Craig Zgabay and Tammy Zgabay v. NBRC Property Owners Association

ACCEPTED

03-14-00660-CV

3999768

THIRD COURT OF APPEALS

AUSTIN, TEXAS

2/3/2015 12:09:58 PM

JEFFREY D. KYLE

CLERK

No. 03-14-00660-CV

FILED IN

3rd COURT OF APPEALS

IN THE AUSTIN, TEXAS

THIRD DISTRICT COURT OF APPEALS 2/3/2015 12:09:58 PM

AT AUSTIN, TEXAS JEFFREY D. KYLE

Clerk

CRAIG ZGABAY AND TAMMY ZGABAY,

Appellants

v.

NBRC PROPERTY OWNERS ASSOCIATION,

Appellee

Appeal from the 433rd Judicial District Court,

Comal County, Texas, Cause No. C2014-0501C

APPELLEE’S BRIEF

Wade C. Crosnoe Tom L. Newton, Jr.

State Bar No. 00783903 State Bar No. 14982300

Brian D. Hensley Allen, Stein & Durbin, P.C.

State Bar No. 24036759 6243 IH-10 West, 7th Floor

Thompson, Coe, Cousins & Irons, LLP P. O. Box 101507

701 Brazos, Suite 1500 San Antonio, Texas 78201

Austin, Texas 78701 Telephone: (210) 734-7488

Telephone: (512) 708-8200 Facsimile: (210) 738-8036

Facsimile: (512) 708-8777 E-mail: tnewton@asdh.com

E-mail: wcrosnoe@thompsoncoe.com

Counsel for Appellee NBRC Property Owners Association

Oral Argument Requested

IDENTITY OF PARTIES AND COUNSEL

1. Appellants/Plaintiffs Craig and Tammy Zgabay

Trial and Appellate Counsel:

J. Patrick Sutton

1706 W. 10th Street

Austin, Texas 78703

Telephone: (512) 417-5903

Facsimile: (512) 355-4155

2. Appellee/Defendant NBRC Property Owners Association

Trial Counsel:

Brian Hensley

Thompson, Coe, Cousins & Irons, L.L.P.

701 Brazos, Suite 1500

Austin, Texas 78701

Telephone: (512) 708-8200

Facsimile: (512) 708-8777

Tom L. Newton, Jr.

Ashley Giordano

Allen Stein & Durbin, P.C.1

6243 IH-10 West, 7th Floor

San Antonio, Texas 78201

Telephone: (210) 734-7488

Facsimile: (210) 738-8036

1

Guillermo M. Hernandez, III also appeared as counsel in the trial court proceedings but is no

longer with Allen Stein & Durbin, P.C.

i

Appellate counsel:

Wade C. Crosnoe

Brian D. Hensley

Thompson, Coe, Cousins & Irons, L.L.P.

701 Brazos, Suite 1500

Austin, Texas 78701

Telephone: (512) 708-8200

Facsimile: (512) 708-8777

Tom L. Newton, Jr.

Allen Stein & Durbin, P.C.

ii

TABLE OF CONTENTS

Identity of Parties and Counsel ...................................................................................i

Table of Contents ..................................................................................................... iii

Index of Authorities ...................................................................................................v

Statement of the Case............................................................................................. viii

Statement Regarding Oral Argument .......................................................................ix

Statement of Facts ......................................................................................................1

Summary of the Argument.........................................................................................3

Argument....................................................................................................................5

I. The Rules of Construction for Restrictive Covenants ..................................... 5

II. Under Texas Law, Short-Term Rentals Are Not a Single-Family

Residential Use ................................................................................................9

III. The Out-of-State Cases Are Distinguishable and Should Not Be

Followed by This Court .................................................................................15

IV. The Zgabays’ Challenge to the Alleged Vagueness of the Injunction

Was Not Preserved and Lacks Merit .............................................................18

Conclusion and Prayer .............................................................................................19

Certificate of Compliance ........................................................................................20

Certificate of Service................................................................................................21

iii

Appendix

Order on Competing Motions for Summary Judgment (CR 127–29) ............ Tab 1

Declaration of Covenants, Conditions and Restrictions for River Chase

Unit Three (CR 67–87) .............................................................................. Tab 2

Tex. Prop. Code §§ 202.002, 202.003 ............................................................. Tab 3

iv

INDEX OF AUTHORITIES

Cases

Applegate v. Colucci, 908 N.E.2d 1214 (Ind. Ct. App. 2009) .......................... 15, 17

Ashcreek Homeowner’s Ass’n v. Smith, 902 S.W.2d 586 (Tex. App.—

Houston [1st Dist.] 1995, no writ) .........................................................................7

Benard v. Humble, 990 S.W.2d 929 (Tex. App.—Beaumont 1999, pet.

denied) ................................................................................................... 8, 9, 10, 14

Cedar Oak Mesa, Inc. v. Altemate Real Estate, LLC, No. 03-10-

00067-CV, 2010 WL 3431703 (Tex. App.—Austin Aug. 31, 2010,

no pet.)..................................................................................................................11

City of Pasadena v. Gennedy, 125 S.W.3d 687 (Tex. App.—Houston

[1st Dist.] 2003, pet. denied) ..................................................................................8

Dunn v. Aamodt, 695 F.3d 797 (8th Cir. 2012) ................................................ 15, 17

Estates at Desert Ridge Trails Homeowners’ Ass’n v. Vazquez, 300

P.3d 736 (N.M. Ct. App. 2013)............................................................................16

Highlands Mgmt. Co. v. First Interstate Bank, 956 S.W.2d 749 (Tex.

App.—Houston [14th Dist.] 1997, pet. denied) .....................................................7

InterFirst Bank San Felipe, N.A. v. Paz Constr. Co., 715 S.W.2d 640

(Tex. 1986) ...........................................................................................................18

Int’l Bhd. of Elec. Workers Local Union 479 v. Becon Constr. Co.,

104 S.W.3d 239 (Tex. App.—Beaumont 2003, no pet.) .....................................18

Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492 (Tex. 2013) .................................6

Lowden v. Bosley, 909 A.2d 261 (Md. 2006) ..........................................................16

Mason Family Trust v. Devaney, 207 P.3d 1176 (N.M. Ct. App. 2009) .......... 16, 17

McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex.

1993).....................................................................................................................13

Mullin v. Silvercreek Condo. Owner’s Ass’n, Inc., 195 S.W.3d 484

(Mo. Ct. App. 2006) ...................................................................................... 15, 17

v

Munson v. Milton, 948 S.W.2d 813 (Tex. App.—San Antonio

1997, pet. denied) ...................................................................... 7, 8, 10, 12, 14, 18

Pinehaven Planning Bd. v. Brooks, 70 P.3d 664 (Idaho 2003) ........................ 16, 17

Quinn v. Harris, No. 03-98-00117-CV, 1999 WL 125470 (Tex.

App.—Austin March 11, 1999, pet. denied)............................................... 7, 8, 12

Reagan Nat’l Adver. of Austin, Inc. v. Capital Outdoors, Inc., 96

S.W.3d 490 (Tex. App.—Austin 2002, pet. granted, judgm’t

vacated w.r.m.) ............................................................................................ 5, 8, 12

Roaring Lion, LLC v. Exclusive Resorts PBL1, LLC, No. CAAP-11-

0001072, 2013 WL 1759002 (Haw. Ct. App. April 24, 2013) ............... 15, 16, 17

Ross v. Bennett, 203 P.3d 383 (Wash. Ct. App. 2009) ............................................16

Russell v. Donaldson, 731 S.E.2d 535 (N.C. Ct. App. 2012) ........................... 16, 17

Scott v. Walker, 645 S.E.2d 278 (Va. 2007) ............................................................16

Shields v. State, 27 S.W.3d 267 (Tex. App.—Austin 2000, no pet.).......................18

Slaby v. Mountain River Estates Residential Ass'n, Inc., 100 So. 3d

569 (Ala. Civ. App. 2012)....................................................................................16

Slusher v. Streater, 896 S.W.2d 239 (Tex. App.—Houston [1st Dist.]

1995, no writ) .......................................................................................................10

Smith v. Bd. of Regents of Univ. of Houston Sys., 874 S.W.2d 706

(Tex. App.—Houston [1st Dist.] 1994, writ denied) ...........................................10

Warehouse Partners v. Gardner, 910 S.W.2d 19 (Tex. App.—Dallas

1995, writ denied) ................................................................................................10

Wein v. Jenkins, No. 03-04-00568-CV, 2005 WL 2170354 (Tex.

App.—Austin Sept. 9, 2005, no pet.) ...................................................................11

Wilkinson v. Chiwawa Cmtys. Ass’n, 327 P.3d 614 (Wash. 2014) .........................17

Yogman v. Parrott, 937 P.2d 1019 (Or. 1997).................................................. 16, 17

vi

Statutes

Tex. Gov’t Code § 311.021(2) ...................................................................................6

Tex. Prop. Code § 92.152(a) ....................................................................................10

Tex. Prop. Code § 202.002(a) ....................................................................................6

Tex. Prop. Code § 202.003(a) ......................................................................... 5, 8, 16

Tex. Prop. Code § 202.004 ........................................................................................2

Rules

Haw. R. App. P. 35 ..................................................................................................15

Tex. R. App. P. 9.4(i)(1) ..........................................................................................20

Tex. R. App. P. 9.4(i)(2)(B) .....................................................................................20

Tex. R. App. P. 33.1(a) ............................................................................................18

Tex. R. Civ. P. 166a(c) ............................................................................................13

Tex. R. Civ. P. 683 ............................................................................................ 18, 19

vii

STATEMENT OF THE CASE

Nature of the Case: This is a declaratory-judgment action brought by two

homeowners, Craig and Tammy Zgabay, seeking an

interpretation of restrictive covenants governing a

residential subdivision (CR2 6-10). Defendant NBRC

Property Owners Association counterclaimed for

injunctive relief, statutory damages, and attorney’s

fees (CR 11-15).

Course of Proceedings: The parties filed cross-motions for summary

judgment (CR 18-51, 54-101; 102-21; SCR 7-35).

Trial Court’s The 433rd District Court of Comal County, the

Disposition: Honorable Dib Waldrip presiding, granted the

Association’s summary judgment motion and denied

the Zgabays’ motion (CR 127-29; Apx. 1). The

court’s order enjoined the Zgabays from renting their

house to any person or the public for temporary or

transient purposes, and awarded the Association

statutory damages of $500 and attorney’s fees of

$3,422.50 (CR 129; Apx. 1).

2

“CR” refers to the Clerk’s Record. As used in this brief, “SCR” refers to the Supplemental

Clerk’s Record and “Apx.” refers to the appendix attached to this brief.

viii

STATEMENT REGARDING ORAL ARGUMENT

The Association disagrees with the Zgabays’ assertion that no precedent

squarely addresses the issue in this case. Two published opinions by Texas courts

address the same or a similar issue. Nevertheless, the Association believes that

oral argument would help the Court in deciding the appeal because of the unsettled

question on how to reconcile the statute mandating liberal construction of

restrictive covenants with the common-law rule of strict construction.

ix

STATEMENT OF FACTS

The Declaration of Covenants, Conditions and Restrictions for River Chase

Unit Three—a residential subdivision in Comal County, Texas—was adopted and

recorded in November 1999 (CR 67-87; Apx. 2). Among other provisions, the

Declaration has restrictive covenants that (1) limit each tract to one dwelling unit

to be used for “single family residential purposes” and (2) prohibit activities “not

related to single family residential purposes” (CR 70, 72 [§§ 3.01, 3.14]; Apx. 2).

The Declaration states that its “provisions . . . shall be liberally construed as a

whole to effectuate the purpose of this Declaration” (CR 86 [§ 9.05]; Apx. 2).

The Declaration also created the NBRC Property Owners Association,

consisting of all record owners of tracts, and the Association’s Board of Directors

(CR 67-68 [§§ 1.01, 1.02]; Apx. 2). The Board has the authority to enforce the

Declaration’s provisions, including through legal actions (CR 84 [§ 8.11]; Apx. 2).

Craig and Tammy Zgabay bought a lot in the River Chase subdivision in

2000 and built a house in 2004 (CR 50). They did not get around to reading the

Declaration until later (CR 50). Upon reading the Declaration, Craig Zgabay

allegedly concluded that it had no restrictions on leasing (CR 50). Early last year,

he and his wife began renting the house for periods ranging from two to eight days,

1

and intend to continue with short-term rentals of the house (CR 50).3 According

to a neighbor, the Zgabays’ renters have used the neighbor’s pool without

permission during the night and played loud music at all hours (CR 90).4

After receiving complaints from neighbors (CR 88), the Board wrote to the

Zgabays and demanded that they cease short-term rentals (CR 50). The Zgabays

responded by filing this declaratory-judgment action seeking a ruling that the

restrictive covenants do not prohibit short-term leases (CR 6-10). The Association

responded with a counterclaim for injunctive relief, and also sought to recover

statutory damages under section 202.004 of the Texas Property Code and

attorney’s fees (CR 11-14).

The parties filed cross-motions for summary judgment (CR 18-51, 54-101,

102-21; SCR 7-35). After a hearing, the trial court granted the Association’s

motion and denied the Zgabays’ motion (CR 127-29; Apx. 1; RR 1:1). The court’s

summary judgment order enjoined the Zgabays from renting their house to any

person or the public for temporary or transient purposes (CR 129; Apx. 1). This

appeal followed (CR 170-71).

3

Although the Zgabays’ brief asserts that they have moved and have leased the house for a one-

year term (Appellants’ Brief at 6-7), nothing in the record supports either assertion.

4

The Zgabays’ brief contends that the trial court struck the neighbor’s affidavit and another

affidavit filed with the Association’s summary judgment motion (Appellants’ Brief at 8). But

their supporting record cite is to a docket entry that indicates the trial court took the motion to

strike those affidavits under advisement (CR 173). The record contains no written order or oral

ruling on the motion to strike. Regardless, the affidavits are cited only for background purposes.

2

SUMMARY OF THE ARGUMENT

The Zgabays’ brief effectively asks this Court to disregard the Texas statute

requiring liberal construction of restrictive covenants. But the Legislature must

have meant to accomplish something when, in the face of the common-law rule

requiring strict construction of restrictive covenants, it mandated liberal

construction of all such covenants. This Court is not free to disregard the

Legislature’s pronouncement. And although Texas courts are split on the interplay

between the statute and common-law rule, under the approach this Court follows

the common-law rule never comes into play unless the restrictive covenant is

ambiguous. Neither side in this case argues that the restrictive covenant is

ambiguous. The common-law rule is therefore irrelevant, and the statutory rule of

liberal construction controls.

The Texas rule of liberal construction goes a long way toward explaining the

differing results reached by Texas courts and some out-of-state courts. Texas

courts have held that virtually-identical or similar restrictive covenants prohibit

short-term rentals. Against the backdrop of liberal construction, those Texas courts

have reasoned that residency generally requires a fixed place of habitation and an

intent to remain despite temporary absences. When, as here, a series of families or

other groups stay in a rental house for a few nights or less, the house is not the

3

residence of any of them. It certainly is not being used for “single family

residential purposes” under the wording of the covenants at issue here.

To be sure, courts in some other states have reached contrary conclusions.

But those decisions from twelve other states—out of fifty, last we checked—are

hardly the “overwhelming tide” that the Zgabays portray them to be. More

importantly, those decisions generally turn on the rule of strict construction

followed in those states. In this state, the converse rule of construction is mandated

by statute. The Zgabays should take their complaint that Texas will be out of step

with other states to the Texas Legislature. Meanwhile, this Court should follow the

legislative rule of liberal construction and the Texas cases holding that similar

restrictive covenants prohibit short-term rentals.

4

ARGUMENT

I. The Rules of Construction for Restrictive Covenants

Under the common law, restrictive covenants are subject to the traditional

rules of contract construction. See, e.g., Reagan Nat’l Adver. of Austin, Inc. v.

Capital Outdoors, Inc., 96 S.W.3d 490, 493 n.2 (Tex. App.—Austin 2002, pet.

granted, judgm’t vacated w.r.m.). The goal is to determine the drafters’ objective

intent by examining the entire instrument. Id. at 493. But any “[d]oubts about the

meaning of a covenant are resolved against the party seeking to enforce it and in

favor of the free and unrestricted use of land.” Id.

In 1987, however, the Texas Legislature altered the common-law rule. The

Legislature amended the Texas Property Code to mandate liberal construction of

restrictive covenants:

A restrictive covenant shall be liberally construed to give

effect to its purposes and intent.

Tex. Prop. Code § 202.003(a) (Apx. 3). Notably, the Declaration at issue adopts

this statutory rule of construction, stating that “[t]he provisions of this Declaration

shall be liberally construed as a whole to effectuate the purpose of this

Declaration” (CR 86 [§ 9.05]; Apx. 2).

The Zgabays make various arguments about how the common-law rule

supposedly is more specific and should effectively trump the statute (and the

contract provision adopting the statute). But just like the common-law rule once

5

did, the statute applies to all restrictive covenants. See Tex. Prop. Code §

202.002(a) (Apx. 3). One is no more specific than the other.

The Zgabays argue that the trial court gave “undue weight” to the statutory

rule (Appellants’ Brief at 10). By this they appear to mean that the trial court

should not have given any weight to the statute. But that approach runs afoul of

the rule of statutory construction that the entire statute is intended to be effective.

See Tex. Gov’t Code § 311.021(2). Under the Zgabays’ reading of the statute, the

Legislature accomplished nothing when it mandated liberal construction of all

restrictive covenants. The courts are not free, however, to disregard legislative

pronouncements. See Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492, 493-94

(Tex. 2013) (stating that it is not the court’s province to override a legislative

determination and that the “primary objective in constructing a statute is to

ascertain and give effect to the Legislature’s intent”).

In any event, the trial court certainly did not give “undue weight” to the

statutory rule. The summary judgment order expressly states that the court

balanced the statute requiring liberal construction of restrictive covenants with the

common-law rule of strict construction (CR 127; Apx. 1). Given that the statute

“applies to all restrictive covenants regardless of the date on which they were

created,” see Tex. Prop. Code § 202.002(a), the only way the trial court erred, if at

6

all, was in giving any weight to the common-law rule. But the Zgabays can hardly

complain about that.

Though not necessarily correct, the trial court’s attempt to balance the rules

was certainly understandable in light of (1) the lack of guidance from the Supreme

Court of Texas on the interplay of the statute and the common-law rule and (2) the

lack of agreement in the courts of appeals. As this Court has noted, its sister

courts have taken differing approaches on this question. See Quinn v. Harris, No.

03-98-00117-CV, 1999 WL 125470, at *2 n.3 (Tex. App.—Austin March 11,

1999, pet. denied). Some have said that there is no conflict between the rules

without explaining how they fit together. Id. (citing, e.g., Ashcreek Homeowner’s

Ass’n v. Smith, 902 S.W.2d 586, 588-89 (Tex. App.—Houston [1st Dist.] 1995, no

writ)). Other courts seem to have concluded that the statute trumps the common-

law rule entirely. Id. (citing Highlands Mgmt. Co. v. First Interstate Bank, 956

S.W.2d 749, 752 (Tex. App.—Houston [14th Dist.] 1997, pet. denied)). And still

others have attempted to harmonize the standards by liberally construing restrictive

covenants to determine the drafters’ intent but if that intent is ambiguous, then

strictly construing the covenant in favor of the unrestricted use of property. Id.

(citing Munson v. Milton, 948 S.W.2d 813, 816 (Tex. App.—San Antonio 1997,

pet. denied)); see also City of Pasadena v. Gennedy, 125 S.W.3d 687, 693-95 (Tex.

7

App.—Houston [1st Dist.] 2003, pet. denied) (collecting cases and discussing

various approaches).

This Court follows the Munson approach of harmonizing the statute and

common-law rule. See Quinn, 1999 WL 125470, at *2 n.3; Reagan Nat’l Advert.

of Austin, Inc., 96 S.W.3d. at 493 n.2. Under this approach, the common-law rule

does not come into play unless the restrictive covenant is ambiguous. See Quinn

1999 WL 125470, at *2 n.3 (citing Munson, 948 S.W.2d at 816). As noted by the

trial court, the parties in this case agree that the applicable restrictive covenants are

unambiguous (CR 127; Apx. 1). The Zgabays do not contend otherwise on appeal,

and do not explain how the common-law rule would come into play under the

Munson approach in the absence of an ambiguity. Thus, the common-law rule has

no relevance to this appeal.

For the record, however, the Association does not believe the common-law

rule survived the enactment of section 202.003(a). That statute mandates liberal

construction of all restrictive covenants—presumably even ambiguous ones. It is

difficult to understand why liberal construction should not require interpreting

ambiguous restrictive covenants in favor of the person seeking enforcement when

strict construction requires the exact opposite—that is, interpreting ambiguous

covenants against such persons. See Benard v. Humble, 990 S.W.2d 929, 930-31

(Tex. App.—Beaumont 1999, pet. denied) (concluding that the Legislature

8

intended for restrictive covenants to be construed in a manner that might “run hard

afoul of the strict common law requirements,” and noting that the court would have

reached a different result if strict construction applied).

II. Under Texas Law, Short-Term Rentals Are Not a Single-Family

Residential Use

The Zgabays’ forty-page brief devotes less than two pages to discussing the

two leading Texas cases on the short-term rental issue: Benard and Munson. In

the former case, the Beaumont Court of Appeals interpreted a restrictive covenant

stating that “[n]o lot shall be used except for single-family residential purposes.”

See Benard, 990 S.W.2d at 930. That covenant is virtually identical to the

restrictive covenants in this case, which likewise limit use to “single family

residential purposes” (CR 70, 72 [§3.01, 3.14]; Apx. 2). The Benard court held

that the trial court did not err in ruling that the covenant prohibited renting for

periods of less than ninety days. Id. at 930-32.

Although the Benard court agreed that renting was not prohibited per se, the

court explained that renting a house on a weekly or weekend basis is more akin to

temporary or transient housing rather than residential housing. Id. at 931. The

court analogized to cases involving residency requirements for voting or obtaining

a divorce, and observed that residency typically requires a fixed place of habitation

and intent to remain or return despite any temporary absences. Id. at 931-32

(citing Slusher v. Streater, 896 S.W.2d 239, 243-44 (Tex. App.—Houston [1st

9

Dist.] 1995, no writ)). In reaching this result, the Court noted the outcome might

have been different if the common-law rule of strict construction applied but

concluded it was compelled to give effect to the statutory mandate of liberal

construction. Id. at 930-31.

In Munson, the San Antonio Court of Appeals addressed a restrictive

covenant requiring that lots be used for “residential, camping or picnicing [sic]

purposes” and not “for business purposes.” Munson, 948 S.W.2d at 815. The court

agreed that the trial court’s temporary injunction against all rentals was too broad

and modified it to prevent only leasing “to the public for temporary or transient

housing purposes.” Id. at 817. In concluding that such rentals were prohibited, the

court of appeals reasoned that residence generally requires both physical presence

and intent to remain. Id. at 816 (citing, e.g., Smith v. Bd. of Regents of Univ. of

Houston Sys., 874 S.W.2d 706, 712 (Tex. App.—Houston [1st Dist.] 1994, writ

denied)). Thus, when a person comes to a place temporarily, without any intention

of making the place his or her home, the place is not the person’s residence. Id. at

817. The Munson court further reasoned that the Texas Property Code

distinguishes between a permanent residence and transient housing. Id. (citing

Warehouse Partners v. Gardner, 910 S.W.2d 19, 23 (Tex. App.—Dallas 1995, writ

denied); Tex. Prop. Code § 92.152(a)).

10

This Court has not squarely addressed whether a similar restrictive covenant

bars short-term rentals. In one case, however, the Court upheld a permanent

injunction that interpreted a “single-family, private residential purposes” restriction

to preclude operating a “bed & breakfast,” hotel, inn, or venue for parties, business

meetings, or retreats. See Wein v. Jenkins, No. 03-04-00568-CV, 2005 WL

2170354, at *1-3 (Tex. App.—Austin Sept. 9, 2005, no pet.). In rejecting the

contention that the plaintiffs received greater relief than they requested, this Court

observed that the trial court’s interpretation of what the phrase “single-family,

private residential purposes” does not include—e.g., bed & breakfast, inn, etc.—

was “consistent with both the plain language and the underlying purpose” of the

restriction. Id. at *2. This statement strongly suggests that similarly-transient uses

(such as short-term rentals) are not single-family residential uses either.

In another case, this Court held that a restrictive covenant stating that no

more than one “private dwelling house” could be erected on each lot was

ambiguous as to whether it prohibited short-term rentals, and remanded that fact

issue for trial. See Cedar Oak Mesa, Inc. v. Altemate Real Estate, LLC, No. 03-10-

00067-CV, 2010 WL 3431703, at *2-5 (Tex. App.—Austin Aug. 31, 2010, no

pet.). As noted, however, neither side in this case contends the restrictive

covenants are ambiguous. Also, the wording of the covenants—“single family

residential purposes”—is markedly different than the “private dwelling” language

11

in Cedar Oak Mesa. Presumably because of those distinctions, the Zgabays cite

Cedar Oak Mesa but do not contend that its reasoning controls here.

Finally, this Court has found the Munson court’s analysis persuasive on the

interplay between the statutory and common-law rules of construction. See Reagan

Nat’l Advert. of Austin, Inc., 96 S.W.3d at 493 n.2; Quinn v. Harris, 1999 WL

125470, at *2 n.3. In doing so, the Court did not express any doubts about

Munson’s reasoning on the short-term rental issue.

The Zgabays nevertheless argue that this Court should not follow Munson on

the merits. They attempt to distinguish the restrictive covenant in Munson based

on its express prohibition on business uses, and its language clarifying that motels,

tourist courts, and trailer parks are business uses. Munson, 948 S.W.2d at 815. On

the flipside, however, the Munson restrictive covenant lacked the additional

requirement found in the covenants in this case, which require that the residential

use be “single family.” Entering into a series of short-term rentals with separate

families (or other groups) is not a “single family” use.

Moreover, both Munson and Bernard relied on well-established Texas law in

distinguishing between temporary and residential housing. Both courts are surely

correct that residential housing does not encompass the temporary or transient

presence that is the hallmark of short term-rental housing. This Court should rule

likewise.

12

Given the unfavorable Texas law, the Zgabays resort to novel appellate

arguments. They contend that (1) the trial court effectively imposed an occupancy

requirement the Zgabays cannot meet because they no longer live in the house and

(2) the restrictive covenants elsewhere distinguish between temporary and

permanent structures but not between temporary and permanent residence. But

they never made either argument in their summary judgment papers, and have

therefore waived them for appeal. See McConnell v. Southside Indep. Sch. Dist.,

858 S.W.2d 337, 341 (Tex. 1993) (stating that grounds for or against summary

judgment must be expressly presented in the motion or response); Tex. R. Civ. P.

166a(c) (“Issues not expressly presented to the trial court by written motion,

answer or other response shall not be considered on appeal as grounds for

reversal.”)

Regardless, the trial court’s order imposes no “occupancy” requirement. It

does not require that the Zgabays or anyone else occupy the house. The order

simply enjoins the Zgabays from renting to the public for temporary or transient

purposes (CR 129; Apx. 1).

The Zgabays’ other argument mixes apples and oranges or, more aptly,

permitted structures and permitted uses. Section 3.04 of the Declaration generally

bars temporary residential structures, with certain exceptions (CR 71; Apx. 2). On

the other hand, the provisions at issue here—sections 3.01 and 3.14—limits use of

13

the permanent structure to single-family residential purposes (CR. 70; Apx. 2).

Section 3.04 does not speak to or imply anything about whether a short-term rental

is a permitted use. But by limiting use to single-family residential purposes,

sections 3.01 and 3.14 confirm that temporary use for short-term rentals is not

allowed. See Benard, 990 S.W.2d at 930-32; Munson, 948 S.W.2d at 815-17.

The Zgabays say that the test for single-family residential use should be

“whether natural persons (or a “single family,” whatever that may encompass)

occupy the property consistent with the property’s nature as a place for dwelling as

opposed to a place for those persons’ conducting of a trade or commercial

enterprise on the property” (Appellants’ Brief at 29). They cite no Texas case or

any other authority for this proposed test. They also fail to recognize that their use

fails their own test. Even if one accepts the dubious proposition that temporary

occupancy of property equates to residence, a “single family” is not occupying the

property when it is rented for short periods to either successive families or

successive other groups.

Crucially, the Zgabays also concede that the duration of the lease may be

relevant to their proposed test (Appellants’ Brief at 30). But it is difficult to

imagine much shorter durations than the periods the Zgabays have leased their

house for (two to eight days), or the one-night rentals that they say would also be

14

permissible (CR 50; Appellants’ Brief at 29, 37). Once again, the Zgabays’ use

fails their own test.

III. The Out-of-State Cases Are Distinguishable and Should Not Be

Followed by This Court

Finding no support in Texas law, the Zgabays turn to decisions by courts

outside the state (Appellants’ Brief at 33-34). But the “overwhelming tide” of out-

of-state cases they cite consists of decisions from just twelve other states. In seven

of those twelve states, the issue has not been decided by the state’s highest court.

And one of the decisions—Roaring Lion, LLC v. Exclusive Resorts PBL1, LLC,

No. CAAP-11-0001072, 2013 WL 1759002 (Haw. Ct. App. April 24, 2013)—is a

memorandum opinion that is not even precedent under Hawaiian law. See Haw. R.

App. P. 35. Even at first blush, the out-of-state cases are hardly overwhelming.

Closer inspection further undermines the Zgabays’ reliance on the out-of-

state cases. First and foremost, the result in most of those cases turned on the

common-law rule requiring strict construction of ambiguous restrictive covenants.

See, e.g., Dunn v. Aamodt, 695 F.3d 797, 799-802 (8th Cir. 2012) (applying

Arkansas law)5; Applegate v. Colucci, 908 N.E.2d 1214, 1220 (Ind. Ct. App.

2009); Mullin v. Silvercreek Condo. Owner’s Ass’n, Inc., 195 S.W.3d 484, 490

(Mo. Ct. App. 2006); Estates at Desert Ridge Trails Homeowners’ Ass’n v.

5

The Zgabays’ brief cites only the district court’s unpublished decision, which was affirmed by

the Eighth Circuit.

15

Vazquez, 300 P.3d 736, 740-43 (N.M. Ct. App. 2013); Mason Family Trust v.

Devaney, 207 P.3d 1176, 1178-79 (N.M. Ct. App. 2009); Russell v. Donaldson,

731 S.E.2d 535, 538-39 (N.C. Ct. App. 2012); Yogman v. Parrott, 937 P.2d 1019,

1022-24 (Or. 1997); Scott v. Walker, 645 S.E.2d 278, 283 (Va. 2007); see also

Pinehaven Planning Bd. v. Brooks, 70 P.3d 664, 668-69 (Idaho 2003) (alternative

holding was based on rule of strict construction).6

None of the out-of-state cases applies a statute that, like section 202.003(a)

of the Texas Property Code, requires liberal construction of all restrictive

covenants. Given the unique Texas statute, it is hardly surprising that Texas courts

have reached a different result than courts in other states. Needless to say,

however, foreign cases applying a common-law rule of strict construction have

little to no relevance in Texas cases where liberal construction is mandated.

Beyond the diametrically-opposed rules of construction, the out-of-state

cases are distinguishable for other reasons:

• Several cases involved restrictive-covenant language that does not

include a residential-use restriction. See Pinehaven Planning Bd.,

70 P.3d at 668 (addressing covenant limiting construction to one

6

Of the remaining five cases, the two Washington cases indicate that Washington courts no

longer strictly construe restrictive covenants. See Wilkinson v. Chiwawa Cmtys. Ass’n, 327 P.3d

614, 619 (Wash. 2014); Ross v. Bennett, 203 P.3d 383, 387 (Wash. Ct. App. 2009). In a third

case, the court noted the rule of strict construction for ambiguous restrictive covenants but held

that the covenant at issue was unambiguous. See Lowden v. Bosley, 909 A.2d 261, 266-69 (Md.

2006). In two other cases, the court mentioned the rule of strict construction but it is not clear

whether the courts’ holdings on the short-term rental issue turned on strict construction of the

restrictive covenants. See Slaby v. Mountain River Estates Residential Ass’n, Inc., 100 So. 3d

569, 578 (Ala. Civ. App. 2012); Roaring Lion, LLC, 2013 WL 1759002, at *4-5.

16

single-family dwelling per lot and prohibiting commercial use;

distinguishing the San Antonio Court of Appeals’ decision in

Munson as involving narrower residential-use language); Mason

Family Trust, 207 P.3d at 1178 (addressing dwelling-use limitation

and prohibition on commercial use, and distinguishing Munson on

the same basis); Russell, 731 S.E.2d at 538 (interpreting covenant

prohibiting use of land for business or commercial purposes and

distinguishing cases involving residential-use restrictions).

• A number of the cases interpreted covenants that limited use to

residential or dwelling use but did not add the “single family”

qualifier present here. See Dunn, 695 F.3d at 798; Applegate, 908

N.E.2d at 1217; Roaring Lion, LLC, 2013 WL 1759002, at *1-2;

Mason Family Trust, 207 P.3d at 1177; Russell, 731 S.E.2d at 537;

Yogman, 937 P.2d at 1020.

• In some cases, there was evidence that short-term rentals were

widely allowed in the subdivision. See Mullin, 195 S.W.3d at 490-

91 (discussing the evidence that from the beginning, condominium

units had been rented on a short-term or nightly basis); Wilkinson,

327 P.3d at 617 (stating that subdivision residents had entered into

short-term rentals for decades without controversy).

• The restrictive covenants in one case incorporated definitions from

that state’s Uniform Business Code, which defined residential use

to include apartments and lodging houses. See Pinehaven

Planning Bd., 70 P.3d at 668.

Viewed in light of all of these distinctions, including the dispositive distinction of

liberal versus strict construction, the Zgabays’ “overwhelming tide” is a trickle at

best. This Court should follow the Texas cases and the Texas statute mandating

liberal construction of restrictive covenants.

17

IV. The Zgabays’ Challenge to the Alleged Vagueness of the Injunction Was

Not Preserved and Lacks Merit

The Zgabays also argue that the permanent injunction is too vague to be

enforced. But they never raised that argument in the trial court, either in their

summary judgment response or in a motion to modify the injunction. As a result,

their vagueness challenge is not preserved for appeal. See Shields v. State, 27

S.W.3d 267, 273 (Tex. App.—Austin 2000, no pet.) (holding that defendant

waived complaint about order not stating reasons for permanent injunction by

failing to raise complaint in trial court, citing Tex. R. App. P. 33.1(a)).7

In any event, the language in the trial court’s order—enjoining the Zgabays

“from renting their property . . . to any person or the public for temporary or

transient purposes” (CR 129; Apx. 1)—is based upon and nearly identical to the

language approved by the Munson court. See Munson, 948 S.W.2d at 817

(modifying injunction to enjoin appellants from “renting and/or leasing said

property to the public for temporary or transient housing purposes.”) Moreover,

the trial court’s order elaborates that residential use “means to occupy a place over

7

Other Texas courts have held that complaints about an injunction’s failure to comply with Tex.

R. Civ. P. 683 cannot be waived because the requirements of that rule are mandatory. See, e.g.,

Int’l Bhd. of Elec. Workers Local Union 479 v. Becon Constr. Co., 104 S.W.3d 239, 243 (Tex.

App.—Beaumont 2003, no pet.) (citing InterFirst Bank San Felipe, N.A. v. Paz Constr. Co., 715

S.W.2d 640, 641 (Tex. 1986)). But both cases involved temporary (rather than permanent)

injunctions, which have differing requirements under Rule 683. Interfirst Bank involved a

failure to comply with a separate requirement of Rule 683 (the requirement that a temporary

injunction order set the case for trial), and there apparently was no appellate argument that the

complaint was waived. See InterFirst Bank San Felipe, N.A., 715 S.W.2d at 640-41.

18

a substantial period such that it is permanent rather than temporary evidenced by

one’s physical presence simultaneous with a then-existing intent to remain” (CR

128; Apx. 1). Read in its entirety, the order satisfies the requirement that the act

sought to be restrained be described in “reasonable detail.” See Tex. R. Civ. P.

683.8

CONCLUSION AND PRAYER

For these reasons, the trial court’s summary judgment order and injunction

should be affirmed. The Association also requests all other relief to which it is

justly entitled, including an award of its appeal costs.

8

The Zgabays are not entitled to remand for an award of attorney’s fees because they have not

demonstrated any reversible error in the trial court’s judgment.

19

Respectfully submitted,

THOMPSON, COE, COUSINS & IRONS,

L.L.P.

By: /s/ Wade Crosnoe

Wade C. Crosnoe

State Bar No. 00783903

Brian D. Hensley

State Bar No. 24036759

701 Brazos, Suite 1500

Austin, Texas 78701

Telephone: (512) 708-8200

Facsimile: (512) 708-8777

E-Mail: wcrosnoe@thompsoncoe.com

bhensley@thompsoncoe.com

Tom L. Newton, Jr.

State Bar No. 14982300

Allen, Stein & Durbin, P.C.

6243 IH-10 West, 7th Floor

P. O. Box 101507

San Antonio, Texas 78201

Telephone: (210) 734-7488

Facsimile: (210) 738-8036

E-Mail: tnewton@asdh.com

Counsel for Appellee NBRC Property Owners

Association

CERTIFICATE OF COMPLIANCE

This brief complies with the word limit of Tex. R. App. P. 9.4(i)(2)(B) be-

cause it contains 4,447 words, excluding the parts of the brief exempted by Tex. R.

App. P. 9.4(i)(1).

/s/ Wade Crosnoe

Wade Crosnoe

20

CERTIFICATE OF SERVICE

I certify that a true and correct copy of this Appellee’s Brief was served on

February 3, 2014, via electronic service or email, to the following counsel:

J. Patrick Sutton

1706 W. 10th Street

Austin, Texas 78703

E-Mail: jpatricksutton@jpatricksuttonlaw.com

Counsel for Appellants

/s/ Wade Crosnoe

Wade Crosnoe

21

APPENDIX

APPENDIX

Tab 1

Order on Motions for Summary Judgment

150 N. Seguin, Suite 317 830-620-5562

New Braunfels, Texas 78130 Fax 830-608-2030

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September 19, 20 14 \

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Cause No. C2014-0501C

CRAIG ZGABAY AND § IN THE DISTRICT COURT

TAMMYZGABAY §

Plaintiffs/Counter-Defendant§

vs. § 433rd JUDICIAL DISTRICT

§

NBRC PROPERTY OWNERS §

ASSOCIATION §

Defendant/Counter-Plaintiff § COMAL COUNTY, TEXAS

ORDERS ON COMPETING MOTIONS FOR SUMMARY JUDGMENT

CAME ON TO BE CONSIDERED Plaintiffs'/Counter-Defendants' Craig and

Tammy Zgabay (hereinafter "Zgabay") and Defendant's/Counter-Plaintiffs NBRC

Property Owners Association (hereinafter "NBRC") competing Motions for Summary

Judgment.

Among other matters, both parties principally seek reciprocal declarative relief

regarding the subject Declaration of Covenants, Conditions and Restrictions to River

Chase Subdivision, Unit Three. The parties agree the applicable provisions of the

restrictive covenants are not ambiguous. While it is the Court's duty to determine the

intent of the drafter of the covenants, the Court must do so balancing both statutory

requirements to liberally construe language within such subdivision covenants with

common law mandates to strictly construe restrictive clauses in real estate instruments

resolving all doubt in favor of the free use of real estate. See generally, Benard v.

Humble, 990 S.W.2d 929, 930 (Tex.App.-Beaumont 1999, writ ref'd n.r.e.) (noting the

invariable legal conflict).

127

After considering the Motions, the responses, the pleadings, the evidence properly

before the Court, and the arguments of counsel, the Court determines that the

Defendant's/Counter-Plaintiffs Motion should be and is hereby GRANTED while the

Plaintiffs'/Counter-Defendants' Motion should be and is hereby DENIED for the

following reasons.

The parties do not differ nor argue about the summary judgment evidence, and

key word central to the instant dispute from within the subject covenants is the word

"residential." Common law authorities whose opinions are controlling upon this Court

from the United States and Texas Supreme Courts along with the 3rd Court of Appeals in

Austin hold, for various purposes and reasons, that a "residence" is a place occupied over

a substantial period such that it is permanent rather than temporary evidenced by one's

physical presence simultaneous with a then-existing intent to remain. See generally,

Martinez v. Bynum, 461 U.S. 321, 103 S.Ct. 1838, 1843, 75 L.Ed.2d 879 (1983)

("Although the meaning may vary according to context, 'residence' generally requires

both physical presence and an intention to remain."), Mills v Bartlett, 377 S.W.2d 636,

637 (Tex. 1964) ("Neither bodily presence alone nor intention alone will suffice to create

the residence, but when the two coincide at that moment the residence is fixed and

determined."); Howell v. Mauzy, 899 S.W.2d 690, 697 n. 9 {Tex.App.-Austin 1994, writ

denied) (residence is a fixed place of abode occupied substantially enough to become

permanent).

Although the legislature has assigned differing minimum lengths of time (i.e., 30

days to 6 months) in order that a person might obtain some various benefit or avoid some

various consequence, the Texas Supreme Court held in Mills, supra, that for a purpose of

residency under the Texas Election Code "no specific length of time [is required] for the

bodily presence to continue." Mills, supra at 637. The San Antonio Court of Appeals,

albeit in construction of a more specific set of covenants than are at issue here, noted the

well-recognized distinction in Texas law between a permanent residence and temporary

housing. Munson v. Milton, 948 S.W.2d 813, 816-17 (Tex.App.-San Antonio 1997,

writ denied). Without ascribing any specific length of time or bright-lined rule, the San

Antonio Court modified the lower court's injunction enjoining a homeowner from

"renting and/or leasing [the subject] property to the public for lodging, vacation and

recreation purposes" to prohibit "renting and/or leasing [the subject] property to the

public for temporary or transient housing purposes." Id. at 815 & 817.

Based upon the existing and proper summary judgment record, the Court has no

doubt regarding the intent of the drafter of the instant covenants. The covenants, created

and filed in 1999, clearly allow properties to be rented or leased for residential purposes

consistent with the then-existing common law understanding and meaning of that word at

that time. Thus, the Court declares that, within the Declaration of Covenants, Conditions

and Restrictions for River Chase Unit Three-as used in the phrase single-family

residential purposes, to be "residential" means to occupy a place over a substantial period

such that it is permanent rather than temporary evidenced by one's physical presence

simultaneous with a then-existing intent to remain.

128

(·)-~'-.'.·:

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Accordingly, it is ORDERED that Counter-PlaintiffNBRC is entitled to

injunctive relief against Counter-Defedants Zgabay restraining them from renting their

property located at 1175 River Chase Drive, New Braunfels, Texas 78132 (hereinafter the

"Property") to any person or the public for temporary or transient purposes.

It is FURTHER ORDERED that consistent with the Declaration of covenants,

Conditions and Restrictions for River Chase Unit Three, which is applicable to the

Property, neither Counter-Defendants Zgabay, nor their tenants, assigns, heirs or

successors, shall allow or cause the Property to be rented, sub-rented, leased or subleased

to any person or the public for temporary or transient purposes.

It is FURTHER ORDERED that Plaintiffs/Counter-Defendants Zgabay take

nothing against Defendant/Counter-PlaintiffNBRC and that all claims asserted by

Plaintiff/Counter-Defendant Zgabay are denied and that all costs of court be taxed against

Plaintiff and that Defendant/Counter-PlaintiffNBRC recover from Plaintiffs $3,422.50 as

reasonable and necessary attorney's fees and $500.00 as statutory damages.

129

APPENDIX

Tab 2

Declaration of Covenants, Conditions and

Restrictions for River Chase Unit Three

Doclt 9906031628

.... vaoso:uua

Document Numbe~ 9906031412 is re-recorded to correct Page 8.

This document as re-recorded replaces Document Number 9906031t12

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS

RIVER CHASE UNIT THREE

STATE OF TEXAS

KNOW AU. MEN BY THESE PRESENTS;

COUNTY OF COMAL

Thle Declaration made on thlt' date hereinafter set forth by TEXAS

SOUTHERLAND VENTURE, formerly known u TEXAS SUMMERLIN VENTURE, a

Maauchuaette Joint Vlt'nture, acting h~~rein by and through iU duly authorized Joint

Venturer, SOUTHERLAND PROPEFITIES, INC., formerly known a•

SUMMERUN

PROPERTIES, INC., a Texaa Corporation, duly authorized to do busineu in the Statlt'

of Texu, hereinafter referred to u "Developer".

WITNESSETH:

WHEREAS, Developer is the owner of that certain tract of land known ae RIVER

CHASE UNIT TWO, beiniJ a subdlvlaion containing 741.43 l1Cf8S out of a 1494.571

acre tract of land situated In ComaJ County, Texas (hereinafter referred to as the

"Property• or tha "Subdivlalon") with the Plat of RIVER CHASE UNIT THREE, baing

recorded In the olflca of the County Clerk of Coma! CountY, Texas on the 5111 day of

November, 1999, after having bean approved 111 provided by 1-.

and being recorded

in Book Volume13, PagR 131-138, of tha Mep Recorde of ComaJ County, Tax•••

and,

WHEREAS, it Ia the desire of Developer to place certain reatrictlons. -manta,

covenants, conditions, atipulatlone and reservation• (herein sometime• referred to u

(the •Reatrlctlona"l upon and agelntt RIVER CHASE UNIT THREE in order to establish

a uniform pian for itt development, improvement and sale, and to insure tha

preservation of IUch uniform plan for the baneflt of both the present and future ownare

of tracta in RIVER CHASE UNIT THREE.

NOW, THEREFORE, Developer hereby adopts, eatablishaa and lmpo- upon

RIVER CHASE UNIT THREE, and daclaras -the following ruarvationa, eaaamente,

reatrictiona. covenants and conditiona eppllcable thereto all of which are for the

purpqaae of enhancing and protecting the value. daeirabillty and ettrxtivenesa of said

Propart'f, which Reatrlctiona shall run with aeid PropertY and title or lntaraat therein,

or any part thereof, and ahalllnura to the benefit ot each owner thereof. Developer

also doclaree that RIVER CHASE UNIT THREE shall beaubject to the juriadlctlon of tha

• Association• (ae hereinafter defined).

I ARTICLE I

QEFINII!ONS

I

Section 1.01 • Association" shall maan and refer to the NBRC PROPERTY OWNERS

ASSOCIATION, and ita auccasaors and a~algna. Notwithstanding anything herein to

the contrllfY, the NBRC PROPERTY OWNERS ASSOCIATION ahaU co111iat of members

from all Sections and Unite within the Property. It is Intended that only one NBRC

i PROPERTY OWNERS ASSOCIATION exista for the whole ofthe 1494.871 acres and

I for any other property hereafter subjected to theee reatrictiona.

~

ta

1

EXHIBIT

I Jl

67

.llac:H 99868iU41il!

Doctt 9'906031628

Section1.02 'Bgard gf Qjrectgrs" shall mean and refer to the Board of Directors of the

Association.

Section1.03 "Builders• shall mean and refer to persona or antltiaa that purchase tracts

and build specu latlve or custom homes thereon lor third party purchasers.

Section1.04 'Cgmmon Area• shall mean all real Property (including the Improvements

thereon) within the Subdivlaion owned by the Developer and/or tho Aa•oclation for the

common usa and enjoyment of the Owners.

Section 1.05 "Cgntragtgr• sheD mean end refer to the parson or entity with whom an

Owner contracts to construct a residential dwelling on such Owner's Tract.

Sectlon1.06 "Oevelgoar• shall maan and refer to TEXAS SOUTHERLAND VENTURE,

a MaaAChuaatta Joint Ventura, acting herein by and through ita duly authorized Joint

Venturer, SOUTHERLAND PROPERTIES, INC., a Texas Corporation, itsauccesaora and

aaslgna.

Section 1 .07 .:.II:G1: shall mean and refer to any plot of land identified as a parcel or

home site on the Plat of RIVER CHASE UNIT THREE. For purposes of this instrument,

"T ract• shall not be deemed to includs any portion of tho "Common Araaa • or

'Unrestricted Reserves•, (defined herein as any Common Areaa and Unrestricted

Raaarvaa shown on the Plstl in RIVER CHASE UNIT THREE, regardless of the use

made of such area.

Sectlon1.08 "Member• shall mean and refer to every parson or entity who holds a

membership in the Aesoclation.

Sectlon1.09~ shall mean and refer to the record owner, whether one or more

persons or entitles, of fee simple title to any tract which is a part of the Subdivision,

Including (i} contract aellar (a sellar under a Contract for Dead), but excluding those

having auch interest merely as security for the performance of an obligation, (iii

Developer (except es otherwise provided heralnl, end IIIII Bulldera.

Section1.1 0 ~The words 'Sectlon(al' and 'Unitlsl" are uaad interchangeable

within those Rastrictiona to refer to a particular tract of land designated on each filed

map or plat of RIVER CHASE.

ARTICLE II

RESERVATIONS EXCEPTION ANQ QEQICADONS

Sectlon2.01 Recgr!led SubdMajgn Map gf tho Prooartv. The Plat ("Piat"l of RIVER

CHASE UNIT THREE dedicates for use aa such, subject to the limitations aa set forth

therein, the roada, streets and easements shown thereon. The Plat further establishes

certain raetrictiona applicable to RIVER CHASE UNIT THREE. All dadicatlona,

restrictions and reaarvatlons created herein or shown on the Plat, rapists or

amendment of the Plat of RIVER CHASE UNIT THREE recorded or hereafter recorded

shall be construed as being included in each contract, dead, or conveyance executed

2

63

- - - - - - - - - t '}•?- - - - - - - - . . . ~r--------

Doell 9906031628

or to be executed by or on behalf of Developer, whether speclllcellv referred to therein

or not.

Section 2.02 Easements. Developer reserves for pubtic use the utility eeaementl

shown on the Plat or that have bean or hereafter may be cr81ted by separate

instrument recorded In the Official Public Records of Carnal County, Texaa, for the

purpose of conetructing, melntainlng and repairing a syatem or syateme of electric

lighting, electric power, telegraph and telephone line or linea, storm surface drainage,

cable television, or any other utility the Developer sees fit to lnetall In, acrose and/or

under the Property. All utility eaaemante In the Subdivision may be used for the

construction of drainage swalea In order to provide for Improved surface drainage of

the Reserves, Common Area end/or Tracts. Should any utUity company furnishing a

service covered by the general sasement herein provided or provided on the plat

requeat a specific easement within the general easement area by separate recordable

document, Developer, without the joinder of any other Owner, shall have the right to

grant such easement on said Property without conflicting with the terms hereof. Any

utility company serving the Subdivision shall have the right to enter upon any utility

easement for the purpose of installation, repair and maintenance of their respective

facilitlas. Neither Developer nor any utility company, political subdivision or other

authorized entity using the aasemante herein refaned to shall bailable for any damages

dona by them or their &Siigna, agents, employees, or servants, to fences, shrubbery,

trees and Iaws or any other Property of the Owner on the Property covered by said

easements.

Section 2.03 Tjtle Sub!ect to Easamants. It is expressly agreed and understood that

the title conveyed by developer to any of the Tracts by dead, contract for deed or

other corrveyanca shall be subject to any easement affecting aama for roadwaya or

drainage, electric lighting, electric power, telegraph or telephone purposes and other

easements hereafter granted affecting the Tracta. The Owners of the respective

Tracts shall not be deemed to own pipes, wires, conduits or other service linea running

through their Tracts which are utilized for or service to other Tracts, but each Owner

shall have an easement in and to the aforesaid facilities as shall ba necessary for the

use, maintenance and enjoyment of his Tract. The Developer may convey title to the

above said easamenta to the public, a public utility company or the Allocietlon.

Section 2.04 Utllitv Ea§8menta.

(a) Utility ground and aerial easement• have been dedicated In accordance

with tha Plat and by separate recorded easement documents.

(b) No building shell be located over, under, upon or serosa any portion of

any utility easement. The Owner of each Tract shall have the right to

construct, keep and maintain. concrete drives, fences, and similar

improvements across any utility easement, and shall be entitled to cross

such easements at ali times for purposes of gaining acceae to and from

such Tracts, provided, however, any concrete drive, lance or similar

improvement placed upon such Utility Easement by the Owner shall be

constructed, maintained end used at Owner's risk and, as such. the

Owner of each Tract subject to said Utility Easements shall be

3

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I

I

69

---------r.:fi)._---------:.,.~~--------

Doc• 9906031628

responsible for (i) any and all repairs to the concrete drives, fences and

similar improvements which erose or are located upon such Utility

Easamenta and (ill repairing any damaga to said lmprovemanta caused by

the Utility District or any public utility in the caursa of lnstalftng,

operating, maintaining, repairing, or removing Ita facilities located within

the Utility Easamants.

ARTICLE Ill

USE RESTRICTIONS

Section 3.01 SlngiB Family Bujdeotial Construction. Except aa provided below, no

building shall be erected, altered, placed or permitted to remain on any Tract other than

one dwelling unit par each Tract to be used for single family residential purposes. One

guest/aervanta house may be built provided said guest/servants housa contains no lass

than five hundred (500) square feat, no mora that on•thousand (1 000) square feat,

is built after or while the main dwelling Is being built and haa prior approval of the

Architectural Control Committee. All reaidances muat have a garage. Detached

II

garagea and work shops may not ba conatructed on the Property prior to the main

dwelling being built. Barns and/or storage buUdlnga may be conatructad on the

property prior to the main dwelling being built provided they ere approved In writing

by the Architectural Control Committee prior to baing erected, altered or placed on the

property and are placed on the reer half of the property, out of view of any road, and

behind the Intended dwelling alta. All structure• must be approved In writing by the

Architectural Control Committee prior to being erected, altered or placed on the

Property. The term "dwelling• doaa not Include either double wide or manufactured

homes, or single wide mobile homes, or prefeb houses regardless of whether the aame

are placed upon permanent foundation, and said homea are not permitted within the

Subdivision. All dwellings must have at least one thousand eight hundred (1800)

I square feet of living area for one story homaa and two thousand 120001 square feat

l of living area for two story homes, with at laaat one thousand (10001squara feat on

the ground floor, excluding porchee, and be built with new construction material. Any

building, structure or lmprovamanta commenced on any tract shall be completed aa to

the exterior finish and appearance within six (61 montha from the commencement date.

All garagaa, Including detached garagea, wiU be of the same general construction as

the main dwelling and located on the tract according to the Committee approved

building aite plan and shell be aultable for not lasa that two (21 automobiles. All

garages must be aide or rear entry. No carports shall ba allowed.

Section 3.02 Comgosita Building Sjto, Any Owner of one or mora adjoining Tracts lor

portions thareofl may, with the prior written approval of the Architectural Control

Committee, and with approval of the Coma! County Commissioner's Court, If required,

consolidate such Tracts or portion• Into one bulldlng alta, with the privilege of placing

or constructing improvements on such resulting site, In which caaa the aida setback

linea shall be meesured from the raaulting side Property linea rather than from the Tract

linea as Indicated on the Plat. Public utility and drainage eaeementa era exempt from

this provision.

Section 3.03 Location of the lmproyementa upon the Tract, No building of any kind

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l shall be located on any tract nearer than forty feat (40') to the side Property line,

no nearer than seventy-five feet (76'1 to the front Property Una and no nearer than

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seventy-five feat (76'1 to the rear Property line, provided however, as to any tract, the

Architectural Control Committee may waive or altar any such setback Una, If the

Architectural Control Committee In the exercise of the Architectural Control

Committee's aola discretion, such waiver, or alteration Is necacsary to permit affective

utilization of a tract. Any such waiver or alteration must be in writing and recorded

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In the Offlclal Publlo Recorda of Comal County, Texas. All dweUings placed on Subject

Property must be equipped with Class I Aerobic Septic tank system that meet all

applicable laws, rules, standards and specifications, and all such dwellings must be

served with water and electricity.

Section 3.04 Usa pf Temoorarv Structural. No structure of a temporary character,

whether trailer, motor home, basement, shack, garage, bam or other outbuilding shall

be maintained or used on any Tract at any time as a residence, either temporarily or

permanently, except as provided below. No Trect shall be uaed as a camping ground.

A property owner may usa an RV camper or motor home as hlslhar temporary

residence for up to six (61 months during construction provided an approved septic

system has bean Installed and the RV camper or motor home Is placed behind the

construction site. After the dwelling is complete an RV camper or motor home may be

stored on the tract provided It Ia stored In compliance with Section 3.17 of the1e

restrictions. The Declarant or the Commlttaa shall have the right to have any RV or

motor home found to ba in violation of these raatrictions removed end stored at the

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expanse of the owner: and, for these purposea Declarant andlor the representative of

the Committee Ia granted express written consent to remove the same without penalty

or offense.

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i The Developer resarvea the exclusive right to erect, place and maintain a mobile home,

i camper or motor home In or upon any portion of the Subdivision as In Its sola

Ii discretion may be necessary or convenient while selling Tracts, selling or constructing

residences and constructing other Improvements within the Subdivision. The

Developer Ia not raatrlctad by any of the above time constraint& in thla provision.

l Section 3.06 Repair of Buildjnga. All Improvements upon any of the Property shaD at

l all times be kept in good condition and repair and adequately painted or otherwise

maintained by the Owner thereof.

i Section 3.06 Alteration or Removal of Improvements Any construction, other than

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normal maintenance, which altars the exterior appearance of any Improvement, or the

removal of any Improvement, shell ba performed only with the prior written approval

of the Architectural Control Committee.

i' Section 3.07 Roofing Materiels. The roof surface of all principal and secondary

structures Including garages and domestic living quartera shell be of slate, stone,

i. concrete tile, clay tile, or other tile of a ceramic natura, composition shingles with a

1 twenty-five (25) year or mora warranty; or they may ba metal, left natural or painted

J a color approved by the Architectural Control Committee, using standing or battened

~ seams. The Architectural Control Committee shall have the authority and sola

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discretion to approve other roof treatments and materials if the form utilized will be

harmonious with the surrounding homes and subdivision as a whale.

Section 3.08 Construction In Place. All dweiUngs constructed on the Property shall

be built In place on the applicable Lot. The use of prefabricated materlala for any

Improvements, Including but not limited to fences, shall be allowed only with the prior

written approval of the Architectural Control Committee.

Section 3.09 ~ All exterior color schemes on any structure must be approved by

the Architectural Control Committee prior to use.

Section 3.1 0 Model Hom11. Notwithstanding anything herein contained, Builders shell

be allowed to construct model homes aa long aa such modal homes conform to these

restrictions.

Section 3.11 ~ The exterior walls of the main residence conatructed on any

lot shall be at leaat sevanty·flve percent (76%1 masonry or masonry veneer, Inclusive

of door, window and similar openings. However, all exterior walls exposed to view

from the front property line shall be constructed of no lass that seventy-five percent

(76%1 masonry or masonry veneer exclusive of all door, window or similar openings.

Masonry and Masonry veneer lncludea atucco, ceramic tile, clay, brick, rock and all

other materials commonly referred to In the New Braunfels, Texas area aa masonry.

Notwithstanding this provision, log housea not meeting the above masonry

requirements may be allowed with the prior written approval of the Architectural

Control Committee.

Section 3.12 Walls. foncaa, qnd Mall Boxes. Walls and fences, if any, must be

approved prior to construction by the Architectural Control Committee and, unless

otherwise permitted by the Architectural Control Committee, must be constructed of

wood, metal, masonry, masonry veneer, smooth wire or barbed wire. Electric wire and

chain link fencing shall not be permitted. All wooden fencea must be painted and the

color of such paint muat be approved by the Architectural Control Committee. All

individual mall boxea (If approved by the poatal department) must be of masonry

construction and approved by the Architectural Control Committee.

Section 3.13 Antonnat, Towera. qnd Satellite pjahal. Antennas, towarl, or sateUita

dlshe1 of any kind shall not exceed ten feat above the roof of the Dwelling or

Accaasory Building whichever Ia higher. Any anteMae, tower or eatelllte dish rnuat

be located to the side or rear of the Dwelling or Accessory Building and not within

forty feat (40'1 of any side Property line or seventy-five feet (76') of any rear Property

line. Nothing herein shall be construed to conflict with the latest rules and regulations

I set forth by the Federal Communications Commission.

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Section 3.14 Prohibition of Offwjve Actjyitjas. No Activity, whether for profit or nat,

shall be conducted on any Tract which Is not releted to single family residential

purposes, unleaa said activity meets the following criteria: (a) no additional exterior

sign of activity is pre11nt, (b) It Ia the type of action that usually happens In a home,

''~' (c) no additional traffic, that would not be there normally, Is created, and (d) nothing

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dangerous Ia present that should not be there. Thla restriction is waived in regard to

the customary sales activities required to sell homes In the Subdivision. The discharge

or u.. of firearms is el(presllly prohibited. Hunting Is elCpresaly prohibited. Tha

Association shall have the sola and ab10lute dlacretion to determine what constitutes

a nuisance or annoyance.

Section 3.15 Garbage and Trash Disposal. Garbage and trash or other refuse

accumulated In thla Subdivision shall not be permitted to be dumped at any place upon

adjoining land where a nuisance to any residence of this Subdivision Is or may be

created. No Tract shall be used or maintained as a dumping ground for rubbish.

Trash, garbage or other waste shall not be allowed to accumulate, shall be kept In

sanitary containers and shaU be disposed of regularly. All equipment for the storage

or disposal of such material shall be kept In a clean and sanitary condition.

Section 3.18 Junked Motor Vehicles Prohjbjted. No tract shall be used as a depository

for abandoned or junked motor vehicles. No junk of any kind or character shall be kept

on any Tract.

Section 3.17 TrajfeCJ. Rys. Boats All trailars, travel trailars, graders, recreational

vehicles IRV's), trucks (other than pickups of a size one 111 ton or less), boats,

tractors, campans, wagons, buses, motorcyclea, motor scooters and lawn or garden

maintenance equipment shall be kept at all times, elCcapt when In actual use, In

enclosed structures or screened from view from common areas, public or privata

thoroughfares and adjacent properties.

Section 3.18 ~. No signs, advertising, billboards or advertising atructure of any

kind may be aracted or maintained on any Tract without the consent In writing of the

Architectural Control Committee, elCcept one 111 professionally made sign not more

than twenty-four Inches 124 "I by thirty Inches (30") advartislng Owner's Tract for sale

or rant, and one 111 profesaionally made sign, not more than twelve inches 112"1 by

twenty-four Inches 124"1 identifying the Tract owner's name or names. The term

"professionally made algn• does not Include the plastic pre-made "for sale" or "for

rent" signs. No algn shall be nailed to a tree. Daclarant or any member of such

Committee shall have the right to remove any such sign, advertisement or billboard or

structure which is placed on any Tract In violation of these reatrlctlons, and In doing

so, shan not be liable, end are hereby elCpressly relieved from, any liability for trespass

or other tort in connection therewith, or arising from such removal.

Section 3. 19 Animal Husbandry. No animals, livestock or poultry of any kind shall be

raised, bred or kept on any Tract &lCcept that one (1) horse par avery 2.5 acres may

be kept, ea long as it doaa not become a nuisance or threat to other Owners.

Provided, however, animals baing raised for 4-H or school sponsored prograrne will be

permitted. No pigs or hogs will be permitted under any circumstances or programs.

All horses, cows and 4-H animal• baing raiaed by Individual tract owners must be kept

In e fenced araa on the owner's tract. No ovargrazlng Is permitted on any portion of

tha lot. Dogs, cats, or other common housahold pata may be kept on a Tract. Dogs

must be kept in a kennel, dog run, or fenced In area that confinn aald doglsl to that

area, and for these purposes chain link fencing shall be permitted provided, however,

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no such fenced In area shall be located adjacent to any aida, front or rear boundary

line. Dogs will not be permitted to run loose In the Subdivision and muat be

vaccinated for rabin according to State law once a year and registered with Comal

County once a year.

Section 3.20 Mineral Developmem. No commercial oil drilling, oil development

operations, oil refining, quarrying or mining operation of any kind shall be permitted

upon or In any Tract. No demck or other structures daigned for the uaa of boring for

oil or natural gas shall be erected, maintained or permitted upon any Tract.

Section 3.21 prajnage, Natural established drainage patterns of atreeta, tracts or

roadway ditches wiU not ba Impaired by arry person or paraona. Driveway culverts

must ba Installed and will ba of suHiclant size to afford proper drainage of ditches

without backlog water up Into ditch or diverting flow. Drainage culvert installation Is

subject to the inspection and approval of the Architactural Control Committee and to

County requirements.

Section 3.22 Ro-sybdjy!sjon. Except as provided below or as otherwise permitted In

thea& restrictions, no tract shall be re-aubdivlded or spUt. Lots may be combined Into

one Lot for building purposes and the Interior common boundary line shall be

extinguished by filing a recordable document of record, joined by the Declarant, or

Architectural Control Committee. or ita duly authorized represantstlva, declaring the

same to be extinguished. Thereafter, aU sat back linea shall refer to the exterior

property llna1. Combined Lots shall nevarthalasl b1 considered as separate Lots for

assessment purposes, unless otherwise determined by tha Architectural Control

Committee. Public utility end drainage aaaementa ara exempt from thla provision.

Builder reserves the right to further subdivide Lot 220. Thla right Ia assignable by

Developer at ita sole discretion. The assignment, if any, shall be executed at such

time aa Lot 220 Ia sold by Davalopar and shall ba evidence in writing and filed of

record, Thl8 right Is exclusive to Developer and shall not be affected by the transfer

of architectural and property owner aaeociatlon control.

In the evant of the failure of Owner to comply with the above requirements after ten

(101 days written notice thereof, the Auoclatlon or their designated agents may,

without liability to the Owner, Contractor or any occupant• of the Tract In trespass or

otherwise, enter upon (and/or authorize one or mora othara to enter upon) said Tract,

causa to be removed, such garbage, traah and rubbish or do any other thing necessary

to secure compliance with this Declaration at the expanse of Owner. Payment for the

chargae by such Owner shall be payable on the flrat day of the next calendar month.

ARTICLE IV

ARCHITECTURAL CQNTBOL COMM!me

Section 4.01 Basic Control

(a) No building or other Improvements of any character shell be erected or

placed, or the erection or placing thereof commenced or changes made

In the design or exterior appearance thereof (excluding, without

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limitation. any staining, painting or aiding), or any addition or exterior

alteration made thereto after original by construction, or demolition or

destruction by voluntary action made thereto after originally constructed,

on any tract in the Subdivision until the obtaining of the neca11ary

approval (as hereinafter provided) from the Committee of the

construction plana and specification for the construction or alteration of

such improvements or demolition or destruction of existing improvements

by voluntary action. Approval shall be granted or withheld besed on

matters of compliance with the provisions of thia Instrument.

(bl Each application made to the Committee. or to the Davalopar, shall be

accompanied by two seta of plans and specifications for all proposed

construction (initial or alteration) to be done on auch Tract including plot

plana showing location on the tract.

Section 4.02 Architectural Comrol Committee.

(a) The authority to grant or withhold architectural control approval as

referred to above ie initially vested In the Oavalopar; provided, however,

the authority of the Daveloper shall caue and tarmlnate upon the election

of the Architectural Control Committee of the Association (sometimes

herein referred to as the "Committee"), In which avant such authority

shall be vested In and exercised by the Committee (aa provided In (bl

below), hereinafter referred to, e~ecept aa to plena and specifications and

plot plans theretofore submitted to the Daveloper which shall continua to

e~eercise auch authority over all such plana, specifications end plot plans.

Notwithstanding, attar the Control Transfer Date, both the Davelopar and

the Architectural Control Committae 1hall have the right to grant a

variance from the building set-back Una restrictions. Either party may

grant this variance as It determines In its sole discretion is needed,

without the consent of the other. The term "Committee•, as used in this

Declaration, shall mean or refer to the Developer or to the RIVER CHASE

Architectural Control Committee composed of members of the

Association, as applicable.

(b) On or after such time as fifty-one percent (51 %1 of all of the Tracts in all

sections of the Subdivision are conveyed by Developer I from time to time

hereafter referred to as the "Control Transfer Data"), the Developer shall

cause an Instrument transferring control to the Association to be placed

of record in the Official Public Recorda of Come! County, Texea (the

effective control Transfer Data shall be the data of its recording).

Thereupon, the Developer shall appoint a Committee of three (31

members to be known as the RIVER CHASE Architectural Control

Committee who ahall serve until the next aucceeding annual meeting

following the Control Transfer Data. From and after the Control Transfer

Data, each member of the Committee must be an Owner of the Pro~rty

in soma Section of RIVER CHASE. Additionally, the Developer shaft have

the right to discontinue the exercise of architectural control privilegas and

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arrange for the trans far to the Assoc;iatlon at any time prior to the Control

Transfer Date by flUng a statement and Instrument to such effect in the

Official Public Recotda of Coma! CountY, Taxa.

Section 4.03 Effect of Inaction. Approval or disapproval aa to architectural control

mettera aa aet forth In tha preceding provisions of thfa Declaratlon ahell be In writing.

In the event that the authority exarc:ialng the prerog11tlve of approval or disapproval

(whether the Developer or the Committeel falla to approve or disapprove In writing any

plana and apeclflc:lltloM and plot plans received by it in compliance with the preceding

provlalom within thirty (301 days following such submissions, such plana and

apec:iflcatlona and plot plan shall be deemed approved and the construction of any

such building and other Improvements may be cornmanced and proceeded with In

compliance with all such plana and spec;ltlcatlona and plot plan and all of the other

terma and provislona hereof.

Section 4.04 Effect of Aoproyal. The granting of the aforesaid approval (whether In

writing or by lapse of tlrna• shall constitute only an expreatlon of opinion by the

Committee that the term• and provialone hereof shaft be complied with if the building

and/or other Improvements are erected in accordance with said plana and

specificatlone and plot plan; and such approvel shall not constitute any nature of

waiver or estoppal either ae to the persona expreaaing such approval or any other

peraon In the avant that such building and/or improvements ate not constructed in

accordance with such plane and specifications end plot plan, but, nevertheless, fail to

comply with the provlalona hereof, Further, no pereon exarcblng any prerogative of

approval of disapproval shaft Incur any liabilitY by reasons of the good faith exarc;ille

thereof.

Section 4.05 ~ The Developer or the Committee, aa the case may be. may

authorize variance• from compftance with any of the provllions of thllt Declaration or

minimum acceptabto construction standard• or regulations and requirement• aa

promulgated from time to time by the Developer or the Committee, when

clrcumatancaa such 111 topography, natural obstruction•• Tract configuration, Tract

size, hardahlp, aeathatio or environmental conalderstlona require 1 variance. Tha

Developer and the Committee reserve the right to grant variances at to building

set·back nn... Such variances must be evidenced in writing and shall become

effective whan signed by the Developar or by at laest a majority ot the members of the

Committee. If any such vlirlancea are granted, no violation of the provlslona of this

Declaration shall be deamed to have occurred with respect to the matter for which the

verlance Is granted; provided, however, that the granting of a vlirlance shall not

operata to waive any of the provtslona of thla Declaration for any purpoaa except as

to the partiCUlar Property and partlculer provlslons hereof coVered by the vlirlanca, nor

ahall the granting of any variance affect in any way tha Owner's obligation to comply

with all governmental law. and regulations affecting the Property concerned and the

Plat.

ARTICLE V

NBBC PROPERTY OWNERS ASSOCIATION

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Section 5.01 Mambershlo. Every person or entity who Is a record owner of any Tract

which Ia subject to the Maintenance charge (or could be following the withdrawal of

an exemption therefrom) and other aasenmenta provided herein, shall be a "Member"

of the Association. The foregoing Ia not Intended to include persona or antitiea who

hold an interest merely as sacurity for the performance of an obligation or thosa having

only an interest In the mineral estate. No Owner ahall have mora than one membership

for each Tract owned by such Member. Memberships shaH be appurtenant to and may

not be separated from the ownership of the Tracta, ragardlaaa of the number of

persona who may own a Tract (such as husband and wife, or joint tenanta, ate.) there

shall be but one membership for each Tract. Additionally, the Directors of the

Association must be Members of the Assoclatlon (as more particularly described in the

By-laws). Ownership of the Tracts ahall be the aole qualification for membership. The

voting rlghta of the Members are sat forth In the Bylawa of the Association.

However, the Reatrlctlva covenants will not be construed as to assess the Vaterens

Land Board or the State of Texas. Any asaaumenta are the personal obligation of the

Veteran purchaser, hla succuaors, hairs and assigns. Any lien Imposed by the

restrictive covenanta does not affect the Veterana Land Board's Interest In the

Property.

Section 5.02 Non·Profjt Corooratlon, NBRC PROPERTY OWNERS ASSOCIATION, a

non-profit corporation, has bean (or will bel organized and It shall be governed by the

Articles of Incorporation and Bylaws of said Association; and all duties, obligations,

benefits, Uens and rights hereunder In favor of the A11oclation shall vest In said

corporation.

Section 5.03 .!MutL The Association has adopted or may adopt whatever Bylawa it

may choose to govern the organization or operation of the Subdivision and the usa and

enJoyment of the Tracts and Common Areas, provided that the same are not In conflict

with the terms and provisions hereof.

Section 5.04 Owner's Rjght of Enloyment, Evvry Owner shall have a banvficial

Interest of usa and enjoyment In and to the Common Areas and such right shall be

appurtenant to and shall pasa with tha title to avery assessed Tract, subject to the

following provisions:

(a) the right of the Association, with respect to the Common Areas, to limit

the number of guuta of Owners;

(b) the right of the Anoclatlon, In accordance with Its Articles and Bylaws

(and until fifty-one percent (51 %1 of all tracts in the Subdivision are

sold), subject to the prior written approval of the Oeveloper, to Ill borrow

money or the purpose of Improving and maintaining the Common Areas

and facilities (including borrowing from the Developer or any entity

affiliated with the Developer) and (iil mortgage said Property, however,

the rights of such mortgage of said Property shall be subordinate to the

rights of the Owners hereunder;

(cl the right of the Association to suspend the Members voting rights and

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the Member' a and Related User• right to use any recreational facilities

within the Common Areas during any period In which the Maintenance

Charge or any assestment agalnat this Tract ramalna unpaid;

ldl the right of the Association to suspend the Mamber'a voting rights and

the Member" a and Related Users' right to usa any recreational facintles

within the Common Ares, after notice and hearing by tha Board of

Dlractors, for the Infraction or violation by such Member or Related Users

of this Declaration or the "Rules and Reguletlons', as hereinafter defined,

which auspension shall continue for the duration of such Infraction or

violation, plue a period not to axceed sixty (601 days following the

cessation or curing of such Infraction or violation.

ARnCLEVI

MAINTENANCE FUNQ

Section 8.01 Maintenance Fund ObUqatlon. Each Owner of a tract by acceptance

of a dead therefore, whether or not It shall be axpreuad in any such dead or other

conveyance, Ia deemed to covenant and agrees to pay to the Association a monthly

maintenance charge (the "Maintenance Charge"), and any other asaassmenta or

charges hereby levied. The Maintenance Charge and any other asaassments or

chargee hereby levied, together with such Interest thereon and costs of collection

thereof, as hereinafter provided, shell be a charge on the Tracts and shall be a

continuing lien upon the Property against which each such Maintenance Charge and

other chargee and aaseasmants ara made.

Section 8.02 Basis of tho Malntenancg Charge.

(a) The Maintenance Charge referred to shall bo used to create a fund to ba

known ae the "Maintenance Fund". which shall be used as herein

provided; and each such Maintenance Charge (except 111 otherwise

heralnafter provided) shall be peld by the Owner of each Tract (or

residential building site) to the Association. The Maintenance Charge for

the year of purchase shall be pro-rated at closing and then shall be paid

annually, In advance, on or before the first day of tha first month of each

calendar yaer. Provided, however If such owner owne mora than one

tract In the subdivision, such Owner shall pay only twice the aseaesment

of one I 11 tract no matter how many tracta are owned or In the avant as

Owner obtains consent from the Committee for a Composite Building site

pursuant to Section 3.02 hereof, such Composite Building Site shall be

considered for the Maintenance Charge of one Tract for beginning upon

the completion of the Improvement& thereon.

(b) Any Maintenance Charge not paid within thirty (30) days after the due

data shall bear Interest from the due data at the Iasser of Iii the rata of

eighteen percent ( 18%) per annum or (Ill the maximum rate permitted by

law. The Association may bring an action at law against the Owner

personally obligated to pay the same, or foreclose tha hereinafter

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described lien against the Owner's Tract. No Owner may waive or

otherwise escape liability for the Maintenance Charge by non-use of any

Common Areaa or rec:reationel facilities evailllble for uae by Ownara of

the Subdivision or by the abandonment of his tract.

(c) The Initial amount of the Malntenanca Charge applicable to each Tract

will be $120.00 per year due In advance, payable on January 1 of each

year. All other mattera relating to the Maintenance Charge and the

collection, expenditures and administration of the Maintenance Fund shall

be determined by the Developer or the Board of Dlrectora of the

Association, subject to the provlaiona hereof.

ldl The Association, from and attar the Control Tranafer Date, shall have the

further right at any time, with a majority vote of all esaoclatlon membara,

to adjust or alter said Maintenance Charge from year to year salt deems

proper to meat the reasonable operating expanses and reserve

requirements of the Asaoclatlon In order for the Association to cerry out

Its duties hereunder.

Section 6.03 Craatjgn of Uen and Personal Obligation. In order to secure the

payment of the Maintenance Charge, and other charges and aaaassmanta hereby

levied, each Owner of a Tract In the Subdivision, by such party's acceptance of a

dead thereto, hereby granta to the Association a contractual lien on such Tract which

may ba foreclosed on by non-judicial foreclosure, pursuant to the provisions of Section

61.002 of the Taxes Property Code (and any aucceaaor statute); end each such owner

hereby expressly grants the Aesoclation a power of sale In connection therewith. The

Association shall, whenever It proceeds with non-judicial foreclosure pursuant to the

provlalona of seld Section 61.002 of the Taxae Property Code and said power of sale,

designata In writing a Trustee to post or causa to be posted all required notlcaa of

such foreclosure sale and to conduct such foracloaura sala. The Trustaa may ba

changed at any time and from time to time by the Association by means of written

Instrument axacutad by the President or any Vlce-Prallldant of the Association and filed

for record In the Official Public Recorda of Cornel County, Taxes. In the evant that the

Association has detarmlnad to non-judicially foreclose tha lien provided harein pursuant

to tha provisions of said Section 51.002 of tha Texaa Property Coda and to exercise

tha power of sale haraby granted, the Association, or the Association's agent, shall

give notice of foreclosure sale as provided by the Texas Property Code as than

amended. Upon request by Association, the Trustee shall give any further notice of

foraclosura sale sa may be required by the Texas Property Coda as than amended, and

shall convey such Tract to the highest bidder for cash by tha General Warranty Deed.

Out of the proceeds of such sale, if any, there shaU first ba paid all expenses incurred

by the Association In connection with such default, Including reasonable attornay'a

teas and a reasonable truataa's faa; second, from such procaads there shall ba paid to

the Association an amount equal to tha amount In default; and third, the remaining

balance shall be paid to such Owner. Following any such foreoloaura, each occupant

of any such Tract foreclosed on and each occupant of any Improvements thereon shall

ba deemed to be a tenant at suffaranca and may be removed from possession by any

and all lawful means, Including a judgment for poaaasslon In action of forcible detainer

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and the Issuance of a writ of restitution thereunder.

In the event of non-payment by any Owner of any Maintenance Charge or other charge

or assessment levied hereunder, the Association may,ln addition to foreclosing the lien

hereby retained, and exercising the remedies provided herein, upon ten 1101 days prior

written notice thereof to such non-paying Owner, exercise all other rights and remedlee

available at law or In equity.

It Is the intent of the provisions of this 6.03 to comply with tha provisions of said

Section 61.002 of the Texas Property Coda relating to non·judicial sale a by power of

sale and, In the event of the emandmant of said Section 51.002 of the Taxes Property

code hereafter, the Pre1ident or any Vice-Praaidant of the A"ociatlon, acting without

joinder of any other Owner or mortgagee or other person may, by amendment to thla

Declaration file In the OHiclal Public Recorda of Comal County, Texas, amend the

provislona hereof so as to comply with said amendments to Section 61.002 of the

Taxes Property Code.

Section 6.04 Notice of Lien, In addition to the right of the Aseociatlon to enforce the

Maintenance Charge or other charge or assessment levied hereunder, the Association

may file e claim or lien against the Tra11t of the delinquent Owner by recording a notice

("Notice of Uen") setting forth (a) the amount of the claim of delinquency, lbl the

Interest thereon, (c) the costs of collection which have accrued thereon, (d) the legal

description and street address of the Tract against which the lien le claimed and (a)

the name of the Owner thereof. Such Notice of Lien shall be signed and

acknowledged by an officer of the Association or other duly authorized agent of the

Association. The lien shaU continue until the amounts secured hereby end all

subsequently accruing amounts are fully paid or otherwise satisfied. When allemounta

claimed under the Notice of Lien and all other costs and assessments which may have

accrued subsequent to the filing of the Notice of Lien have been fully paid or satisfied,

the Association shall execute and record a notice releasing the lien upon payment by

the Owner of a reasonable fee as fixed by the Board of Directors to cover the

preparation and recordation of such release of lien Instrument.

Section 6.06 Uena Subordinate to Mortgages. The lien described In this Article VI

shall be deemed subordinate to a first lien or other Ilene of any bank, Insurance

company, aavinga and loan association, university, pension and profit sharing truats

or plans, or any other third party lender, Including Developer, which may have

heretofore or may hereafter lend money In good faith for the purchase or Improvement

of any Tract and any renewal, extension, rearrangement or refinancing thereof. Each

such mortgagee of 11 mortgage encumbering a Tract who obtains title to such Tract

pursuant to the remedies provided In the deed of trust or mortgage or by judicial

foreclosure shall take title to the Tract free and clear of any claims for unpaid

Maintenance Chargea or other charges of assessment• against such Tract which

accrued prior to the time such holder ecqulred title to such Tract. No such sale or

transfer shall relieve such holder from liability for any Maintenance Cherge or other

cherg.. or 81sessmenta thareaftar becoming due or from the lien thereof. Any other

sale or transfer of a Tract shall not affect the Association's lien for Maintenance

Charges or other chargee or assessments. The Aaaoclation shall make a good faith

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nan• V99603141E

effort to give each such mortgagaa sixty (601 days advance written notice of the

Aaaoclatlon'a proposed foreclosure of lien described In Section 6.01 hereof, which

notice shall be sent the nearest office of auch mortgagee by prepeid United States

registered or Certified mail, return receipt requeated, and shall contain a atatemant of

delinquent Maintenance Charges or other chargea or uaesamenta upon which the

proposed action Ia baaed provided, however, the Aaaoclation'a failure to give such

notice shall not Impair or lnvelldate any foreclosure conducted by the Association

purauant to the provisions of this Article VI.

.!

Section 6.08 PucDO&a of the Malntrmance Charges. The Maintenance Charge levied

by the Developer or the A11ociatlon ahaU be used exclusively for the purpose of

promoting the recreation, health, safety, and welfare of the Ownera of the Subdivision

which hereafter may become subject to the jurisdiction of the Association. In

particular, the Maintenance Charge ahall be used for any Improvement or aervicaaln

furtherance of these purposea and the performance of the Association' a duties

described In Article VIII, Including the malntenence of any Common Areas, any

Drainage Easements and the establishment and maintenance of a reserve fund for

maintenance of any Common Areas. The Maintenance Fund may be expanded by the

Developer or the Association for any purposes which, In the judgment of the

Association, will tend to maintain the Property values in the Subdivision, Including, but

not limited to, providing funds for the actual coat to the Association of all taxes,

Insurance, repairs, anergy chargaa, replacement and maintenance of the Common Area

es may from tima to tima be authorized by the Aaaoclatlon. Except for the

Association's use of the Maintenance Charge to perform Ita duties daacribad In this

Declaration and In the Bylaws, the usa of the Maintenance Charge for any of these

purposes Ia permissive and not mandatory. It is understood that the judgment of the

Association 11 to the expenditure of said fundi shall be final and conclusive so long

as tuch judgment Ia exercised In good faith.

Section 6.07 Handling of Malntenanet CharaOI· The collection and management of

the Maintenance Charge or other charge or assessment levied hereunder, shall be

performed by the Developer until the Control Transfer Date, at which time the

Developer shall deliver to the Asaocletlon aH funds on hand together with all books and

recorda of receipt and dlsburaements. The Devalopar end, upon transfer, the

Anoclatlon, shall maintain aaparete special accounts for th888 funds, and Owners

shall be provided at taut annually Information on the Maintenance Fund.

ARTICLE VII

DEVELOPER'S RIGHTS AND RESERVATIONS

Section 7. 01 Par!od gf peve!gpac'1 BIQhtl and Rtsttvlflon•· Developer shall have,

retain and reeerve certain rlghta aa aat forth In this declaration with raapect to the

Association and the Common Area from the dete hereof, until the earlier to occur of

Iii the Control Transfer Date or 1111 Developer'• written notice to the AHoclatlon of

Developer' a termination of the rights described In Article VII hereof, lese, save and

except those rlghta set forth In Sectlona 7.03, 7.04 and 7 .06. The rights In Sections

7 .03, 7,04 end 7.06 shall be released et such time as 11 document relinquishing aaid

rights Ia filed of record or the developer no longer holds record title to any Iota In the

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lteelt 'J1J8603141&-

subdivision. The rights and reservations hereinafter set forth shall be deemed

excepted and reserved In each conveyance of a Tract by Developer to an Owner

whether or not apacifically stated therein and In each dead or other Instrument by

which any Property within the Control Area Is conveyed by Developer. The rights,

reservations and easemanta hereafter set forth ahaU be prior and superior to any other

provisions of thla Declaration and may not, without Developer's prior written consent,

be modified, amended, rescinded or affected by any amendment of this Declaretlon.

Developer's consent to any one auch amendment shall not be construed as a consent

to any other or aubaequent amendment.

Section 7.02 Bight to Cgnstruct Mdit!pnollmprovomentaln Common Area, Developer

shall have and hereby reaervn the right !without the consent of any other Owner),

but shall not be obligated to construct additional Improvements within the Common

Area at any time and from time to time In accordance with this Declaration for the

Improvement and anhancemont thereof and for tho benefit of the Aeaoclatlon and

Ownera, so long oa such construction does not directly result In the Increase of such

Maintenance Charge. Developer shall, upon the Control Transfer Date, convey or

transfer such Improvements to the Association and the Association shall bo obligated

to accept tltlo to care for and maintain the same aa olsewhera provided in this

II

Declaration.

Section 7.03 Develgpgr'a Bights tg Use Common Areas jn P,omotlon and Marketing

gf thg Proportv. Developer shall have and hereby raservea the right to reasonable use

of the Common Area and of services offered by the Aaaoclatlon In connection with the

promotion and marketing of land within the boundaries of the Property. Wrthout

limiting the generality of the foregoing, Developer may erect and maintain on any part

of the Common Area such signa, temporary building• and othar structures as

t Developer may reasonably deem necessary or proper in connection with the promotion,

I

development and marketing of land within the Property; may usa vehicles and

equipment within the Common Area for promotional purposes; and may permit

prospective purchaaera of Property within the boundaries of the Property, who era not

Owners or Mambera of tho Association, to usa the Common Area at reaaonable times

l and In reaaonable numbers; and may refer to the aervicea offered by the Association

~

i In connection with the development, promotion and marketing of the Property.

l

! Section 7.04 Qgyeloper's Rights tg Grant and Creetg Easements Developer shall have

and hereby reaerves the right, without the consent of any other Owners or the

l\ Association, to grant or create temporary or permanent easements, for access,

utllltlea, pipeline easement, cable ta!evlslon systems, communication and aecuritv

system&, drainage, water and other purposes Incidental to development, sale,

operation and maintenance of the Subdivision, located In, on, under, over and across

(I) the Tracts or other Property owned by Developer, (ill the Common Area, and liill

existing utility easements. Developer also reserves the right, without the consent of

J any other Owner or the Association, to (I) grant or create temporary or permanent

j easements for access over and across the streets and roads within the Subdivision.

Section 7.05 Deva!goer's Rights tg Cgnygy Additional Cgmmgn Area tg the

Assocjatlgn. Developer shall have and hereby reserves the right, but shall not be

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Doell 9906.0316.28

obligated to, convey additional real Property and Improvement& thereon, If any, to the

Aseoclatlon as Common Area at any time and from time In accordance with this

Declaration, without the consent of any other Owner or the Auociatlon.

Section 7.06 Annexation of Additional Areas. Developer may causa additional real

property to be annexed to the Property, by caua!ng a written Annexation Declaration

confirming the annexation thereof, adopting these Restrictions, to be placed of record

In the Official Public Records of Camel County, Texas. At that point the annexed

property ahaU bec:ome a part of this Subdivision and shall be subject to all of the

Restrictions herein set forth the same aa If originally Included. No consent shall be

required of the Asaocletlon or any Member thereof, each Owner baing deemed to have

appointed Developer as hla agent and attorney·ln-fact to effect this Annexation, which

power hereby granted to Developer Is and shall b.- a power coupled with an lntereat.

Thereaftar the Association shall be the Association for the entirety of the Subdivision,

the same aa It the Property ware Included In the first instance. The Owner of the

Annexed Property shall be subject to these Reatrictlons and shall be a member of the

Association and shall be entitled to all of the rights and benefits provided members.

ARTICLE VIII

QUilES ANP POWERS OF THE PROPERTY OWNERS ASSOCIATION

Section 8.01 General Qut!oa and powora of the A§loc!ation. The Assocletlon has

been formed to further the common Interest of the Members. The Assocletlon, acting

through the Board of Dlractora or through persona to whom the Board of Directors has

delegated such powers (and subject to the provisions of the Bylaws), shall have the

duties and powere hereinafter lit forth and, in general, the power to do anything that

may ba naceS&ary or desirable to further the common Interest of the members, to

maintain, Improve and enhance the Common Areas and to Improve and enhance the

attractiveness, desirability and safety of the Subdivision. The Aaaoclatlon shall have

the authority to act 111 the agent to enter into any and all contracts on behalf of the

Members In order to carry out the dutiel, powers and obligations of the Association

as sat forth In this Declaration.

Section 8.02 Dutv to Accent tba Property and Eacj!it!es Ironstaaoct bv Deyaloptr.

The Aaeoclatlon shall accept title to any Property ,Including any Improvements thereon

and personal property transferred to the Association by Developer, and equipment

related thereto, together with the responsibility to perform any and all edmlnlstrative

function• and recreation functions associated therewith (collectlvaly herein referred to

as "Functions"), provided that such Property and Functions are not lncon•lstant with

the tsrma of this Declaration. Property Interest transferred to tha Association by

Developer may Include faa simple title, easements, leasehold Interests and llcenaea to

usa such Property. Any Property or interest In Property transferred to the Association

by Developer ahaU be within the boundaries of tha Property. Any Property or lntareat

in Property transferred to the Association by Developer shall, except to the extent

otherwise specifically approved by resolution of the Board of Directors, be transferred

to the Association free and clear of all liens and mortgages (other than the lien for

Property taxes and asse&lilments not than due and payable), but shall be subject to tha

terme of this Declaration, the terms of any declaration of covenants, conditions and

17

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Doell 990&031628

:Dvolt 990503l4J 2

restrictions llllflexlng such Property to the Common Area, and ell euamenu,

covenanu, conditions, restrictions and equitable servitude or other encumbrances

which do not materially affect the Owners authorized to use such Property. Except

as otherwlae specifically approved by raaolutlon of the Board of Directors, no Property

or Interest In Property transferred to the Association by the Developer shall Impose

upon the Association any obligation to make monetary paymanU to Developer or any

affiUata of Developer Including, but not limited to, any purchase price, rent, charge or

faa. The Property or Interest In Property transferred to the Aeeaclatlon by Developer

shall not Impose any unreuonable or special burdens of ownership of Property,

Including the management maintenance, replacamant and operation thereof.

Section 8.03 Puty to Maoage and Care fgr the Common Area. The Aasociatlon shall

manage, operate, care for, maintain and repair all Common Areu and keep the same

in e safe, attrectlva and desirable condition for the use and enjoyment of the Membare.

The duty to operate, manage and maintain the Common Araaa shall Include, but not

be limited to the following: establishment, operation and maintenance of a security

ayatam, If any, for the Subdivision; landacaplng maintenance, repair and replacement

of park, end management, maintenance, repair end upkeep of the subdivision

entrances and other common areas.

Section 8.04 Other lnsyranca Bgnds, The Association shall obtain such insurance

as may be required by law, Including workman's compenaation insurance, and shall

have the power to obtain such other Insurance end such fidelity, Indemnity or other

bonde as the Aaaociatlon shall deem nacassery or daalrebla.

Section 8.05 Putv tp Prepare Budgets, The Aaaoclation shall prepare budgets for the

Association, which budgeU shall include a reserve fund for the maintenance of all

Common Araaa.

Section 8.06 pyty tg law and Cgllact the Ma!ntananca Charqa, The Asaociatlon

shall levy, collect and enforce the Maintenance Charge and other chargea and

assessment• 11 elsewhere provided In this Declaration.

Section 8.07 Dyly to Proy!da Annyal Review. The Association shall provide for an

annual unaudited Independent review of the accounts of the Association. Copies of

tha review shall be made available to any Member who requeau a copy of the same

upon payment by such Member of the reasonable coat of copying the same.

Section 8.08 Putlas wjtb Basooct to Arcbjtocwral Approyals. Tha Association shall

perform functions to assist the Committee as elsewhere provided In Article IV of this

Declaration.

Section 8.09 Power to Acgyjra P,gporty and Cpnstruct lmprgyomwa The

Association may acquire Property or an Interest In Property (Including leases) for the

common benefit of Ownara Including Improvements and personal property. The

Association may construct Improvements on the Property end may demolish existing

lmprovemanta.

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Doell 9906031628

Section 8.10. Power to Adopt Byles and Regulations. The Association may adopt,

amend, repeal and enforce rulea and regulationa ("Rulaund Begulationa"), flnaa,!evlea

and enforcement provlaiona aa may be deemed necessary or desirable with respect to

the interpretation and Implementation of thla Declaration, the oparetlon of the

Association, the use and enjoyment of tha Common Areas, and the usa of any other

Property, fac!l!tlas or Improvements ownad or operetad by the Association.

Section 8.11 Powtr to Enforce Bastdct!qns and Byfgs grul Bpgulations. The

Association (end any Owner with respect only to the ramedlaa described In (Ill below)

shall have the power to enforce the provisions of this Declaration and the Rulaa and

Regulations and 1hall taka such action as the Board of Directors daema necessary or

desirable to caun such compliance by each Member and each Related User. Without

limiting the ganeralltv of the foregoing, the Association aha!! have the power to enforce

the provlalona of thla Declaration and of Rulaa and Raguletlona of the Asaoolatlon by

l

any one or mora of the following means: Ill By entry upon any Property, excluding

main residence, within the Subdivision after notice and haerlng (unless a bona fide

emergency axiata in which event this right of entry may be exercisad without notice

(written or oral) to the Owner In such manner to avoid any unraa1onabla or

unnecetsary lntarfersnca with the lawful poussaion, usa or enjoyment of the

I Improvements situated thereon by the Ownar or any other parson), without !lability

by the Association to the Owner thereof, for the purpose of enforcement of this

I Declaration or the Buies and Regulations; (iii By commencing and maintaining actions

and sulta to restrain and enjoin any breach or threataned breach of the provialons of

thle Declaration or the Rulea and Regulationa; (iii) By exclusion, after notice and

hearing, of any Member of Related User from usa of any recreational facilities within

the Common Areas during and for up to sixty (60) days following any breach of this

Declaration or auch Rules and Regulatlona by such Member or any Relatad User,

unless the breach Is e continuing breach in which case axcluslon shall continua for so

long as such breach continuea; (lv) By suspension, after notice and hearing, of the

voting rlghta of a Member during and for up to sixty (801 days following any breach

by auch Membar or a Related User of a provision of this Declaration or such Rules and

Regulation•, uniau the breach i1 a continuing breach in which casa IIUCh suspension

shall continua for so long ss auch breach contlnuea; (vi By levying and collecting, after

notice and hearing, an asnssmant against any Member for breach of thl1 Declaration

or such Rulea end Regulations by such Member or a Belated User which asaaument

reimbursed the Association for the costa Incurred by the Association In connection

with such breach; (vii by levying and collecting, after notice and hearing, raesonable

and uniformly applied flnaa and penaltl.., established in edvanca In the Rulee and

Regulation• of the Association, from any Member or Related User for breach of this

Declaration or auch Rules and Ragulatlon• by such Member or • Belated User; and (viii

By taking action Itself to cure or abate such violation and to charge the expanse•

theraof, if any, to such vlcletlng Members, plus attorney'a faas Incurred by the

Association with respect to exercising such remedy.

Before the Board may invoke the remediet provided above, it aha!! give registered

notice of such alleged violation to Owner, and shall afford the Owner a hearing. If,

after tha hearing, a violation is found to exist, the Board's right to proceed with the

l!stad ramadlet shall become absolute. Each day a violation continues aha!! ba deemad

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Doclt '9'90603162&

........ 9'9e6&at ua

a separate violation. Failure of the Association, the Developer, or of any Owner to

taka any action upon any breach or dafault with respect to any of tha foregoing

violations shall not ba deemed a waiver of their right to take enforcement action

thereafter or upon a subsequent breach or default.

Section 8. 12 Power to Grant Easomenta, In addition to any blanket easemenw

described In this Dacleratlon, the A88ociatlon shall hava the power to grant accesa,

utility, drainage, water facilhy and other easements in, on, over or under the Common

Area.

ARTICLE IX

GENERAL PROVISIONS

Section 9.01 Imn. The provisions hereof shall run with all Property In RIVER CHASE

UNIT THREE and shall be binding upon all Owners and all persons claiming under them

for a period of forty 1401 years from the data this Declaration Ia recorded, after which

time said Declaration shall be automatically extended for succesalva periods of ten (1 0)

years each, unless an Instrument, signed by not leas than two-thirda 12/3rdsl of the

Owners (Including the Developer) of the Tracts has bean recorded agreeing to amend

or change, In whole or In part, this Declaration.

Section 9.02 Amendments. This Declaration may be amended or changed, In whole

or in part, at any time by the written agreement or by signed ballots voting for such

amendment, of not less than two-thirds 12/3rdal of ell of the Ownere (Including

Developer) of the Subdivision. There shall be one vote per Tract. Anyone owning

mora than one Tract shall have one vote for each Tract owned. If the Declaration Is

amended by a written Instrument signed by those Ownera entitled to cast not leas than

two-thirds 12/3rdsl of all of the votes of the Owners of the Association, such

amendment must be approved by said Ownera whhln three hundred sixty-five 1365)

days of tha data the first Owner executea such amendment. Tha data an Owner's

signature Is acknowledged shall constitute prima facia evidence of the data of

execution of said amendment by such Owner. Those Members (Ownara, Including the

Devaloparl entitled to cast not lasa than two-thirds (2/3rdsl of all of the votes of the

Membere of the A..oclatlon may also vote to emend thla Declaration, In person, or by

proxy, at a meeting of the Members IOwnars, Including tha Oecfarant) duly called for

such purpoaa, written notice of which shall be given to all Ownefl et least ten (1 01

days and not mora then sixty 1601 days in advance and ahallaet forth the purpose of

such meeting, Notwithetandlng any provision contained In the Bylaws to the Contrary,

a quorum, for purposes of such meeting, shall consist of not less than seventy percent

(70%1 of all of the Mambara lin parson or by proxy) entitled to vote. Any such

amendment shall become effective when an Instrument Ia filed for record In the Official

Publlo Records of Comal County, TeKal, accompanied by a certificate, signed by a

majorhy of the Board of Trustees, stating that the required number of Members

(Owners, Including the Developer) executed the Instrument amending this Declaration

or cast a written vote, In pereon or by proxy, In favor of said amendment et the

meeting called for such purpo... Copies of the written ballots pertaining to such

amendment shall be retained by the Association for a period of not less than thraal31

years after the data filing of the amendment or termination.

20

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Doell 9906031628

Daett 99860314:J:i!

Section 9.03 Amendment by the Dgyalooar. The Developer shall have and raaarvas

the right at any time and from time to tima prior to the Control Tranafar Data, without

the joinder or consent of any Owner or otbar party, to amend thle Declaration by an

Instrument In writing duly signed, acknowledged, and filed for record for the purpose

of correcting any typogrephlcal or grammatical error, oversight, ambiguity or

lnconslatency appearing herein, provided that any such amendment shall be consistent

with and In furtherance of the general plan and achama of development as evidenced

by this Declaration and shall not impair or adveraely affect tha vested Property or other

rigbtl of any Owner or his mortgagae. Additionally, Developer shall have and reserves

the right at any time and from tlma to tlma prior to the Control Tranafer Date, without

the joinder or consent of any Owner of other party, to amend thla Declaration by an

Instrument In writing duly signed, acknowledged and filed for record for the purpose

of permitting the Owners to enjoy the benefits from technological edvancas, such as

security, communications or anergy-related davlcaa or equipment which did not al!lsta

or ware not In common usaln residential subdivisions at the time this Declaration was

adopted. Ukewise, the Developer shall have and re10rvas the right at IJ/tiY time and

from time to time prior to the Control Transfer Date, without the joinder or consent of

any Owner or other party, to amend this Declaration by an Instrument In writing duly

signed, acknowledged and filed for record fcir the purpose of prohibiting the usa of any

device or apparatus developed and/or avaDable for residential usa following the data

of this Declaration if the use of euch device or apparatus will adverealy affect the

Asaoclatlon or wiH adversely affect the Property values within the Subdivision.

Section 9.04 Severability. Each of the provisions of this Daclaratlon shall be deemed

Independent end severable and the invalidity or unenforcaabillty or partial invalidity or

partially unenforcaablllty of any provision or portion hereof shall not affect the validity

or enforceability of any other provision.

Section 9.05 Uberallntgroretatjon. The provisions of this Declaration shall be liberally

construed as a whole to effectuate the purpose of thla Declaration.

Section 9.08 Succa11ors and Ats!qns. The provisions hereof shall be binding upon

and Inure to the benefit of the Owners, the Developer and the Association, and their

respective hairs, legal rapresentatlvae, executora, administrators, successors and

assigns.

Section 9.07 Effect of Ylolotions on Mortgages. No violation of the provisions herein

contained, or any portion thereof, shall affect the lien of any mortgage or dead of trust

pra10ntly or hereafter placed of record or otherwise affect the rights of the mortgagee

under any such mongage, the bolder of any such lien or beneficiary of any such deed

of trust; and any such mongage, lien or dead of trust may, nevarthela88, be enforced

In accordance with its terms, subject, naverthelesa, to the provisions herein contained.

Section 9.08 Terminology All personal pronoune used In this Declaration and all

exhibits attached berato, whether used In the masculine, feminine or neuter gander,

sbaU Include all other ganders; the singular aballlnclude the plural and vice versa. Title

of Articles and Section• are for convenience only and neither limit nor amplify tha

provisions of this Declaration Itself. The terms "herein", "hereofft and similar terms, as

21

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Doc:tt 9906031628

used in this instrument~ refer to the entire agreement and are not limited to referring

only to the specifiC paragraph, Section or article In which auch tarma appear. All

reference• In this Declaration to Exhibltl shall refar to the Exhiblta attached hereto.

VEIEBAN PI,IRCHASER PABDAL RELEASE

Notwithstanding anything contained In the Restrictions to the contrary, a Veteran

Purchaser shall be entitled to have a 1.00 acre tract released from the Vetarana Land

Board for a home Bite and same shall not be construed as a violation of the above

Restrictive Covenants.

IN WITNESS WHE~EOF, the und,raigned, being the Developer herein, has hereunto sat

Its hand of this~ day of )_.;>J v•-kL , 1999.

TEXAS SOUTHERLAND VENTURE, a

Massachusetts Joint V. re by

SOUTHERLAND P ERT S, INC.

a Texas C , Join Venturer

ON, Vice President

1~:.ra603162a

THE STATE OF TEXAS

m: 1~::1J't!'"

2J~I af

AI

~ ~s

COUNTY OF Y"l)4c • COUIIIT

Thle inttrument waa acknowledged before me on thl• the "~ day of

lL-Ii<r,L."c , 1999, by JAY PATTERSON, Vice President of SOUTHERLAND

PROPERTIES, INC., a Taxaa Corporation, as Joint Venturer for TEXAS SOUTHERLAND

VENTURE, a Ma11achusett1 Joint Venture. In the capacity therein stated, on behelf

of said Corporation.

,., ' 0

N~.i:~f~a~. ~Ari'o~-TEXAS

Nort:tm• ~~~t: g .. ._ ..

My Commitlon Expires: tV·i:l·:;..lJ<'<•

1

AFTER RECORDING RETURN TO:

BOB R. KIESUNG, P.C.

J. P. 0. Box 3l1688

I~ New Braunfela, TX 78131·1686

22

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APPENDIX

Tab 3

Tex. Prop. Code §§ 202.002, 202.003

PROPERTY CODE

TITLE 11. RESTRICTIVE COVENANTS

CHAPTER 202. CONSTRUCTION AND ENFORCEMENT OF RESTRICTIVE

COVENANTS

* * *

Sec. 202.002. APPLICABILITY OF CHAPTER. (a) This chapter applies to all restrictive

covenants regardless of the date on which they were created.

(b) This chapter does not affect the requirements of the Community Homes for Disabled Persons

Location Act (Article 1011n, Vernon's Texas Civil Statutes).

Added by Acts 1987, 70th Leg., ch. 712, Sec. 1, eff. June 18, 1987.

Sec. 202.003. CONSTRUCTION OF RESTRICTIVE COVENANTS. (a) A restrictive

covenant shall be liberally construed to give effect to its purposes and intent.

(b) In this subsection, "family home" is a residential home that meets the definition of and

requirements applicable to a family home under the Community Homes for Disabled Persons

Location Act (Article 1011n, Vernon's Texas Civil Statutes). A dedicatory instrument or

restrictive covenant may not be construed to prevent the use of property as a family home.

However, any restrictive covenant that applies to property used as a family home shall be

liberally construed to give effect to its purposes and intent except to the extent that the

construction would restrict the use as a family home.

Added by Acts 1987, 70th Leg., ch. 712, Sec. 1, eff. June 18, 1987.

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