Owners who have worked on new CC&R's submit their suggestions for others to review and offer input!

Attached is a proposed set of CC&R's that has been worked on, reviewed, and revised by many homeowners in the community. We feel this is a very good starting point and we are hoping for good input from the community to help finely hone these basic ideas before they are put to a vote.
Please carefully read this document and note any ideas you might want to incorporate.
In fact we already have some suggested modifications that we will soon be adding as a comment to the original post.

Thank You
VENeighbors
Submitted by
Rod Parker and Dennis Griffin    

COVENANTS, CONDITIONS And RESTRICTIONS (CC&R’s)

Of The Valle Escondido Homeowners Association

CHAPTER I – DEFINITIONS

1. Association shall mean the Valle Escondido Homeowners Association, its successors and assignees.
2. LECHERIA, S.A. is the Developer of the Valle Escondido Project.
3. Regulations shall refer to these Covenants, Conditions and Restrictions (CC&R’s) of the Valle Escondido Homeowners Association applicable to the properties or lots of the Valle Escondido Urbanization.
4. Valle Escondido shall refer to the entire Development and Urbanization from the main Property No. 50,694, duly registered at Code 4301, Document 298240 of the Public Registry, located in Boquete, in the province of Chiriqui, Republic of Panama.
5. Urbanization shall mean exclusively the collection of lots or real property segregated from the main Property No. 50,694, duly registered at Code 4301, Document 298240 of the Public Registry, located in Boquete, Chiriqui, Republic of Panama plus the common areas, internal ways, and future annexations.
6. Common Areas shall mean all real property in Valle Escondido such as roads, parks, walkways, etc. intended for the common use and enjoyment of the Members of the Association.
7. Lot shall refer to any plot of land segregated from Property No. 50,694, with the objective of building a home. Owner shall refer to the recorded owner, whether one or more persons or entities, of a fee simple title to any Lot, which is a part of the Urbanization. This definition excludes those having interest (mortgage) merely as security for the performance of an obligation.
8. Member refers to any person or entity who holds Membership in the Association by virtue of ownership of a Lot.
9. Structure shall refer to any building or portion thereof, fences, pavement, driveway or appurtenances to any lot in Valle Escondido
10. Mortgagee shall refer to any person or entity secured by a duly registered first mortgage on any Lot.
11. Section shall refer to each division of the Master Plan:

A. Vista Golf I

B. Vista Golf II

C. Vista Golf III

D. Baru Vista

E. Rio Cerquita

12. Board of Directors. This refers to the elected Board authorized to act on behalf of the Members
13. The Steering Committee (SC). An elected Committee acting under the Board of Directors to administer the powers and duties of the Board of Directors.

CHAPTER II - POWERS AND DUTIES OF THE ASSOCIATION

Article 1. The SC, acting on behalf of the Association and at the will of its members, shall have the following powers and duties.The expenses and costs of any proceedings initiated by the Steering Committee under this Chapter shall be paid out of the General Fund of the Association, through dues if properly budgeted or otherwise by Assessments approved by the Members, as hereafter provided for;

1. To enforce any building restrictions which are imposed by the terms on the Statute and Regulations or which may hereafter be imposed on any part of the Valle Escondido Project.
2. To provide and maintain such lighting as the Association may deem advisable on streets and for the maintenance of any and all improvements, structures or facilities which may exist or be erected from time to time on any Common Area;
3. To use the Common Area and any improvements, its structures or facilities erected thereon subject to the general rules and regulations established and prescribed by the Association and to establish charges for their use;
4. To mow and sow the grass and to care for, spray, trim, protect, plant and replant trees and shrubs growing on the Common Area and to pick up and remove from said property and area all loose material, rubbish, filth and accumulations of debris; and to do any other thing necessary or desirable in the judgment of the SC to keep the Common Area neat in appearance and in good order;
5. To exercise all rights and control over any easements which the Association may from time to time acquire, including, but not limited to, those easements specifically reserved to the Association in Article IX, hereof;
6. To employ legal counseling for the Meetings of Board of Directors, SC, and General Assemblies; to institute and prosecute such suits as the association members may deem necessary or advisable; and to defend suits brought against the Association;
   1. Except for liens and/or suits filed against VEHOA members for non-payment of dues, assessments, and other violations of the CC&R’s, any and all suits initiated against any party must be approved by a majority of VEHOA members.
   2. The SC shall purchase an insurance policy to cover costs of any legal action filed against the association as a whole or any member of the SC.
   3. With regards to said insurance policy, should any claim be denied due to a SC member being found culpable for the legal actions against the VEHOA and/or its members, all legal costs, fines, and judgments shall be the sole responsibility of that individual.
7. To employ from time to time such agents and workers as the SC may deem necessary in order to exercise the powers, rights and privileges granted to it, and to make contracts for routine services;
8. To contract, maintain, and negotiate with LECHERIA, S.A, for an annual fee to provide the services of maintenance, gardening and lightning of the principal access road of the Urbanization.
9. To hold and administer the Common Areas for the benefit and enjoyment of the owners and occupiers of lots in the subdivision. The purpose of this provision is to impose on the Association the obligation maintain the same for the benefit of owners and occupants of Lots; and
10. To create and enforce the rules that govern the usage of the Common Areas and all the regulations provided by these Covenants, Rights, Duties and Restrictions.
11. To create, to enforce, to collect and to manage of the maintenance fees and the charges for the services provided for the benefit of every member of the Association.
12. To provide the personnel, procedures and equipment of the vigilance security staff in the Valle Escondido Urbanization.
13. Budget.

1. Each calendar year, not later than September 1^st, the SC shall submit a proposed Budget for the following year to the Membership for approval.
2. A Special Budget Election will be held to approve the Budget within 30 Days.
3. If the Budget is not approved, subsequent Special elections will be held until a Budget is approved.
4. The Budget shall be binding upon the SC. The total funds specified in the Budget shall not be exceeded. At the SC discretion, funds for individual line items may be exchanged up to 10% of the total line item. Any expenditure exceeding the Budget must be approved by the Members with a 60% of the Member voting affirmatively.
5. No increase in Member Dues may be placed in effect until a Budget is approved by the Members.
6. The Treasurer shall prepare and post monthly on the VEHOA website monthly financial statements including and income and expense report, cash flow report, and budget update.
7. There will be a yearly audit of finances by and outside accountant, the results of the audit will be made public to the Association within 10 days of completion of the audit

N. The Secretary will post minutes of all public sessions of the Board of Directors within two weeks of such meetings.

O. Committees. The SC shall establish and appoint Members to the following Committees:

1. Security
2. Budget & Finance
3. CC&R Review
4. Electrical
5. Roads & Common Areas
6. Water and Waste
7. Transfer of Infrastructure

Article 2. The SC shall be empowered to obtain fidelity coverage against dishonest acts on the part of directors, managers, trustees, employees, or agents responsible for handling funds collected and held for the benefit of the Association.

Article 3. The Association shall maintain a comprehensive policy of public liability insurance covering the Common Area. Such insurance policy shall contain a severability of interest clause of endorsement, which shall preclude the insurer from denying the claim of an Owner because of negligent acts of the Association or other Owners

Article 4. The Steering Committee (SC). This group is composed of 5 members who will serve as the decision making body for the Valle Escondido Homeowners’ Association. The SC shall have the authority to adopt such rules and regulations regarding Articles 1 through 24 of Chapter VI, as it may from time to time consider necessary or appropriate, provided such rules or regulations are first approved by the Membership.

Article 5. If a Steering Committee member is accused (or has been found guilty in the past) of any act involving moral, criminal, or ethical issues under any law, or performs any act which casts an unfavorable light upon or adversely affects the VEHOA, that individual must immediately resign their position on the SC and shall be prohibited from serving on the SC at any time in the future.

Article 5. Steering Committee Rules of Election. Nominations and Elections to the Steering Committee will be conducted according to the following procedures.

1. Members to the Steering Committee will be elected on a rotating basis with two (2) new members beginning their term in even number years and three (3) new members beginning their term in odd number years.
2. Each member will serve for a two-year term.
3. Steering Committee members will be elected by a simple majority of voters who cast their vote personally, electronically (on-line) or by proxy in accordance with the guidelines established in the Rules of Election.
4. If there are two members being elected, the two candidates with the most votes will be elected, if three members are being elected, the three candidates with the most votes will be elected.
5. In the event of a tie, there will be a run-off scheduled within 7 days of the original election.
6. By the nomination deadline, if the number of candidates matches the number of committee member vacancies, the election does not need to be held and can be deemed complete by the Election Inspectors.
7. The required quorum for this election will be the same as that established in Chapter III, of this document.
8. At the beginning of each year, the five (5) Steering Members will elect among themselves a Chairperson, Vice Chairperson, Secretary, and Treasurer. A member may hold more than one except that the office of Chairperson and Treasurer must be separate.
9. The Steering Committee will make decisions by simple majority with a minimum of three SC members casting their vote. The SC is empowered to carry out and enforce these decisions. Items requiring legal filing will be submitted to and approved by the Membrs prior to any filing.
10. If a SC Member is unwilling or unable to fulfill his or her position for the elected term, a Special Election of the Members will be held to elect a replacement Board Member. This election will be held within 30 days via eMail, electronic vote or Proxy vote. No quorum is required for this Special Election and a simple majority of those voting will determine the election. This replacement will be in effect for the remainder of the term being vacated.

CHAPTER III - VOTING RIGHTS

1. Rules of Election

A. Elections will be conducted in accordance with the Valle Escondido Rules of Election, which can be modified by majority vote of the existing SC and a simple majority of a vote of Association Members.

B. The Valle Escondido Rules of Election provides for an Election Inspector to ensure the validity of all elections. The Inspector will be appointed by the Steering Committee.

C. One vote will be allotted to each lot.

D. For election purposes, this vote will be referred to as a "Member" in the Valle Escondido Homeowners' Association.

E. When one home is constructed on two or more lots, the Member will be entitled to only one vote.

F. When more than one person holds interest in any lot or home, they will decide among themselves how the vote will be cast, but in no event shall more than one vote be cast with respect to any lot or home.

3. Member in Good Standing.

1. Each member is entitled to one vote per lot given that the owner is a “Member in Good Standing”.
2. A Member in Good standing is one who has not been declared “In Default” in payment of all debts to the Valle Escondido Homeowners’ Association.
3. In the event that any Member is delinquent in full payment of dues and assessments for a period of sixty (60) days, that member may, upon a majority vote of the SC be declared “In Default”. Any Member in default must be notified by the Board of Directors in writing of their default.
4. A Member in Default may not vote in any VEHOA election. The Member will have until ten (10) days prior to the election to clear the default. A simple late payment of dues or assessments does not disqualify a member from voting. Provisions for financial penalties to a Member for late payment are outlined in Chapter V.
5. It is the responsibility of the Election Inspector(s) to determine the eligibility of voting members. This must be done twenty-five (25) days prior to the close of the election.

4. Quorum.

1. In order to achieve a quorum for an election 60% of the Total Membership of the VEHOA must be available to vote by casting an online ballot, being represented by Proxy, or attending the Homeowner’s meeting which has been called for the purpose of an election.
2. If the required quorum is not met, a second ballot may be called; voting to be done electronic ballot, on-line (Email), Proxy Voting and/or a Membership meeting. The required quorum at any such subsequent meeting shall be one-half (1/2) of required quorum at the preceding meeting, or 30% of the members. Such subsequent meeting will be held within sixty (60) days following the preceding meeting.

5. Election Timeframe.

1. Notice of election will be given via eMail and/or other written media no fewer than thirty (30) or more than fifty (60) days prior to the voting date of the election.
2. Information regarding candidates and issues will be published no fewer than 14 days prior to the date of the election.

CHAPTER IV - PROPERTY RIGHTS

1. Members' Easements of Enjoyment. Every member shall have a right of enjoyment in and to the Common Areas and such easement shall be appurtenant to and shall pass with the title to every Lot.

2. Delegation of Use. Any member may delegate, in accordance with the Statute and Regulations, his right of enjoyment to the Common Area and facilities to the members of his family, his tenants, or shareholders who reside on the member's Lot.

CHAPTER V - COVENANT FOR ASSESSMENTS

1. Personal Obligation of Assessments.

A. Property owners are subject to two forms of assessments:

1) Annual dues as set forth in Chapter V, Article 3, and

2) Special Assessments as set forth in Chapter V, Article 4.

B. Payment of dues begins when at least one of the following criteria is met:

1) Acceptance of Title for the property

2) Inhabitance/use of the property

2. Purpose of Assessments.

1. The Annual Assessments levied by the Association shall be used exclusively for the purpose of promoting the recreation, health, safety and welfare of the residents in the Urbanization and in particular for the improvements and maintenance of services and facilities devoted to this purpose and related to the use and enjoyment of the Common Areas.
2. Funds needed for any issue not covered in sub-paragraph 2.A shall be obtained via a Special assessment. Such issues include Capital Improvements, extraordinary legal issues, hiring of Consultants, etc.

3. Annual Dues.

A. After consideration of current maintenance costs and further needs of the Association, the Board of Directors may increase the annual dues no more than 10% of the current year’s dues over a two-year period.

B. This increase must then be submitted for appropriate legal filing.

C. If an increase of more than 10% is deemed necessary by the Board of Directors, a Special vote of the members will be called. Such an assessment must be approved by sixty (60%) percent of the Members of the VEHOA.

D. An election for this purpose shall follow the election requirements as stated in Chapter III of this document.

E. As stated in Chapter II Article 2, no increase in Member Dues may be placed in effect until a Budget is approved by the Members.

5. Special Assessments.

A. In addition to the annual assessments authorized above, the Valle Escondido Homeowners’ Association may levy in any assessment year, a special assessment applicable to that year only.

B. This assessment would be for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Common Area.

C. An election for this purpose shall follow the election requirements as stated in Chapter III of this document.

D. Such special assessments shall require the approval of more than Sixty Percent (60%) of the Members of VEHOA.

E. Upon approval of the assessment, an e-mail, fax or written invoice for the special assessment shall be sent to every Owner subject thereto with a due date no sooner than 30 days after the close of the election.

F. Failure to pay the assessment will result in the procedures and penalties as detailed in Chapter V.

6. The Association can fix a yearly special assessment for the maintenance and cleaning of those homes connected to the central sewage system. The rate of this assessment shall be relative to the specific needs of the homes. This assessment has to be approved by the Members.

7. The Association can fix a yearly special assessment for the painting of those homes connected by means of a multifamily construction. The rate of this assessment shall be relative to the specific needs of the homes. This assessment has to be approved by the Members.

8. Rate of Assessment.

A. Annual assessment shall be fixed for all Lots not owned by Lecheria, S.A. per the terms in the following paragraph.

B. Any unoccupied Lot or Lots owned by Lecheria, S.A. shall not be assessed an annual fee.

C. As long as Lecheria, S.A. retains the right to be exempt from such payments in any section, Lecheria, S.A. must also maintain the Common Areas in such Section at no cost to the Association.

D. Annual assessment shall be fixed at a uniform rate for all Lots not owned by Lecheria, S.A. with the exception that all units in the three (3) story multi-family structures shall have an annual assessment of fifty percent (50%) of the annual assessment of the rate for all lots not owned by Lecheria.

8. Quorum for any Authorized Action of the General Assembly of Members.

A. At a meeting called, as provided in Article 3 and 4 herein, the presence at the meeting of members, or by email, or proxies entitled to cast a minimum of sixty percent (60%) of all the votes of each class of membership shall constitute a quorum.

B. If the required quorum is not forthcoming at any meeting, another meeting may be called subject to the notice requirements set forth in Articles 3 and 4, and the required quorum at any such subsequent meeting shall be one-half (1/2) of required quorum at the preceding meeting. No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting.

9. Date of Commencement of Annual Assessments.

A. Assessment Amount. The SC, shall fix the amount of the annual assessment against each Lot not later December 1 of each Calendar year. Increases in Assessments may not be levied until the Annual Budget is approved by the Members.

B. Notice of Assessment shall be made by eMail, fax or written notice to every Owner subject thereto.

3. Assessments shall be due and payable on or before January 1 of each year.
4. Monthly payments. Monthly payment of dues are authorized, provided that such payments are made by electronic means or by such other method that imposes little or no additional accounting duties on the HOA. Such methods include automatic bank drafts and credit card authorizations.
5. Discount. The SC may authorize a discount of 3% or such other sum at it’s discretion for Members who pay the Annual Assessment in one lump sum on or before January 1.
6. The Treasurer will issue receipts upon payment of the assessments, The Association shall upon demand at any time furnish a certificate in writing signed by an officer of the Association setting forth that the assessments on a specified Lot have been paid. and shall, upon request, issue a signed certificate in writing stating that the assessments for a specific Lot have been paid. A reasonable charge may be made by the SC for the issuance of these certificates. Such certificates shall be conclusive evidence of payment of any assessment stated to have been paid.

10. Remedies of the Association in the Event of Default.

A. Breach of any article of the these CC&R’s will require the Association to send a minimum of two notices regarding the matter over a two month period to the Member in breach.

B. After this action the Association can use whatever legal means available to enforce compliance.

11. Payment of Assessments. If any assessment is not paid within sixty (60) days after the due date, the assessment shall bear interest from the date of delinquency at the rate of 10 percent (10%) per annum. Additionally, the Association in its discretion may:

A. Impose additional penalties as established by the SC.

B. Bring an action at law against the Owner personally obligated to pay the same, and/or

C. Foreclose the lien against the property, and interest, costs and reasonable attorney's fees of any such action shall be added to the amount of such assessment.

D. No Owner may waive or otherwise escape liability for the assessments provided for herein by-non- use of the Common Area or abandonment of his Lot.

Article 11. Subordination of the Lien to Mortgages. The lien of the assessments provided for herein shall be subordinate to the lien of any registered mortgage. Sale or transfer of any Lot shall not affect the assessment lien. No sale or transfer shall relieve such Lot from liability for any assessments which thereafter become due or from the lien thereof.

CHAPTER VI - RESTRICTIVE COVENANTS

1. The Urbanization shall be used exclusively for residential purposes. Only one home may be constructed on a lot, but two (2) lots can be used to construct one (1) single home. However, LECHERIA, S.A., reserves for itself, its successors and assignees, the right, prior to sale and transfer of any Lot, to alter, amend and change any lot lines or subdivision plans.

2. No building shall be erected, altered, placed or permitted to remain on any Lot other than one single-family attached dwelling, garages and other approved structures for use solely by the occupants except building areas LECHERIA, S.A. has designated for multifamily dwellings.

3. No sign, advertisement or message shall be displayed or published offering or implying commercial or professional services, or which might constitute any other kind of business solicitation in, or from, any residence or residential property (with the exception of those meant for identification purposes for each home and/or lot). Notwithstanding the foregoing, LECHERIA, S.A. or its assignees may:

A. During the construction and/or sales period, and within five (5) years from the date of subdivision of a particular Section, erect, maintain and operate real estate sales andconstruction offices, displays, signs and special lighting on any part of the Valle Escondido Development and on or in any building or structure now or hereafter erected thereon while owned by LECHERIA, S.A.; and

B. On Lots now or hereafter specifically designated for such purposes by LECHERIA, S.A., there may be erected and/or operated, a church or place of public worship, a school, a public park, or a swimming pool, a recreational area, and appurtenances thereto.

4. The construction of a home meeting these General Regulations and Construction Review must begin within two (2) years of deed transfer or down payment, if financed, and must be completed within one (1) year from the construction start date. If construction of the home does not start and be completed within the period herein indicated, LECHERIA, S.A., may levy a penalty of US$750.00 per month of delay. Any issue regarding this matter shall be consulted directly with LECHERIA, S.A. If the Owner engages LECHERIA, S.A. or any of its approved companies for the construction of the home, they may both agree in writing on a different start and finish date for the construction, in which case the penalty will not be levied.

5. (REVISED) If the Owner has not complied with the construction of the home within the time stipulated in these covenants and restrictions, LECHERIA, S.A. will have the first option to buy the property at the original lot price minus a 20% discount plus any construction or remodeling expenses incurred by the Owner, This first option will expire upon termination of the construction of the home.

6. The Architectural Review Committee (ARC)

A. The ARC shall consist of the Steering Committee of the Association, or a committee of three (3) or more persons appointed by them duly authorized by the Steering Committee.

B. The function of the ARC is to maintain style, standards and the construction quality of the homes by means of the approval of the proposed design and structure of the homes before the start of the works.

C. Applications for approval by the Home Construction Review Committee shall be in writing.

D. Approval or disapproval by the SC shall also be in writing.

E. Failure of the Committee to approve or disapprove a request within forty-five (45) days shall be construed as Committee approval of the request.

F. All structural or design modifications to the plans already approved by the Architectural Review Committee (ARC), shall be submitted by the same procedure established for the original plans.

7. No construction may take place within 10 feet of adjacent property lines on lots where the lot width (to adjacent property) is less than 80 feet. Where lot widths exceed 80 feet no construction may take place within 15 feet of property lines of adjacent property. No construction may take place within 20 feet of any roads (not including driveways). The property line should be verified by the Architectural Review Committee (ARC) Board before the start of the construction.

8. In the areas of Río Vista, Alto Rio Vista and Río Cerquita, roof heights may not exceed 18 feet from ground level unless approval is granted by the Architectural Review Committee (ARC). A minimum home size of two hundred (200) enclosed square meters (2152.782 square feet) of construction (not including carport or garage) will apply to all homes built in the Urbanization.

9. Private homes may not be constructed within 45 feet of the river (Quebrada Grande). All construction should comply with Panamanian Law.

10. The Architectural Review Committee (ARC) must approve any change of water flow from rivers, springs or creeks. No chemicals or other additives may be put into any running water within the Project.

11. No trees may be cut down without approval by the Architectural Review Committee (ARC), and with all necessary government permits attained.

12. Common areas. The following areas are designated as common areas for the Urbanization and are to be maintained by the Association.

A. Roads around and between the boulevards inside the residential area.

B. Lake Park

C. Waterfall Park

D. River Park

E. Vista Golf I Park

13. The Association shall maintain and dispose of trees, rocks, mud or dirt that falls from the valley walls onto Common Areas that are currently maintained by VEHOA.

14. All homes must use a clay or concrete tile roof material and hard finished surface driveways made of paving stone, asphalt or concrete, all of which must be approved by the The Architectural Review Committee (ARC).

15. No clothing, laundry, or wash shall be aired or dried on any portion of the Lots.

16. No tree, hedge or shrub planting shall be maintained in such a manner as to obstruct sight lines for vehicular traffic.

17. Coffee plants may not be cut or trimmed within 10 feet of property lines adjacent to another homeowner without approval by the SC. Coffee plants must be maintained by the Owner or the Association if a maintenance agreement is in force.

18. (NEW HEADING) Property Appearance.

A. No noxious or offensive activity shall be carried on upon any Lot, nor shall anything be done or placed thereon which may become an annoyance or nuisance to the neighborhood.

B. Owners shall, at all times, maintain their property and all appurtenances thereto in good repair and in a state of neat appearance.

C. Except for flower gardens, shrubs, and trees, which shall be neatly maintained, all open Lot areas shall be maintained in lawns or other materials approved by the The Architectural Review Committee (ARC)..

D. All lawn areas shall be kept mowed and shall not be permitted to grow to a height in excess of four (4) inches.

19. (NEW HEADING) Animals.

A. No horse, pony, cow, chicken, pig, hog, sheep, goat or other domestic or wild animal shall be kept on any Lot; however, common household pets, such as dogs and cats may be kept or maintained, provided that they are not kept, bred or maintained for commercial purposes and do not create a nuisance or annoyance to surrounding Lots or the neighborhood.

B. Total number of dogs, cats and their offspring per residence is limited to three (3) unless approved different by the SC.

C. No pets are permitted to run at large inside the Urbanization. All pets must be kept restrained or on a leash at all times when on the grounds.

D. Any and all damage created by a pet is the sole responsibility of the pet owner or the property owner if the pet owner is a renter.

E. Damage to property will be repaired and the reasonable repair costs billed to the property owner.

F. Pet owners shall clean up after pets properly.

G. Violation of and of the above statutes may result in additional fines as determined by the SC.

20. Trash and garbage.

A. Containers shall not be permitted to remain in public view except on days of trash collection.

B. Trash cans can be kept in the carports as long as they are clean.

C. No accumulation or storage or litter, new or used building materials or trash of any other kind shall be permitted on any Lot.

D. Organic waste is not to be stored on any lot.

E. Lawn, shrub and plant clippings may be placed for collection one day a week as determined by the Board of Directors.

21. The exterior of any building may not be painted a color different than the original color of the building without the written approval of the Architectural Review Committee.

22. The exteriors of all structures, including walls, doors, windows, fences and roofs shall be kept in good maintenance and repair. No structure shall be permitted to stand with its exterior in an unfinished condition for longer than one year after the commencement of construction. In the event of Acts of God, the exterior of no structure shall be permitted to remain in a damaged condition for longer than three (3) months.

23. No structure or addition to be a structure shall be erected, placed, altered or externally improved on any Lot until the plan and specification, including elevation, material, color and texture and a site plan showing location of improvement with grading modifications shall be filed with and approved in writing by the Home Construction Review Committee. No alterations, additions, or improvements shall be made to any garage, which would defeat the purpose for which it was intended.

24. All fences or enclosures must be approved by the Home Construction Review Committee as to location, material and design. Any fence or wall built on any Lots shall be maintained in a proper manner so as not to detract from the value and desirability of surrounding property.

25. Only small dish antennas are allowed inside the lots, with prior authorization of the Architectural Review Committee.

26. No junk vehicles, recreational vehicles, house trailers, or commercial or industrial vehicles such as, but not limited to, moving vans, trucks, tractors, trailers, vans, wreckers, hearses, buses, boats, boating equipment, travel trailers or camping equipment, shall be parked overnight within in the boundaries of Valle Escondido, except in the areas designated by the Association or LECHERIA, S.A.

CHAPTER VII – COMMON DRIVEWAYS

1. Definitions.

A. Common Driveways shall be the areas within the Ingress and Egress Easements as shown on the plats attached to Master Plan or as may subsequently be established by LECHERIA, S.A.

B. Affected Lots shall be the Lots encumbered by and/or served by a Common Driveway.

2. Restrictions.

1. Common Driveways shall be used for the purpose of ingress and egress to the Affected Lots served by the driveway, for governmental and other emergency vehicle ingress and egress, and for construction and maintenance of utilities on LECHERIA, S.A. part;

2. No act shall be performed by any Members, their tenants, guests or agents which would in any manner affect or jeopardize the free and continuous use and enjoyment of any other authorized Member in and to the Common Driveway 'of an Affected Lot; and

3. There shall be no parking within Common Driveways at any time except for delivery and/or emergency vehicles, unless all Proprietaries of Affected Lots pertaining thereto agree upon other parking limitations.

3. Damage or Destruction. In the event that any Common Driveway is damaged or destroyed:

1. Through the act of Member or any of his agents or guests or members of his family (whether or not such act is negligent or otherwise culpable), it shall be the obligation of such a Member to rebuild and repair the Common Driveway without cost to the other Owners of Affected Lots for that Driveway;

2. Other than by the act of a Member, his agents, guests or family, it shall be the obligation of all owners of Affected Lots for that Common Driveway to rebuild and repair such Common Driveway at their joint and equal expense.

CHAPTER VIII – PRIVATE DRIVEWAYS

1. The driveways and common areas inside the Urbanization are for private use of the Association’s Members. Access to the Urbanization is granted to the Association, its directors, officers, agents, and employees, to any Manager employed by or on behalf of the Association, and to all policemen, firemen, ambulance personnel and all similar persons to enter upon the Valle Escondido Urbanization, in the event of emergencies, and in performance of governmental functions.

2. The rights accompanying access granted Article 1 of this Chapter shall be exercised only during reasonable daylight hours and then whenever practicable only after advance notice to, and with the permission of, any Proprietary or Tenant directly affected thereby except in an emergency situation or a governmental function.

3. LECHERIA, S.A., its agents and employees, shall have a right of access over the Common Area as required for construction and development of the Project.

4. There shall be and is hereby reserved to LECHERIA, S.A. a nonexclusive access over any Common Area, for the purpose of installing, repairing and/or maintaining utility lines of any sort including, but not limited to, storm drains, sanitary sewers, gas lines, electric lines and/or cables, water lines, telephone lines and the like or with maintenance purposes, to perform gardening and landscaping services, cut the grass, install and maintain street intersection signs, directional signs, and entrance features and/or "theme areas", light, stone, wood, or masonry wall features and for the purpose or purposes of executing any of the powers, rights or duties granted to or imposed on the Association in this Chapter.

5. LECHERIA, S.A. is also authorized, with previous written notice, access to any Lot to perform general urgent repairs and/or cleaning that the situation requires.

6. LECHERIA, S.A., is obliged to build pavements, sewage public works and ornamentation, according to the specifications of the correspondent institutions. Maintenance of such infrastructure, after the registration in the Public Registry and sale, will be done by the Association.

CHAPTER IX - RIGHTS AND DUTIES OF MORTGAGEES

1. A Mortgagee, upon request, will be given written notification from the Association of any default in the performance by the Owner of a Lot relating to the mortgage owned by the Mortgagee of any obligation under this General Regulations or related Association documents, which is not cured within sixty (60) days.

2. Any Mortgagee who obtains title to a Lot pursuant to the remedies provided in the mortgage, or foreclosure of the mortgage, or deed or transfer in lieu of foreclosure, will be liable for such Lots' unpaid dues or charges which accrue prior to the acquisition of title to the Lot by the Mortgagee.

3. A Mortgagee shall have the right to examine the books and records of the Association.

4. The Mortgagee who obtains title to a Lot as above mentioned, will have the duty to adopt and comply with all the provisions, rules and resolutions issued by the Board of Directors of the Association, as well as with the provisions of these regulations.

CHAPTER X - GENERAL PROVISIONS

1. Enforcement.

1. Any litigation or controversy related to these General Regulations, the Statutes as the interpretation, application, execution, and/or compliance of restrictions, conditions, covenants, reservations liens and charges now or thereafter imposed by the provisions of this dispositions; as for the termination of any of its original motivations shall be resolved by means of Arbitration in Law, previous attempt of Conciliation by the Center of Arbitration and Conciliation of Panama according to its rules and procedure.

2. The Member, the Association and LECHERIA, S.A. agree that the procedure will be followed in Spanish.

3. Non-exigency or compliment with any right, disposition, covenant, restriction or condition, granted by these General Regulations or the Statute by the Association or any of its Members, will not constitute waiver to the right of the Association or from a Member to exercise or demand compliance of such right, disposition, covenant, restriction or condition, in the future.

4. Failure by the Association or by any Member to enforce any right, provision, covenant, or condition which may be granted by this Declaration shall not constitute a waiver of the right of the Association or an Owner to enforce such right, provision, covenant, or condition in the future.

5. All rights, remedies and privileges granted to the Association or any Member pursuant to any term, provision, covenant or Condition of these General Regulations will be considered cumulative shall be deemed to be cumulative, and the exercise of any one or more thereof shall not be deemed to constitute an election of remedies, nor shall it preclude the party exercising such privileges as may be granted to such party by these General Regulations, by means of Arbitration.

6. Whatever has not been determined herein shall be determined in accordance with Panamanian legislation on this matter.

2. The covenants and restrictions of these General Regulations shall run with and bind the land, and shall enforceable by the Steering Committee for the benefit of all members, their respective legal representatives, heirs, successors and assigns.

1. The Board of Directors may recommend amendments to these covenants and restrictions. Any proposed Amendment shall be put to a vote of members.

2. Such an election shall follow the requirements as stated in Chapter III of this document. Any amendment shall have the assent of 60% of members who are voting in person, on line or by proxy.

3. Upon approval of the Membership the Amendment will then be duly signed and filed by the Board of Directors.

3. Amendment Severability. Invalidation of any one of these General Regulations or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect.