1465 Post Road
P.O. Box 369
Wells, ME 04104
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DECLARATION OF CONDOMINIUM

HOLIDAY HOUSE CONDOMINIUM

HOLIDAY HOUSE CONDOMINIUM

WELLS, MAINE

This Declaration has been recreated by scanning the original document using optical character recognition software.  Therefore it can be searched (using the "Find" menu choice under "Edit" in Microsoft Internet Explorer, for example).  However, there may have been errors in the scanning process and the original documents should be double checked before relying on the language here.

THIS DECLARATION is made this 7th day of June, 1986, by Peter Blanchard and Sally L. Blanchard (the "Declarant"), as the owner in fee simple of the Real Estate hereinafter described.

ARTICLE 1 SUBMISSION

Section 1.1. Property. Declarant, the owner in fee simple of the Real Estate described in Exhibit A attached hereto and made a part hereof (the "Real Estate") situated in the Town of Wells, County of York and State of Maine, hereby submits the Real Estate, together with and subject to all easements, rights and appurtenances thereto belonging and the Buildings and improvements erected or to be erected thereon (collectively, the "Property") to the provisions of Chapter 3l of Title 33 of the Maine Revised Statutes Annotated, as the same may be amended from time to time, known as the Maine Condominium Act (the "Act"). The maximum number of Units shall be forty seven (47).

Section l.2 Address of Condominium. The address of the Condominium is:

Holiday House Condominium

P.O. Box 2266

Ogunquit, Maine 03907

ARTICLE 2 DEFINITIONS

Section 2.1 Terms Defined in the Act. Capitalized terms are defined herein or in the Plats and Plans, otherwise they shall have the meanings specified or used in the Act.

Section 2.2 Terms Specifically Defined in this Declaration. In addition to the terms hereinabove defined, the following terms shall have the following meanings in this Declaration, the Bylaws, and Plats and Plans:

(a) "Association" means the Unit owner's Association of the Condominium, which is known as "Holiday House Condominium Association".

(b) "Building" means any motel, housekeeping unit, service or recreational structure or other improvement now or hereafter constructed on the Property.

(c) "Bylaws" means the document having that name and providing for the governance of the Association, pursuant to Section 1603-106 of the Act, as such document may be amended from time to time.

(d) "Common Elements" (or in the singular, a "Common Element") means those parts of the Property either described in the Act as being Common Elements or described herein or in the Plats and Plans as being Common Elements.

(e) "Condominium" means the Condominium described in Section 1.1 above. The term does not imply any use other than "motel" or "housekeeping unit" use, as those terms are defined in the Wells Zoning Ordinance.

(f) "Condominium Documents" includes the Declaration, Plats and Plans, Bylaws, and Rules and Regulations.

(g) "Declarant" means the Declarant described in Section 1.1 above.

(h) "Declaration" means this document, as the same may be amended from time to time.

(i) "Development Rights" means any rights which the Declarant has reserved to itself as set forth in Article 15 and elsewhere in this Declaration.

(j) "Eligible Mortgage Holder" means the holder of a recorded first mortgage on a Unit which has delivered written notice to the Association by prepaid United States mail, return receipt requested, or by delivery in hand securing a receipt therefore, which notice shall state the Mortgagee's name and address, the Unit owner's name and address, and the identifying number of the Unit, and shall state that the mortgage is a recorded first mortgage.

(k) "Executive Board" means the Executive Board of the Association.

(1) "General Common Expense" means Common Expenses as determined in Section 5.2 hereof.

(m) "Insurance Trust Agreement" means that certain agreement, if any, between the Association and the Insurance Trustee providing for the management and disbursement of insurance proceeds in accordance with Section 9.3 hereof.

(n) "Insurance Trustee" means that certain entity responsible for the management and disbursement of insurance proceeds pursuant to the Insurance Trust Agreement, if any.

(o) "Limited Common Elements" (or in the singular, a "Limited Common Element") means those parts of the Property either described in the Act as being Limited Common Elements or described herein or in the Plats and Plans as being Limited Common Elements.

(p) "Periodic Assessment" means the Unit owner's share of the anticipated Common Expenses, allocated by Unit, for each period of the Association's fiscal year as reflected in the budget adopted by the Executive Board for such year.

(q) "Mortgagee" means the holder of any recorded first mortgage encumbering one or more of the Units.

(r) "Percentage Interest" means the undivided interest in the Common Elements appurtenant to a Unit, as set forth on Exhibit B attached hereto, as the same may be amended from time to time. (s) "Property" means the Property described in Section 1.1. above.

(t) "Plats and Plans" means the Plats and Plans recorded herewith as such may be amended from time to time, reduced photocopies of which are attached hereto as Exhibit C.

(u) "Record" means to record in the York County Registry of Deeds.

(v) "Rules and Regulations" means such rules and regulations as are promulgated by the Declarant or the Executive Board from time to time with respect to the use of all or any portion of the Property.

(w) "Special Assessment" means a Unit owner's share of any assessment made by the Executive Board in addition to the Periodic Assessment.

(x) "Special Declarant Rights" means those rights which the Declarant has reserved to itself as set forth in Article 15 and elsewhere in this Declaration.

(y) "Unit" means a physical portion of the Condominium designated for separate ownership or occupancy, the boundaries of which are described in Article 3, and the use of which is limited to "motel" or "housekeeping unit" use, as those terms are defined in the Wells Zoning Ordinance. The "Motel Units" shall mean Units M-1 to M-21. The "Cottage Units" shall mean Units C-1 to C-26.

Section 2.3 Provisions of the Act. The provisions of the Act shall apply to and govern the operation and governance of the Condominium, except to the extent that contrary provisions, not prohibited by the Act, are contained in one or more of the Condominium Documents.

ARTICLE 3 UNIT BOUNDARIES AND MAINTENANCE RESPONSIBILITIES

Section 3.1 Unit Boundaries.

(a) Motel Units The boundary lines of each Motel Unit are as shown on the Plats and Plans and are formed by the following planes:

(1) The Unit-side surface of the walls and partitions of the Building which separates such Unit from adjoining Units or Common Elements, the Unit to include the thickness of the finish material such as plaster, paneling or drywall;

(2) The Unit-side surface of the furring around utility shafts, and other Common Elements within or passing through such Unit, the Unit to include the thickness of the finish material such as paneling, plaster or drywall; otherwise, the Unit-side surface of ceilings and flooring under and around (I) wood members and (ii) utility lines, ducts and cables, the Unit to include the thickness of finish material such as plaster, paneling or drywall.

(3) The planes formed by the Unit-side surface of the ceiling, the Unit to include the thickness of finish material such as plaster or drywall, but excluding any beams which extend below the horizontal plane of the upper boundary of the Unit;

(4) The Unit-side surface of the structural wood floor of such Unit, or the Unit-side surface of the concrete slab, as the case may be, the Unit to include the thickness of the finish material such as carpet, ceramic or resilient tile or hardwood;

(5) The Unit-side surface of the sash of windows which are set in the exterior walls or ceilings of such Unit, the exterior surface of the panes of such windows and the Unit-side surface of window sills, moldings, trim, jambs and mullions for such windows, the Unit to include the thickness of the finish material such as plaster, paneling or drywall; and

(6) The exterior surface of doors, and their sills and hardware, and the Unit-side surface of the door frames in which such doors are set, the Unit to include the thickness of the finish material such as plaster, paneling or drywall.

(b) Each Motel Unit consists of all portions of the Building within the aforesaid boundary lines, except the air space displaced by

(I) structural members, load bearing partitions within or passing through such Unit which are deemed to be Common Elements:

(ii) other Common Elements within such Unit including, without limitation, chutes, flues, ducts, wires, conduits and piperuns which serve more than one Unit and

(iii) any beams which extend below the horizontal plane of the upper boundary of the Unit.

By way of illustration and not limitation, there is included within a Motel Unit: (l) the air space enclosed by such boundary lines, (2) all non-load bearing partitions which are wholly contained within such boundary lines, including but not limited to, all doors, door frames, stairways, hardware, electrical outlets and wiring, telephone outlets and conduits and other equipment and devices in such partitions serving only such Unit, (3) all fixtures located within such boundary lines and serving only such Unit, and their water and waste connections, (4) all items of kitchen equipment located within such boundary lines and serving only such Unit, and such equipment's water, waste, and electrical connections, (5) exhaust fans, and the grills, registers, ventilation ducts, and related fixtures, and screens and storm windows, which serve only such Unit, whether or not any of the forgoing is located in any portion of the Common Elements, (6) lighting devices (including by way of illustration and not limitation, lamps and bulbs which are surface mounted on, recessed in, or suspended from, ceilings, walls and partitions, within or around the perimeter of such Unit) serving only such Unit, whether or not such lighting devices are themselves located entirely within the boundary lines of such Unit, (7) telephone, cablevision, and electrical outlets, air conditioning units, wires, cables, conduits, circuits and related equipment which serve only such Unit and which are located entirely within the boundary lines of such Unit, (8) surface mounted and recessed medicine cabinets including, by way of illustration and not limitation, all associated lighting fixtures and accessories, and (9) any appliances and the portions of their water, waste, electrical and exhaust connections located within such boundary lines and serving only such Unit.

(b). Cottage Units. The boundary lines of the Cottage units are as follows: For all Cottage Units except Units C-5 and C-6, the boundary lines are the vertical planes constituting the exterior wall of the structure in which the Unit is located, and are shown on the Plats. No part of the Building contained within the Unit shall be considered part of the Common Elements. The boundary line between Units C-5 and C-6 is a vertical plane running through the midpoint of the cement block wall separating said Units. The other boundary lines of said Units C-5 and C-6 are as shown on the Plats and plans. There is also excluded from Unit C-21 the electrical panel for common electrical service which is attached to the outside of the structure located within the bounds of Unit C-21. The Unit further includes (whether within the aforesaid boundary lines or not): all roofing and roof overhang, eaves, gutters, doors, chimneys, walls, windows, screens, sills, shutters, frames, doorsteps, stoops, posts, masonry, foundations, frost walls and thresholds of the building containing the Unit. No part of the Building shall be considered part of the Common Elements.

(c) Each Unit's identifying number is shown on the Plats and Plans and on Exhibit B.

Section 3.2. Maintenance Responsibilities. Each Unit owner is responsible for repairs and maintenance of his or her Unit in accordance with Section 1603-107 of the Act, and the Association is responsible for repairs and maintenance of the Common Elements.

ARTICLE 4 DESCRIPTION AND ALLOCATION OF COMMON ELEMENTS AND LIMITED COMMON ELEMENTS

Section 4.1 Description and Location of Common Elements. Common Elements shall mean those portions of the Building defined as such pursuant to Section 1602-102(l) of the Act, except as provided otherwise herein, or as identified and designated as Common Elements in the Plats and Plans. The Common Elements include land (except land underneath Units that have no horizontal boundaries), foundations, roof, exterior walls, load bearing portions of Units that do have horizontal boundaries, and the swimming pool with its surrounding pool deck and fence.

Section 4.2. Description and Location of Limited Common Elements - Motel Units. Limited Common Elements, the exclusive use of which is reserved to a particular Unit, to the exclusion of other Units, consist of the following: a. Shutters, awnings window boxes, doorsteps, stoops, crawl spaces, balconies, porches and patios, if any, which are not a part of the Unit but which are adjacent thereto and which serve only such Unit. However, the upstairs walkway in front of Units M-15 to M-21 shall be subject to an easement for access by owners of those Units. b. Those areas identified and designated as Limited common Elements on the Plats and Plans.

Section 4.3. Description and Location of Limited Common Elements - Cottage Units. Limited Common Elements, the exclusive use of which is reserved to a particular Unit, to the exclusion of other Units, consist of those areas identified and designated as Limited Common Elements on the Plats and Plans.

Section 4.4. Reserved.

Section 4.5 Reserved Common Elements. The Executive Board shall have the power in its discretion from time to time to grant revocable licenses in designated Common Elements to the Association or to any Unit owners and to establish a reasonable charge to such Unit owners for the use and maintenance thereof. Such designation by the Executive Board shall not be construed as a sale or disposition of the Common Elements. The Executive board shall assign parking spaces to Units in such manner as they may deem in the best interest of the Condominium, provided, however, that each Unit shall be allocated at least one parking space. The Executive Board shall have the right to erect such sheds or storage facilities on the Common Elements as it may deem desirable or necessary.

ARTICLE 5 ALLOCATION OF PERCENTAGE INTERESTS, COMMON EXPENSES AND VOTING RIGHTS

Section 5.1. Percentage Interests Attached as Exhibit B hereto is a list of all Units by their Identifying Number and their Percentage Interest appurtenant to each Unit, determined on the basis of equality.

Section 5.2. Common Expenses. The liability of each Unit for the Common Expenses of the Condominium shall be the same percentage share as the Percentage Interest set forth on Exhibit B, determined on the basis of equality. However, those utilities serving some but not all of the Units will be paid for only by the Units so served.

Section 5.3. Allocation of Unit Owner's Voting Rights. The vote in the Association to which each Unit owner is entitled shall be as set forth on Exhibit B attached hereto.

ARTICLE 6 EASEMENTS 6.1 Utilities, Pipes and Conduits. Each Unit Owner shall have an easement in common with all other Unit Owners to use all pipes, wires, ducts, cables, conduits, public utility lines and other Common Elements serving his Unit and located in any of the other Units. Each Unit shall be subject to an easement in favor of all other Unit Owners to use the pipes, ducts, cables, wires, conduits, public utility lines and other Common Elements serving such other Units and located in such Unit. The Association and its Executive Board shall have the right to grant to third parties additional permits, licenses and easements over and through the Common Elements for utilities, roads, and other purposes reasonably necessary or useful for the proper maintenance and operation of the Condominium.

6.2 Ingress, Egress and Regress. Each Unit owner shall have an easement, subject to any rules and regulations established by the Executive Board, in common with all other Unit Owners to use the entrances, exits, corridors and other Common Elements asa means of ingress, egress and regress to and from the Property and the adjoining public streets. The Executive Board shall not and cannot establish any rules and regulations depriving any Unit Owner of reasonable ingress, egress and regress to and from his Unit, the Property and Common Elements, and the adjoining public streets, provided, however, the Executive Board may by regulation limit access of Unit Owners to those portions of the Common Elements, such as machinery or equipment rooms or management offices, which it deems desirable or necessary, provided the Unit Owners shall have unrestricted access to his Unit.

6.3 Condominium Association and Executive Board Access. Declarant reserves in favor of itself, the Association and its Executive Board, officers, agents and employees, and the managing agent and every other person authorized by the Executive Board the irrevocable right and easement to have access to each Unit as provided in Section 1603-107(a) of the Act as may be necessary for the inspection, maintenance, repair or replacement of any of the Common Elements and Limited Common Elements therein or accessible therefrom or the making of any addition or improvements thereto, including the storage area between Units C-5 and C-6; or to make repairs to any Unit, the Common Elements or the Limited Common Elements if such repairs are reasonably necessary for public safety or to prevent damage to any other Unit or Units, the common Elements or the Limited Common Elements, or to abate any violation of law, orders, rules or regulations of the Association or of any governmental authorities having jurisdiction thereof. Such right of entry shall be immediate whether or not the Unit Owner is present at the time.

6.4 Declarant's Easement for Marketing. The Declarant reserves the right with respect to its marketing of Units to use the Common Elements and Limited Common Elements for the ingress and egress of itself, its officers, employees, agents, contractors and subcontractors and for prospective purchasers of Units, including the right of such prospective purchasers to park in parking spaces. The Declarant also reserves the right to use any Units owned or leased by the Declarant as models, management offices, sales offices for this project or customer service offices. The Declarant reserves the right to relocate the same from time to time within the Property; upon relocation, the furnishings thereof may be removed. The Declarant further reserves the right to maintain on the Property such advertising signs as may comply with applicable governmental regulations, which may be placed in any location on the Property and may be relocated or removed, all at the sole discretion of the Declarant. Prior to assignment of Assignable Limited Areas as Limited Common Elements, the Declarant shall have the right to restrict the use of certain Common Element parking spaces to sales purposes and to use such spaces for sales purposes. The Declarant shall have the right to erect on the Common Elements temporary offices for models, sales, management, customer service and similar purposes, which may be relocated or removed, all at the sole discretion of Declarant and which may be of such types and sizes as Declarant may deem appropriate. This easement shall continue until the Declarant has conveyed all Units in the Condominium to Purchasers.

6.5. Declarant's Easement for Construction. The Declarant reserves the Special Declarant Right and easement, right and privilege without let or hindrance with respect to the construction of the Units, Common Elements, Limited Common Elements and other improvements of the Condominium, to go upon any and all of the Property for purposes of reconstruction, maintenance, repair, renovation, replacement or correction of the Units or Common Elements. Furthermore, the Declarant reserves an easement in the Units and Common Elements pursuant to Section 1602-116 of the Act for the purpose of discharging Declarant's obligations and exercising the Special Declarant Rights reserved pursuant to this Declaration or on the Plats. This easement shall continue until the Declarant has conveyed all Units in the Condominium to Purchasers. This Paragraph shall not be amended without the written consent of the Declarant.

6.6 Declarant's Easement to Correct Drainage. Declarant reserves an easement on, over and under those portions of the Common Elements not located within a Building for the purpose of maintaining and correcting drainage of surface water in order to maintain reasonable standards of health, safety and appearance. The easement created by this Paragraph expressly includes the right to cut any trees, bushes, or shrubbery, to grade the soil, or to take any other action reasonably necessary to achieve this purpose, following which the Declarant shall restore the affected property as closely to its original condition as practicable. The reservation of this right does not and shall not result in the imposition of an obligation. This easement shall continue until the Declarant has conveyed all Units in the Condominium to Purchasers.

6.7 Encroachments. Each Unit shall have an easement to the extent necessary for structural and subjacent support over every other Unit and over the Common Elements, and each Unit and the Common Elements shall be subject to an easement for structural and lateral support in favor of every other Unit. If any portion of the Common Elements or Limited Common Elements hereafter encroaches upon any Unit, or if any Unit hereafter encroaches upon any other Unit or upon any portion of the Common Elements or Limited Common Elements, as a result of settling or shifting of any Building or Buildings in which they are located or otherwise than as a result of the purposeful or negligent act or omission of the Owner of the encroaching Unit, or of the Association in the case of encroachments by the Common Elements or Limited Common Elements, a valid easement appurtenant to the encroaching Units, Common Elements or Limited Common Elements for the encroachment and for the maintenance of the same shall exist for so long as the encroachment shall exist. In the event that any Building or Buildings shall be partially destroyed as a result of fire or other casualty or as a result of a taking by the power of, or in the nature of, eminent domain or by an action or deed in lieu of condemnation, and then is rebuilt, encroachments of a portion or portions of the Common Elements or Limited Common Elements upon any Unit or of any Unit upon any other Unit or upon any portion of the Common Elements or Limited Common Elements, due to such rebuilding, shall be permitted, and valid easements appurtenant to the encroaching Units, Common Elements or Limited Common Elements for such encroachments and the maintenance thereof shall exist so long as that Building as so rebuilt shall stand.

6.8 Declarant's Right to Connect with Utilities. The Declarant further reserves an easement to connect with and make use of utility lines, wires, pipes and conduits located on the Property for construction purposes on the Property, provided that Declarant shall be responsible for the cost of service so used, and to use the Common Elements for ingress and egress and construction activities and for the storage of construction materials and equipment used in the completion of the Units and Common Elements. This easement shall continue until the Declarant has conveyed all Units in the Condominium to Purchasers. 6.9 Declarant's Right to Grant Easements. The Declarant shall have the right, until the Declarant has conveyed all Units in the Condominium to Purchasers, to grant and reserve easements and rights-of-way through, under, over and across the Property for the installation, maintenance and inspection of the lines and appurtenances for public or private water, sewer, drainage, gas, electricity, telephone and other utilities. The Units and Common Elements shall be, and are hereby, made subject to easements in favor of the Declarant, appropriate utility and service companies and governmental agencies or authorities for such utility and service lines and equipment as may be necessary or desirable to serve any portion of the Property. The easements created in this paragraph shall include, without limitation, rights of Declarant or the providing utility or service company, or governmental agency or authority to install, lay, maintain, repair, relocate and replace pipes and conduits, water mains and pipes, sewer and drain lines, telephone wires and equipment, television equipment and facilities (cable or otherwise), heating systems, ventilation systems, electric wires, conduits and equipment and ducts and vents over, under, through, along and on the Units and Common Elements. This easement shall expire after all the Units have been conveyed to Purchasers and the Declarant has completed all warranty-related work and non-warranty-related work to the Condominium.

6.9 Declarant's Right to Grant Easements. The Declarant shall have the right, until the Declarant has conveyed all Units in the Condominium to Purchasers, to grant and reserve easements and rights-of-way through, under, over and across the Property for the installation, maintenance and inspection of the lines and appurtenances for public or private water, sewer, drainage, gas, electricity, telephone and other utilities. The Units and Common Elements shall be, and are hereby, made subject to easements in favor of the Declarant, appropriate utility and service companies and governmental agencies or authorities for such utility and service lines and equipment as may be necessary or desirable to serve any portion of the Property. The easements created in this paragraph shall include, without limitation, rights of Declarant or the providing utility or service company, or governmental agency or authority to install, lay, maintain, repair, relocate and replace pipes and conduits, water mains and pipes, sewer and drain lines, telephone wires and equipment, television equipment and facilities (cable or otherwise), heating systems, ventilation systems, electric wires, conduits and equipment and ducts and vents over, under, through, along and on the Units and Common Elements. This easement shall expire after all the Units have been conveyed to Purchasers and the Declarant has completed all warranty-related work and non-warranty-related work to the Condominium.

6.10. Common Elements Easement in Favor of Unit Owners. The Common Elements (including, but not limited to, the Limited Common Elements) shall be and are hereby made subject to the following easements in favor of the Units benefitted:

For the installation, repair, maintenance, use, removal and/or replacement of pipes, ducts, heating systems, electrical, telephone and other communication wiring and cables and all other utility lines and conduits which are a part of or serve any Unit and which pass across or through a portion of the Common Elements.

For the installation, repair, maintenance, use, removal and/or replacement of lighting fixtures, electrical receptacles, panel boards and other electrical installations which are a part of or which serve any Unit but which encroach into a part of a Common Element adjacent to such Unit; provided that the installation, repair, maintenance, use, removal or replacement of any such item does not unreasonably interfere with the common use of any part of the Common Elements, adversely affect either the thermal or acoustical character of the building or impair or structurally weaken the building.

6.11 Alteration of Common Elements by Declarant. The Declarant reserves the right to modify, alter, remove or improve defective, obsolete or nonfunctional portions of the Common Elements, including without limitation any equipment, fixtures and appurtenances when in the Declarant's judgment it is necessary or desirable to do so, until the expiration of the applicable warranty period, if any.

Section 6.12. Access to Pool facilities by Owners of Adjacent Property and their Guests. The Declarant, and subsequent owners of the house located adjacent to the Property, together with their guests, shall be allowed to use the pool facilities, subject to a yearly charge of 10% of all pool related expenses, as set by the Association. The Declarant and subsequent owners of Declarant's adjacent property will be subject to the same rules regarding pool use as the Association sets for Unit owners.

Section 6.13. Easement in favor of Blanchard for access. There is reserved from the Property a permanent easement for access by foot and vehicles and for utilities across, along, beside and underneath both existing driveways located on the Property, in favor of the premises now owned by Peter and Sally Blanchard, their heirs and assigns forever.

ARTICLE 7 RESTRICTIONS ON USE; SALE AND LEASE OF UNITS.

Section 7.1 General.

(a) Use of any Unit as a year round dwelling, as that term is used in the Wells Zoning Ordinance, is prohibited without approval of the Wells Planning Board. Use of the premises is limited to "motel" occupancy and/or "housekeeping unit"occupancy, as those terms are defined in the Wells Zoning Ordinance as of the date of this Declaration. The Units may not be used for any other purposes by the Unit owner or any future Unit owner, unless allowed by future changes in the Wells Zoning ordinance.

(b) The Cottage units shall be occupied only during the period between April 15 and October 15 of each year, except that as to owners of Units C-11 through C-26, occupancy is prohibited only during the months of January and February. Unit owners who desire to do this must make their own provisions for installing foundations and taking other measures to insure that water pipes will not freeze. Units M-1 to M-26 may be occupied any time except that occupancy is prohibited during the months of January and February. Occupancy of any Unit at any other time is expressly prohibited. Owners of each building containing motel units may agree among themselves to keep their building open from March 1-April 15 and October 15-December 30, and if they do so decide, each unit in the building shall be required to maintain heat to a temperature of at least 50 degrees at all times to keep water pipes from freezing.

(c) No Unit owner may carry on any practice, or permit any practice to be carried on, which unreasonably interferes with the quiet enjoyment of the occupants of any other Unit. 

(d)The Executive Board may from time to time promulgate reasonable Rules and Regulations, not in conflict with the provisions of this Declaration, concerning the use and enjoyment of the Property. Copies of the then current Rules and regulations and any amendments thereto shall be furnished to all Unit owners by the Association promptly after the adoption of such Rules and Regulations and any amendments thereto.

(e) The owner of a Unit shall not alter in any way any portion of his Unit which is part of the exterior facades of the Building which contains the Unit, including by way of example but not by way of limitation, exterior siding or doors, without the prior written consent of the Executive Board. Not less frequently than every three years, the Association shall hire a painting contractor who shall repaint those portions of the exterior of each Cottage Unit, including decks, and repaint or restain those portions of the exterior of the Buildings containing the Motel Units, as may be necessary in the sole opinion of the Executive Board to maintain the Property in an attractive condition. The contractor shall itemize his bill for such repainting or restaining by Unit or Building, and the Association shall pay the bill and shall rebill the Unit owners for that portion of the itemized bill relating to his or their Unit or Units. In the case of Motel Units, the bill shall be divided by Building and each Unit owner in that building shall pay an equal share of the bill. Such bill to the Unit owners shall be treated as an assessment against that Unit, and shall become a lien in the same manner as other assessments.

Nothing contained in this paragraph 7.1 (e) shall prohibit a Unit owner or Unit owners from doing their own painting or restaining, or from installing vinyl siding or other material not requiring painting, but all paint and stain shall be of the same shade, color, and type, and all siding shall be of the same color and shall be approved in advance by the Executive Board or managing agent. All doors, flower boxes and shutters must similarly be maintained in a consistent color, which such color shall be determined by the Executive Board. In similar fashion, all portions of any Unit or Building visible from outside the Unit or Building shall be maintained in a manner consistent with the rest of the Property, and shall be kept in good repair. The Executive Board may, after notice given to Unit owners, perform repairs and maintenance to Units or buildings which do not comply, and bill the cost of same to Unit owners, in the same manner as set forth above, and the cost of such repair or maintenance shall be a lien, in the same manner as other assessments by the Association.

(f) The Property is to be maintained in a clean and sanitary condition, and no Unit owner may place any garbage, trash, or rubbish anywhere in the Property other than in his own Unit and in or on such parts of the Common Elements as may be designated for such purpose by the Executive Board.

(g) Occupancy of Units shall be restricted to the reasonable sleeping capacity of the Units, as determined by the Executive Board. The Executive Board may delegate to the managing agent the right to charge a sum, not to exceed ten dollars per day per person, for violation of this provision. Said sum, if assessed, shall be added to the monthly maintenance assessment and shall constitute a lien against the Unit, in the same manner as assessments.

(h) There is allowed on the Common Elements no more than one automobile per Unit, and except that owners of Cottage Units may park two automobiles on the premises during the period of their occupancy of their Unit. Parking areas for vehicles shall be as designated by the Executive Board.

(I) No glass objects shall be allowed anywhere in the pool area.

(j) Owners of Units may bring their own household pets of the usual type and kind on the premises, provided that they are leashed when outside the Units, and do not disturb the quiet enjoyment by others, of their Units. Unit owners are required to pick up after their pets. No lessee, tenant or guest shall be allowed to bring or keep pets on the Common Elements or in any Unit.

Section 7.2. Sale and Lease of Units.

(a) A Unit Owner (other than the Declarant) may sell or lease (consistent with the nature of the Property as a motel or housekeeping unit) his Unit at any time and from time to time provided that: (l) For the Cottage Units, all tenancies shall be for a term of not less than one week, during the months of July and August, unless the Executive Board, by affirmative vote, determines otherwise; (2) Each tenant shall be subject to and be bound by all of the covenants, restrictions, and conditions set forth in the Condominium Documents. It is the responsibility of each Unit Owner to acquaint tenants with the provisions of this Article 7 and of the rules and regulations, and Unit Owners shall be liable to pay for all damage to the Common Elements caused by their guests. (b) This Section 7.2 shall not be deemed or construed to impair a Mortgagee's right to foreclose, accept a deed in lieu of foreclosure, or sell or lease a Unit so acquired by the mortgagee.

Section 7.3 Common Areas. The following restrictions shall apply to the use of Common Elements.

(a) No Unit owner may obstruct the Common Elements in any way. No Unit owner may store anything in or on the Common Elements without the prior written consent of the Executive board.

(b) No signs shall be placed on the premises except "For Sale" or "For Rent" signs. Such signs shall be no more than 1 foot square in size and be placed in a window inside a building being offered for sale or rent. The Executive Board may allow one sign of its own size and design to be placed at the location of the Property sign along Route 1 offering Units for rent.No trailers shall be placed or stored on the premises. No automobiles shall be parked in driveways or anywhere on the premises except designated areas.

(c) No tenting shall be allowed on the Property. Section

7.4. Management Office. Nothing in this Article 7 shall be construed to prohibit the Association from using the Unit which is being purchased by the Association as a management office, or for any other lawful purpose.

ARTICLE 8 RIGHTS OF MORTGAGEES, INSURERS, AND GUARANTORS

Section 8.1. Subject to Declaration. Whether or not they expressly so state, any mortgage which constitutes a lien against a Unit and an obligation secured thereby shall provide generally that the mortgage and the rights and obligations of the parties thereto shall be subject to the terms and conditions of the Act, the Declaration, the Plats and Plans and any Rules and Regulations.

Section 8.2. Rights of Eligible Mortgage Holders. (a) The Association shall send reasonable prior written notice by prepaid United States mail to Eligible Mortgage Holders of the consideration by the Association of the following proposed actions: (l) The termination of the Condominium pursuant to Section 1602-118 of the Act; (2) A change in the allocated interest of a Unit, a change in the boundaries of a Unit or a subdivision of a Unit; (3) The merger or consolidation of the Condominium with another condominium; (4) The conveyance or subjection to a security interest of any portion of the Common Elements; (5) The proposed use of any proceeds of hazard insurance required to be maintained by the Association under Section 1603-113(a) of the Act for purposes other than the repair or restoration of the damaged property; (6) The adoption of any proposed budget by the Executive Board and the date of any scheduled Unit owners meeting to consider ratification thereof;a summary of the proposed budget shall accompany this notice; and (7) Any default in the performance or payment by a Unit owner of any obligations under the Declaration, including, without limitation, default in the payment of Common Expense liabilities. (b) In the event of any proposed actions described in Subsection (a), paragraphs (l), (2), (3), (4), or (5) hereinabove, an Eligible Mortgage Holder shall have the right but not the obligation in place of the Unit owner to cast the votes allocated to that Unit or give or withhold any consent required of the Unit owner for such action by delivering written notice to the Association with a copy to the Unit owner prior to or at the time of the taking of the proposed action, which notice shall be sent by prepaid United States mail, return receipt requested, or by delivery in hand. Failure of the Eligible Mortgage Holder to so exercise such rights shall constitute a waiver thereof and shall not preclude the Unit owner from exercising such right. In the event of any default described in Subsection (a), paragraph (7), the Eligible Mortgage Holder shall have the right but not the obligation to cure such default. (c) In addition, an Eligible Mortgage Holder or its representative shall have the right to attend Association and Executive Board meetings for the purposes of discussing the matters described in Subsection (a), paragraphs (l) through (6).

Section 8.3. Rights of Mortgage Holders, Insurers, or Guarantors. (a) The Association shall send timely prior written notice by prepaid United States mail to holders, insurers and guarantors of the Mortgage on any Unit of the following matters: (l) Any condemnation or casualty loss that affects either a material portion of the Condominium or the Unit securing the Mortgage. (2) Any sixty (60)-day delinquency in the payment of Periodic Assessments or other charges owed by the owner of any Unit on which it holds the Mortgage. (3) A lapse, cancellation, or material modification of any insurance policy or fidelity bond maintained by the Association; and (4) Any proposed action that requires the consent of fifty-one percent (5l%) of the Eligible Mortgage Holders. (b) To receive such notice, the mortgage holder, insurer, or guarantor shall send a written request therefore to the Association, stating its name and address and the Unit number or address of the Unit on which it holds, insures, or guarantees the Mortgage. 

Section 8.4. Liability for Use and Charges. Any Mortgagee who obtains title to a Unit pursuant to the remedies provided in a mortgage for foreclosure of such mortgage or a deed in lieu of foreclosure shall not be liable for such Unit owner's unpaid assessments or charges which accrue prior to the acquisition of title to such Unit by the Mortgagee, except to the extent otherwise provided for in the Act and except to the extent that such Mortgagee is liable as a Unit owner for the payment of such unpaid assessment or charge that is assessed against the mortgagee as a result of all Unit owners being reassessed for the aggregate amount of such deficiency.

Section 8.5. Condemnation Rights. No provision of this Declaration shall give a Unit owner, or any other party, priority over any rights of the Mortgagee of a Unit pursuant to its mortgage in the case of a distribution to such Unit owner of insurance proceeds or condemnation awards for loss to or a taking of one or more Units and/or Common Elements. Section 8.6. Books and Records. Any Mortgagee shall have the right, exercisable by written notice to the Executive Board, to examine the books and records of the Association and to require that it be provided with a copy of each annual report of the Association and other financial data of the Association reasonably requested by such Mortgagee.

ARTICLE 9 INSURANCE

Section 9.1. Types and Amounts. The Association shall maintain as a common expense and to the extent reasonably available, the following types and amounts of insurance: (a) Property insurance insuring against "all risks", subject only to policy exclusions, of direct physical loss commonly insured against or such other fire and casualty insurance as the Executive Board may determine provides equal or greater protection for the Unit owners and their Mortgagees, if any, in each case complying with the applicable requirements of Section 9.2. hereof. The insurance maintained by the Association shall cover the Property, including but not limited to, all Common Elements and Limited Common Elements, the Units, and all improvements, furnishings originally supplied with the Units, and their replacements, fixtures and appliances contained within the Unit as of the date of settlement on the Unit by the Declarant or the value thereof, and building service equipment and common equipment and supplies owned by the Association, but excluding any improvements or appliances subsequently added by a Unit owner and all other personal property of the Unit owner. The amount of any such hazard insurance obtained pursuant to this paragraph (a) shall be equal to one hundred percent (100%) of the current replacement cost of the Condominium, including the individual Units, at the time the insurance is purchased and at each renewal date without deduction for depreciation, exclusive of land, foundations, excavation and other items normally excluded from coverage. In the event that there are multiple Buildings or locations, insurance will be written on a "blanket" basis. Such hazard insurance policy may, at the option of the Association, contain a "deductible" provision in an amount to be determined by the Executive Board, but not less than $250. The proceeds of such policy shall be payable to the Insurance Trustee, if any, otherwise to the Association for the benefit of the Unit owners and holders of mortgages secured by the Units. Such hazard insurance policy shall include a separate "loss payable endorsement" in favor of the Mortgagees, if any, modified to make the loss payable provisions in favor of the Mortgagees subject and subordinate to the loss payable provisions in favor of the Association if there is no Insurance Trustee, or if there is an Insurance Trustee, to the Insurance Trustee under the Insurance Trust Agreement. If the Executive Board fails within sixty (60) days after the date of an insured loss to initiate a claim for damages recoverable under the policy or policies obtained pursuant to this paragraph (a), any mortgagee may initiate such a claim on behalf of the Association. (b) Comprehensive Liability Insurance, including medical payments insurance, complying with the requirements of Section 9.2. hereof, insuring the Unit owners, in their capacity as Unit owners and Association members and any managing agent retained by the Association, against any liability to the public or to other Unit owners, their tenants or invitees, relating in any way to the ownership and/or use of the Common Elements, public ways and any other areas under the supervision of the Association and any part thereof. Such insurance policy shall contain a "severability of interest endorsement" or equivalent coverage which precludes the insurer from denying the claim of a Unit owner because of the negligent acts of the Association or another Unit owner. Such insurance shall include coverage for bodily injury and property damage that results from the operation, maintenance or use of the Common Elements, and any liability resulting from law suits related to employment contracts in which the Association is a party. Broad form extended liability endorsements will also be included with such endorsements covering personal injury, contractual, broad form property damage and other commonly included perils. Liability for nonowned and hired automobiles, liability for property of others, and such other risks as are customarily covered in similar projects will also be included. The amount of such liability insurance shall be at least $1,000,000.00 for bodily injury and property damage for any single occurrence. The scope and amount of coverage of all liability insurance policies shall be reviewed at least once each year by the Executive Board and may be changed in its discretion provided that such policies shall continue to comply with the requirements of this Section and Section 9.2. hereof. (c) Such worker's compensation insurance as applicable laws may require. Independent contractors must provide the Association with appropriate certificates of insurance. (d) Insurance to satisfy the indemnification obligation of the Association and all Unit owners set out in Section 10.2 hereof, if and to the extent available, including but not limited to insurance coverage commonly referred to as "Directors and Officers Insurance". (e) A blanket bond to cover treasurers and other Association members who handle money of the Association.

Section 9.2. Required Provisions. Insurance obtained by the Association shall be in accordance with the following provisions: (a) All policies shall be written with a company authorized to do business in the State of Maine and, for the hazard insurance policy described in Section 9.1. (a) hereof, such company must hold a general policy holder's rating of at least "B+" by Best's Insurance Reports at time of issuance of the policy, or by an equivalent rating bureau should Best's Insurance Reports cease to be issued. (b) Exclusive authority to adjust losses under policies hereafter in force on the Property shall be vested in the Executive Board or its authorized representative. (c) Each Unit owner may obtain additional insurance at his own expense; provided, however, that: (1) such policies shall not be invalidated by the waivers of subrogation required to be contained in policies required by this Declaration; and (2) no Unit owner shall be entitled to exercise his right to maintain insurance coverage in such away as to decrease the amount which the Association may realize under any insurance policy which the Association may have in force on the Property at any particular time. (d) Any Unit owner who obtains individual insurance policies covering any portion of the Property other than personal property belonging to such owner shall be required to file a copy of such individual policy or policies with the Association within thirty (30) days after purchase of such insurance. (e) With respect to the insurance policies described in subsection (a) and (b) of Section 9.1. issued to the Association and covering all or any part of the Property, the Association shall cause such policies to provide that: (1) Each Unit owner is an insured person under such policies with respect to liability arising out of his ownership of an undivided interest in the Common Elements or membership in the Association; (2) The insurer waives its right to subrogation under the policy against any Unit owner or members of his household; (3) No act or omission by any Unit owner, unless acting within the scope of his authority onbehalf of the Association, will void such policies or be a condition to recovery under such policies; (4) If at the time of a loss under such policiesthere is other insurance in the name of a Unit owner covering the same risk covered by the policy, the Association's policy provides primary insurance. (5) The liability of the insurer shall not be affected by, and the insurer shall not claim, any right of set-off, counterclaim, apportionment, proration, or contribution by reason of any other insurance obtained by or for any Unit owner; (6) The insurer shall be relieved from no liability for loss occurring while the hazard to the Property is increased, whether or not within the knowledge or control of the Executive Board, or because of any breach of warranty or condition or any other act or neglect by the Executive Board, or any Unit owner or any other person under either of them; (7) Such policies may not be canceled nor may coverage thereunder be substantially changed (whether or not requested by the Executive Board) except by the insurer giving at least twenty (20) days' prior written notice thereof to the Executive Board, the Insurance Trustee, if any, Unit owners, each holder of a first mortgage which is listed as a scheduled holder of a first mortgage in such policies, and every other party in interest who shall have requested such notice of the insurer; (f) With respect to the property insurance policy described in subsection (a) of Section 9.1., such policy shall contain a standard mortgagee clause which shall: (1) Provide that any reference to a mortgagee in such policy shall mean and include all holders of mortgages of any Unit in their respective order and preference, whether or not named therein; (2) Provide that such insurance as to the interest of any mortgagee shall not be invalidated by any act or neglect of the Executive Board or Unit owners or any persons under any of them; (3) Waive any provision invalidating such mortgagee clauses caused by reason of the failure of any mortgagee to notify the insurer of any hazardous use or vacancy, and requirement that the mortgagee pay any premium thereon, and any contribution clause; and (4) Provide that without affecting any protection afforded by such mortgagee clause, any proceeds payable under such policy shall be payable to the Insurance Trustee designated by the Executive Board for that purpose, otherwise to the Association. (g) With respect to the property insurance policy described in subsection (a) of Section 9.1, such policy shall contain the following endorsements: (1) Agreed Amount Replacement Cost and Inflation guard Endorsement, when it can be obtained. (2) Construction Code Endorsements, if there is a construction code provision that requires changes to undamaged portions of the building even when only part of the Condominium is destroyed by an insured hazard.

Section 9.3. Insurance Trustee and Power of Attorney. Notwithstanding any of the provisions and requirements of this Article relating to property or liability insurance, the executive Board may designate as an insured, on behalf of the Association, the Association's authorized representative, including any trustee with whom the Association may enter into any Insurance Trust Agreement or any successor to such trustee (hereinafter referred to as the "Insurance Trustee"), who shall have the exclusive authority to negotiate losses under any policy providing such property or liability insurance.

Section 9.4. Repair of Damage or Destruction to Condominium. The repair or replacement of any damaged or destroyed portion of the Condominium shall be done in accordance with and governed by the provisions of Sections 1603-113(e) and (h) of the Act. Section

9.5. Additional Insurance. Nothing in this Declaration shall be construed to limit the authority of the Executive Board to obtain additional insurance which it deems advisable.

Section 9.6. Flood Insurance. Should Association property be found in a flood plain, as designated by Federal Flood maps, the Association shall purchase flood insurance in an amount equal to the full replacement cost of buildings within the flood zone, subject to availability and limitations provided by the U.S. government.

LIMITATION OF LIABILITY

Section 10.1. Limited Liability of the Executive Board. The Executive Board, and its members in their capacity as members, officers and employees, shall have no personal liability arising out of their duties, except for the Executive Board members' own willful misconduct or gross negligence.

Section 10.2. Indemnification. Each member of the Executive Board in his capacity as an Executive Board member, officer or both, shall be indemnified by the Association against all expenses and liabilities, including attorneys' fees, reasonably incurred by or imposed upon him in connection with any proceeding in which he may become involved by reason of his being or having been a member and/or officer of the Executive Board, or any settlement of any such proceeding, whether or not he is an Executive Board member, officer or both at the time such expenses are incurred, except in such cases wherein such Executive Board member and/or officer is adjudged guilty of willful misconduct or gross negligence in the performance of his duties or any other standard imposed by the Act; provided that, in the event of a settlement, this indemnification shall apply only if and when the Executive Board (with the affected member abstaining if he is then an Executive Board member) approves such settlement and reimbursement as being in the best interests of the Association. The indemnification by the Unit owners set forth in this Section 10.2. shall be paid by the Association on behalf of the Unit owners and shall constitute a Common Expense and shall be assessed and collectible as such. Such right of indemnification shall not be deemed exclusive of any other rights to which such Executive Board member and/or officer may be entitled as a matter of law or agreement or by vote of the Unit owners or otherwise.

Section 10.3. Joint and Several Liability of Unit owners and Lessees. Each Unit owner shall be jointly and severally liable with any tenants of the Unit owned by such Unit owner for all liabilities arising out of the ownership, occupancy, use, misuse or condition of such Unit or any portion of the Common Elements or Limited Common Elements.

Section 10.4. Defense of Claims. Complaints brought against the Association, the Executive Board or the officers, employees or agents thereof in their respective capacities as such, or the Condominium as a whole, shall be directed to the Executive Board of the Association, which shall promptly give written notice thereof to the Unit owners and the holders of any mortgages and such complaints shall be defended by the Association. The Unit owners and the holders of mortgages shall have no right to participate other than through the Association in such defense. Complaints of a nature specified in Section 10.3. hereof against one or more but less that all Unit owners shall be defended by such Unit owners who are defendants themselves and such Unit owners shall promptly give written notice of the institution of any such suit to the Association and to the holders of any mortgages encumbering such Units.

ARTICLE 11 UNITS SUBJECT TO CONDOMINIUM DOCUMENTS; EMINENT DOMAIN

Section 11.1. Applicability of Condominium Documents. Each present and future owner, tenant, occupant and Mortgagee of a Unit shall be subject to and shall comply with the provisions of the Act, and with the covenants, conditions and restrictions as set forth in the Condominium Documents and the deed to such Unit; provided that nothing contained herein shall impose upon any tenant or Mortgagee of a Unit any obligation which the Act or one or more of such documents, or both, make applicable only to Unit owners (including, without limitation, the obligation to pay assessments for Common Expenses). The acceptance of a deed or mortgage to any Unit, or the entering into of a lease or the entering into occupancy of any Unit shall constitute an agreement that the provisions of the Act and the covenants, conditions and restrictions set forth in the Condominium Documents and the deed to such Unit are accepted and ratified by such grantee, Mortgagee or tenant. All of such provisions shall be covenants running with the land and shall bind any person having at any time any interest or estate in such Unit, as though such provisions were recited and stipulated at length in each and every deed, conveyance, mortgage or lease thereof. The Association and any aggrieved Unit owner shall have a right of action against Unit owners who fail to comply with the provisions of the Condominium Documents or with decisions made by the Association or the Executive Board. Aggrieved Unit owners shall have similar rights of action against the Association.

Section 11.2. Eminent Domain. Whenever all or part of the Common Elements shall be taken, injured or destroyed by eminent domain, each Unit owner shall be entitled to notice thereof and to participate in the proceedings incident thereto, provided, however, that the Association shall officially represent the Unit owners in such proceedings. In any proceedings for the determination of damages, such damage shall be determined for such taking, injury or destruction as a whole and not for each Unit owner's interest therein and any award for such damage shall be payable to the Association for the benefit of the Unit owners and of the mortgagees of the Units.

ARTICLE 12 EXECUTIVE BOARD OF THE ASSOCIATION

Section 12.1. Members. (a) The initial Executive Board shall consist of five (5) members. The members of the initial Executive Board shall be appointed, removed and replaced from time to time by the Declarant without the necessity of obtaining resignations. The Declarant-appointed members of the Executive Board shall be replaced with Unit owners other than the Declarant in accordance with the provisions of paragraph (b) of this Section 12.1. (b) The transition from Declarant-appointed members of the Executive Board to Unit owners other than the Declarant shall occur as follows: (1) No later than the earlier of (I) sixty (60) days after the conveyance of seventy five per cent of the Units to Unit owners other than the Declarant or (ii) three (3) years following conveyance of the first Unit to a Unit owner other than the Declarant, members of the Executive Board appointed by the Declarant shall resign and the Unit owners (including the Declarant to the extent of Units owned by the Declarant) shall elect new members of the Executive Board. (2) The members of this Executive Board shall serve until the first regular election of the Executive Board held at the first regular meeting of the Association held in accordance with the Bylaws. (c) The Executive Board shall possess all of the duties and powers granted to the Executive Board by the Act.

Section 12.2 Disputes. In the event of any dispute or disagreement between any Unit owners other than Declarant) relating to the Property, or any questions of interpretation or application of the provisions of the Condominium Documents the determination thereof by the Executive Board shall be final and binding on each and all such Unit owners. the Executive Board shall have the authority to seek a declaratory judgment or other appropriate judicial relief in order to assist it in carrying out its responsibilities under this Section 12.2. All costs of obtaining such a judgment shall be borne by the disputants, or in the absence of disputants, by the Association as a Common expense.

Section 12.3. Abating and Enjoining Violations by Unit Owners. The violation of any Rules and Regulations adopted by the Executive Board, the breach of any provision contained in the Bylaws or the breach of any provision of this Declaration or the Act by any tenant of such Unit owner, shall give the Executive Board the right, in addition to any other rights to which it may be entitled, to enjoin, abate or remedy by appropriate legal proceedings, either by law or in equity, the continuance of any such breach.

ARTICLE 13 MANAGEMENT The Association shall employ a professional experienced managing agent who shall oversee the daily operation of the Condominium in accordance with the provisions of the Act and the Condominium Documents; provided, however, that no such agreement for such professional management of the Condominium may exceed a term of three (3) years but may be renewed upon consent of the Association. Such agreement shall be cancelable by either party without cause and without a termination fee upon not less than sixty (60) days nor more than ninety (90) days' written notice and shall be cancelable by the Executive Board with cause upon not less than Thirty (30) days' written notice. Any agreement for professional management negotiated by the Declarant shall not exceed one (1) year but may by renewed upon consent of the Association.

ARTICLE 14 ASSESSMENTS; LIABILITY OF UNIT OWNERS

Section 14.1. Power to Assess. The Association, acting through the Executive Board in accordance with the Bylaws, shall have the power to fix and determine, from time to time, the sums necessary and adequate to provide for the Common Expenses, including, but not limited to, such amounts as are necessary for uncollectible assessments, budget deficits, such reserves as are hereinafter described and such additional reserves as the Executive Board shall deem necessary or prudent, and such other expenses as are specifically provided for in the Act, this Declaration or the Bylaws. The Association shall establish an adequate reserve fund for maintenance, repair and replacement of those Common Elements which are anticipated to require replacement, repair or maintenance on a periodic basis. The reserve fund shall be funded by periodic payments as a part of the Common Expenses.

Section 14.2. Special Assessments. If the cash requirement estimated at the beginning of any fiscal year shall prove to be insufficient to cover the actual Common Expenses for such fiscal year for any reason (including by way of illustration and not limitation, any Unit owner's non-payment of his assessment or municipal assessments not yet assessed), the Executive Board shall have the power, at any time it deems necessary and proper, to levy one or more Special Assessments against each Unit owner. Special Assessments shall be due and payable in the manner and on the date set forth in the notice thereof.

Section 14.3. Payment of Assessments. Each Unit owner shall pay all assessments levied by the Association. Liability for such assessments shall begin accruing at the time of the creation of the Condominium and they shall be due and payable on a periodic basis as designated by the Executive Board, provided, however, that such Periodic Assessments shall be first due on the first day of the period following the closing of the first sale of a Unit to a purchaser other than the Declarant, and further provided that assessments shall be made at least annually, as required by section 1603-115 of the Act. Assessments that are unpaid for over fifteen (15) days after the due date shall bear interest at the rate of eighteen percent (18%) per annum from the due date until paid. In the sole discretion of the Executive Board, an additional late charge of $25.00 per assessment notpaid when due may be assessed against the delinquent Unit owner.

Section 14.4. Failure to Fix New Assessments. If the Executive Board shall fail to fix new Periodic Assessments for Common Expenses for the subsequent fiscal year before the expiration of any fiscal year, the Unit owners shall continue to pay the same sums they were paying for such Periodic Assessments during the fiscal year just ended and such sum shall be deemed to be the new Periodic Assessments for the succeeding fiscal year. If the Executive Board shall change the Periodic Assessment at a later date, the difference between the new Periodic Assessment, if greater, and the previous year's Periodic Assessment up to the effective date of the new Periodic Assessment shall be treated as if it were a Special Assessment under Section 14.2 hereof; thereafter each Unit owner shall pay the new Periodic Assessment. In the event the new Periodic Assessment is less than the previous year's Periodic Assessment, in the sole discretion of the Executive Board, the excess either shall be refunded to the Unit owners, credited against future Periodic Assessments or retained by the Association for reserves.

Section 14.5. No Exemption by Waiver. No Unit owner may exempt himself from liability for the Common Expenses by waiver of the enjoyment of the right to use any of the Common Elements or by the abandonment of his Unit or otherwise. Section 14.6. Personal Liability of Unit Owners. All sums assessed by the Association as a Periodic or Special Assessment shall constitute the personal liability of the owner of the Unit so assessed and also, until fully paid, shall constitute a lien against such Unit pursuant to Section 1603-116 of the Act. The Association shall take action for failure to pay any assessment or other charges pursuant to Section 1603-116 of the Act. The delinquent owner shall be obligated to pay (a) all expenses of the Executive Board, including reasonable attorneys' fees, incurred in the collection of the delinquent assessment by legal proceedings or otherwise, and (b) any amounts paid by the Executive Board for taxes or on account of superior liens or otherwise to protect its lien, which expenses and amounts, together with accrued interest, shall be deemed to constitute part of the delinquent assessment and shall be collectible as such.

Section 14.7. Liability of Purchaser of Unit for Unpaid Assessments. Upon the voluntary sale, conveyance or any other voluntary transfer of a Unit or any interest therein, the grantee thereof shall not be personally liable with the grantor thereof for all unpaid assessments for Common Expenses which are a charge against the Unit as of the date of consummation of the sale, conveyance or transfer, unless such grantee agrees to assume the obligation therefore.

Section 14.8. Subordination of Certain Charges. Any Periodic Assessments or any fees, charges, late charges, fines and interest that may be levied by the Association pursuant to section 1603-102 of the Act shall be subordinate to any first mortgage lien recorded before such Periodic Assessments, fee, charge, late charge, fine or interest was due.

Section 14.9 Working Capital Fund. Declarant shall establish a working capital fund equal to a minimum of three months estimated Common Expense Liability. Each Unit's share of the working capital fund shall be collected from the Unit purchaser upon the initial transfer of title from the Declarant to the purchaser and shall be transferred to the Association for deposit in the working capital fund that shall be maintained in a segregated account for the use and benefit of the Association. The amount paid by the Unit purchaser shall not be considered as advance payment of the normal Common Expense Liability and no Unit owner shall be entitled to a refund of these monies by the Association upon the subsequent conveyance of his Unit or otherwise. Section

14.10. Surplus. The Budget of the Association shall set forth General Common Expenses. Any amounts accumulated from assessments for General Common Expenses in excess of the amount required for actual General Common Expenses and reserves for future General Common Expenses, unless otherwise directed by the Executive Board, in its sole discretion, shall be credited to each Unit owner, such credit to be applied to the next Periodic Assessments of General Common Expenses due from said Unit owners under the current fiscal year's budget, and thereafter, until exhausted or retained by the Association for reserves.

Section 14.11. Common Expenses benefitting less than all Units. Any Common Expense benefitting fewer than all the Units shall be assessed exclusively against the Units benefitted. The Association shall have the express power to separately charge a Unit and the owner thereof for services rendered to that Unit. Such charges shall be a lien on the Unit with the same status asa lien for Common Expenses under this Declaration and the Bylaws.

Section 14.12. Service Charges. The Association shall have the express power to separately charge a Unit and the owner thereof for services rendered to that Unit. Such charges shall be a lien on the Unit with the same status as a lien for Common expense assessments under this Declaration and Bylaws, which lien for service charges may be foreclosed in a like manner as a mortgage on real estate. The recordation of this Declaration constitutes record notice of the lien. Service charges shall include without limitation: A. If a Unit owner, members of his family, guests or tenants, requests the Association to perform repair and maintenance work on his Unit, damages the Common elements, or fails to perform maintenance and repair work required, the expense thereof as determined by the Executive Board or its designee may be assessed as a service charge. B. Charges for management, reservation, linen service, maid service, repairs, and any other rental services provided to units by the Association, its agents or designees, and rental fees for the leasing or renting of Units arranged by the Association, its agents and licensees, at the request of the Unit owner.

ARTICLE 15 DEVELOPMENT RIGHTS AND SPECIAL DECLARANT RIGHTS

Section 15.l. Reservation of Rights. The Declarant reserves no Development Rights. Declarant does reserve all special Declarant Rights as set forth in this Declaration.

Section 15.2. Exercise of Rights. The exercise of the Development Rights and Special Declarant Rights reserved herein

ARTICLE 17. AMENDMENT OF THE DECLARATION.

    Pursuant to Section 1602-117 of the Act and except as provided herein for amendments which may be executed by the Declarant, the Association or certain Unit owners, this Declaration may be amended only by vote or agreement of owners of Units to which at least sixty-seven percent (67%) of the votes in the Association are allocated.  In addition, approval of amendments of a material nature must be obtained from mortgagees representing at least fifty-one percent (51%) of the votes of Units that are subject to mortgages.  A change to any of the following would be considered as material:

(a)    Voting rights;

(b)    Assessments, assessment liens, or subordination of assessment liens;

(c)    Reserves for maintenance, repair and replacement of Common Elements;

(d)    Responsibility for maintenance and repairs;

(d)    Reallocation of interests in the Common or Limited Common Elements, or rights to their use;

(f)    Boundaries of any Unit;

(g) Convertibility of Units into Common Elements or vice versa; (h) Expansion or contraction of the Condominium, or the addition, annexation or withdrawal of property to or from the Condominium; (i) Insurance or fidelity bonds; (j) Leasing of Units; (k) Imposition of any restrictions on a Unit owner's right to sell or transfer his or her Unit; (l) A decision by the Association to establish self- management when professional management had been required previously by an Eligible Mortgage Holder; (m) Restoration or repair of the Condominium (after a hazard damage or partial condemnation) in a manner other than that specified in the Condominium Documents; (n) Any action to terminate the legal status of the Condominium after substantial destruction or condemnation occurs; or (o) Any provisions that expressly benefit mortgage holders, insurers or guarantors. If the amendment is not of such material nature, the approval of a mortgagee may be assumed when that mortgagee has failed to submit a response to any written proposal for an amendment within thirty (30) days after the proposal is made.

ARTICLE 18 TERMINATION The Condominium may be terminated only by agreement of the Unit owners of Units to which eighty percent (80%) of the votes in the Association are allocated; provided, however, that if the Condominium is being terminated for reasons other than substantial destruction or condemnation of the Condominium, the termination of the Condominium must also be approved by mortgagees of Units to which sixty-seven percent (67%) of the votes in the Association are allocated. Termination of the Condominium will be governed by the provisions of Section 1602-118 of the Act.

ARTICLE 19 GENERAL PROVISIONS 

Section 19.l. Headings. The headings used in this Declaration and the table of contents are inserted solely as a matter of convenience for the readers of this Declaration and shall not be relied upon or used in construing the effect or meaning of any of the provisions of this Declaration.

Section 19.2. Severability. The provisions of this Declaration shall be deemed independent and severable, and the invalidity or unenforceability of any provision or portion thereof shall not affect the validity or enforceability of any other provision or portion hereof, unless such deletions shall destroy the uniform plan of development and operation of the condominium project which this Declaration is intended to create.

Section 19.3. Applicable Law. This Declaration shall be governed and construed according to the laws of the State of Maine.

Section 19.4. Interpretation. The provisions of this Declaration shall be liberally construed in order to effect Declarant's desire to create a uniform plan for development and operation of the Condominium.

Section 19.5. Effective Date. This Declaration shall become effective when it and the Plats and Plans have been recorded.

Section 19.6. Notices. All notices and other communications required or permitted to be given under or in connection with this Declaration shall be in writing and shall be deemed given when delivered in person or on the second business day after the day on which mailed by certified mail, return receipt requested, addressed to the address maintained in the register of current addresses established by the Association.

Section 19.7. Exhibits. All exhibits attached to this Declaration are hereby made a part of this Declaration. Section 19.8. Arbitration. In any dispute between one or more Unit owners and the Declarant regarding the common area, the Executive Board shall act for the Unit owners, and any agreement with respect thereto by the Board shall be conclusive and binding upon the unit owners. All claims, disputes and other matters in question between the Declarant, on the one hand, and the Association or any Unit owners on the other hand, arising out of or relating to, this Declaration, the Bylaws, or the deed to any Unit or the breach thereof, except for claims which have been waived by the acceptance of a deed, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereon. Notice of demand for arbitration shall be filed in writing with the other parties and with the American Arbitration Association. The demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen, and in no event shall it be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations or other principals of law and equity.

IN WITNESS WHEREOF, the Declarant has caused this Declaration to be duly executed as of the day and year first above written.

WITNESS

                                                                                    ___________________________________

                                                                                        Peter Blanchard Sally L. Blanchard

STATE OF MAINE

County of York 19

Personally appeared the above named and acknowledged the execution of this Declaration of Condominium to be his free act and deed.

                                                                                                        _____________________________

                                                                                                        Notary Public

                                                                                                        _____________________________

                                                                                                            Printed Name: 

My Commission expires: 19

EXHIBIT A TO DECLARATION

DESCRIPTION OF REAL ESTATE

A certain tract or parcel of land with the buildings thereon, situated in Wells, County of York and State of Maine, more particularly described as follows: Beginning at an iron pipe on the westerly sideline of U.S. Route 1 and the southeasterly corner of land of Majestic Motel Associates; thence running N 64 deg. 10' 55" W, by and along land of Majestic Motel Associates a distance of 85.42 feet to an iron pin; then running N 39 deg. 16' 42" W a distance of 35.00 feet to an iron pin: thence running N 46 deg. 27' 31" W a distance of 74.73 feet to another iron pin; thence running N 59 deg. 17' 08"W a distance of 94.19 feet to another iron pin; thence running N 61 deg. 22' 20" W by land of said Majestic and a stone wall a distance of 329.66 feet to a corner of the wall and the King's Highway, so called; thence running along the southeasterly bound of the King's highway S 61 deg. 53' 00" W a distance of 41.29feet to an iron pin; thence running along land now or formerly of Baston S 61 deg. 22' 20" E a distance of 250.00 feet to an iron pin; thence running by land of said Baston S 59 deg. 59' 30" W a distance of 306.39 feet to an iron pin at a stone wall and land now or formerly of Lenk; thence running S 63 deg. 26' 00" E by land of Lenk and land now or formerly of Glazier a distance of 137.47 feet to an iron pin; thence running by said stone wall and land now or formerly of Pilger S 64 deg. 41'30" E a distance of 104.91 feet to an iron pin; thence running along land of Pilger and land now or formerly of Upton S 27 deg. 21' 30" W, through an iron pin and partially along a stone wall a distance of 330.71 feet to a painted rock; thence running S 62 deg. 45' 30" E, by and along land now or formerly of Smith, through a monument which is located 17.81 feet from the painted rock, a distance of 231.89 feet to an iron pin; thence running N 21 deg. 34' 00" E along land of said Smith a distance of 121.06 feet to a monument next to a willow tree; thence running N 22 deg. 14' 15" E by land now or formerly of Cooper a distance of 159.09 feet to a monument; thence running S 75 deg 06' 15" E, by and along land now or formerly of Cooper, a distance of 109.50 feet to an iron pin set in a stone wall at the westerly sideline of U.S. Route 1; thence running N04 deg. 34' 30" E, by and along the westerly sideline of said road, a distance of 50 feet to a point; thence running N 75 deg. 06' 15" W, by and along land of Blanchard, a distance of 170 feet to a point; thence running N 30 deg. 06' 15" W, along land of Blanchard a distance of 21.21 feet to a point; thence running N 14 deg. 53' 45d" E, by land of Blanchard, a distance of 77 feet to a point; thence running S 75 deg. 06' 15" E, by land of Blanchard, a distance of 70 feet to a point; thence N 28 deg. 33' 19" E by land of Blanchard a distance of 67.84 feet to a point; thence N 50deg. 08' 05" E, a distance of 20 feet to a point; thence S 39 deg. 51' 55" E, still along land of Blanchard , a distance of 139.73 feet to the westerly sideline of U.S. Route 1; thence running N 35deg. 08' 05" E, by and along the westerly sideline of Route 1 a distance of 129.83 feet to the point of beginning. The above described premises is subject to easements set forth in the Declaration of Condominium of the Holiday House Condominiums.

PERCENTAGE INTEREST IN COMMON ELEMENTS AND VOTING RIGHTS

C-1 through C-26,

and Units M-1 through M-21 2.1277% each 1 each 5/18/86