MONTREUX AT DEERWOOD LAKE, A CONDOMINIUM PROSPECTUS

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1 MONTREUX AT DEERWOOD LAKE, A CONDOMINIUM PROSPECTUS

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3 INDEX TO EXHIBITS Exhibits to Prospectus Exhibit A. Exhibit B. Exhibit C. Exhibit D. Exhibit E. Exhibit F. Exhibit G. Exhibit H. Exhibit I. Exhibit J. Exhibit K. Exhibit L. Exhibit M. Exhibit N. Exhibit 0. Exhibit P. Exhibit Q. Exhibit R. Declaration of Condominium Exhibit 1. Exhibit 2. Exhibit 3. Exhibit 4. Legal Description, Survey, and Plot Plan Allocation of Percentage Shares of Common Elements, Common Surplus and Common Expenses Articles of Incorporation of Condominium Association By-Laws of Condominium Association Schedule A to Bylaws: Rules and Regulations Estimated Operating Budget, Fees and Reserve Schedule Form of Purchase Agreement Escrow Agreement Schedule of Bedrooms and Bathrooms Proposed Typical Unit Floor Plans Evidence of Ownership Receipt for Condominium Documents Frequently Asked Questions and Answers Sheet Declaration of Easements Covenants and Restrictions for Deerwood Lake Articles of lncorporation of Deerwood Lake Property Owners' Association By-Laws of Deerwood Lake Property Owners' Association, Inc. Management Agreement Alternative Media Disclosure Conversion lnspection Report Termite Inspection Report Acknowledgement Letter from City of Jacksonville Copy of Archer Exterminators, Inc. Agreement and Protection Plan

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5 PROSPECTUS

6 PROSPECTUS TABLE OF CONTENTS.... Description of Condominium... I Maximum Number of Units that will use Facilities in Common with the Condominium... 2 Interests Offered for Sale... 2 Recreational and certain other commonly used facilities which are intended to be used only by Owners of Units in the Condominium Expansion of Recreational Fac~l~t~es... 3 Parking... 4 Parking Garages... 4 Storage Areas The Associations... 5 Leasing of Developer-Owned Units Management of the Condominium... 6 Transfer of Control of the Condominium Association Statement of Conversion Cond~t~ons... 7 Restrictions on Use of Units and Common Elements and Alienability... 8 Easements Located or to be Located on the Condominium Property Utilities and Certain Services Apportionment of Common Expenses, Ownership of the Common Elements and Percentage Shares of Common Expenses Estimated Operating Budgets Additional Expenses... I6 Title Insurance Sales Commcss~ons The Developer Mold Noise and other Disturbances Additional Matters Lake Disclaimers Disclaimer of Obligations Additional Disclaimers Presale Requirement Developer's Repurchase Option..., Evidence of Ownership General Definitions Effective Date PROSPECTUS -I-

7 MONTREUX AT DEERWOOD LAME, A CONDOMlNlUM PROSPECTUS THlS PROSPECTUS CONTAINS IMPORTANT MATTERS TO BE CONSIDERED IN ACQUIRING A CONDOMINIUM UNIT. THE STATEMENTS CONTAINED HEREIN ARE ONLY SUMMARY IN NATURE. A PROSPECTIVE BUYER SHOULD REFER TO ALL REFERENCES, ALL EXHIBITS HERETO, THE CONTRACT DOCUMENTS, AND SALES MATERIALS. ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. REFER TO THlS PROSPECTUS AND ITS EXHIBITS FOR CORRECT REPRESENTATIONS. PROSPECTUS -11-

8 SUMMARY THE CONDOMINIUM WlLL BE CREATED AND UNITS WlLL BE SOLD IN FEE SIMPLE INTERESTS. RECREATIONAL AND OTHER COMMONLY USED FACILITIES MAY BE EXPANDED, ADDED, REMOVED OR REDUCED WITHOUT THE CONSENT OF UNlT OWNERS OR THE CONDOMlNlUM ASSOCIATION. THERE ARE LIENS OR LIEN RIGHTS AGAINST EACH UNlT TO SECURE THE PAYMENT OF ASSESSMENTS OR OTHER EXACTIONS COMING DUE FOR THE USE, MAINTENANCE, UPKEEP AND REPAIR OF THE RECREATIONAL OR OTHER COMMONLY USED FACILITIES. THE UNlT OWNER'S FAILURE TO MAKE THESE PAYMENTS MAY RESULT IN THE FORECLOSURE OF LIENS. THE UNITS MAY BE TRANSFERRED SUBJECT TO A LEASE. THERE IS A CONTRACT FOR THE MANAGEMENT OF THE CONDOMINIUM. THE DEVELOPER HAS THE RIGHT TO RETAIN CONTROL OF THE CONDOMINIUM ASSOCIATION AFTER A MAJORITY OF THE UNITS HAVE BEEN SOLD. THE SALE, LEASE OR TRANSFER OF UNITS IS RESTRICTED OR CONTROLLED. PROSPECTUS

9 PROSPECTUS: SUMMARY OF CERTAIN ASPECTS OF THE OFFERING Description of Condominium The name of the Condominium is Montreux at Deerwood Lake, a Condominium (the "Condominium"). The Condominium will be located at 8550 Touchton Road, Jacksonville, FL on an approximately 23 acre parcel at the intersection of Touchton Road and Deerwood Lake Parkway, east of Southside Boulevard. Montreux at Deerwood Lake, LLC, a Florida limited liability company (the "Developer" or the "Declarant"), is the owner of the unsold Units in the Condominium that are being offered for sale pursuant to this Prospectus. The Condominium will be a conversion of existing improvements which consist of twenty-two (22) two and three story buildings (the "Buildings") which contain a total of four hundred forty-four (444) residential units (the "Units"), as shown on proposed Exhibit "1" to the Declaration of Condominium. The number of bedrooms and bathrooms planned for each Unit is set forth in Exhibit "En to this Prospectus. Except to the extent prohibited by the Act, Developer reserves the right for Developer, or any subsequent owner of any such Units that are adjacent, or directly above or below another Unit, to combine any two Units by installing or removing the walls separating the Units or combining the passage way through the interior walls of such Units. Notwithstanding the combination of any two Units, if any, the total number of Units in the Condominium, the apportionment of Common Expenses and ownership of the Common Elements attributable to each Unit, including the Units so combined, and the voting rights and membership in the Condominium Association shall remain the same as currently set forth in the Declaration. The Condominium will consist of the Units, and the Common Elements and Limited Common Elements appurtenant to the Units, as described in this Prospectus and in the proposed Declaration of Condominium (the "Declaration of Condominium") attached hereto as Exhibit "A" and the survey and plot plan of the Condominium attached thereto as Exhibit "1 ". Various recreational facilities, including, without limitation, two (2) swimming pools, a children's playground area, a tennis court, a volleyball court and a clubhouse with various amenities therein, as well as parking areas and other amenities, which are all more particularly described in later sections of this Prospectus, will be included in the Common Elements of the Condominium. The Condominium is located within a parcel of property (the "Deerwood Lake Parcel") that is subject to the terms and conditions of the Declaration of Easements, Covenants and Restrictions for Deerwood Lake recorded May 28,2002 in Official Records Book 10503, Page 1690 of the Official Public Records of Duval County, Florida, and attached hereto as Exhibit "J" to this Prospectus (the "Master Covenants"). All Properties within the Deerwood Lake Parcel are subject to the governance of the Deerwood Lake Property Owners' Association, Inc., a Florida not for profit corporation (the "Master Association"), which is not controlled by or affiliated with the Developer. The construction, finishing and equipping of the Units and the Common Elements is substantially complete as of this date. Notwithstanding the foregoing, the Developer reserves the right to modify, alter, repair, demolish, construct, finish and equip the Units; provided, at all times, such activities shall be maintained in accordance with the provisions of the Declaration of Condominium and the Master Covenants. PROSPECTUS

10 Maximum Number of Units that will use Facilities in Common with the Condominium The maximum number of units which will share the recreational and other facilities and Common Elements located within the Condominium in common with other Unit Owners is Four Hundred Forty-Four (444). Interests Offered for Sale THE CONDOMINIUM WlLL BE CREATED AND UNITS WlLL BE SOLD IN FEE SIMPLE INTERESTS. The Developer reserves the right to lease Units that are unsold. Recreational and certain other commonly used facilities which are intended to be used only by Owners of Units in the Condominium The following facilities are to be located on the Common Elements of the Condominium and are intended to be used, except as may be provided herein to the contrary, exclusively by Owners and occupants of Units in the Condominium. These facilities are currently intended to include, but are not necessarily limited to, the following (all to be located on designated portions of the Common Elements):... Facility Swimming Pool #I (unheated) Swimming Pool #2 (unheated) Playground Clubhouse Tennis Court Volleyball Court Media Room Gymnasium Telephone / A.V Room Storage Room Location NW Corner of Condominium Property adjacent to clubhouse Southern portion of Condominium Property Adjacent to Swimming Pool #2 Adjacent to Swimming Pool #I East of Clubhouse East of Tennis Court Clubhouse Clubhouse Clubhouse Clubhouse Approximate Estimated Approx. Size (Sq. Ft.) Completion Capacity Date (Persons) 1,800 Completed 45 1,200 Completed 4,000 Completed 10,350 Completed 7,800 Completed 3,300 Completed 1,119 Completed 3,346 Completed 39 Completed 43 Completed PROSPECTUS -2-

11 Men's Room #I Ladles' Room #I Workout Room w/ children's area Clubhouse Clubhouse Clubhouse ,108 Completed Completed Completed Game Room Conference Room Office 1 Office 2 Office 3 Closet Gathering Room (including welcoming area) Business Center Service Bar and Seating Area Sauna Sorting Room Ma11 Room Mechanical Room #2 Men's Room #2 Ladies' Room #2 2 Toilet Rooms Mechanical room # 1 Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Clubhouse Club House Clubhouse each 7 8 Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed Completed All descriptions in this Prospectus of the locations, areas, capacities, and sizes are approximations only. However, all facilities will be available for inspection by the prospective buyer and any condition or fact revealed by such inspection will control over any representations contained herein. The Developer will spend a minimum of $10,000 to purchase personal property for the above facilities, the kind nature and value of which will be determined by the Developer in its sole discretion. The above facilities may be used by all Unit Owners, their guests, tenants and invitees. The use of such facilities shall be subject to the restrictions and limitations set forth in the Declaration of Condominium and all rules and regulations now or hereafter enacted by the Condominium Association. The Condominium Association shall have the right to, among other things, prohibit dual usage of facilities by a Unit Owner and its tenant during periods when the Unit is being rented. Expansion of Recreational Facilities RECREATIONAL AND OTHER COMMONLY USED FACILITIES MAY BE EXPANDED OR ADDED WITHOUT CONSENT OF UNIT OWNERS OR THE CONDOMINIUM ASSOCIATION PROSPECTUS -3-

12 See Sections 6.6 and 9.2 of the Declaration of Condominium..., The Developer reserves, for itself and its affiliates, the right at any time to provide, expand and/or add to any of the recreational facilities described in this Prospectus and to include or exclude such facilities as the Developer may, in its sole and absolute discretion, deem appropriate. While any such expense or modification shall be subject to the terms and conditions of the Master Covenants and the Declaration of Condominium the consent of the Unit Owners or the Condominium Association shall not be required for any such expansion or modification if the cost of construction of any such expansion or modification is borne exclusively by the Developer. The Developer is not obligated to expand such facilities, provide additional facilities or modify any planned facilities. Parking The Common Elements shall include outside parking spaces for the non-exclusive use of Unit Owners and their guests, tenants, and inv~tees Parking spaces shall not be assigned to Un~ts or Unit Owners and shall be available on a non-exclusive, first come, first serve basis to every Unit Owner, or guest, tenant or ~nvitee Each Unit Owner acknowledges and agrees that a portion of the parking areas in the Condominium is located below the federal flood plain, and, accordingly, in the event of flooding, any automobiles andlor personal property stored therein is susceptible to water damage. Additionally, insurance rates, both for the Condominium Association in insuring the parking areas, and for owners, may be higher than if the parking areas were above the federal flood plain. By acquiring title to, or taking possession of, a unit, or using a parking space, each Owner, for himself and his tenants, guests and invitees, hereby expressly assumes any responsibility for loss, damage or liability resulting therefrom. Unit Owners and occupants shall be responsible for removing their vehicles and other property from the parking areas upon the issuance of a tropical storm or hurricane warning. Parking Garages The Condominium shall contain, within its Common Elements, certain Limited Common Element Parking Garages. The Developer, for so long as it owns a Unit in the Condominium, shall be entitled to assign any Parking Garage for the exclusive use of a Unit, and thereafter the Condominium~Association will have the right of such assignment. The Developer, for so long as it owns a Unit in the Condominium, and thereafter the Condominium Association, shall be entitled to receive compensation in exchange for assignments of Parking Garages. Any Parking Garage assigned to a Unit shall be a Limited Common Element of that Unit. The maintenance of the interior, non-structural portions of each of the Parking Garages, and all contents therein, as well as the insurance of such contents, shall be the sole responsibility of the Owner of the applicable Units to which such Parking Garages are assigned. Each Unit Owner acknowledges and agrees that the Parking Garages may be located below the federal flood plain, and, accordingly, in the event of flooding, any automobiles andlor personal property stored therein is susceptible to water damage. Additionally, insurance rates, both for the Condominium Association in insuring the Parking Garages, and for Owners, may be higher than if the Parking Garages were above the federal flood plain. By acquiring title to, or taking possession of, a Unit, or using a Parking Garage, each Owner, for himself and his tenants, guestsand invitees, hereby expressly assumes any responsibility for loss, damage. or liability resulting therefrom. Unit Owners and occupants shall be responsible for removing their vehicles and other property... : from the Parking Garages upon the issuance of a tropical storm or hurricane warning PROSPECTUS -4-

13 See Sect~on 3 3(b) of the Declarat~on of Condom~nium for assignments relating to Parking Garages. Storage Areas The Condominium shall contain, within its Common Elements, certain Limited Common Element Storage Areas. The Developer, for so long as it owns a Unit in the Condominium, shall be entitled to assign any Storage Areas for the exclusive use of a Unit, and thereafter the Condominium Association will have the right of such assignment. The Developer, for so long as it owns a Unit in the Condominium, and thereafter the Condominium Association, shall be entitled to receive compensation in exchange for assignments of Storage Areas. Any Storage Area assigned to a Unit shall be a Limited Common Element of that Unit. The maintenance of the interior, non-structural portions of each of the Storage Areas, and all contents therein, as well as the insurance of such contents, shall be the sole responsibility of the Owner of the applicable Units to which such Storage Areas are assigned. Each Unit Owner acknowledges and agrees that the Storage Areas may be located below the federal flood plain, and, accordingly, in the event of flooding, any personal property stored therein is susceptible to water damage. Additionally, insurance rates, both for the Condominium Association in insuring the Storage Areas, and for Owners, may be higher than if the Storage Areas were above the federal flood plain. By acquiring title to, or taking possession of, a Unit, or using a Storage Areas, each Owner, for himself and his tenants, guests and invitees, hereby expressly assumes any responsibility for loss, damage or liability resulting therefrom. Unit Owners and occupants shall be responsible for removing their property from the Storage Areas upon the issuance of a tropical storm or hurricane warning. Areas. See Section 3.3(c) of the Declaration of Condominium for assignments relating to Storage The Associations The Condominium is governed by the following condominium association: Montreux at Deerwood Lake Condominium Association, Inc. (the "Condominium Association") 444 Units (Maximum) The Condominium is also part of and is located within the Deerwood Lake Parcel (see the subsection hereof entitled "Description of Condominium"), and is therewith subject to the Master Covenants and the Master Association. There is no recreation lease or land lease associated with the Condominium or with the Deerwood Lake Parcel; however, each Unit will be assessed, in the budget for the Condominium, for a portion of the Condominium's share of the assessments imposed on the Deerwood Lake Parcel pursuant to the Master Covenants. THERE ARE LIENS OR LIEN RIGHTS AGAINST EACH UNIT AND THE IMPROVEMENTS THEREON TO SECURE THE PAYMENT OF ASSESSMENTS PROSPECTUS -5-

14 OR OTHER EXACTIONS COMING DUE FOR THE USE, MAINTENANCE, UPKEEP AND REPAIR OF THE RECREATIONAL OR OTHER COMMONLY USED FACILITIES. THE UNIT OWNER'S FAILURE TO MAKE THESE PAYMENTS MAY RESULT IN FORECLOSURE OF THESE LIENS. For further information with respect to the Condominium see Section 13 of the Declaration of Condominium. For further information with respect to the Deerwood Lake Parcel, see Article V of the Master Covenants. Membership in the Condominium Association is mandatory for all Unit Owners. The Condominium Association is responsible for operating and maintaining the Common Elements of the Condominium. The Condominium Association has the power to assess Unit Owners for a share of the expenses of such operation and maintenance, including management fees, and to impose and foreclose liens in the event such assessments are not paid when due. Pursuant to the Master Covenants, the Master Association is responsible for operating and maintaining the stormwater management systems and other Common Areas (as defined in the Master Covenants) of the Deerwood Lake Parcel and any improvements and landscaping situated in the Common Area, if any. Reference should be made to the Declaration of Condominium, as well as the Articles of Incorporation and By-Laws of the Condominium Association (and all amendments and supplements thereto) for a complete explanation of the powers and responsibilities of the Condominium Association. Reference should be made to the Master Covenants, for an explanation of the powers and responsibilities of the Master Association. See also the subsection hereof entitled "Operating Budget." The budget contained in this Prospectus as Exhibit "6" is the projected estimated budget for the Condominium Association for the year stated therein. The estimated budget for the Condominium Association includes the estimated periodic assessments owed to the Master Association with regard to the Deerwood Lake Parcel. Leasinq of Developer-Owned Units THE UNITS MAY BE TRANSFERRED SUBJECT TO A LEASE See Section 17.2 of the Declaration of Condominium. The Developer does not at this time intend to engage in a program of renting or leasing unsold Units, but reserves the right to do so in the future. In the event any Unit is sold prior to the expiration of the term of a lease, title to such Unit will be conveyed subject to the lease and the Buyer will succeed to the interests of the applicable landlord. If any Unit is sold subject to a lease, a copy of the executed lease will be attached to the Purchase Agreement in accordance with the terms of Florida Statutes, Section (1)(a)(4). The Units have been previously occupied, as disclosed by the Developer to each prospective Buyer in the Purchase Agreement. Management of the Condominium THERE IS A CONTRACT FOR THE MANAGEMENT OF THE CONDOMINIUM. PROSPECTUS -6-

15 The Condominium Association has entered into a management contract (the "Management Contract") with a licensed community association manager, a copy of which is included as Exhibit "M" to this Prospectus. Any fees payable under the Management Contract will be part of the Common Expenses of the Condominium that are included in the Assessments of the Condominium Association payable by the Unit Owners. Pursuant to the Management Agreement, Sterling Fin. & Mgmt., Inc., a Florida corporation, has been retained as the exclusive manager of the Condominium. The term of the Management Agreement shall be for 1 year and will continue for each consecutive one (1) year after that, unless sooner terminated or unless extended in accordance with the terms therein. Other than the Management Contract, there are currently no management, maintenance or service contracts having a non-cancelable term in excess of one year except for that Archer Exterminators, Inc. Agreement and Protection Plan attached hereto as Exhibit "R". The Condominium Association is empowered at any time and from time to time, to enter into such agreements upon such terms and conditions as its Board of Directors shall approve and without the consent of Unit Owners. The Management Agreement, as well as any other management, maintenance or service contracts having a non-cancelable term in excess of 1 year, may be subject to cancellation by the Condominium Association and by Unit Owners directly in accordance with the Section , Florida Statutes (this is not, however, an admission or suggestion by the Developer, the Declarant, the Condominium Association, or any other relevant contractor, that the Management Contract or any particular contract is, in fact, so cancelable). Transfer of Control of the Condominium Association THE DEVELOPER HAS THE RIGHT TO RETAIN CONTROL OF THE CONDOMINIUM ASSOCIATION AFTER A MAJORITY OF THE UNITS HAVE BEEN SOLD. For further information, see Section , Florida Statutes, and Section 4.15 of the By- Laws of the Condominium Association, a copy of which is attached as Exhibit 4 to the Declaration of Condominium. The Directors of the Condominium Association designated by the Developer will be replaced by Directors elected by the Unit Owners, other than the Developer, in accordance with Section , Florida Statutes, and Section 4.15 of the By-Laws. Statement of Conversion Conditions The Condominium is being created by the conversion of existing improvements. To the fullest extent permitted by law, and except as noted below, each Unit shall be delivered in "AS IS" condition without any express warranties or representations by the Developer, the Condominium Association or any broker or agent. No converter reserve accounts have been establrshed pursuant to Sectron (1), Florrda Statutes. Therefore, pursuant to Sectlons (6), Florrda Statutes, unless and until expired, the Developer IS deemed to have granted to the Buyer of each Unrt an impl~ed warranty of fitness and merchantab~lity for the purposes or uses intended, as to the roof and structural components of the buildrng or the rmprovements, as to fireproofing and fire protectron systems, and as to mechanical, electrical and plumbing elements servlng the improvements or the Buildings, except mechanrcal elements serving only one Unit PROSPECTUS -7-

16 To the fullest extent permitted by law, the Developer specifically disclaims any and all other warranties, including (without limitation) any and all warranties of merchantability and fitness as to the Condominium Property, the Buildings, the Units, and the appurtenances thereto, including any appliances, furniture, fixtures or personal property, subject only to the provisions of Sections (6), Florida Statutes, as outlined above. The statements contained in the Conversion lnspection Report of Qualified Architect or Engineer, which discloses the condition of the Condominium and is included as Exhibit "0" to this Prospectus pursuant to Section , Florida Statutes (the "lnspection Report"), are solely the opinions of Murray Schmidt, P.A., Architect, on behalf of Development Compliance & Inspecting, Inc. (the "lnspector") and they represent estimates upon available information. Each Buyer, by virtue of its execution of a Purchase Agreement, shall agree and acknowledge that the lnspector is not affiliated with the Developer in any manner, and is a third party, independent contractor employed by the Developer to furnish the lnspection Report as required by the Florida Condominium Act. Each Buyer is advised to review the lnspection Report carefully, including all disclaimers set forth therein. The Developer does not adopt or reject any of the conclusions or observations set forth in the lnspection Report, which are entirely the work of the Inspector. A copy of the termite inspection report is attached hereto and made a part of Exhibit "P" of this Prospectus. A letter countersigned by the City of Jacksonville (the "City"), acknowledging that the City has been notified of the proposed creation of the residential condominium by conversion of existing previously occupied improvements, and also acknowledges compliance with applicable zoning requirements, is attached to this Prospectus as Exhibit "Q". Restrictions on Use of Units and Common Elements and Alienability THE SALE, LEASE OR TRANSFER OF UNITS IS RESTRICTED OR CONTROLLED. The following is a summary of certain of the restrictions that affect the Units and the Unit Owners and Occupants. For further information, see Sections 17 and 18 of the Declaration of Condominium. use. Each Unit shall be used for residential purposes only, whether for permanent or temporary All re-sales of Units are subject to (i) a right of first refusal in favor of the Developer as set forth in the Purchase Agreement; and (ii) a right of first refusal in favor of the Condominium Association as set forth in Section 18 of the Declaration of Condominium. There are occupancy and use restrictions governing the use of the Units. Occupancy and Use Restrictions. Except as otherwise herein expressly provided, the Units shall be used for residential purposes only. No business, profession or trade of any type shall be conducted on any portion of the Units. This prohibition shall not be applicable to the Developer or its affiliates with respect to its improvements to the Condominium, its construction, remodeling, repair, decorating, administration, sale, rental or lease of Units, or its use of Units as models, V.I.P. or guest suites, or for sales offices or management services for the Condominium. Nothing herein shall be construed to prohibit ownership of a Unit by a corporation, domestic or foreign, provided that the,! residential nature of the Units is not disturbed.... PROSPECTUS -8-

17 Occupancy in Units, except for temporary occupancy by visiting guests, shall not exceed two (2) persons per bedroom and one (1) person per den (as defined by the Condominium Association for the purpose of excluding from such definition living rooms, dining rooms, family rooms, country kitchens and the like). The provisions of this Section shall not be applicable to Units used by the Developer or its affiliates for model units, VIP suites, sales offices or management or other services for the Condominium. Unless otherwise determined by the Board of Directors of the Condominium Association, and except as otherwise provided in Section 17.2 of the Declaration of Condominium, a person(s) occupying a Unit for more than one (1) month without the Unit Owner or a member of his family being-present shall not be deemed a guest but, rather, shall be deemed a lessee for purposes of said Section (regardless of whether a lease exists or rent is paid) and shall be subject to the provisions of the Declaration of Condominium which apply to lessees. The purpose of this paragraph is to prohibit the circumvention of the provisions and intent of the Declaration of Condominium pertaining to the approval of leases, and the Board of Directors of the Condominium Association shall enforce, and the Unit Owners shall comply with, this provision with due regard to such purpose. Leases. Leasing of Units shall be subject to the prior written approval of the Condominium Association. Every lease of a Unit shall specifically require a deposit from the prospective tenant in an amount not to exceed one (1) month's rent ("Deposit"), to be held in an escrow account maintained by the Condominium Association, provided, however, that the Deposit shall not be required for any Unit which is rented or leased directly by or to the Developer. No lease shall be for a term of less than twelve (1 2) months. In the event any lease terminates prior to the end if its term, a Unit Owner may lease its Unit one additional time during the calendar year of such termination. In no event shall a Unit be leased more than two (2) times within any calendar year, regardless of the lease term. The foregoing requirement shall not apply to a Unit rented or leased directly by or to the Developer. Every lease shall provide (or, if it does not, shall be automatically deemed to provide) that: (i) a material condition of the lease shall be the tenant's full compliance with the covenants, terms, conditions and restrictions of this Declaration (and all Exhibits hereto), the Master Covenants, and with any and all rules and regulations adopted by the Condominium Association from time to time (before or after the execution of the lease); (ii) and that a tenant may not, under any circumstances, sublet the Unit (or any portion thereof) to any other person or permit occupancy by any other person. Additionally, copies of all written leases shall be submitted to the Condominium Association and tenants must register with the Condominium Association prior to moving in. The Unit Owner will be jointly and severally liable with the tenant to the Condominium Association for any amount which is required by the Condominium Association to repair any damage to the Common Elements or any other protions of the Condominium from the acts or omissions of tenants (as determined in the sole discretion of the Condominium Association) and to pay any claim for injury or damage to property caused by the negligence of the tenant and a special charge may be levied against the Unit therefore. When a Unit is leased, a tenant shall have all use rights in Association Property and those Common Elements otherwise readily available for use generally by the Unit Owners, and the of the leased Unit shall not have such rights, except as a guest, unless such rights are waived in writing by the tenant. Nothing herein shall interfere with the access rights of the Residential Unit Owner as a landlord pursuant to Chapter 83, Florida Statutes. The Condominium Association shall have the right to adopt rules to prohibit dual usage by a Unit Owner and a tenant of Association Property and Common Elements otherwise readily available for use generally by Unit Owners. Additionally, copies of all leases of Units shall be submitted to the Condominium Association and the tenants thereunder must register with the Condominium Association prior to any occupancy. PROSPECTUS -9-

18 All leases are hereby made subordinate to any lien filed by the Condominium Association whether prior or subsequent to such lease. Children. Children are permitted to reside in the Units. See Section 17.3 of the Declaration of Condominium and Rule 3 of the Rules and Regulations attached to the By-Laws as Schedule A thereto. Pet Restrictions. No more than two (2) household pets (as may be defined and re-defined by the Condominium Association) shall be maintained in any Unit or any Limited Common Element appurtenant thereto. The maximum total weight for any one household pet may not exceed one hundred (100) pounds. Household pets shall not be kept, bred or maintained for any commercial purpose and shall not become a nuisance or annoyance to neighbors. Those pets which, in the sole discretion of the Condominium Association endanger health, safety, have the propensity for dangerous or vicious behavior (such as pit bulldogs or other similar breeds or mixed breeds), make objectionable noise, or constitute a nuisance or inconvenience to the Owners of other Units or to the owner of any other portion of the Condominium shall be removed upon request of the Board of the Condominium Association. Unit Owners must pick up all solid wastes of their pets and dispose of such wastes appropriately. All pets (including cats) must be kept on a leash of a length that affords reasonable control over the pet at all times, or must be carried, when outside the Unit. No pet may be kept on a balcony or terrace when its owner is not in the Unit. Without limiting the generality of Section 19 of the Declaration of Condominium, any violation of the provisions of this restriction shall entitle the Condominium Association to all of its rights and remedies, including, but not limited to, the right to fine Unit Owners (as provided in any applicable rules and regulations) and/or to require any pet to be permanently removed from the Condominium Property. See Section 17.4 of the Declaration. Use of Common Elements and Association Property. No portion of the Units, the Limited Common Elements, the other Common Elements, or the Condominium shall be used for any purpose other than those reasonably suited for furnishing the services and facilities incident to the use and occupancy of tt-e-units: The-Common Elements shall not be obstructed, littered, defaced, or misused in any manner. In no event shall any Unit Owner or occupant place, or permit the placement of, any item that obstructs, or otherwise impedes access to, any portions of the Condominium that are either designated or used as delivery and receiving areas. Nuisances. No portion of the Units, Limited Common Elements or other Common Elements shall be used, in whole or in part, for the storage of any property or thing that will cause it to appear to be in an unclean or untidy condition or that will be obnoxious or unsightly to the eye; nor shall any substance, thing, or material be kept on any portion of the Units, Limited Common Elements or Common Elements that will emit foul or obnoxious odors or cause any noise or other condition that will or might disturb the peace, quiet, safety, comfort or serenity of the occupants of surrounding properties. No obnoxious or offensive activity shall be carried on in any Units, Limited Common Elements, Common Elements, nor shall anything be done therein which may be or become an unreasonable annoyance or nuisance to any Unit Owner. No loud noises or noxious odors shall be permitted in any portion of the Condominium Property (including, without limitation the Units and other Common Elements), and the Board of Directors of the Condominium Association shall have the right to determine if any equipment, fixture, improvement, materials or activity producing such noise or odor constitutes a nuisance. In particular, during the hours from 11 :00 p.m. through 8:00 a.m. no Owner shall play (or permit to be played in his Unit or on the Limited Common Elements or Common Elements) any musical instrument, phonograph, television, radio or the like in a way that unreasonably disturbs or annoys other Unit Owners or occupants. Additionally, there shall not be.., maintained any plants, animals, devices or things of any sort whose activities or existence is in any way noxious, dangerous, unsightly, unpleasant, or of a nature that may diminish or destroy the....i: PROSPECTUS -1 0-

19 enjoyment of the Units or the Condominium. No outside burning of wood, leaves, trash, garbage, or household refuse shall be permitted within the Condominium Property. No activity specifically permitted by the Declaration of Condominium shall be deemed a nuisance. Outside Items. No rubbish, garbage, refuse or trash shall be kept, stored or allowed to accumulate on any portion of the Condominium, except within designated trash receptacles. No linens, clothing, household fabrics, curtains, rugs, or laundry of any kind shall be hung, dried or aired from any windows, doors, balconies, terraces, or other portions of the Condominium. No articles shall be placed on balconies, patios or similar areas. The foregoing shall not prevent placing and using patio-type furniture, planters and other items in such areas if the same are normally and customarily used for a residential balcony, patio or terrace area. In the event of any doubt or dispute as to whether a particular item is permitted hereunder, the decision of the Board of Directors shall be final and dispositive. See Section 17.7 of the Declaration of Condominium for additional restrictions. Firearms. The discharge of firearms and fireworks within the Condominium is prohibited. The term "firearms" includes "B-B" guns, pellet guns, and other firearms of all types, regardless of size. Sound, Weight and Flooring Restrictions. The installation of hard and/or heavy surface floor covering such as tile, marble, wood, and the like, other than in the ground floor Units and in the bathrooms, kitchens and foyer areas of all other Units, must be approved by the Board of Directors of the Condominium Association which approval shall not be unreasonably withheld, conditioned or delayed. Additionally, the installation of any heavy improvement or heavy object in or on the Condominium Property must be approved by the Board of Directors of the Condominium Association which approval shall not be unreasonably withheld, conditioned or delayed. The Board of Directors of the Condominium Association may in- its reasonable discretion require a structural engineer to review certain of the proposed improvements, with such review to be at the Owner's sole expense. Any use guidelines set forth by the Condominium Association shall be consistent with good design practices for the waterproofing and overall structural design of the Building. Owners will be held strictly liable for violations of these restrictions and forall damages resulting therefrom andthe Condominium Association has the right to require immediate removal of violations. A waterproofing system is to be placed on the concrete surface of the balcony prior to the installation of the setting bed and tile. This waterproofing system must be as recommended by the manufacturer of the tile setting material and the installation must follow the waterproofing manufacturer's written recommendations. Applicable warranties of the Developer, if any, shall be voided by violations of these restrictions and requirements. Each Owner agrees that sound transmission in a building such as the Condominium is verydifficult to control, and that noises from adjoining or nearby Units andlor mechanical equipment can often be heard in another Unit. The Developer does not make any representation or warranty as to the level of sound transmission between and among Units and the other portions of the Condominium, and each Owner shall be deemed to waive and expressly release any such warranty and claim for loss or damages resulting from sound transmission. Alterations or Additions. No Unit Owner shall cause or allow improvements or changes to the structure or exterior of any Unit, Common Elements, Limited Common Elements or any other Condominium Property, which alters the exterior appearance thereof, or which could in any way affect the structural, electrical, plumbing or mechanical systems of the Building or elsewhere within the Properties, without obtaining the prior written consent of the Condominium Association in the manner specified in Section 9.1 of the Declaration of Condominium. No spas, hot tubs, whirlpools or similar improvements shall be permitted on any patio or balcony. See Section of the! Declaration for details.... PROSPECTUS -11-

20 Exterior Improvements Without limiting the generality of Sections 9.1 or of the :. Declaration of Condominium, but subject to the provisions thereof specifically permitting same, no Unit Owner shall cause anything to be affixed or attached to, hung, displayed or placed on the exterior walls, doors, balconies or windows of the Units (including, but not limited to, awnings, canopies, shutters, signs, screens, window tinting, fixtures and equipment), nor plant or grow any type of shrubbery, flower, tree, vine, grass or other plant life or landscaping on its patio or balcony, without the prior written consent of the Condominium Association. No painting or changes in the exterior colors of any Units or the Limited Common Elements appurtenant thereto shall be permitted. No painting or changes in the exterior colors of any Units or the Limited Common Elements shall be permitted. See Sections through of the Declaration of Condominium for additional restrictions... Siqns. No sign, poster, display, billboard or other advertising devices of any kind including, without limitation, "FOR SALE", "FOR RENT", security services or construction signs shall be displayed to the public view on any portion of the Units, Limited Common Elements or Common Elements, without the prior written consent of the Condominium Association, except, (a) signs, regardless of size, used by the Developer, its successors or assigns, including signs for construction or repairs, advertising, marketing, promotion, sale, leasing, and rental activities, (b) signs installed as part of the initial construction of the Condominium and replacements of such signs (similar or otherwise), (c) and bulletin boards, entrance, directional, informational and similar signs used by the Condominium Association. Liqhtinq. All exterior lights and exterior electrical outlets must be approved in accordance with Section of the Declaration of Condominium. Exterior Sculpture and Similar Items. Exterior sculpture, flags, and slmrlar Items must be approved in accordance with Section 9 of the Declaration of Condom~nium. Notwithstanding the foregoing, any Unit Owner may respectfully display one (1) portable, removable American flag, and, on Armed Forces Day, Memorial Day, Flag Day, Independence Day, and Veterans Day, any Un~t Owner may respectfully disptay portable, removable official flags, not larger than four and one-half feet by six feet (4'6" x 6') that represent the United States Army, Navy, Air Force, Mar~ne Corps, or Coast Guard. Outside Installation. No radio station or short wave operations of any kind shall operate from any Unit, Limited Common Elements or Common Elements. No exterior satellite dish, or other transmitting or receiving apparatus radio antenna, television antenna or other antenna of any type shall be erected or maintained on the Common Elements, Limited Common Elements or Units, without the prior written consent of the Condominium Association. Notwithstanding the foregoing, upon obtaining the prior written consent of the Condominium Association, satellite dishes and other devices permitted under Section 207 of the Telecommunications Act of 1996, may be installed within the Units or within any Limited Common Elements appurtenant thereto, provided however, that in no event shall any such device be installed in or on any other portion of the Condominium Property. To the extent permissible under applicable law, the Condominium Association may enact Rules and Regulations, requiring that any such devices which may be permitted under applicable law are comparable in size, weight and appearance, are installed and maintained in a manner designed to protect the safety of the Building and its occupants, and satisfy any standards established by the Condominium Association for architectural appearance purposes. Mold Prevention. No Unit Owner shall install within his or her Unit, or upon the Common Elements or Limited Common Elements, non-breathable wall-coverings or low-permeance paints. Additionally, any and all built-in casework, furniture and/or shelving within a Unit must be installed over floor coverings to allow air space and air movement and shall not be installed with backboards PROSPECTUS -1 2-

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