Ammended ByLaws
Jun 7th, 07
AMENDED AND RESTATED BYLAWS OF LEGACY BAY HOMEOWNERS ASSOCIATION
Section 1. Applicability. These Bylaws are established pursuant to the Tennessee Nonprofit Corporation Act, Tennessee Code Annotated Section 48-51-101, et seq. (the ?Act?) and are applicable to the Legacy Bay Homeowners Association (?Association?); and are binding on all present and future owners, and occupants of any lot in Legacy Bay Subdivision (?Legacy Bay?).
ARTICLE II
MEMBERSHIP AND MEETINGS
Section 1. Members. All owners of lots in Legacy Bay shall constitute the members of the Association. The owner of any lot, upon acquiring title thereto, shall automatically become a member of the Association and shall remain a member thereof until such time as his ownership of such lot ceases for any reason, at which time his membership in the Association shall automatically cease; provided, however, that to such extent and for such purposes, including voting, as shall be provided by lease of any lot filed with the Board of Directors of the Association, the lessee of such lot shall be deemed the owner thereof.
Section 2. Place of Meetings. Meetings of the Association members shall be held at the principal office of the Association, or at such other suitable place convenient to the members as may be designated by the Board of Directors of the Association.
Section 3. Annual Meetings. The first annual meeting of the members of the Association shall take place within 9 months after 75% of the lots within Legacy Bay have been conveyed by the developer of Legacy Bay (the ?Developer?). Thereafter, annual meetings shall be held on the second Monday of January of each succeeding year.
Section 4. Special Meetings. It shall be the duty of the President to call a special meeting of the lot owners if so directed by resolution of the Board of Directors or upon a petition signed and presented to the Secretary by not less than 10%, in the aggregate, of members.
Section 5. Notice of Meeting. The Secretary shall give written notice of every meeting to every member according to the Association?s record of membership, at least 10 days, but no more than 60 days before the date set for the meeting. Each notice shall state the time, date, place and purpose of the meeting. Written notice may be served upon a member by (a) delivering it to him personally, or (b) by mailing it, first class postage prepaid, to his address as it appears on the Association?s record of membership. Written notice mailed first class postage prepaid is effective the earliest of the following: (1) when received; or (2) 5 days after its deposit in the United States Mail. The failure to give notice of any meeting to any member who shall waive notice thereof whether before, at or after the meeting, or who shall be present in person or by proxy, shall not invalidate the meeting unless it is a meeting for which a waiver of notice is prohibited by law. However, attendance at a meeting for the express purpose of objecting that the meeting was not lawfully called or convened shall not constitute a waiver of notice. No business shall be transacted at a special meeting except as stated in notice. If the meeting notice contains any item(s) requiring a vote of the members a proxy shall be mailed along with the meeting notice.
Section 6. Quorum; Quorum for First Election of Directors. The presence in person or by proxy of members owning more than 35% of the lots shall constitute a quorum at all meetings of the members. Notwithstanding the foregoing, the presence in person or by proxy of members owning more than 10% of the lots shall constitute a quorum at the first meeting of the members at which the members elect the initial members of the Board of Directors.
Section 7. Adjournment of Meetings. Any meeting of the Association may be adjourned to such place and time as may be determined by majority vote of the members present, whether or not a quorum be present, without notice other than the announcement at such meeting.
Section 8. Voting. Voting shall be as provided in the Declaration of Covenants, Conditions and Restrictions, for Legacy Bay Subdivision (?Restrictions?). Votes may be cast in person or by proxy. Proxies must be filed with the Secretary at or before the time of each meeting. A member must designate any person, who need not be a member, to act as proxy. The designation of any such proxy shall be made in writing, signed by the member, and unless limited by its own terms, shall be revocable by written notice to the Secretary. If more than one person or entity shall own a lot, and agree on their vote, then the majority of the owners of the lot shall be entitled to cast the vote, or, if no majority position can be arrived at, the President shall declare the vote a nullity.
Section 9. Suspension of Membership and Voting Rights. During any period in which an owner of any lot shall be in default of any payment of any assessment, annual, special or otherwise, then the member shall not be entitled to vote until such time as the default is cured or the suspension has ended.
Section 10. Vote Required to Transact Business. Unless expressly provided otherwise by the Act, these Bylaws or the restrictions, a majority of the votes cast by the members, in person or by proxy, shall bind the Association and all members. A majority of the votes shall mean those members having more than 50% of the total authorized votes of all members present in person or by proxy at any meeting of the members.
Section 11. Procedure for Election of Directors. Any member may nominate any other member to serve on the Board of Directors of the Association pursuant to timely notice in writing to the President or Secretary of the Corporation. To be timely, a member?s notice must be received at the offices of the Association not fewer than 30 days, nor more than 60 days, prior to the scheduled date of a meeting, regardless of any postponement, deferral or adjournment of that meeting to a later date; provided, however, that if fewer than 40 days notice or prior public disclosure of the date of the meeting is given or made to members, notice by the member to be timely must be so delivered or received not later than the close of business on the 10th day following the earlier of the day on which such notice of the date of such meeting was mailed or the day on which such public disclosure was made. A member?s notice shall set forth:
(a) as to each person whom the member proposes to nominate for election or reelection as a director: (i) the name, age, business address and residence address of such person, and (ii) such person?s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; and
(b) as to the member giving the notice, the name and address of such member.
(c) EXCEPTIONS PURSUANT TO CORPORATE LAW. This section shall not apply to the election of a director to a directorship which may be filled by the Board of Directors under the Act.
Section 12. Vote Required to Elect Directors. Election of directors at all meetings of the members at which directors are to be elected may be by written ballot, and a plurality of the votes cast thereat shall elect directors.
Section 13. Order of Business. The order of business at all meetings of the members shall, to the extent required, be as listed below. Items requiring a vote of the members shall be listed separately under new business and include a concise explanation of the issue.
(a) Roll call
(b) Proof of notice of meeting or waiver of notice
(c) Reading of minutes of preceding meeting
(d) Reports of officers
(e) Reports of Board of Directors
(f) Reports of committees
(g) Election of Board of Directors
(h) Unfinished business
(i) New business
(j) Adjournment
ARTICLE III
BOARD OF DIRECTORS
Section l. Number and Term. The affairs of the Association shall be governed by the Board of Directors. The members of the Association shall elect 5 directors to the Board of Directors. Each director shall serve a 3 year term. All persons elected to the Board of Directors shall be members of the Association.
Section 2. Powers and Duties. The Board of Directors shall have the powers and duties necessary for the administration of the affairs of the Association and shall do all such acts and things except by law, or by these Bylaws or the Restrictions may not be delegated to the Board of Directors. Such powers and duties of the Board of Directors shall include, but shall not be limited to, the following:
(a) Operation, care, surveillance, upkeep and maintenance of the Common Area.
(b) Determination of the common expenses required for the affairs of Legacy Bay.
(c) Collection of the common charges from the members.
(d) Employment and dismissal of the personnel necessary for the maintenance, operation, repair, and replacement of the Common Area and facilities.
(e) Adoption and amendment of Rules and Regulations covering the details of the operation and use of Legacy Bay, except those established in the Restrictions.
(f) Opening and maintaining of bank accounts on behalf of the Association and designating the signatories required therefore.
(g) Obtaining and reviewing the insurance for the Common Area pursuant to the provisions of Article VIII.
(h) Levying special assessments against the members for violations of the Rules and Regulations established by the Board of Directors.
(i) Adjusting and settling claims under insurance policies obtained pursuant to Articles VII and VIII and executing and delivering releases or settlement of such claims in behalf of all the members, all holders of deeds of trust, mortgages, or other liens on the Common Area and all owners of the other interest in the property.
Section 3. Managing Agent. The Board of Directors may employ a managing agent at a compensation established by the Board of Directors, to perform such duties and services as the Board of Directors shall authorize. The Board of Directors may delegate to the managing agent any of its power granted in these Bylaws as it deems necessary except for those powers set forth in subdivisions (b), (e), (f), and (i) of Section 2 of this Article.
Section 4. Removal of Directors. At a special meeting of the members called for the purpose of removing a director, any one or more of the members of the Board of Directors may be removed from office with or without cause by a majority vote of the members and a successor may then and there or thereafter be elected to fill the vacancy thus created. Any director whose removal has been proposed by the member shall be given an opportunity to be heard at the meeting. Any director who is a member of the Association and who is delinquent in any assessment owed to the Association and fails to cure the default owed to the Association within 30 days shall automatically be removed from office. Any director who has had his membership rights terminated (as by sale of his lot) or suspended for any reason for a period greater than 30 days shall automatically be removed from office. Any vacancy in the Board of Directors caused by automatic removal of one or more directors shall be filled in accordance with the procedure provided in Article III, Section 5.
Section 5. Vacancies. All vacancies in the Board of Directors caused by any reason other than removal of a director by a vote of the members shall be filled by a vote of a majority of the remaining directors at a special meeting of the Board of Directors held for that purpose promptly after the occurrence of any such vacancy, even though the members of the Board of Directors present at such meeting may constitute less than a quorum. Each person so elected to the Board of Directors shall remain a director for the remainder of the term of the director replaced.
Section 6. Regular Meetings. Regular meetings of the Board of Directors may be held at such time and place as shall be determined from time to time by the majority of the members of the Board of Directors provided that at least 2 such meetings shall be held during each fiscal year.
Section 7. Special Meetings. Special meetings of the Board of Directors may be called by the President. Upon the written request of 2 or more directors for a special meeting, the President shall call a special meeting.
Section 8. Notice of Meeting. The Secretary shall give written notice of each regular or special meeting of the Board of Directors to every director at least 2 days before the date set for the meeting. Written notice may be served upon a member of the Board of Directors by (a) delivering it to him personally or (b) by mailing it, first class postage pre-paid, to his correct address. Written notice mailed first class postage prepaid is effective the earliest of (i) when received or (ii) 5 days after its deposit in the United States mail. The failure to give notice of any waive notice thereof whether before, at or after the meeting, or who shall be present in person, shall not invalidate the meeting unless it is a meeting for which a waiver of notice is prohibited by law. However, attendance at a meeting for the express purpose of objecting that the meeting was not lawfully called or convened shall not constitute a waiver of notice.
Section 9. Quorum and Majority of the Board of Directors. A majority of the members of the Board if Directors shall constitute a quorum. At any meeting if the Board of Directors at which a quorum is present, a majority of those directors present may transact all business properly before the Board of Directors. A majority of directors means more than 50% if the directors present at a meeting. Any meeting at which less than a quorum is present may be adjourned to such time and place as the majority of directors present at the meeting so decide without further notice.
Section 10. Compensation. No director shall receive any compensation from the Association for acting as such. However, a director shall be reimbursed for any reasonable and necessary expenses incurred on behalf of the Association.
Section 11. Liability of the Board of Directors. The members of the Board of Directors shall not be personally liable to the members of the Association for any mistakes of judgment, negligence, breach of fiduciary duty or otherwise, except for any breach of the Director?s duty of loyalty to the Association or its members, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or for unlawful distributions.
Section 12. Fidelity Bonds. That Board of Directors shall obtain adequate fidelity bonds for all officers, agents, and employees of the Association handling or responsible for Association funds. The premiums on such bonds shall be deemed a common expense. The members if the Association may waive this requirement upon unanimous vote.
ARTICLE IV
OFFICERS
Section 1. Designation of Officers. The principal officers of the Association shall be the President, the Vice President, the Secretary-Treasurer, all of whom shall be elected by, and in the case of the President from, the Board of Directors. Persons may hold more than one office, except that the President and Secretary-Treasurer shall be different persons. The Board of Directors may appoint an assistant secretary-treasurer and such other officers as in their judgment may be necessary. All officers shall be members of the Association.
Section 2. Election and Term. The officers of the Association shall be elected annually by the Board of Directors at their first regular meeting following the annual members? meeting. The officers shall hold office at the pleasure if the Board of Directors. The first elected President shall serve a 3 year term. The first elected Vice President shall serve a 2 year term. The first elected Secretary-Treasurer shall serve a 1 year term. Thereafter officers shall be elected for a 3 year term.
Section 3. Removal of Officers. Any officer may be removed either with or without cause by majority vote of the Board of Directors or any special meeting called for such purpose.
Section 4. President. The President shall be the chief executive officer of the Association and shall preside at all meetings of the members and of the Board of Directors. Subject to the control of the Board of Directors, he shall exercise general supervision and direction over the management and conduct of the business and affairs of the Association, with all the general powers and duties which are incident to the office of president of a corporation. He shall also have such duties and powers as may be imposed upon him by the Board of Directors.
Section 5. Vice President. The Vice President shall assume and perform the duties of the President whenever the President shall be absent or unable to act. The Vice President shall also have such duties and powers as may be imposed upon him by the Board of Directors or by the President.
Section 6. Secretary-Treasurer. The Secretary-Treasurer shall attend and keep the minutes of all meetings of the members and the Board of Directors, give all notices as provided by these Bylaws, maintain and keep a continuous record of ownership of all lots, have charge of such books, documents and records of the Association as the Board of Directors may direct, and in general perform all the duties incident to the office of secretary of a corporation. He shall also have such duties and powers as may be imposed upon him by the Board of Directors. He shall also be responsible for accurately maintaining and keeping the financial records and books of account showing all receipts and disbursements of the Association and prepare regular reports thereof. He shall be responsible for the proper deposit and custody in the name of the Association of all the Association funds and securities. He shall also have such duties and powers as may be imposed upon him by the Board of Directors.
Section 7. Compensation. No officer shall receive any compensation from the Association for acting as such. However, an officer shall be reimbursed for any reasonable and necessary expenses incurred on behalf of the Association.
ARTICLE V
INDEMNIFICATION
Section 1. Circumstances for Claim of Indemnification. Subject to Section 4 of this Article, any person who was or is a party to, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by the Association) by reason of the fact that he is or was a director, officer, employee or agent of the Association, shall be indemnified by the Association against all expenses (including attorneys? fees, judgments, fines and amounts paid in settlement) actually and reasonably believed to be in or not opposed to the best interest of the Association and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself; create a presumption that the person did not meet the standard of conduct set forth in this section.
Section 2. Determination of Right to Indemnification. Subject to Section 4 of this Article, determination of the right to indemnification and the amount thereof may be made, at the option from time to time in these Bylaws or by any of the following procedures: (i) Order of the court, administrative body or agency having jurisdiction of the action, suit or proceeding; (ii) Resolution adopted by the majority of a quorum if the Board of Directors of the Association without counting in such majority or quorum any directors who have incurred expenses in connection with such action, suit or proceeding; (iii) Resolution adopted by a majority of the quorum of the members entitled to vote at a meeting without counting members who are directors who have incurred expenses in connection with such action, suit or proceeding; or (iv) Order of any court having jurisdiction over the Association. Any such determination that a payment by way of indemnity should be made shall not be exclusive of any other right which such directors, officers, employees and agents of the Association may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to the directors, or agreement, their rights under this Article being cumulative. The provisions of this Article shall apply to any member of any committee appointed by the Board of Directors.
Section 3. Payment During Pendency of Action. A disinterested majority of the Board of Directors of the Association or a majority of quorum of the members entitled to vote at a meeting shall be authorized to pay to any person entitled to indemnification under this Article all actual expenses incurred in connection with such action, suit or proceeding during the pendency thereof.
Section 4. Intent. It is the intention of the Association that this Article and the indemnification possible under the laws of the State of Tennessee and if one or more provisions of this Article should be held unenforceable for any reason, all of the remaining portions of this Article shall remain in full force and effect.
ARTICLE VI
COMMON EXPENSES AND ASSESSMENTS
Section 1. Common Area Expenses. The Common Expenses shall include, among other things, (a) the costs of repair and maintenance of the general and limited common areas and facilities (subject to the primary responsibility of each member to maintain and repair limited common areas and facilities), (b) the cost of all insurance premiums on all policies of insurance required to be or which have been obtained by the Board of Directors, (c) such amounts as the Board of Directors may deem proper for the operation and maintenance of the property, (d) reserve funds required to be established under Section 2 of this Article, (e) any amount necessary to indemnify a director, officer, employee or agent of the Association under Article V, and (f) any other expense deemed a common expense under the act, the Master Deed, or these Bylaws and (g) as defined in the Restrictions.
Section 2. Reserve Funds. The Board of Directors shall establish a general fund and reserve funds to be funded as a Common Expense. The funds shall be kept in interest-bearing accounts or securities with the exception of those funds necessary to cover ongoing expenses. Funds to cover on-going expenses may be maintained in a checking account, interest bearing if possible. All disbursements must be made by signature of the President and the Secretary-Treasurer. The Vice President may sign in the absence of either the President or the Secretary-Treasurer.
(a) The ?general fund? shall be used for all common expenses and generally to provide for normal budgeted expenses.
(b) The ?operation reserve fund? shall be used to meet any deficits incurred after the annual budget determination for common expenses and generally to provide an immediate influx of working capital for the Association. The Board of Directors shall determine from time to time a percentage of the yearly assessment of money to be placed in the fund, provided, however, that in no event should this amount be less than 5% of the yearly assessment of all members. The yearly allocation to this fund shall cease when the accumulated fund balance exceeds one year's total common expense budgeted for the entire Legacy Bay.
(c) The ?reserve for replacements fund? shall be used for the improvement, reconstruction, replacement, or alteration of any part of Legacy Bay which has not been budgeted for in the annual budget determined under Section 3 of this provided for in Article VIII of these Bylaws. The Board of Directors shall determine from time to time a percentage of the yearly assessment and thus allocate an amount of money to be placed in this fund yearly, provided, however, that in no event shall this amount be less than 5% of the yearly assessment of all members. The yearly allocation to this fund shall cease when accumulated fund balance exceeds a sum equal to 25% of the current full replacement value of the entire Common Area facilities as determined annually by the Board of Directors for insurance protection as provided for in Article VII, Section 3.
Section 3. Annual Budget. The Board of Directors shall from time to time, and at least annually, prepare a budget for Legacy Bay determining the amount of money necessary to pay the common expenses of Legacy Bay, as determined by Article IV of the Declaration of Covenants and Restrictions for Legacy Bay Subdivision. A copy of the annual budget shall be made available to each member. The Board of Directors shall advise all members, in writing, of the annual assessment(s). The Board of Directors may not increase the annual assessment more than 5% over the previous year without a majority vote of those present in person or by proxy at the annual meeting for that budgeting year.
Section 4. Special Assessments. In the event that the Board of Directors determines that additional money is needed to pay common expenses, that may, whether the reserve funds are depleted or not, assess that additional money against all members according to their percentage of individual ownership interest in the common areas and facilities. Any such special assessment shall be due and payable at such time or times as the Board of Directors shall determine.
Section 5. Liens for Unpaid Assessments. The Association shall have a lien on the real property of any member whose assessment, either annual or special or any installment thereof has not been paid by the due date for payment thereof. No such lien shall be prior to the lien of any mortgage or deed of trust on any one or more lot. All members expressly waive any right to homestead or other statutory exemption that may have with respect to such lien, and expressly waive any right of redemption should such lien be foreclosed.
Section 6. Collection of Assessments. The Board of Directors shall determine the times and methods for payment of the common expense assessments and shall take prompt action to collect any assessment from any member who is in default in the payment of his assessment. A member is in default when his assessment remains unpaid for 10 days after the due date for payment thereof.
Section 7. Default in Payment of Assessments. In the event of default by any member in payment of any assessment, or installment thereof, owed by him, the Board of Directors may, in its sole discretion, accelerate the members monthly installments and declare the entire remaining balance of the annual assessment immediately due and payable. In the event of default, all sums due and payable by the member shall, in the discretion of the Board of Directors, bear interest at the highest rate permitted by law. The Board of Directors may maintain a suit to recover a money judgment for unpaid assessments or may maintain an action to foreclosure the lien on the member?s lot. The Association shall have the right to purchase such lot at the foreclosure sale. In the event of any default, the member shall be obligated to pay, and shall be liable for all unpaid assessments and interest, together with all expenses, including attorney's fees, incurred by the Board of Directors in any proceeding brought to collect such unpaid assessments whether or not suit has been filed. A suit to recover a money judgment for unpaid assessments shall be maintainable without foreclosing or waiving the lien securing the same.
Section 8. Assessments of Units Owned by the Association or Developer. If the Association or Developer, prior to sale, owns or leases one or more lots, the assessment for the common expenses against these lots shall be deemed a common expense and shall be allocated to the remaining members according to the percentage that their undivided ownership interest in the common area appurtenant to all lots not owned or leased by this Association or the Developer. All expenses incurred by the Association or the Developer for maintaining any lots it may own or lease shall be deemed common expenses.
Section 9. Other Assessments. In the event that a member violates any of the Rules and Regulations established pursuant to these By-laws or the Restrictions, the Board of Directors may, in its discretion, regardless of any other remedies available to the member committing a violation, provided, however, that in no event shall such additional assessment exceed $50 for each violation.
Section 10. Assessments and Sale or other Transfers of Lots. No member shall be liable for the payment of any part of the common expenses assessed against his lot subsequent to a sale, transfer or other conveyance by him of such lot. Such member, however, will remain personally liable for any unpaid assessment made prior to the sale, transfer or other conveyance by him. A purchaser or other transferee of a lot shall be personally liable for the payment of common expenses assessed against his lot prior to the acquisition by him of such lot.
Section 11. Statement of Unpaid Assessments. The Board of Directors shall promptly provide any member requesting in writing, a written statement of all unpaid assessments due from such member. In no event shall any unpaid assessment be demanded and collected which exceeds the amount in the statement claimed to be due and payable. The Board of Directors may in its discretion charge a reasonable fee for providing such statement to a member.
ARTICLE VII
INSURANCE
Section 1. Insurance. To the extent available, the Board of Directors shall obtain and maintain coverage as set forth herein. All insurance affecting Legacy Bay shall be governed by the provisions of this Article. The premiums for all insurance obtained by the Board of Directors shall be deemed a common expense.
Section 2. Insurable Interest of the Association. The insurable interest of the Association shall be coverage on the common real property and all improvements thereon as well as personal property owned by the Association. The real property and all of the personal property owned by the Association shall be insured against loss or damage by reason of fire or other perils normally covered by extended coverage, vandalism and other mischief, such other risks of physical damage as the Board of Directors deems appropriate.
Section 3. Amount of Insurance. Personal property shall be insured for an amount equal to its actual cash value. All real property and fixtures shall be insured for at least an amount equal to its actual cost. Prior to obtaining any insurance on real property under this Section and at least annually thereafter, the Board of Directors shall determine the actual replacement cost of the property using whatever professional assistance that might be required to make the determination.
Section 4. Policy Provisions. The insurance policy obtained shall include, to the extent available, without limitation, the following provisions:
(a) Waivers by the insurer of rights of subrogation, other than those based on fraud or criminal acts, against the Association and the members;
(b) That the insurance shall not he affected or diminished by reason of any other insurance carried by the member or mortgagee of the lot;
(c) That the insurance shall not be affected or diminished by any act or neglect of any member or any occupants or owners of any improvement when such act or neglect is not within control of the Association.
(d) That the insurance shall not he affected or diminished by failure of any member or any occupants or owners of improvements to comply with any warranty or condition when such failure to comply is not within the control of the Association;
(e) Such deductible as to loss, but not coinsurance features, as the Board of Directors, in its sole judgment and discretion, deems prudent and economical;
(f) That the insurance may not be canceled or substantially modified (except for the addition of property increases in the amount of coverage) without at least 30 days prior written notice to both the name and all mortgages of lots;
(g) Adjustment of loss shall be made with the Board of Directors of the Association;
(h) Proceeds for losses shall be payable to the Board of Directors, as Trustee, subject to the rights of individual mortgagees,
(i) The named insured shall be the Association;
(j) That, before the insurer exercises any option to restore the property instead of making a cast settlement, the insurer shall obtain a written permission from the Board of Directors; and
(k) That the insurer shall pay the assessments for common charges assessed against any damaged insured property until such property is repaired and habitable.
Section 5. Liability Insurance. The Board if Directors shall obtain and maintain public liability insurance for bodily injury and property damage in such limits as the Board of Directors may from time to time determine, insuring the Association, the Board of Directors, and each member with respect to liability arising from ownership of the common elements. Such liability insurance shall also cover cross-liability claims among members and the Association. The Board of Directors shall review and adjust, if necessary, such limits at least annually. The insurance provided under this Section shall include, without limitation, the same provisions enumerated in subsections (a), (b), (c) and (d) of Section 4 of this Article.
Section 6. Other Insurance. The Board of Directors is authorized to obtain and maintain such other insurance as it may from time to time deem appropriate, or as may be required by law.
Section 7. Evidence of Insurance. Upon written request of any member or mortgagee, the Association will supply copies of insurance policies maintained by the Association, as well as proof of payment of premiums thereon, provided however, that the Association shall not be liable for any failure to provide such copies or proof.
ARTICLE VIII
REPAIR AND RECONSTRUCTION AFTER FIRE OR OTHER CASUALTY
Section 1. Vote of the Members. In the event of damage to a common area improvement through fire or other casualty, the Board of Directors shall promptly call a special meeting of the members for the purpose of voting on whether to repair or reconstruct the damage to the improvement, except as provided by Section 2 of this Article VIII. If reconstruction would comprise more than 2/3 rds of the building, the Board of Directors shall proceed with repair or reconstruction only upon the affirmative approval by 2/3 rds vote of all members present at such special meeting, in person or by proxy. If reconstruction would comprise 2/3 rds or less of the building, and if damage caused by fire or other casualty is not fully insured and therefore, insurance funds are not available for repair or reconstruction, then repair or reconstruction shall commence only upon the affirmative vote of 2/3 rds of the members present at a special meeting, in person or by proxy.
Section 2. Vote Not Required. In the event that damage caused by fire or other casualty can be repaired at a cost not exceeding the amount of casualty insurance funds that are available for repair or reconstruction, and if reconstruction would comprise 2/3 rds or less of the building the Board of Directors may proceed with the repair or reconstruction or may, in their discretion, call a special meeting of the members to vote upon whether to proceed with repair or reconstruction. If 2/3 rds of the members present at any such special meeting, in person or by proxy, vote to repair or reconstruct, the Board of Directors shall promptly proceed with such repair or reconstruction.
Section 3. Repair and Reconstruction. Repair or reconstruction must be either (a) substantially in accordance with the architectural and engineering plans and specifications as provided for herein by the Restrictions, or (b) according to new plans and specifications approved by the Board of Directors, a 2/3 rds majority of the lot owners and by holders of the first mortgages encumbering more than 2/3 rds of the undivided common elements and facilities.
Section 4. Funds for Repair or Reconstruction. If repair or reconstruction is to take place, to the extent available, any insurance proceeds received due to a fire or other casualty shall be used for repair or reconstruction. In the event that the insurance proceeds are not sufficient to repair or reconstruct that damage caused by fire or other casualty, the Board of Directors shall use so much of the reserve for replacements fund as it deems appropriate. Any remaining balance of funds necessary to complete the repair or reconstruction shall be deemed a common expense and be assessed against all members in accordance with Section 4 of Article VI.
ARTICLE IX
RESTRICTIVE COVENANTS
Section 1. Notwithstanding any provisions herein contained to the contrary, it shall be expressly permissible for the Developer to maintain during the period of construction, and sale, upon such portion of the premises as Developer may choose, such facilities as in the sole opinion of Developer may be reasonably required, convenient or incidental to the construction, sale or leasing of lots including but without limitation, a business office, storage area, signs, sales office and construction facilities.
Section 2. The Restrictions shall govern the use of all lots and Common Areas within Legacy Bay. Any conflict between provisions of the Bylaws of the Association and Restrictions shall be resolved in favor of the Restrictions the provisions of which are superior to and shall supersede the Bylaws.
ARTICLE X
FINANCIAL MANAGEMENT AND RECORDS
Section 1. Records. The Secretary-Treasurer shall keep financial records and books of account for the Association as well as a separate account for each lot which shall contain the amount of each assessment of the common expenses against such lot, the date when due, the amounts paid thereon, and the balance remaining unpaid, and all other records required under the Act.
Section 2. Examination of Records. The Secretary-Treasurer shall keep detailed, accurate records, in chronological order, of the receipts and expenditures of the Association, specifying and itemizing the maintenance and repair expenses of the common elements and facilities and other expenses incurred by the Association. Such records and the vouchers and receipts supporting such records shall be made available for examination and inspection by any member or his appointed agent during convenient weekday hours.
Section 3. Statement. A written report summarizing all receipts and expenditures of the Association shall be rendered by the Board of Directors to all members at least annually.
Section 4. Annual Report. The annual report of the financial statements of the Association shall be rendered by the Board of Directors to all members.
Section 5. Fiscal Year. The Board of Directors shall, in their sole discretion, select a fiscal year for the Association.
ARTICLE XI
MAINTENANCE, REPAIR AND IMPROVEMENTS
Section 1. Maintenance of Lots and Improvements. Every member or occupant shall, at his own expense, at all times well and substantially repair and maintain his lot and the improvements thereon land shall be liable for all uninsured loss caused by his failure to perform such work diligently. Every member or occupant shall reimburse the Association promptly on demand for all expenses incurred by it in repairing or replacing any uninsured loss or damage to the common elements and facilities caused by such person shall give prompt notice to the Board of Directors of any such loss or damage or either defect in the common elements when discovered.
Section 2. Additions, Alterations or Improvements by Association. Whenever, in the judgment of the Board of Directors, the common elements and facilities shall require additions, alteration or improvements costing in excess of an amount equal to $500.00 times the number of lots, and the making of such additions, alterations, or improvements shall have been approved by a majority of the members, which approval shall not be withheld unreasonably, the Board of Directors shall proceed with such addition, alterations or improvements and shall assess all members for the costs thereof as a common expense. Any additions, alterations, or improvements costing less than an amount equal to $500.00 times the number of lots may be made by the Board of Directors without approval of the members and the costs thereof shall constitute a common expense.
Section 3. Right of Access. All lot owners shall grant a right of access to his lot and the improvements therein to the Board of Directors or its designee, for the purpose of making inspections or for the purpose of making inspections or for the purpose of correcting any condition originating on his lot or improvements and threatening a common element or facility, or other lots and improvements, provided that requests for entry are made at least 48 hours in advance and that such entry is at a time reasonably convenient to the member. In the case of an emergency, as determined in the sole discretion of the Board of Directors or its designee, such right of entry shall be immediate, whether the member is present at the time or not.
ARTICLE XII
DISSOLUTION OF THE ASSOCIATION
Section 1. The property of the Association shall include, but not limited to, bank accounts, insurance policies and proceeds and books and records, and are conclusively deemed to be common elements appurtenant to each lot and shall not be subject to withdrawal or an action to partition such property by any member except as provided for in these Bylaws.
Section 2. Vote of the Lot Owners. Upon the unanimous vote of all the lot owners and all mortgagees and the proper recordation by deed of that vote in the Register's Office for Hawkins County, Tennessee, the Association shall cease and all the lot owners shall own the property as tenants in common with each lot owner holding the same undivided interest in the property as they held in the common elements and facilities.
ARTICLE XIII
GENERAL PROVISIONS AND SEVERABILITY
AND CONFLICTING PROVISIONS
Section 1. If any term, covenant, restriction, provision, phrase or other element of the Covenants, Conditions and Restrictions of Legacy Bay Subdivision (?Restrictions?) or Bylaws is held to be invalid or unenforceable for any reason whatsoever, such holding shall not be deemed to affect, alter, modify or impair in any manner whatsoever any other term, provision, restriction, covenant or element of the said documents.
Section 2. Captions used in the Restrictions and Bylaws are inserted solely as a matter of convenience and shall not be relied upon or used in construing the effect or meaning of any of the text of the Restrictions and Bylaws.
Section 3. If any provision of the Bylaws or Restrictions or any section, sentence, clause, phrase or word or the application thereof in any circumstances be judicially held in conflict with the laws of the State of Tennessee, then the said laws shall be deemed controlling, and the validity of the remainder of the Restrictions and Bylaws and the application of any provision, section, sentence, clause, phrase or word in other circumstances shall not be affected thereby. If any provisions of the Bylaws should conflict with provisions of the Covenants, Conditions and Restrictions of Legacy Bay Subdivision, or should appear to be in conflict, then the provisions of the Covenants, Conditions and Restrictions shall be deemed to be superior and shall control.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 1. Tort Liability. Each lot owner shall be deemed to have released and exonerated each other lot owner and the Association, and the Association shall be deemed to have released and exonerated each lot owner, from any tort liability other than based on fraud, intentional or criminal acts to the extent to which such liability is satisfied by proceeds of any liability insurance carried by the Association or by a lot owner.
Section 2. Amendments. These Bylaws may be amended in any respect not inconsistent with the act or the Restrictions, and amended, by vote of 75% of the lot owners present or by proxy at any meeting of the Association duly called for such purpose. For 7 years from the date of the adoption of the Bylaws, however, no such amendment shall be effective to defeat or limit the right of the Developer to amend these Bylaws. Provided, however, these Bylaws may be amended in any respect incident to any amendment to the Restrictions made by the Developer pursuant to the right reserved by the Developer to amend said Restrictions by these Bylaws. The original recorded amendment or amendments to the Restrictions and/or these Bylaws made by the Developer shall be furnished to the Board of Directors within fifteen days after the adoption thereof. The Board of Directors shall thereupon furnish a copy thereof to each lot owner and known mortgagee.
Section 3. Mortgagees. Wherever the term mortgage or mortgagee shall appear in these Bylaws, the same shall be deemed to include deeds of trust and the beneficiary under such deed of trust.
Section 4. Subordination. The Bylaws are subordinated and subject to all provisions of the Restrictions, which shall control in case of any conflict. All terms herein, unless plainly evident from the context that a different meaning was intended, shall have the same meaning as in the Restrictions.
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