement abstaining) approves such settlemenL and reimbursement as being in the best interests of the Association. The foregoing right of indemnification shall be in addition to and not exclusive of all other rights to which such director or officer may be entitled. At least ten (10) days prior to payment of any indemnification which it has approved, the Board of Directors shall notify all co-owners thereof.
