Phase I By-laws

PRIVATE PROPERTY AREAS VALUES JOINT OWNERS ASSEMBLIES ADMINISTRATION OF THE JOINT OWNERSHIP PROPERTY SURVEILLANCE COMMITTEE

JOINT OWNERSHIP PROPERTY SYSTEM BY-LAWS FISCAL OBLIGATIONS NON-COMPLIANCE BY THE JOINT OWNERS AMENDMENTS TO THE JOINT OWNERSHIP PROPERTY SYSTEM CONTROVERSIES RECITAL AND AUTHORITY PERMITS TRANSITORY PROVISIONS PLANS

CONDOMINIUM BY-LAWS
“SECONDARY JOINT OWNERSHIP PROPERTY SYSTEM FOR LOT NUMBER 16-A” RECITALS
DEFINITIONS CLASSIFICATION OF THE REAL ESTATE AND ITS USE

RESTRICTIONS ON THE USE OF PRIVATE PROPERTY AREAS. Disturbances. Vehicle Parking. Restrictions to the Possession of Animals. Trash. Temporary Constructions. External Facilities. Insurance Premiums. Sewage. Compliance with Norms and Restrictions. Outdoor fires. External Facilities. Constructions. Dangerous or Flammable Substances. Service Systems in Common Use Areas. Obstruction of Visibility. Dangerous Activities. Firearms. Eyesores. Access to the Golf Course. Advertisements or Signals. Use of the Private Property Areas. Payment of the Sale/Purchase Price. Indivisibility of the Private Property.

PLEASE NOTE THAT NOT ALL PARAGRAPHS ARE REPRINTED HERE DUE TO TECHNICAL AND PHYSICAL CONSTRICTIONS. ORIGINAL TEXT OF BY-LAWS IS IN REGULAR FONT. ANY ADDITIONS MADE AFTER INCORPORATION ARE IN BOLD OR ITALIC FONT. AN ORIGINAL, REFORMATTED COPY IS AVAILABLE FROM THE HOA ADMINISTRATOR AND SUPERSEDES ANY INFORMATION PUBLISHED WITHIN.

CONDOMINIUM BY-LAWS
“SECONDARY JOINT OWNERSHIP PROPERTY SYSTEM FOR LOT NUMBER 16-A” RECITALS


A. – The foregoing By-laws are set by the DECLARANT “STONE ISLAND DEVELOPMENT”, SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE, and they refer to the Joint ownership property system that governs the real estate owned by the DECLARANT, described in Recitals First, Second and Third of Public Deed number 5759 five thousand and fifty nine, volume One hundred-twenty-four, Book One, from the protocol of Notary Public number fifty nine of the State of Sinaloa, with commission in Mazatlan, Fernando A. Orrantia Arellano, on March ninth of the year Two-thousand, by means of which the legalization of the Joint ownership property system took place, and these by-laws are part of the same document.


The provisions of these By-laws are part of the regulations of the Joint ownership property system, thus they are compulsory for all the joint-owners or owners of the areas of private property located within the Urbanization project governed by said Joint-ownership Property System.


B. – The DECLARANT is the owner and the holder of a lot of land located in the city of Mazatlan, Municipality of Mazatlan, Municipal Sub-division of Villa Union, State of Sinaloa, Mexican United States, the perimeter of which comprises a surface of 41,585.12 (Forty-one thousand five hundred and eighty-five point twelve) meters square, with the lines and limitations listed in the First Recital of the Public Deed of the legalization of the Joint-Ownership Property System in the Plan attached to said document, listed as Appendix number 2 (Two).

In the aforementioned lot, the DECLARANT has carried out an Urbanization project and she/he has built a street, side-walks, gardens, a traffic circle and parking area, as well as providing a drinking water and sewage system, electricity and telephone lines, which are part of the Common Use Areas of the Urbanization project.

C. – The DECLARANT deems necessary that these by-laws include the general regulations that will allow the use of the various real properties that make up the Urbanization project, as well as the orderly socializing of the joint-owners or the persons who will purchase and use the lots of land and the apartments built therein, which make up the areas of private property of the Urbanization project. These regulations set restrictions, conditions, rights and obligations for the current and future joint-owners and their purpose is to protect and increase the value, appeal and quality of the real state that are part of the Urbanization project, for the benefit of the current and future owners.


D. – Therefore, said regulations, restrictions, rights and obligations contained in the Regulations hereof will be compulsory for all joint-owners and their successors, as well for all persons that enter the Urbanization project as visitors, guests, or relatives of the Joint Owners. Like wise, all construction, repairs and improvements erected or performed within the Urbanization project, as well as all alienations legally set up by the DECLARANT and his/her successors, shall respect and comply with all the conditions and restrictions contained in the Joint Ownership Property System and the present Joint Ownership Regulations.

E.- The lot of land whose Joint Ownership Property System is now being legalized, is part of a Joint- Ownership Urban Tourist Development named “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY” established in Public Deed number 5756 five thousand six hundred and fifty-six, volume one hundred and fourteen, book two, of the protocol of Notary Public number fifty nine, of Sinaloa, commissioned in Mazatlan, Fernando A. Orrantia Arellano, dated February twenty fourth of the year two thousand and one, whose recording in the Public Property Registry in Mazatlan is pending due to its date of issuance. .In said Joint Ownership Property System, the land lot subject to the By-laws hereof is marked as “LOT NUMBER 16 – A (SIXTEEN DASH A).

ARTICLE ONE – DEFINITIONS

For the purpose of these Bylaws, unless stated otherwise in the text, the following vocabulary shall have the following meaning:

1. – CONDOMINIUM ADMINISTRATOR. – This means the Private person or legal entity appointed by the General Assembly of Joint-owners, who is in charge of running and supervising the organization, administration and vigilance of theUrbanization project, including the area facing the beach, adjacent to the sea. The Condominium Administrator will perform his/her duties pursuant to the provisions contained in the By-laws hereof, the Joint-Ownership Property System that regulates the Urbanization project and the law regulating the Joint-Ownership Property System for real estate in the State of Sinaloa.

2. – PRINCIPAL CONDOMINIUM ADMINISTRATOR. – This means the Administrator of the Condominium appointed by the Joint-owners of the Tourist Urban Development in Joint-Ownership property system named “ESTRELLA DEL MAR GOLD AND BEACH RESORT COMMUNITY, of which the Urbanization project is part.

3. – FISCAL YEAR. This means the period of time between the first day of January and the last day of December of the same year.


4. – ANNEXABLE AREA. – This means any part of the area of private property that can be turned into an Area of Common Use for the Urbanization project, by decision of his owner or Joint-owner and with the prior authorization of the General Assembly of Joint Owners. This action must cause an amendment to the Joint Ownership Property System.


5. – LOT AREA. This means the set of thirty-nine land lots located within the Urbanization project, in which single-family houses will be built.

6.- COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE.- Means the area of land in the development designated for the common use of all and every one of the Joint Owners of Lot 16-A, and which includes solely and exclusively the following areas:

(a) The main access road to the Development, including an area comprised of around about with thirty-one parking spaces, and a pedestrian walkway which leads from the mentioned parking area to the “Apartment Building” and ends precisely where the lot destined to the “Apartment Building” begins, all of which occupies a total area of 4,815.07 (four thousand eight hundred and fifteen point zero-seven) square meters.

(b) The duct systems for water supply, drainage, electricity, telephone and television, which run through or pass by the areas aforementioned.

The aforementioned common use areas, belong in joint ownership to all and every one of the Joint Owners of the Condominium Regime of which these Bylaws are a part, pursuant to the provisions of the Condominium Regime, with the exception of the Beach Front Area which does not belong to the Joint Owners, but shall be subject to surveillance and cleaning by the Condominium Administrator.

6.1.- COMMON PROPERTY AREAS OF THE APARTMENT OWNERS WHICH COMPRISE THE “APARTMENT BUILDING” AND THEREFORE OF THEIR EXCLUSIVE USE.– Means the area of land in the development, designated for the common use of the owners of the 64 (sixty-four) apartments that comprise the “Apartment Building”, and which includes solely and exclusively the following areas:

(a) Reception and Administration area of the building.
(b) Recreational area with terrace and gardens.
(c) Pool area with beach front.
(d) Area of machines, equipment and all accessories for the utilities of the building.

The aforementioned Common Use Area belongs in joint ownership to the Joint Owners of all and every one of the 64 (sixty-fourapartments that comprise the “Apartment Building” in the Condominium Regime, pursuant to the provisions of the same Condominium Regime, with the exception of the Beach Front Area which does not belong to the Joint Owners, but shall be subject to surveillance and cleaning by the Condominium Administrator.

6.2.- COMMON PROPERTY AREAS OF THE OWNERS OF THE LOTS WHICH COMPRISE THE “LOT AREA”, AND THEREFORE OF THEIR EXCLUSIVE USE.- Means the area of land in the development, designated for the common use of the owners of the 39 (thirty-nine) land lots which comprise the “Lot Area” and which includes solely and exclusively the following areas:

(a) Area of a pedestrian walkway leading from the “Apartment Building”, to the pedestrian walkway that connects parking area of the access road of the development to the beach , the aforementioned Common Use Area belongs in joint ownership to the Joint Owners of all and every one of the 39 (thirty-nine) land lots that comprise the “Lot Area” in the Condominium Regime, pursuant to the provisions of the same Condominium Regime, with the exception of the Beach Front Area which does not belong to the Joint Owners, but shall be subject to surveillance and cleaning by the Condominium Administrator.

7. – BEACH FRONT AREA. – This means the section of land located between the sea and the land lots that comprise the Urbanization project. It is not owned in co-ownership by the Joint-owners, but it is part of the Areas for Common use due to the fact that this section can be used by all the Joint-owners, and it must be subjected to vigilance and cleaning by the Condominium Administrator.

8. – AREAS OF PRIVATE PROPERTY. – These mean each one of the thirty-nine land lots and each one of the sixty-four apartments located within the Urbanization project, which can be purchased by a private party or a legal entity, by means of an agreement with the DECLARANT, “STONE ISLAND DEVELOPMENT, SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE”, or by means of contract entered into with a successor of said corporation.

The Joint-owner or proprietor of an area of private property shall have no right over the other areas of private property whatsoever; therefore, he/she will not have access to any of them.


9. – PRIVATE AREA FOR DEVELOPMENT. – This means each one of the areas of private property that are part of the Tourist Urban Development in Joint-ownership property system named “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, of which the Urbanization Project, subject matter of the Joint-ownership property system regulated by the present By-laws, is part.

10. – RECREATIONAL PRIVATE AREA. This means the business corporations established within the area of private property of the Tourist Urban Development “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, in whose facilities, one or various sports can be practiced, for the exclusive use and recreation of the persons who are members, partners or shareholders of said corporations.

The capacity of Joint-owners in the Urbanization project regulated by the Joint-ownership property system of which these By-laws are part, does not grant the right to use the facilities of said sports clubs or access to same, due to the fact that they are private property and to their being located in an area of private property. 

11. – GENERAL ASSEMBLY OF JOINT-OWNERS. This means the meeting of the Joint-owners, pursuant to the requirements provided in the Joint-Ownership Property System, of which these By-laws are part. It is the higher governing body in the Joint-Ownership Property System.

12. – SPECIAL ASSEMBLY OF JOINT-OWNERS. This means the meeting of the Joint-owners proprietors of a land lot in the “Lot Area” of the Urbanization; or the meeting of the Joint Owners proprietors of an apartment in the “Apartments Building” built inside the Urbanization project. They are special assemblies because only the Joint Owners that acquire a land lot or an apartment located inside the Urbanization project participate, in order to decide issues and problems related to their area of interest within the Urbanization project.

13. – COMMON MOVABLE PROPERTY. – It means all the machinery and equipment, vehicles, tools and mobile property in general, owned by all the Joint Owners of the Joint Ownership Property System of the Urbanization, because that property was bought with the monies contributed by all the Joint Owners and because they are for the care, vigilance, maintenance and repair of the Common Use Areas of the Joint Ownership Property of the Urbanization project. 

14. – ARCHITECTURAL COMMITTEE. – Means the group of people that will perform supervisory work on the architectural quality of the constructions that are going to be made in the Private Property Areas of the Urbanization project pursuant to the provisions contained in the Eleventh Chapter of these By-laws.

15. – SURVEILLANCE COMMITTEE.- Means the committee of a minimum of three joint owners, referred to in Chapter Nine of the Joint Ownership Property System of which these By-laws are a part.


16. – JOINT OWNER. – Means any person who acquires a Private Property Area located inside the Urbanization project, and is therefore subject to the liabilities and enjoyment of the rights set forth in the Joint Ownership Property System to which these By-laws belong.

For the purposes of the Joint Ownership Property System to which these By-laws belong; the word JOINT OWNER includes relatives, hosts and guests of the JOINT OWNER, to whom the norms and restrictions indicated in the Joint Ownership Property System and in these By-laws also apply.


17. – SALE/PURCHASE AGREEMENT. – Means the agreement signed by a physical person or a legal entity, for the purchase of all or a part of an area of private property located inside the Urbanization project, subjected to the provisions of the Joint Ownership Property System and these By-laws.

It also means the Trust Agreement through which a person who is not a citizen of Mexico, acquires the right of use of all or part of a Private Property Area, whose property is assigned to a Fiduciary bank pursuant to the provisions of the Federal Law of Foreign Investment.


18. – DECLARATION OF THE JOINT OWNERSHIP PROPERTY SYSTEM. – It means the JOINT OWNERSHIP PROPERTY SYSTEM defined in subsection number 31 thirty one of the same clause, set forth by the DECLARANT over the Property that conforms the Urbanization Project, pursuant to the provisions of the Private Property Area Law for real estate in the State of Sinaloa.

19. – DECLARANT. – It means “STONE ISLAND DEVELOPMENT” SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE”, a Partnership owner of the land lots and of the apartments located inside the Urbanization Project which are the object of this Joint Ownership Property System to which these By-laws belong.

20. – TRUST BENEFICIARY RIGHTS. – It means the rights resulting from a Trust Agreement whose object is a Property located inside the Urbanization Project.


21. – TOURIST AND URBAN DEVELOPMENT IN JOINT OWNERSHIP PROPERTY SYSTEM. – It means the urban complex under Joint Ownership Property System named “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, made of thirty Private Property Areas or PRIVATE AREAS OF DEVELOPMENT, as well as by streets, sidewalks, gardens, drinking water systems, sewage, electricity and telephone lines, easements, vigilance and maintenance of services and equipment, that constitute the Common Use Areas of the Joint Ownership Property.

22. – APARTMENT BUILDING. – Means the set of sixty-four one family apartments, that constitute the building located inside the Urbanization Project.


23. – TRUST BENEFICIARY. – Means the physical person or legal entity, holder of the Beneficiary rights, whose object is a property located inside the Urbanization Project.

24. – FIDUCIARY.- Means the Fiduciary bank, proprietor in trust of an area of private property, by virtue of a Trust Agreement legalized pursuant to the Federal Law of Foreign Investment.


25. – MAINTENANCE EXPENSES. – It means all the amounts of money that the Joint Owners or proprietors of each one of the areas of private property located inside the Urbanization project are obliged to pay, for all the maintenance work, improvements and repairs of the Common Use Areas of the Urbanization project.

The General Assembly of Joint Owners, and Special Assemblies of Joint Owners as is applicable pursuant to the provisions in the Joint Ownership Property System, shall approve said expenses and they will be of three different kinds.

(a). – Ordinary Expenses. – This is the amount of money that each Joint Owner must pay and it is a percentage of the Annual Expenses Budget approved by the General Assembly or Special Assemblies of Joint Owners, as is applicable, to take care of the maintenance expenses and repairs of the Common Use Areas of the Urbanization project.

(b). – Improvement expenses. – This is the amount of money that each Joint Owner must pay proportionally, for expenses that have been previously approved by the General Assembly, or Special Assemblies of Joint Owners, as is applicable, to take care of expenses for improvements or constructions that are necessary in the Common Areas or Common Use Areas in the Urbanization project.

(c). – Reimbursement Expenses. – It means the amount of money that each Joint Owner must pay for expenses paid on his (her) behalf by the Condominium Administrator, as representative of the Joint Owners, for expenses approved by the General Assembly or by Special Assemblies of Joint Owners, as is applicable. Similarly, the amounts of money that any Joint Owner must pay as interest or as a conventional penalty, following unfulfillment of any established obligation charged to the Joint Owner by the Joint Owners General Assembly, pursuant to these By-laws, shall be considered as Reimbursement Expenses.

26. – LAND LOTS. – It means any portion or area of land without construction, located inside the Urbanization Project and that constitutes a private property area identified with a number, letter or any other form of designation.


27. – IMPROVEMENT. – It means any construction, addition, repair, change or modification necessary for the adequate maintenance of the Common Use Areas of the Urbanization Project, as well as any building, structure or facility that has been approved by the Joint Owners General or Special Assemblies, as an indispensable measure for the preservation and the general aesthetics of the Common Use Areas of the Urbanization Project.

28. – ARCHICTECTURAL NORMS. – It means the norms, limitations, conditions, and requirements applicable to the quality, aesthetics, permanence, strength and safety of the Common Use Areas of the Condominium and also to the constructions the Joint Owner shall build on the land lots that are private property areas in the Urbanization Project, as well as the norms applicable to repairs, additions, improvements and reconstructions that are carried out on the entire private property areas of the Urbanization Project. These norms shall be the guidelines for the performance of the Architectural Committee of the Tourist Urban Development in and its compliance shall be the responsibility of the Condominium Administrator.

29. – DEVELOPMENT MASTER PLAN. – Means the Use of the Land Program and the conditions and limitations applicable to the constructions, improvements and facilities that may be built inside each one of the private property areas or PRIVATE AREA FOR DEVELOPMENTS located inside the Tourist Urban Development in Joint Ownership Property System denominated “”ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, as well as the purpose and use of the Common Use Areas and of the Area, pursuant to the norms included in the Joint Ownership Property System of said Tourist Urban Development of which the Joint Ownership Property System of the Urbanization Project and these By-laws are part.

30.- JOINT OWNERSHIP PERCENTAGE.- It means the proportional part or percentage of the right of ownership of the Common Use Areas in the Development, included in articles 6, 6.1 and 6.2 of these bylaws, which corresponds respectively to the Joint Owners or proprietors of the private property areas within the Development, as a consequence of the Condominium Regime of which these Bylaws are part of. Said percentages which are included in “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS as well as in the 2 (two) additional tables denominated

31. – JOINT OWNERSHIP PROPERTY SYSTEM. – Means the modality of the right of property referred to by the Law on Joint Ownership Property System for real estate in the State of Sinaloa.


32. – PRINCIPAL JOINT OWNERSHIP PROPERTY SYSTEM. – It means the Joint Ownership Property System established in the Tourist Urban Development in Joint Ownership Property System denominated “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY” in public deed number 5756 five thousand seven hundred and fifty six, volume 114 one hundred and fourteen, book 2, two of the Notary Public number fifty nine of the State of Sinaloa, with commission in Mazatlan, Attorney Fernando A. Orrantia Arellano, dated the twenty fourth of February of the year two thousand, of which this Secondary Joint Ownership Property System of the Lot number 16-A (Sixteen dash A) and these By-laws are part.

33. – SECONDARY JOINT OWNERSHIP PROPERTY SYSTEM. – It means the Joint Ownership Property System that can be established by the Joint Owner proprietor of all or part of a private property area or PRIVATE AREA FOR DEVELOPMENT located inside the Tourist Urban Development in Joint Ownership Property System denominated “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, to regulate the construction, use and alienation of land lots, houses, apartments buildings, hotels and recreational areas that are built within said private property areas or PRIVATE AREA FOR DEVELOPMENT, and that eventually they must comply with the norms and restrictions of the Joint Ownership Property System that regulates said Tourist Urban Development in Joint Ownership Property System.

34. – “STONE ISLAND DEVELOPMENT”, S.A. DE R.L. DE C.V.- It means the business partnership incorporated with that denomination pursuant to the laws Mexico in which that the DECLARANT has the capacity of proprietor under the Joint Ownership Property System of which these By-laws are a part of.


35. – “STONE ISLAND GOLF COURSE”, S. DE R.L. DE C.V.-It means the business partnership incorporated with this denomination pursuant to the laws of Mexico.

36. – CONDOMINIUM UNIT. – It means each one of the private property areas that integrate the Urbanization Project under the Joint Ownership Property System of which these By-laws are a part.


37. – URBANIZATION PROJECT. – It means the land lots, the apartment building and the Common Use Areas located in the Urbanization project and regulated by the Condominium Joint ownership system of which these By-laws form part.

JOINT OWNERS”, Table 4 (A) OF ALL Table 4(B) “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE LOT AREA” and Table 4(C) “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE APARTMENT BUILDING”. (These tables are not included here)

CHAPTER ONE
JOINT OWNERSHIP PROPERTY SYSTEM

CLAUSE ONE – CLOSE CORPORATION AND ITS DENOMINATION

THE DECLARANT is “STONE ISLAND DEVELOPMENT” SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE, represented by its General Agent, Mr. ARTHUR JOHN MARTORI.


CLAUSE TWO – JOINT OWNERSHIP PROPERTY SYSTEM

The Special Agent of the Declarant states in this action that he is establishing for his principal, the Joint ownership property system in relation to the land and the building described in the First and Third recitals of this instrument, as each of the thirty nine land lots and the sixty four apartments that make up the Urbanization project therein described, shall be sold to different owners, complying thus with the provisions of article Sixth Bis-A of the Law on Joint ownership property system of Real Estate for the State of Sinaloa. 

CLAUSE THREE – DESCRIPTION OF THE AREAS OF PRIVATE PROPERTY

The one hundred and three areas of private property that are subject to the current Joint Owner property system, have the area, measurements and boundaries indicated in the document given by the Special Agent of the declarant to the undersigned notary public and that is attached to the appendix of this public deed, designated with the number 3 (three).

CHAPTER TWO

USE OF THE AREAS OF PRIVATE PROPERTY

CLAUSE FOUR – USE OF PRIVATE AREAS OF THE DEVELOPMENT

Likewise, the DECLARANT legal representative states that all and each one of the private property areas abided by this Condominium Property Regime, may solely and exclusively be used for RESIDENTIAL purposes, according to the Architectural Norms that will govern the Tourist Urban Joint Ownership Development denominated “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, of which Lot number 16-A (SIXTEEN DASH A) subject of the present Condominium Regime is a part.

Said Architectural Norms describe the purpose and uses allowed for each one of the Private Property Areas, as well as information as regards the number of floors allowed, restrictions for constructions or edifications and other limitations and conditions whose purpose is to regulate all constructions within the development, in order to offer its residents greater comfort and to increase the aesthetic and architectural quality of the development which is the subject of the present Condominium Regime.

In consequence, those Architectural Norms constitute limitations, restrictions and conditions for all constructions that may be built in the Private Property Areas, so that any person be aware of said limitations, restrictions and conditions before acquiring the ownership or Fiduciary rights to a real estate property inside the Development subject of the present Condominium Regime.

Additionally, in the Private Property Areas consisting of undeveloped land lots, the Joint Owners may carry out the construction of single-family residences and will be able to make any improvements they require for their own purposes, provided they comply with the requirements indicated by law, the Condominium Property Regime and its Bylaws which regulate the Tourist Urban Joint Ownership Development of which it is a part, as well as the regulations contained in the present Condominium Regime and the respective Bylaws. Furthermorein order to ensure the aesthetic and architectural quality of every construction inside the development, the quality of the urbanization or construction project must in every case be approved by the tourist urban joint ownership development Architectural Committee, and to whose Condominium Regime and Bylaws this Condominium Regime and its Bylaws are subordinated. Said Architectural Committee shall apply the aforementioned Architectural Norms.

Likewise, in the Private Property Areas integrated in the apartment building, the Joint Owners may carry out the modifications, repairs, and improvements they require for their own purposes, as long as they comply with the requirements established by the law, the Condominium Property Regime and its Bylaws which regulate the Tourist Urban Joint Ownership Development of which the Development is a part of, as well as with the regulations set forth in the present Condominium Regime and respective Bylaws. Furthermore, in order to avoid causing disturbance for the other joint owners residing in the apartment building, it is established that the joint owners shall be able to carry out those modifications, repairs, and improvements in their apartments deemed as major, annoying or noisy or that in any way may upset the tranquility of the other joint owners, only between the 01(first) day of June and the 31 (thirty-first) day of October of each year. For any other time, authorization in writing must be obtained from the Condominium Administrator. This last restriction shall not be applicable when dealing with urgent repairs or when they constitute an emergency to the building or the apartment itself, as long as it is so determined by the Condominium Administrator.

CHAPTER THREE

DENOMINATION OF THE TOURIST DEVELOPMENT

CLAUSE FIVE – DENOMINATION

The urbanization project made on the land described in the First Recital of this instrument that now is subjected to this Joint ownership property system, is denominated “SECONDARY JOINT OWNERSHIP PROPERTY SYSTEM OF LOT NUMBER 16 –A (SIXTEEN DASH A)”.

The Special Agent of the DECLARANT establishes said denomination for his Principal, same denomination that may only be modified through modification of this Joint ownership property system.

Similarly, the Special Agent of the DECLARANT proves that this Joint ownership property system that is now legalized, is a part of the Joint ownership property system that regulates the Tourist Urban Development in Joint ownership property system denominated “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, therefore, all the norms, restrictions, conditions and provisions contained in said Joint ownership property system are applicable. Thus, this Secondary Joint ownership property system shall be subordinated thereto.

CHAPTER FOUR

COMMON USE OR COMMON PROPERTY AREAS

CLAUSE SIX – COMMON USE OR COMMON PROPERTY AREAS

1. The PRIVATE PROPERTY areas abided by the present Condominium Regime are divided into two parts: the “Lot Area” and the “Apartment Building”, which are described as follows:

  • (a) “Lot Area”.- It is an area comprised of 39 (thirty-nine) lots for the construction of single-family residential houses, which occupies a total surface for private development of square meters.
  • (b) “ Building”.- It is an area of a building which has 64 (sixty- four) single-family residential apartments, and which occupies a total land area for private development of 14,623.61 (fourteen thousand six hundred twenty-three point sixty-one) square meters.

2. The COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE, meaning, of common property and use of all and every one of the joint owners of any one of the lots or apartments which form the Private Property Areas, solely and exclusively are the following:

  • (a) The main access road to the Development and an area of a roundabout with thirty-one parking spaces, all of which occupies a total area of square meters,
  • (b) The duct systems for water supply, drainage, electricity, telephone and television, which run through or pass by the areas aforementioned.

3. The COMMON PROPERTY AREAS OF THE OWNERS OF THE APARTMENTS WHICH COMPRISE THE “APARTMENT BUILDING” AND THEREFORE OF THEIR EXCLUSIVE USE, meaning the common property of all and every one of the owners of the 64 (sixty-four) apartments, and therefore are of their exclusive use, solely and exclusively are the following:

(a) Reception and Administration area of the building.
(b) Recreational area with terrace and gardens.
(c) Pool area with beach front.
(d) Area of machines, equipment, and all accessories for the utilities of the building.

All of which reside on the total land area of the Apartment Building, which is defined above, and which is described on Plan #2 within Appendix 7.

4. The COMMON PROPERTY AREAS OF THE OWNERS OF THE LOTS WHICH COMPRISE THE “LOT AREA”, AND THEREFORE OF THEIR EXCLUSIVE USE, meaning the common property of all and every one of the owners of the 39 (thirty-nine) land lots and therefore are of their exclusive use, solely and exclusively is the following:

(a) An area of a pedestrian walkway that leads from the pedestrian walkway between the parking area and the “Apartment Building”, to the beach occupies a total area of described 222.57 (two hundred and twenty-two point five seven) square meters, and which is on Plan #2 within Appendix 7.

In consequence, the joint owners, who own each one of the land lots which integrate the “Lot Area”, shall not have access to those areas designated as common property and of exclusive use of the owners of the apartments that integrate the “Apartment Building”.

On their part, the joint owners who own the apartments located in the “Apartment Building”, shall not access those areas designated as common property and of exclusive use of the owners of the lots that comprise the “Lot Area”.

CLAUSE SEVEN – JOINT OWNERSHIP OVER THE COMMON USE AREAS

The Joint owner of a private property, be that of a lot in the “Lot Area” or of an apartment in the “Apartment Building”, will be a joint owner of the Common Use Areas referred to in item number 2 (two) of clause Six which precedes, as well as being joint owner of the Common Use Areas referred to in items 3 (three) and 4 (four) of said clause, as it corresponds according to the area where the private property has been acquired; in accordance to the aforementioned, the joint owner who has acquired a private property in the “Apartment Building”, will only be joint owner of the Common Use Areas referred to in item number 3 (three) of clause Six which precedes, while that joint owner who has acquired a private property in the “Lot Area”, will only be joint owner of the Common Use Areas referred to in item number 4 (four) of clause Six which precedes.

Additionally, all of the Joint Owners who own a private property area within the Development subject to this Condominium Regime, have a corresponding joint ownership right over the Common Use Areas of the Tourist Urban Joint Ownership Development denominated “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, of which this Development is a part, therefore all of the Joint Owners of the Condominium Regime which is now formalized will also have the rights and obligations stated in the Master Condominium Property Regime and its Bylaws, which regulate said Tourist Urban Joint Ownership Development.

CLAUSE EIGHT – NON-DIVISIBILITY OF THE CO-OWNERSHIP

The co-ownership right over the Common Use Areas of the Urbanization shall only be sold or encumbered to third parties, jointly with the private property area, which is considered an undetectable annex. The co- ownership over the Common Use Areas of the Urbanization project is not susceptible to division.

Each Joint owner shall be able to sell, mortgage or encumber his (her) private property area, without requiring consent from the rest of the Joint Owners.
When a Joint owner sells or encumbers his (her) private property area, it shall invariably be understood that the co-ownership right to which said Joint owner is entitled over the Common Use Areas are accessory to the property right over his (her) private property area.

CLAUSE NINE – OBLIGATIONS OF JOINT OWNERS

Even in the event that a Joint owner abandons or waives the use of his (her) private property Area, he (she) shall be subject to the liabilities imposed by the law on the Joint ownership property system for Real Estate in the State of Sinaloa, this Joint ownership property system and its By-laws.

CLAUSE TEN – USE OF THE COMMON USE AREAS

Each Joint Owner must use the Common Use Areas corresponding to such Joint Owner and enjoy the collective utilities and facilities of the Development, without restricting the right of the other Joint Owners.

The Joint Owners must use their Private Property Areas, according to their characteristics and the limitations and prohibitions established by the Master Condominium Property Regime which regulates the Tourist Urban Joint Ownership Development and which is referred to in the Second recital of this instrument, as well as the present Condominium Regime and its Bylaws.

Each Joint Owner, lessee, user or beneficiary, must make use of his/her private property in a manner that is prudent, respectful, orderly and quiet so as to not cause any disturbance or annoyance to other Joint Owners so that all may use the Common Use Areas of the Development and the Touristic Urbanization that corresponds to them.

CLAUSE ELEVEN – ALLOCATION OF EXPENSES FOR THE COMMON USE AREAS

Each Joint Owner will be obligated to perform to his/her own charge the works of maintenance and repair required in the interior of his/her private property, as well as of the maintenance of the sidewalk corresponding to the front of his/her respective private property area; the latter, only for those owners of the lots in the “Lot Area”. The street will be repaired with a charge to the “ADMINISTRATION AND MAINTENANCE EXPENSES FUND OF THE COMMON USE AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A” referred to in item (C) of this same clause. However, if the street repair is necessary because a Joint Owner or owner of a private property area has performed works for improvement, maintenance or repair of his/her private area or its constructions or facilities, said Joint Owner will have to pay the cost to repair the street.

For the administration and maintenance of the Common Use Areas of the Condominium indicated in items 2 (two), 3 (three) and 4 (four), of clause Six of the present Condominium Property Regime, as well as for the administration and maintenance of the Common Use Areas of the Master Condominium Property Regime, the following rules will be observed:

(A) The Joint Owners who own land lots in the “Lot Area” ,will pay the expenses related to the administration, maintenance and conservation of the common property and common use areas indicated in item number 2 (two) of Clause Six of this regime, denominated as “COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE”, in a proportion which will be equal to the percentage of joint ownership they have over said Common Use Areas pursuant to PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS, referred to in Clause Seven of the present condominium property regime.

Likewise, the Joint Owners who own land lots in the “Lot Area”, will pay the expenses related to the administration, maintenance and conservation of the common property areas and exclusive use indicated in item number 4 (four) of Clause Six of this regime, denominated as “COMMON PROPERTY AREAS OF THE OWNERS OF THE LOTS INTEGRATED IN THE “LOT AREA” AND THEREFORE OF THEIR EXCLUSIVE USE”, in a proportion which is equal to the percentage of joint ownership they have over said Common Use Areas pursuant TABLE 4 (B) PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS , referred to in Clause Seven of the present condominium property regime. Additionally, the Joint Owners who own a land lot located in the “Lot Area” , will pay in the proportion corresponding to each Joint Owner according to PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS
referred to in Clause Seven of the present condominium property regime, all of the expenses related to the administration, maintenance, surveillance, security, taxes, insurance, administrative expenses and premiums, of the Common Use Areas of the Master Condominium Property Regime and any other expense applicable to “LOT NUMBER 16-A (SIXTEEN DASH A) as a PRIVATE AREA OF DEVELOPMENT that is part of the Master Condominium Property Regime, as well as any other expense related to the administration and maintenance of the Common Use Areas of the Development approved by the Joint Owners General Assembly of the Master Condominium Property Regime, while approving the Annual Expenses Budget of the Development.

Additionally, the Joint Owners who own a land lot located in the “Lot Area”, will pay in the proportion corresponding to each Joint Owner according to Table 4 (A) PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF ALL JOINT OWNERS,referred to in Clause Seven of the present condominium property regime, all of the expenses related to the administration, maintenance, surveillance, security, taxes, insurance, administrative expenses and premiums, of the Common Use Areas of the Master Condominium Property Regime and any other expense applicable to “LOT NUMBER 16-A (SIXTEEN DASH A) as a PRIVATE AREA OF DEVELOPMENT that is part of the Master Condominium Property Regime, as well as any other expense related to the administration and maintenance of the Common Use Areas of the Development approved by the Joint Owners General Assembly of the Master Condominium Property Regime, while approving the Annual Expenses Budget of the Development.

(B) The Joint Owners who own apartments which comprise the “Apartment Building”, will pay the expenses related to the administration, maintenance and conservation of the common property and common use areas indicated in item number 2 (two) of Clause Six of this regime, denominated as “COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE”, in a proportion which is equal to the percentage of joint ownership they have over said Common Use Areas pursuant to PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON Table 4 (A) OF ALL JOINT OWNERS Table 4 (B) OF THE LOT AREA Table 4 (A) USE AREAS , referred to in Clause Seven of the present condominium property regime.

Furthermore, the Joint Owners who own apartments which comprise the “Apartment Building”, will pay the expenses related to the administration, maintenance and conservation of the common property areas and exclusive use indicated in item number 3 (three) of Clause Six of this regime, denominated as “COMMON PROPERTY AREAS OF THE OWNERS OF THE APARTMENTS WHICH INTEGRATE THE “APARTMENT BUILDING” AND THEREFORE OF THEIR EXCLUSIVE USE”, in a proportion which is equal to the percentage of joint ownership they have over said Common Use Areas pursuant to PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS , referred to in Clause Seven of the present condominium property regime.

Additionally, the Joint Owners who own an apartment located in the “Apartment Building”, will pay in the proportion corresponding to each Joint Owner according to the PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS , referred to in Clause Seven of the present condominium property regime, all of the expenses related to the administration, maintenance, surveillance, security, taxes, insurance, administrative expenses and premiums, of the Common Use Areas of the Master Condominium Property Regime and any other expense applicable to “LOT NUMBER 16-A (SIXTEEN DASH A) as a PRIVATE AREA OF DEVELOPMENT that is part of the Master Condominium Property Regime, as well as any other expense related to the administration, and maintenance of the Common Use Areas of the Development and which is approved by the Joint Owners General Assembly of the Master Condominium Property Regime, while approving the Annual Expenses Budget of the Development.

(C) The cost of repair works necessary or indispensable to maintain in good condition of conservation and security the Common Use Areas of the Development indicated in item number 2 (two) of clause Six of this regime, denominated as “COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE”, as well as ensuring the utilities and installations of these areas operate normally and efficiently, will be paid by the Condominium Administrator with charge to the “ADMINISTRATION AND MAINTENANCE EXPENSES FUND OF THE COMMON USE AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A” , which shall be integrated each year with the annual fee with charge to the Joint Owners, as decided by the Joint Owners General Assembly, following the provisions stated in preceding items (A) and (B).

When said fund is not sufficient to pay the corresponding expenses, the Condominium Administrator will call for a Joint Owners General Assembly, in order to resolve as pertinent.

Each Joint Owner of each one of the two areas of the Development: the “Lot Area” and the “Apartment Building”, will be under the obligation to contribute to the “ADMINISTRATION AND MAINTENANCE EXPENSES FUND OF THE COMMON USE AREAS OF EACH AND ALL THE JOINT OWNERS OF LOT 16-A” aforementioned, with a sum equal to the corresponding percentage in joint ownership of the Common Use Areas of the Development, according to Table 4 (A) PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF ALL JOINT OWNERS referred to in clause Seven of this document, in compliance with, in every case, the separation of expenses referred to in items (A) and (B) of this clause Eleven.

The obligation to integrate said “ADMINISTRATION AND MAINTENANCE EXPENSES FUND OF THE COMMON USE AREAS OF EACH AND ALL THE JOINT OWNERS OF LOT 16-A” is inalienable and the payment of the annual fees approved by the respective general and joint owners assemblies, whichever the case, shall be made by the joint owners on a monthly basis, payable on the first day of the month, and every month thereafter.

The joint owner’s monthly payment will be considered late when she/he has not made and every month thereafter. payment of his/her monthly fee in full by the last day of the month in course.

All joint owners who are late, will be liable for an interest late fee charge of monthly interest equivalent of 5% five percent per month. Said late fee interest will be in effect starting the following day that the joint owner’s payment is deemed to be late, and partial months will be considered full months for interest calculation purposes.

(D) In order to perform works of ornate or comfort, which are not indispensable, inside the Common Use Areas of the Development indicated in item number 2 (two) of Clause Six of this regime, denominated as “COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE”, it will be necessary that the Condominium Administrator obtains from the Joint Owners General Assembly the consent of at least 75% seventy-five percent of the total votes cast by the Joint Owners of all private property areas. The same applies for the implementation of works desired in the Areas indicated in items number 3 (three) and 4 (four) of Clause Six of this regime, where the Condominium Administrator must obtain from the respective Special Joint Owners Assembly, the consent of at least 75% seventy-five percent of the total of the votes cast by the Joint Owners of the respective Private Property Area, be that of works to be implemented inside the common property area and of exclusive use of the “Lot Area” or the common property area and of exclusive use of the “Apartment Building”.

CHAPTER FIVE

PRIVATE PROPERTY AREAS

CLAUSE TWELVE – USE OF THE PRIVATE PROPERTY AREAS

The Joint owners must make use of their private property areas in accordance with their characteristics and with their limitations and prohibitions established by this Joint ownership property system, its By-laws and the applicable laws.


Each Joint owner must use his (her) private property area in a prudent, respectful, orderly and quiet manner so it shall not cause trouble to the other Joint owners.

CLAUSE THIRTEEN – OBLIGATIONS OF THE JOINT OWNERS

Each Joint Owner or owner of a private property area subject to the present Condominium Regime will have the rights and obligations stated in this Condominium Regime, its Bylaws, and the law.

The Joint Owner of a private property area will be jointly and severally liable of the damages and prejudices caused by his/her lessee, borrower, user, guest, relative or successor, even when they would have agreed otherwise among themselves.

Each Joint Owner will be under the obligation to notify in writing to the Condominium Administrator any transfer of his/her private property area. Failing to comply with this obligation will cause the Condominium Administrator to prevent any other person other than the Joint Owner from accessing the Development and the respective private property area, and besides, the Condominium Administrator will continue to send all notifications to the Joint Owner registered as the owner.

On their part, any individual or corporation who acquires ownership rights towards any private property area subject to the present condominium property regime, shall provide the following information in writing to the Condominium Administrator within 14 calendar days, from the date said owner acquires the rights and obligations of ownership, either by transfer of title by deed, or by agreement with the seller, which ever comes first:

(a) Full name of the new owner or owners.

(b) Apartment number or lot number acquired as property.

(c) E-mail address.

(d) Telephone numbers where she/he can be inside and outside Mexico.

(e) Address where she/he can be contacted in Mexico and outside Mexico if applicable.

In addition, all joint owners are under the obligation to inform the Condominium Administrator of any change of address, telephone number, e-mail address or any other information deemed relevant in order to be contacted and where to send all the notifications and notices that in compliance to this Regime, its Bylaws and the law must be made; for as long as any joint owner fails to notify in writing to the condominium administrator the change of his/her respective address, telephone number, email address, or any information deemed relevant, all the notifications and notices that in compliance to this Regime, its Bylaws and the law must be made, as well as judicial summons, subpoenas and other judicial or extra- judicial procedures will be served in the address, telephone number or e-mail address register up to the date when they are due, as corresponds to due process.

With the exception of the provisions in clauses Seven and Twenty-One of this instrument, all the Joint Owners will have the same rights and obligations, independently of the characteristics or the location of their respective private area.

CLAUSE FOURTEEN – CONSTRUCTION IN THE PRIVATE PROPERTY AREAS

In the case of Joint Owners who acquire a lot in the “Lot Area”, they will be able to implement any construction works convenient in their private property area, as long as they are single-family residence and that they are in compliance with the limitations, restrictions, conditions and norms established in this Condominium Regime, the respective Bylaws and in the Architectural Norms which regulate the constructions that may be built inside the Development.

Each Joint Owner shall implement his/her construction works without causing disturbance or annoyance to the neighbors and without affecting in any way the adjacent lots or constructions.

All of the constructions that the joint owners build inside the Private Property Areas, shall comply with the requirements set forth in the laws of the State of Sinaloa. Additionally, the constructions must be implemented according to architectural plans of optimum quality, and shall be previously approved by the Development’s Architectural Committee, whose Architectural Norms serve the purpose of ensuring a high level of aesthetic and architectural quality of every construction inside the development, in compliance to the Master Condominium Regime.

The constructions shall in every case be appropriate for the Development they are part of, according to the provisions made in the present Condominium Regime and its Bylaws.

Likewise, each Joint Owner shall, even in the interior of his/her Private Property Area, refrain from performing any act that stops, makes difficult, less efficient, or less pleasant the operation or general use of the facilities of the Development or its Common Use Areas, therefore each Joint Owner shall be under the obligation to maintain in a good state of conservation and operation all the services, utilities and facilities which belong to their private property area.

Failure to comply with this obligation will make the offending joint owner liable for the payment of all the expenses necessary to repair the corresponding services, utilities and facilities, as well as of payment of the resulting damages and prejudices, and the condominium administrator will have grounds to legally sue for the compliance of the obligations to his/her charge or the obligation to respect the prohibitions that are set forth in this Condominium Regime. All of the expenses and wages necessary to exercise said actions, will be charged to the infringer Joint Owner.

The aforementioned statements withstanding, in order to avoid causing disturbance for the other joint owners residing in the apartment building, it is established that the joint owners will be able to carry out those modifications, repairs, and improvements in their apartments deemed as major, annoying or noisy or that in any way upset the tranquility of the other joint owners, only between the 01(first) day of June and the 31 (thirty-first) of October of each year. For all other times, authorization in writing must be obtained from the condominium administrator. This last restriction shall not be in force when dealing with urgent repairs or when they constitute an emergency to the building or the apartment in particular, as long as it is so determined by the Condominium Administrator.”

CLAUSE FIFTEEN – OBLIGATIONS DERIVED FROM THE PRINCIPAL JOINT OWNERSHIP PROPERTY SYSTEM

The Joint Owners of each of the lots or apartments located within the Urbanization project, shall be at the same time in a joint manner Joint Owners of the Principal Joint Ownership Property System, and must appoint a common representative to represent all Joint Owners of this Secondary Joint Ownership Property System in the assemblies of Joint Owners of the Principal Joint Ownership Property System.

Consequently, the proportional payment for the maintenance expenses of the Common Use Areas of the Principal Joint Ownership Property System is an obligation of all Joint Owners of the Urbanization project, in their capacity as Co-owners of Lot Number 16-A (Sixteen dash A), object of this Secondary Joint

Ownership Property System. Each of the Joint Owners of the Urbanization project must pay said expenses according to the percentage indicated in the “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF ALL JOINT OWNERS”, referred to in the Seventh Clause of this instrument that has been attached to the respective appendix of this public deed marked with number 4 (Four) (A).

On the other hand, the 248 (two hundred and forty eight) votes that belong to the Joint Owner proprietor of lot number 16-A (Sixteen dash A), as a PRIVATE AREA OF DEVELOPMENT that constitutes a part of the Principal Joint Ownership Property System, the same votes that will be exercised at the Joint Owners Assemblies of the Principal Joint Ownership Property System, shall be divided between the Joint Owners of the Urbanization project in the same percentage as their Right of Joint Ownership over the Common Use Areas of the Secondary Joint Ownership Property System and are indicated in the document mentioned in the previous paragraph.

Additionally, the provisions of the Principal Joint Ownership Property System state the rights and obligations of the persons who acquire lots, houses or apartments on the private property areas located inside the PRIVATE AREAS OF DEVELOPMENT, without the possibility of modification of said legal relationship that currently exists over whoever is the owner of each of the private property areas, since said rights and obligations stem from the law, the Principal Joint Ownership Property System and its By-laws. Consequently, the successors of the DECLARANT, by the sole fact of acquiring the right to the property of a trust beneficiary of a private property area within the Urbanization subjected to this Joint Ownership Property System and its By-laws, shall have the rights and obligations established by the law, the Principal Joint Ownership Property System and its By-laws.

CLAUSE SIXTEEN – APPLICABLE LEGAL SYSTEM TO JOINT OWNERS

The rights and obligations of the Joint Owners shall be ruled by the Law on Joint Ownership Property System of Real Estate of the State of Sinaloa, by the Civil Code of the State of Sinaloa, by the Principal Joint Ownership Property System and its By-laws and by the Covenant or Agreement through which the Ownership or Trust beneficiary right is acquired over a private property area.

CHAPTER SIX

VALUES

CLAUSE SEVENTEEN – VALUES OF THE PRIVATE PROPERTY AREAS

In order to comply with the provisions of the fifth paragraph of Article Three of the Law on Joint Ownership Property System of Real Estate in the State of Sinaloa, the presenter proves that the private property areas that are a part of the Urbanization project which is now being legalized as Joint Ownership Property System, have the values indicated in the list attached to the original appendix pertaining to this public deed, that was marked with the number 4 (Four).

CHAPTER SEVEN

JOINT OWNERS ASSEMBLIES

CLAUSE EIGHTEEN – JOINT OWNERS ASSEMBLIES

The Joint Owners Assembly is the supreme authority regarding the rights and obligations of the Joint Owners who own real estate in the Development subject to this CONDOMINIUM REGIME.

The Joint Owners Assemblies may be General or Special. They will be Special when held to agree on matters which are solely incumbent to the Joint Owners who own Lots located in the “Lot Area” or only to the Joint Owners who own apartments located in the “Apartment Building”.

A Special Assembly for “Lot Area” Joint Owners and “Apartment Building” Joint Owners will be held annually and the meeting dates should co-incide with the annual General Assembly, or in special cases, when it is requested by the Joint Owners who represent at least twenty-five per cent of the votes of the respective area, be it the “Lot Area” or “Apartment Building” and counting that percentage of votes in agreement with PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE LOT AREA and Table 4 (C) PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE APARTMENT BUILDING.

The General and Special Assemblies shall be held at least once a year and shall be held during the two last months of the fiscal year in course, or otherwise within the two first months after the closure of the fiscal year. For General Assemblies, all the Joint Owners of Lot 16-A must necessarily be summoned. For Special Assemblies, all the Joint Owners of the “Lot Area” or the “Apartment Building” shall be summoned, as the case may be. Thenotification of an assembly shall be issued pursuant to the provisions in the hereby Condominium Regime and its Bylaws, and only the matters not covered by such instruments will be settled pursuant to the Real Estate Condominium Regime Law for the State of Sinaloa.

All the assembly meetings will be held in the city of Mazatlan, Sinaloa, preferably inside the tourist urban development denominated “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY, stating in the respective summons of a meeting, exactly the place where it will be held, under the Condominium Administrator’s responsibility. The summons must state all the matters in the respective Agenda pointing out clearly the items that either the General or the Special Joint Owners Assembly shall discuss. The noncompliance with this requirement shall result in the nullity of the agreements related to the matters not included in the respective Agenda, unless 100% hundred percent of the Joint Owners attend or are legally represented in the General or Special Assembly Meeting, as the case may be.

CLAUSE NINETEEN – SUMMONS FOR THE ASSEMBLIES

The Condominium Administrator will be in charge of summoning the Joint Owners General Assembly Meetings, as well as the Special Joint Owners Assembly Meetings of the “Lot Area” or the “Apartment Building” as the case may be, at least once a year, as well as when requested by the Surveillance Committee, or when requested by at least twenty-five percent of the votes of all the Joint Owners of Lot 16-A for General Assemblies, or if the case is Special Assemblies, by twenty-five percent of the votes of either the Lot Area or Apartment Building as the case may be.

The summons for General and Special Assemblies Meetings, as the case may be, shall be issued at least twenty calendar days before the date appointed for the Assembly, without considering for this period the day of its issuance and the day when the assembly is to take place. The summons shall indicate the place, date, and time on which the Assembly Meeting will take place, as well as the topics of the Agenda that will be discussed.

The Condominium Administrator will personally hand to each Joint Owner, or will send the respective summons by email, at least twenty calendar days in advance of the appointed date for the holding of the Assembly Meeting, and will also post the summons with the same time in advance, in the reception area of the “Apartment Building” and in a visible place in the common walkway of the “Lot Area”.

The Condominium Administrator shall send the summons to the email address the Joint Owners have registered in the Joint Owners Register Book that the Condominium Administrator must keep updated.

A summons will not be necessary if all the Joint Owners, as the case may be, attend the General or Special Assembly Meeting.

The Condominium Administrator shall consider a Joint Owner or title holder, anyone who has proved with the corresponding documents to be the proprietor of a private property area within the development which comprises Lot 16-A.

CLAUSE TWENTY – REGISTRY OF JOINT OWNERS

The Joint Owners General Assemblies and the Joint Owners Special Assemblies will only accept the presence of Joint Owners who are registered as such in the Joint Owners Register Book. This register must be updated at all times, under the responsibility of the Condominium Administrator. It shall contain the full name of the Joint Owner or proprietor of each private property area, his/her permanent address and phone number, their email address, the number of the private property area which belongs to him or her, as well as any other information the Condominium Administrator considers appropriate.

The Joint Owners may be represented in the Assemblies by means of a Letter of Proxy, a simple Power of Attorney or by a written authorization signed or ratified before a Notary Public, which shall be given to the Condominium Administrator before the holding of the assembly meeting. It should clearly state the name of the Joint Owners, his/her private property area number, his/her representative’s name, stating the grant of the necessary capacities to make the decisions the assembly shall require from the Joint Owners, according with the items included in the respective summons.

Besides the manner provided in the preceding paragraph, the Joint Owners may be represented in any of the manners set forth for Mandate in the Civil Code of Sinaloa.

In the cases when the private property area belongs to a Fiduciary bank by virtue of a Trust Agreement, the Trustee or Beneficiary will attend the General or Special Joint Owners Assembly Meetings, and will be authorized to assist and vote at all assemblies.

CLAUSE TWENTY-ONE – VOTES

The owner or Joint Owner of each one of the private property areas shall have in the Joint Owners General Assemblies, as well as in the Joint Owners Special Assemblies, the number of votes stated in the corresponding tables, on the understanding that there is a table that states the percentage and number of votes each Joint Owner has in the Joint Owners General Assemblies, and two tables that indicate the percentage and number of votes each Joint Owner has in the Joint Owners Special Assemblies; that is, one table for the “Lot Area” and one for the “Apartment Building”, on the understanding that these percentages and votes are respectively obtained based on the percentage of joint ownership each joint owner has in Table 4 (A) PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF ALL JOINT OWNERS as well as in Table 4(B) PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE LOT AREA and Table 4 (C) PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE APARTMENT BUILDING, and that the percentages and number of votes are contained there-in.

In case there are several joint owners of a Private Property Area, they shall name a representative in common who will attend the assemblies and shall have the right to vote. The designation of a representative in common shall be made by means of a Letter of Proxy, or a Power of Attorney ratified before a Notary Public by each one of the joint owners, which must be presented to the Condominium Administrator prior to the opening of the Joint Owners General or Special Assemblies. Failing to designate a representative in common will prevent the joint owners to vote in the assembly, but they shall have the right to attend and to receive all the information given to the Joint Owners.

The Joint Owners shall designate who shall chair the assemblies, and the Condominium Administrator will be the Secretary of the Assembly, if an individual, or his/her representative if a legal entity.

In the event the Condominium Administrator does not attend the Assembly, the attending Joint Owners will designate someone who will be the Secretary of the Assembly.

The attending Joint Owners shall designate two persons who will be the Scrutineers to put on record the name of the Joint Owners present in the Assembly and the number of votes each one shall represent, as well as the total number of votes represented by all the attending Joint Owners.

CLAUSE TWENTY-TWO (A) – QUORUM AND VOTING

The General and Special Assembly Meetings shall be considered as legally installed on First Summons, if ninety percent of the votes, to which all the Joint Owners who are entitled to attend that assembly meeting, is represented. The decisions shall be made by the majority of votes represented by the attending Joint Owners, except for the provisions set forth in clause eleven, subsection (D) of this regime.

In the event that this requirement is not met, a second summons, which shall meet the same requirements as the first, will be issued, and the Assembly shall take place if fifty- one percent of the votes, to which all the Joint Owners who are entitled to attend that assembly meeting, is represented. The decisions shall be made by the majority of votes represented by the attending Joint Owners, except for the provisions set forth in clause eleven, subsection (D) of this regime.

If the aforementioned Quorum is not met, a third summons, which shall meet the same requirements of the aforementioned summons, shall be issued, and the Assembly will take place, with whatsoever number of votes is represented. The decisions shall be made by the majority of votes represented by the attending Joint Owners, except for the provisions set forth in clause eleven, subsection (D) of this regime.

The resolutions of the Assemblies issued under the terms and conditions set forth in the present Condominium Regime, in the respective Law, and in the Condominium Bylaws, oblige all the Joint Owners, including absentees and dissidents.

The votes of any Joint Owner will be kept confidential if the vote was by secret ballot.

The corresponding minutes shall be drawn up for each General or Special Joint Owners Assembly, and shall be signed by the President of the Surveillance Committee, or failing the appointment of a President, by all the members of the Surveillance Committee, the Secretary, and the Scrutineers.

CLAUSE TWENTY-TWO (B) – VOTING SYSTEM TO TAKE URGENT DECISIONS

In the cases where there is any urgent situation which due to its nature must be resolved upon by a General or Special Joint Owners Assembly, and whose solution may not be postponed to be decided upon by a duly summoned and celebrated assembly, the following voting procedure shall be followed.

1. The Condominium Administrator, with the authorization of a majority of the members of the Surveillance Committee, shall decide if the issue or situation is urgent and if due to its nature, should not be postponed to be decided upon at the next General or Special Assembly Meeting, as the case may be.

2. Once decided a situation is urgent, the Condominium Administrator shall issue a notice addressed to the Joint Owners, indicating the details of the problem or the opportunity, and any possible recommendations, including costs, estimated time, benefits it would bring to the community and any other manifestation considered necessary for the Joint Owners to be able to cast their vote or make the corresponding observations.

3. The aforementioned notice shall be sent to all Joint Owners to the e-mail address they have registered in the Joint Owners Register Book, which the Condominium Administrator must keep updated. Also, it may be handed personally to any Joint Owner who at that time is living in his private property area, or it may be mailed to the foreign address registered in the aforementioned register book, to those Joint Owners who do not have registered or do not have an e-mail address.

4. Urgent matters to which this section refers, shall, be solved by those Joint Owners whose interests are affected pursuant to the Condominium Regime and the corresponding regulations, in agreement with the attributions conferred on the General and Special Joint Owners Assemblies, as the case may be. In this order an urgent situation that affects interests of all joint owners must be notified and be resolved by all and each of the Joint Owners of Lot 16-A, while those urgent situations that only affect the interest of the Joint Owners who live in the “Lot Area” shall be notified to and resolved exclusively by the Joint Owners who are proprietors of the 39 land lots of the development, and the urgent situations which solely affect the interests of the Joint Owners who live in the “Apartment Building” shall be notified to and resolved by the Joint Owners who are proprietors of the 64 apartments of the development.

5. The Joint Owners shall cast their vote, and shall make the corresponding observations or recommendations within a 14 day period from the day the notice was sent to their e-mail address, or if the case, from the day it was delivered personally, or from the day it was mailed to the foreign address in the Joint Owners Register Book. The Joint Owners shall send their respective vote using the same method of delivery that was used to inform them. The vote shall be addressed directly to the Condominium Administrator.

6. Once the votes are received, the Administrator and the members of the Surveillance Committee that are on site shall, as soon as possible, make the respective count and will execute the authorized resolution made by the voting Joint Owners, considering the observations or recommendations made by the Joint Owners and that, in their opinion, are feasible.

7. Votes received from the Joint Owners after the 14 days stated in the preceding item 5 shall not be considered in the voting. Furthermore, a majority of the total available votes must be received in order for the results of the vote to take effect. A simple majority of the votes that are returned are needed to pass the resolution, as long as a majority of the total available votes were received from the affected Joint Owners, except that all resolutions that are of an ornamental nature, and would be governed by clause 11 (D) of this regime, require the consent of 75% of the available votes to take effect..

8. All and each of the conditions and restrictions set forth in this Condominium Regime and its Bylaws, regarding who have the right to vote in the assemblies, are applicable to these votings.

9. For the votings referred to in this section the Proprietor or Joint Owner of each one of the private property areas shall have the number of votes set forth in the Clause 21 (twenty-one) contained here-in.

10. The resolutions issued under the terms and conditions aforementioned, bind all the Joint Owners, including absentees and dissidents. In any case, the resolutions made with this voting system shall be ratified by the immediately following General or Special Assembly held after said voting.

CLAUSE TWENTY-THREE – POWERS OF THE GENERAL ASSEMBLY


The Joint Owners General Assembly shall have the following powers and obligations:

I. To appoint and remove the Condominium Administrator.
II. To state the monthly income the Condominium Administrator shall receive.

III. To specify precisely the general or special powers it wishes to grant the Condominium Administrator, besides the powers this instrument indicates.

IV. To freely appoint and remove the members of the Surveillance Committee.

V. To decide on the type and amount of the bond the Condominium Administrator must place, in relation to performing his/her job and by the handling of funds under his/her care, or else, excusing him or her from this obligation.

VI. To examine, approve, or reject the Annual Statement the Condominium Administrator presents in relation to the previous exercise, solely and exclusively regarding the COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE, same which are set forth in item 2 (two) of the preceding clause Six.

VII. To discuss and approve the Expenses Budget for each year, solely and exclusively regarding the COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE, same which are set forth in item 2 (two) of the preceding clause Six.

VIII. To determine the fees charged to the Joint Owners, to create the “THE ADMINISTRATION AND MAINTENANCE EXPENSES FUND OF THE COMMON USE AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A” referred to in Clause Eleven, item C) herein, which shall be destined for the maintenance and administration of the COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE, same which are set forth in item 2 (two) of clause Six herein, and pursuant to the rules established in this Condominium Regime and its Bylaws. The Joint Owners Assembly must very clearly establish the amount and manner of payment of said fees.

IX. To initiate before the proper authorities, through an especially appointed representative, the course of action the Joint Owners shall take when the Condominium Administrator incurs liability by lack of compliance with the provisions set forth in the Master Condominium Regime and Bylaws, in this Condominium Regime and its Bylaws, in the respective law or in any other applicable legal provision.

X. To decide the most convenient actions regarding common interest issues that are not included among the powers of the Condominium Administrator.

XI. To discuss and approve the authorization referred to in clause Eleventh, item (D) of the present regime to carry out ornamental or comfort works, which are not essential within the Common Use Areas in the Development, indicated in item 2 (two) of Clause Six in this regime, denominated COMMON PROPERTY AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A AND THEREFORE OF THEIR COMMON USE”.

XII. To amend this Condominium Property Regime or its Bylaws, in the cases and conditions that both provide for and pursuant to the applicable legal provisions.

XIII. Any other powers and obligations established by the Real Estate Condominium Property Regime Law for the State of Sinaloa, and the Condominium Bylaws.

CLAUSE TWENTY-FOUR – POWERS OF THE SPECIAL ASSEMBLIES

The Joint Owners Special Assemblies shall be held with the formalities, requirements and conditions provided in clauses Eighteen to Twenty-Two of this Condominium Property Regime, in what may be applicable. Only those Joint Owners whose private property areas are located in the area for which the Special Assembly is held shall be summoned and will have the right to attend, be that the “Lot Area” or the “Apartment Building”.

The person that the attending Joint Owners designate as President shall chair the Special Assemblies and the Condominium Administrator shall be the Secretary of the Assembly, if an individual, or his/her representative if a legal entity, but will not be able to vote because he is not a joint owner.

The Special Assemblies resolutions shall be mandatory for all Joint Owners whose private property areas are located in the area for which the Special Assembly is held, be that the “Lot Area” or the “Apartment Building”.

In the cases not foreseen for Special Assemblies in this instrument, the joint owner who is designated as President of the Assembly, or if the case, the Condominium Administrator, in his capacity of Secretary, shall stipulate what is deemed necessary so that the assembly may be held and the issues for which it was summoned can be processed.

The Joint Owners Special Assemblies shall have the following powers and obligations:

I. To examine, approve, or reject the Annual Statement the Condominium Administrator presents in relation to the previous exercise, solely and exclusively regarding the Common Property Areas referred to in items 3 (three) or 4 (four) of clause Six of this Regime, as applicable to the “Lot Area” or the “Apartment Building”.

II. To discuss and approve the Expenses Budget for each year, solely and exclusively regarding the Common Property Areas referred to in items 3 (three) or 4 (four) of clause Six of this Regime, as applicable to the “Lot Area” or the “Apartment Building”. The respective Joint Owners Special Assembly, must very clearly state the amount and manner of payment of said fees.

III. To discuss and approve the annual Budget related to administration, maintenance, surveillance, security, taxes, administrative expenses, and insurance premiums of the Common Use Areas of the Master Condominium Regime, as well as any other expense related to the administration and maintenance of the Common Use Areas in the Development and which has been approved by the Joint Owners Assembly of the Master Condominium Regime when approving the Annual expenses budget of the Development; in the understanding that the Special Assembly which corresponds to the “Lot Area” shall makeresolutions regarding the percentage of the Annual expenses budget of the master regime the “Lot Area” shall pay, while the Special Assembly which corresponds to the “Apartment Building” shall make resolutions regarding the percentage of the Annual expenses budget of the master regime the “Apartment Building” shall pay. The respective Joint Owners Special Assembly, must very clearly state the amount and manner of payment of said fees.

IV. To discuss and approve the authorization referred to in clause Eleven, section (D) of this regime, to carry out ornamental or comfort works, which are not essential within the Areas stated in items 3 (three) or 4 (four) of clause Six of this regime, whether they are works to be done within the common property area and of exclusive use of the “Lot Area” or within the common property area and of exclusive use of the “Apartment Building”.

V. Any other powers and obligations established by the Real Estate Condominium Regime Law for the State of Sinaloa or those provided by this Condominium Regime and the Condominium Bylaws.

CHAPTER EIGHT
ADMINISTRATION OF THE JOINT OWNERSHIP PROPERTY

CLAUSE TWENTY-FIVE – CONDOMINIUM ADMINISTRATOR

The Urbanization Project subjected to this Joint Ownership Property System shall be administered by the physical person or legal entity appointed by the Joint Owners General Assembly.
The Condominium Administrator shall be the representative of all the Joint Owners, in relation to the Common Use Areas of the Urbanization Project object of this Joint Ownership Property System, as described in Clause Six, with the powers and obligations pertaining to a General Agent for lawsuits and collections and for administrative actions, with all the general and special powers that require a special clause pursuant to the law, under the provisions of the first two paragraphs of article two thousand and thirty six of the Civil Code for the State of Sinaloa, correlative of article two thousand five hundred and fifty four of the Civil Code for the Federal District.

The Condominium Administrator shall be empowered to initiate claims of a criminal nature on behalf of all the Joint Owners, in relation to the Common Use Areas of the Urbanization Project, as well as to initiate Habeas corpus proceedings and to waive themto answer interrogatoriesto become an assistant of the General or District Attorney and to enter into all types of labor covenants with employees hired to work on the Common Use Areas of the Urbanization Project, without any limitation and to represent the Joint Owners in any labor procedure before the labor authorities in relation to actions initiated by workers hired to repair or maintain the Common Use Areas of the Urbanization Project.

The Condominium Administrator shall only be able to substitute the powers granted for suits and collections, but he (she) cannot substitute the powers for the Administrative Actions that are conferred upon him/her. Unless the Joint Owners General Assembly authorizes it expressly, the Condominium Administrator shall not have the power to perform acts of ownership, nor to subscribe credit instruments.

Only the Joint Owners General Assembly shall be able to grant additional powers, under the terms foreseen by these articles of incorporation.
Additionally, the Condominium Administrator shall have the powers and obligations set forth in articles twenty-nine and thirty of the Law on Joint Ownership Property System of Real Estate in Sinaloa.

CHAPTER NINE 

SURVEILLANCE COMMITTEE

CLAUSE TWENTY-SIX – SURVEILLANCE COMMITTEE

The Surveillance Committee shall be made up of a minimum of three persons. Their main responsibility is to supervise the administration of the Urbanization Project and to inform the Joint Owners of any irregularity that they know could affect the aesthetic quality of the Urbanization Project or the Common Use Areas or the respectful and pleasant living together of the people who acquire private property areas.

In an enunciatively and not limiting manner, the Surveillance Committee shall have the following powers and obligations;

1. To supervise the Condominium Administrator in carrying out the agreements of the Joint Owners General Assembly, as well as all the obligations compelled by the law, this Joint Ownership Property System and its By-laws and, if it is the case, to ensure that the Condominium Administrator gives the bond he (she) is bound to produce.

2. To examine the books with the statement that the Condominium Administrator must present to the General Assembly of Joint Owners and to the Special Assemblies of Joint Owners.

3. To verify the proper use of the monies from the “ADMINISTRATION AND MAINTENANCE EXPENSES FUND FOR COMMON USE AREAS”.

4. Give an account to the General Assembly of Joint Owners of their observations about the administration of the Urbanization Project

5. Report to the Joint Owners General Assembly and to the Special Assemblies of Joint Owners, about the non-compliance of obligations by the Joint Owners and propose the respective sanctions and agreements.

6. Help the Condominium Administrator and ensure that the Joint Owners fulfill their obligations.

7. Convene the General Assembly of Joint Owners and Special Assemblies of Joint Owners when the Condominium Administrator fails to do so within the time required by this regime. Also, when to their judgment it appears necessary to report to the Joint Owners General Assembly of irregularities in which the Condominium Administrator may have incurred, the Surveillance Committee can report in writing to the Joint Owners or convene a Joint Owners General Assembly.

CHAPTER TEN
JOINT OWNERSHIP PROPERTY SYSTEM BY-LAWS

CLAUSE TWENTY-SEVEN – JOINT OWNERSHIP PROPERTY SYSTEM BY-LAWS

The By-laws that shall regulate the activities in the Urbanization Project whose Joint Ownership Property System is now being established are appended to the appendix of this public deed, marked with number 5 (Five).


The Condominium Administrator shall provide to all and each of the Joint Owners a copy of said By-laws to be known and to be complied with.

The Joint Ownership Property System By-laws form an integral part of this Joint Ownership Property System and therefore, they shall be mandatory for all Joint Owners and their successors. For the sole fact of acquiring the property rights or those as Trust beneficiary or user of one of the private property area, each Joint Owner and his (her) successors shall be subject to the rights and obligations set forth in this Joint Ownership Property System and in said Joint Ownership Property System’s By-laws.

CHAPTER ELEVEN

FISCAL OBLIGATIONS

CLAUSE TWENTY-EIGHT – FISCAL OBLIGATIONS FOR THE COMMON USE AREAS

Each Joint Owner is bound to pay and hand over to the Condominium Administrator their respective portion for the payment of taxes, rights and fiscal contributions that are applicable to the Common Use Areas of the Urbanization Project, in the exact percentage indicated in Clause Eleven hereof and taking into account the division of the Joint Owners into two Areas: the “Lot Area” and “Apartment Building”, pursuant to the same Clause Eleven. The Condominium Administrator shall inform the Joint Owners General Assembly, and the Joint Owners Special Assemblies, as the case may be, as exactly as possible and within the Annual Expenses Budget, the amount paid in taxes, rights and fiscal contributions applicable to the Common Use Areas of the Urbanization Project. The Condominium Administrator, on behalf of the Joint Owners, shall be responsible for carrying out the payments that are necessary to keep the Joint Owners current in their fiscal obligations.

CHAPTER TWELVE

NON-COMPLIANCE BY THE JOINT OWNERS

CLAUSE TWENTY-NINE – DEFAULT BY JOINT OWNERS

If any of the Joint Owners is late in paying for any of his/her obligations for the administration and maintenance expenses or fiscal charges of any other kind, in relation to the Common Use Areas of the Development which belong to him or her, regardless of any judicial action the Condominium Administrator may take to force him or her to pay or comply with the respective obligation, the defaulting Joint Owner will be liable for an interest charge of 5% five percent per month on any unpaid fees.

The payment of fees approved by the joint owners general and special assemblies, as the case may be, shall be paid monthly by joint owners on the first day of the month in course. The joint owner’s payment will be considered late when she/he has not made payment of his/her fee in full by the last day of the month in course. The joint owner will be charged 5% per month on the first day after they are late, and partial months will be considered full months for interest calculation purposes.

The aforementioned is due to the fact that said amounts shall be paid by the Condominium Administrator and charged to the fund created by all Joint Owners, in order to keep said Common Use Areas of the Development current in all obligations and in good condition. The aforesaid interest shall increase the “ADMINISTRATION AND MAINTENANCE EXPENSES FUND OF THE COMMON USE AREAS OF EACH AND ALL OF THE JOINT OWNERS OF LOT 16-A”, or of the Common Use Areas of the Lot Area or Apartment Building as applicable, as mentioned in clause Eleven.

Additionally, the Joint Owner who fails to comply with any of his/her obligations will be liable for damages and prejudices caused to the rest of the Joint Owners.

CLAUSE THIRTY – SUSPENSION OF RIGHTS OF DEFAULTING JOINT OWNERS

When a Joint Owner defaults on the obligations in his charge derived from this Joint Ownership Property System or its By-laws, or obligations set forth by the Joint Owners General Assembly or by the Joint Owners Special Assembly, and said default lasts for more sixty natural days after notice has been given in writing to the non-compliant Joint Owner, he (she) can not exercise the rights as Joint Owner and especially, he (she) shall not be able to enter the Urbanization Project throughout the whole period of his (her) default.

This suspension of rights shall be imposed and inspected by the Condominium Administrator and shall be applied to all Joint Owners defaulting on their obligations, besides any other conventional penalty, charge of default interest or damages and losses caused by his (her) non-compliance.

CHAPTER THIRTEEN
AMENDMENTS TO THE JOINT OWNERSHIP PROPERTY SYSTEM

CLAUSE THIRTY-ONE – AMENDMENTS TO THE CONDOMINIUM REGIME

This Condominium Property Regime may be modified by a decision of the Joint Owners General Assembly.

The General Assembly that approves the amendments, through the Secretary of the Assembly, shall draw up the respective minute, and shall designate a legal representative who shall obtain the notarization of the assembly minutes, as well as the registration of the respective public instrument in the Public Records Office of the Municipality of Mazatlán, Sinaloa.

The reforms or amendments to the Regime approved by the Joint Owners General Assembly shall be in effect and shall be valid from the date on which they are approved by the assembly.

CHAPTER FOURTEEN

CONTROVERSIES

CLAUSE THIRTY-TWO – COMPETENT COURTS OF LAW

Any controversy with regards to the interpretation and compliance to the provisions of this Joint Ownership Property System or its By-laws, shall be submitted to the jurisdiction of the courts of law in the city of Mazatlan, Sinaloa, applying the laws of the State of Sinaloa.
For all legal effects that might be required, in the event of controversy before the courts, the defendant Joint Owner must be served in his (her) private property area, if he (she) is present. Otherwise, the formalities prescribed in the Civil Procedures Code of Sinaloa must be obeyed.

CHAPTER FIFTEEN

RECITAL AND AUTHORITY PERMITS

CLAUSE THIRTY-THREE – AUTHORIZATION OF THE JOINT OWNERSHIP PROPERTY SYSTEM

The representative of the DECLARANT gives to the undersigned notary public, to which I attest, a certificate issued by the Urban Development Planning Department of the Municipality of Mazatlan (Direccion de Planeacion del Desarrollo Urbano del Municipio de Mazatlan), dated the sixth day of March of the year two thousand, in which it is stated that the Urbanization Project, object of the Joint Ownership Property System referred to in this instrument, fulfills the necessary characteristics for the Real Estate subjected to a Joint Ownership Property System. Said document is appended to the Appendix of this public deed, marked with number 6 (Six) and represents compliance with the requirement indicated in the First Paragraph of article three of the Law on Joint Ownership Property System of Real Estate for the State of Sinaloa.

CHAPTER SIXTEEN

TRANSITORY PROVISIONS

FIRST – This public deed shall come into effect from the date of its entry into the Property Public Records of the Municipality of Mazatlan.

SECOND – The first Joint Owners General Assembly shall be carried out in the month of January of the year two thousand and one or on the date the Joint Owners decide.

THIRD – The Special agent of the DECLARANT, owner of all the private property areas subjected to this Joint Ownership Property System, in this action designates on behalf of his principal, the Partnership named “PLAYA CONSTRUCTION” SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE, as the Condominium Administrator, which is granted the faculties indicated in clause twenty five hereof.

CHAPTER SEVENTEEN
PLANS


The presenter in this action submits one hundred and ten (110) plans that describe the characteristics of the Master Plan, the Common Areas of 16A, the Plan of Development for 16A, the four floors of the Apartment Buildings, as well as plans for the one hundred and three (103) individual private property areas. Said plans are appended to this public deed as Appendix 7, marked with numbers 1 (one) to 110 (one hundred and ten) as described below. (PLANS ARE NOT INCLUDED HERE)

ESTRELLA DEL MAR MASTER PLAN                    #1
  COMMON AREAS OF 16A                             #2
  PLAN OF DEVELOPMENT FOR 16A                     #3
  PLAN OF INDIVIDUAL LOTS                         #4-42
  FLOOR PLANS OF APARTMENT BUILDINGS              #43-46
  PLAN OF INDIVIDUAL APARTMENTS                   #47-110

CONDOMINIUM BY-LAWS
“SECONDARY JOINT OWNERSHIP PROPERTY SYSTEM FOR LOT NUMBER 16-A” RECITALS


A. – The foregoing By-laws are set by the DECLARANT “STONE ISLAND DEVELOPMENT”, SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE, and they refer to the Joint ownership property system that governs the real estate owned by the DECLARANT, described in Recitals First, Second and Third of Public Deed number 5759 five thousand and fifty nine, volume One hundred-twenty-four, Book One, from the protocol of Notary Public number fifty nine of the State of Sinaloa, with commission in Mazatlan, Fernando A. Orrantia Arellano, on March ninth of the year Two-thousand, by means of which the legalization of the Joint ownership property system took place, and these by-laws are part of the same document.


The provisions of these By-laws are part of the regulations of the Joint ownership property system, thus they are compulsory for all the joint-owners or owners of the areas of private property located within the Urbanization project governed by said Joint-ownership Property System.


B. – The DECLARANT is the owner and the holder of a lot of land located in the city of Mazatlan, Municipality of Mazatlan, Municipal Sub-division of Villa Union, State of Sinaloa, Mexican United States, the perimeter of which comprises a surface of 41,585.12 (Forty-one thousand five hundred and eighty-five point twelve) meters square, with the lines and limitations listed in the First Recital of the Public Deed of the legalization of the Joint-Ownership Property System in the Plan attached to said document, listed as Appendix number 2 (Two).
In the aforementioned lot, the DECLARANT has carried out an Urbanization project and she/he has built a street, side-walks, gardens, a traffic circle and parking area, as well as providing a drinking water and sewage system, electricity and telephone lines, which are part of the Common Use Areas of the Urbanization project.

C. – The DECLARANT deems necessary that these by-laws include the general regulations that will allow the use of the various real properties that make up the Urbanization project, as well as the orderly socializing of the joint-owners or the persons who will purchase and use the lots of land and the apartments built therein, which make up the areas of private property of the Urbanization project. These regulations set restrictions, conditions, rights and obligations for the current and future joint-owners and their purpose is to protect and increase the value, appeal and quality of the real state that are part of the Urbanization project, for the benefit of the current and future owners.


D. – Therefore, said regulations, restrictions, rights and obligations contained in the Regulations hereof will be compulsory for all joint-owners and their successors, as well for all persons that enter the Urbanization project as visitors, guests, or relatives of the Joint Owners. Like wise, all construction, repairs and improvements erected or performed within the Urbanization project, as well as all alienations legally set up by the DECLARANT and his/her successors, shall respect and comply with all the conditions and restrictions contained in the Joint Ownership Property System and the present Joint Ownership Regulations.

E.- The lot of land whose Joint Ownership Property System is now being legalized, is part of a Joint- Ownership Urban Tourist Development named “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY” established in Public Deed number 5756 five thousand six hundred and fifty-six, volume one hundred and fourteen, book two, of the protocol of Notary Public number fifty nine, of Sinaloa, commissioned in Mazatlan, Fernando A. Orrantia Arellano, dated February twenty fourth of the year two thousand and one, whose recording in the Public Property Registry in Mazatlan is pending due to its date of issuance. .In said Joint Ownership Property System, the land lot subject to the By-laws hereof is marked as “LOT NUMBER 16- A (SIXTEEN DASH A).

(The lists of legal descriptions for each lot and apartment have not been included here.)

(Descriptions of each lot are not included here)

CHAPTER THREE

CLASSIFICATION OF THE REAL ESTATE AND ITS USE

ARTICLE THREE – CLASSIFICATION OF THE REAL ESTATE AND ITS USE

There are three different classes for real estate under Joint ownership property system.
(a). -Private property areas, which are the land lots, houses or apartment buildings within the Urbanization project. (b). – Common Use Areas (c). – The Beach front area.

All the real estate located within the Urbanization project must be preserved and used in conformance with the limitations and restrictions established in the Joint ownership property system and the present By-laws. The Joint owners of the private property areas, as well as their successors, guests, and family must make use of their Condominium unit or any part of same in such a way to avoid causing any disturbance to the other Joint owners from other areas of the private property located within the Urbanization project.

ARTICLE FOUR – RESTRICTIONS ON THE USE OF PRIVATE PROPERTY AREAS

With the purpose of making coexistence within the Development more pleasant, the following GENERAL restrictions are set forth:

1. – Disturbances. – No illegal activity, offense or disturbance to third parties can be made within the Urbanization project, whether in the Common Use Areas or within the private property areas. Consequently, all Joint owners will abstain from producing noise which might bother the rest of the Joint owners or other persons within the Urbanization project, for which reason no one may use any kind of voice enhancement devices, sirens, whistles, loud apparatus or machines, bells, loud vehicles or those which produce smoke and, in general, all kinds of instruments or apparatuses which produce noise or sounds which might bother third parties, including tools or vehicles of any kind as well as any appliances or utensils which could interfere with radio, television or telephone signals. The Administrator has the authority to decide if a sound is bothersome to third parties. In the same way any odor judged by the Condominium Administrator as unpleasant, undesirable or intolerable within the Urbanization project will be considered a disturbance.

2. – Vehicle Parking. – No Joint owner may use, park or keep any vehicle other than cars or trucks with up to three quarters of a ton capacity within the Urbanization project, therefore, recreational or collective transport vehicles that due to their size or measurements cannot fit in the parking area of the driveways or garages of the respective private property areas, will not be admitted.


The Administrator of the Principal Condominium that regulates the Tourist-Urban Development in Joint Ownership property system, of which the Urbanization project is part, must issue to each Joint owner of the Urbanization project an authorization document so that vehicles, which comply with the aforesaid regulations, can have access to the Development.


Additionally, all the automobiles of the Joint owners of the Urbanization project must be parked in their designated areas within each area of private property and the Joint owners must keep their automobiles within the respective parking lot or garage, the doors of which must be kept closed at all times they aren’t being used.


Within the Urbanization project and as a part of the Common Use Areas there is a parking lot circle with thirty-one parking spaces which can be used by the Joint owners with a land lot in the “Lot Area” as well by the Joint owners who own an Apartment in the “Apartment Building”. In this place destined for parking there shall not be places for the exclusive use of any Joint Owner, but any Joint Owner could use them, should there be an empty space.


Once the thirty-one spaces of said parking lot of the Urbanization Project are occupied, Joint Owners shall not be allowed to leave their vehicles on the street, they must be parked in the parking lot located outside the Urbanization Project, at the entrance of the Tourist Urban Development under the Joint Ownership Property System. The vehicles that are parked on the street of the Urbanization Project shall be moved by employees working under to the Principal Condominium Administrator of the Tourist Urban Development or by employees of the Urbanization Project Condominium Administrator.


No Joint Owner can, at any time and for any reason at all, park or make repairs to his (her) car(s) inside the Common Use Areas of the Urbanization Project, said activities must be made inside their private property area.

On the other hand, to avoid parking vehicles in the common areas of the Tourist Urban Development, there is a parking area especially destined for this purpose, located outside the Urbanization Project, where the Joint Owners or their visitors can place their vehicles when these can not or must not be parked inside a private property area. Said parking areas have a limited capacity, thus only the vehicles that reasonably fit there can be parked, providing there is a written authorization granted by the Principal Condominium Administrator. There shall be no spaces for the exclusive use of any of the Joint Owners. In the event that a vehicle owned by a Joint Owner could not be parked in said place because of the lack of space or because of its dimensions, it must be placed outside the Tourist Urban Development of the Joint Ownership Property System.

The vehicles used to play golf must be kept inside the closed garages of the private property areas or in the places specifically indicated for said vehicles. Boats of every type, as well as all types of vehicles to be used on or under water must be kept in the specially designed areas for that purpose by the Principal Condominium Administrator of the Tourist Urban Development in Joint Ownership Property System, who also shall decide if said craft or vehicle can be introduced into the Tourist Urban Development in Joint Ownership Property System.

The Condominium Administrator of the Urbanization Project shall have the power to decide whether a vehicle of any type can be introduced to the Urbanization Project.
All vehicles of all kinds must be used by the Joint Owners with the necessary care and caution to avoid accidents or damages to people or to the property of third parties or to the Common Use Areas of the Tourist Urban Development in Joint Ownership Property System or to the Urbanization Project. Consequently, the Joint Owners shall be liable for all damages and losses caused by their vehicles or the same driven by other persons.

The Principal Condominium Administrator of the Tourist Urban Development in Joint Ownership Property System and the Condominium Administrator of the Joint Ownership Property System of the Urbanization Project, shall have separately the power to establish economic sanctions or fines charged to the Joint Owners that do not comply with the restrictions and conditions previously indicated, as well as to decide whether or not a vehicle or boat must be removed from inside the Tourist Urban Development in Joint Ownership Property System or of the Urbanization Project because its preservation, operation or loading and unloading inside the same is incompatible.

3. – Restrictions to the Possession of Animals. – No animal can be kept or introduced into the Tourist Urban Development in Joint Ownership Property System and to the Urbanization Project without prior authorization in writing from the Condominium Administrator and in this case, the authorization shall be granted only for dogs, cats, fish or birds which by virtue of their size can be regarded as “docile domestic pets” and always with the limitation that there shall not be more than two “docile domestic pets” per house or apartment.
All the animals authorized as “docile domestic pets” must remain inside the respective Joint Ownership Property System Unit and when it is necessary to take them out, they must be accompanied at all times by the Joint Owner or by a person from his (her) family or group and if and only if the animal is restrained by a leash or similar device. Ferocious, untrained, or non-docile animals cannot be kept inside the Tourist Urban Development Joint Ownership Property System or inside the Urbanization Project, even when apparently or under other circumstances they could be regarded as domestic pets.
The Principal Condominium Administrator and the Urbanization Project Condominium Administrator shall separately have the power to decide whether or not an animal can be regarded as “docile domestic pet”. In the event of a discrepancy, the decision of the Principal Condominium Administrator shall prevail. Additionally, the Principal Condominium Administrator and the Urbanization Project Condominium Administrator shall separately have the power to order that an animal be taken out of the Tourist Urban Development when in their opinion the animal could be a nuisance or dangerous to third parties or because of the noise, their perilousness or for any other reasonable cause. The Joint Owner that possesses an authorized animal as a “docile domestic pet”, shall be, at all times responsible for any damage or loss the animal causes to third parties, their property or to common property of the Tourist Urban Development in Joint Ownership Property System or of the Urbanization Project. Additionally, the Joint Owner shall be responsible for the cleaning of his animal’s wastes, when they soil the Common Use Areas of the same Development or of theUrbanization Project.

4. – Trash. – All the garbage produced inside the private property areas located inside the Urbanization Project, shall be the responsibility of the respective Joint Owner, who shall also have the obligation to keep the trash outside the Common Use Areas of the Urbanization Project and of the Tourist Urban Development in Joint Ownership Property System, out of the sight of the pedestrians, as well for avoiding all kinds of bad odors.The Joint Owners shall not be able to burn or destroy the trash they produce.

5. – Temporary Constructions. – No Joint Owner or any other person is permitted to make any temporary building or construction of any kind, anywhere in the Urbanization Project, except those that had been approved in writing by the Architectural committee and by the Principal Condominium Administrator.

6. – External Facilities. – No external radio facility may be installed or operated without a prior permit, issued in writing, by the Principal Condominium Administrator. It is also forbidden to install within the Urbanization Project any external radio, television, or electronic or satellite communication aerial, of any kind different from those that had been approved by the Principal Condominium Administrator for the operation, communication and administration of the Development itself. For any other external device or facility, permission in writing must be obtained from both the Architectural Committee and the Principal Condominium Administrator.


Similarly, the construction of walls, fences or divisions of any kind shall not be allowed, without the previous consent in writing of the Principal Condominium Administrator.

7. – Insurance Premiums. – All the Joint Owners must avoid engaging in any action that could increase the insurance premiums that shall be retained to protect the facilities of the Common Use Areas of the Urbanization Project, or that might cause the cancellation of the respective insurance agreements.

8.- Sewage.– No Joint Owner should interfere or hinder in any way the Sewage systems built or established inside the Urbanization Project, either for the storm waters or for the sewage or residual waters, whether said sewage systems are located in the Common Use Areas or in the private property areas or in both. Consequently, the Joint Owners must obtain the previous authorization in writing from both the Architectural Committee and from the Principal Condominium Administrator, before carrying out any construction work or modifying an existing one, to avoid creating obstacles to the drainage systems of the Tourist Urban Development in Joint Ownership Property System and of the Urbanization Project.

9.- Compliance with Norms and Restrictions. – The Joint Owners must comply with the norms established in the stipulations, conditions and restrictions included in the Condominium Regime and in these Bylaws. The Condominium Administrator shall supervise the compliance with said norms by the Joint Owners and their relatives, guests, lessees, users or agents and furthermore, the Condominium Administrator shall have the power to impose fines or economic sanctions to transgressing Joint Owners.

Additionally, the Joint Owner who does not comply with his/her obligations, shall not be able to vote in the Joint Owners Assemblies nor shall be able to use the vote granted from other joint owners by a Proxy document or a power of attorney given before a notary public; independently of the aforesaid, should the non- compliance extend beyond sixty days, the Condominium Administrator may prohibit him/her the access to the Development.

10. – Outdoor fires. The Joint Owners must install grills or barbecue pits to cook in the open inside their private property area or in the places that were approved by the Architectural Committee of the Tourist Urban Development in Joint Ownership Property System and in every case, they should be used in such a manner that they do not represent a fire hazard to the Joint Ownership Property System or to their unit, their neighbors or to the common areas of the Tourist Urban Development in Joint Ownership Property System or to the Urbanization Project.
No fire may be lit inside the Urbanization Project, other than that indicated in the previous paragraph. The Condominium Administrator shall have the right and the obligation to eliminate, by the method he deems fastest, safest and most convenient, any fire started by any of the Joint Owners, even when it has been started with good intentions.

11. – External Facilities. – No aerials, instruments, apparatus or devices of any kind, nature or characteristic, can be installed outside the facilities built inside a private property area without the prior authorization in writing of the Condominium Administrator. The T.V. reception aerials, in this particular case, must be located according to the Architectural Norms and the decisions of the Architectural Committee. No clothing, fabrics or furniture in the process of drying can be displayed to passer-bys or to neighbors, nor shall any Joint Owner build walls, fences or dividing walls that have not been approved previously in writing by the Architectural Committee of the Development.

12.- Constructions.- Before beginning any construction, building, modification, improvement or repair of any kind and purpose, the joint owners must have the approval in writing from the touristic urban development Architectural Committee, which shall decide whether the intended work or improvement to be carried out is compatible with the aesthetic quality of the Tourist Urban Development.

The Condominium Administrator shall have the power to prevent any construction, temporary or definitive that has not obtained the previous consent in writing, of said Architectural Committee.

Likewise, in the Private Property Areas integrated in the apartment building, the Joint Owners may carry out the modifications, repairs, and improvements they require for their own purposes, as long as they comply with the requirements established by the law, the Condominium Master Regime and its Bylaws which regulate the touristic urban development of which this urbanization is a part of, as well as with the regulations set forth in the Condominium Regime of which these Bylaws are part of. Furthermore, in order to avoid causing disturbance for the other joint owners residing in the apartment building, it is established that the joint owners shall be able to carry out those modifications, repairs, and improvements in their apartments deemed as major, annoying or noisy or that in any way may upset the tranquility of the other joint owners, only between the 01 (first) day of June and the 31 (thirty-first) of October of each year. For all other times, authorization in writing must be obtained from the Condominium Administrator. This last restriction shall not be applicable when dealing with urgent repairs or when they constitute an emergency to the building or the apartment itself, as long as it is so determined by the Condominium Administrator.

13. – Dangerous or Flammable Substances. – The Joint Owners shall not be able to keep, possess, or store inside their respective private property area, any substance forbidden by the law and that because of its nature, could be a danger to their neighbors, to the Common Use Areas or to the Urbanization Project in general, or that in any way increases the cost or may even cause the cancellation of the Damages Insurance that the Condominium Administrator shall retain to protect the Common Use Areas of the Urbanization Project.

14. – Service Systems in Common Use Areas. – The Joint Owners must correctly use the drinking water, sewage, electricity, telephone and television services of the urbanization Project, located under the Common Use Areas, in such a manner that no harm or interference is done to said systems.
Any construction or repair, temporary or permanent, that requires connection to any of the aforementioned systems must be made under the supervision of the Condominium Administrator and must be previously approved in writing by the Principal Condominium Administrator and by the Architectural Committee of the Tourist Urban Development in Joint Ownership Property System.

15. – Obstruction of Visibility. – All building or construction carried out inside the Urbanization Project must reasonably respect the view of the neighbors to the Common Use Areas or to the ocean, in each case. Consequently, the Joint Owners may not plant trees, or build fences, or walls that obstruct the view of their neighbors, according to the judgment of the Architectural Committee of the Tourist Urban Development in which case, said Committee shall not authorize the respective construction or building.

16. – Dangerous Activities. – The Joint Owners shall not engage in any illegal, dangerous or harmful activity to their person or property or to neighboring persons or properties or to third parties or to the Common Use Areas of the Urbanization Project in Joint Ownership Property System of which the Urbanization Project is a part.

17. – Firearms. – No Joint Owner shall possess, keep or shoot any firearm inside the Urbanization Project.

18. – Eyesores. – The Condominium Administrator shall remove all types of eyesores. The Condominium Administrator must remove those that are manufactured or placed inside the private property areas if it is so decided by the Principal Condominium Administrator.

19. – Access to the Golf Course. The Joint Owners shall allow golfers entry into their gardens or backyards adjacent to a Golf course, to retrieve their golf balls.

20. – Advertisements or Signals. – No advertisement, signal or placard shall be installed, painted or manufactured by any Joint Owner anywhere in his (her) private property area, without the previous consent, in writing of the Principal Condominium Administrator, who, if necessary, shall get the opinion of the Architectural Committee of the Tourist Urban Development in Joint Ownership Property System.

21. – Use of the Private Property Areas. – All Joint Owners must use their private property area in accordance with the authorized purposes contained in the Architectural Norms of the Joint Ownership Property System, that regulate the use of the soil in each private property area. Each lot, house, apartment or Joint Ownership property Unit destined for habitation purposes must be destined exclusively for said habitation purposes and only one family can occupy or use at any time each of said lots, houses, apartments or Joint Ownership property Units, besides their domestic employees and temporary guests.
However, the use for habitation purposes will not prevent an artist, a craftsperson or a professional from performing his (her) activities inside the lot, house, apartment or Joint Ownership Property Unit within the Urbanization Project, providing that said Joint Ownership Property Unit is also used simultaneously as a dwelling and there are no employees of that artist, craftsperson or professional person and it is not sold to the public or there is no advertising of any product or service in the Unit, unless it has been previously approved in writing by the Principal Condominium Administrator.
Similarly, the Joint Ownership Property Units for habitation purposes can be leased to third parties by the Joint Owner, but in every case, the lessee shall be jointly bound with the Joint Owner, to the restrictions and limitations derived from the Joint Ownership Property System and of these By-laws, especially in relation to the payment of obligations for the maintenance expenses of the Common Use Areas.

22. – Payment of the Sale/Purchase Price. – The use of the private property area by each Joint Owner is dependant upon the Joint Owner paying punctually any amount in his charge derived from the Sale/Purchase Agreement of his (her) Joint Ownership Property Unit. Any Joint Owner in default on any of his (her) payment obligations established in the Sale/Purchase Agreement, shall lose the right of use of his (her) Joint Ownership Property unit during the whole period the default lasts and his (her) counterpart in said Sale/Purchase Agreement shall have the right to enforce the compliance of his (her) unfulfilled obligations in the manner prescribed by the same Sale/Purchase Agreement.

23. – Indivisibility of the Private Property. – No Joint Owner shall be able, either legally or physically, to subdivide in any way a private property area or Joint Ownership Property Unit located inside the Urbanization Project, included this prohibition is any division intended for the creation or establishing the Time Share system of fragmented Property.

ARTICLE FIVE – INDIVISIBILITY OF THE COMMON AREAS
The Common Use Areas of the Urbanization Project shall be the indivisible property of all Joint Owners proprietors of the private property areas. The use by the Joint Owners of the real estate that form the Urbanization Project including the Common Use Areas and the Beach Front Area, shall be subjected to the following limitations and restrictions:

(a). – All the restrictions set forth in chapter Eleven hereof.

(b). – The use of the Real Estate forming the Urbanization Project by the Joint Owners, shall be subjected to the compliance with any right of access set forth in the Joint Ownership Property System and the rights of access that are established later pursuant to the Joint Ownership Property System and its By-laws.

(c). – The use of the Real Estate forming the Urbanization Project by the Joint Owners, is conditioned to the timely payment of all the maintenance fees established by the Joint Owners General Assembly of the Principal Joint Ownership Property System, by the Joint Owners General and Special Assemblies of the Joint Ownership Property System and by the Joint ownership property system of the Urbanization Project and by these By-laws and besides this, the timely payment of any established obligation charged to each Joint Owner in his (her) Sale/Purchase Agreement.

Every Joint Owner that is not current in the payment of said maintenance expenses and obligations derived from his (her) Sale/Purchase Agreement, shall not have the right to use any part of the Urbanization Project and the Condominium Administrator, on behalf of the Joint Owners General Assembly, as well as the DECLARANT or any other creditor, in any case, shall have the power to initiate any procedure conducing to obtain the defaulted payments.

(d). – The use of the private property areas by each Joint Owner must be made in such a manner that it does not cause damage or harm in any way the different parts that made up the Urbanization Project or its vegetation, nor causing an increase in the maintenance cost of the same nor in any way that becomes a nuisance or inconvenience of any kind to other Joint Owners in the enjoyment of their private property area, hence, as examples but without limitation, the following restrictions are set forth:

d1. – Camping or picnics inside the Urbanization Project shall not be allowed.

d2. – Fires inside the Urbanization Project are not allowed, except for those fires lit by the Condominium Administrator or its representatives, that are necessary or convenient for the maintenance and preservation of the diverse areas of the Urbanization Project, as well as the fires made for cooking that are produced inside the private property areas, with the limitations established in these By-laws.

d3. – Animals shall not be permitted inside the Development, except for the domestic animals previously authorized in writing by the Principal Condominium Administrator and that at all times are under the control of their masters.

(e). – Making or constructing improvements, excavations or works that in any way alter the Common Use Areas of the Urbanization Project is not allowed, to this end, the following norms are established:

e1. – With the exception of the provisions of paragraph number 2 two next, no physical person or legal entity different from the DECLARANT or of the Condominium Administrator, shall be able to make any construction work, reconstruction, building, alteration, excavation, or filling nor is changing the storm water drainage system or of any other kind permitted, destruction or transplanting of trees or plants in any of the Common Use Areas of the Urbanization Project is also forbidden.

e2. – As long as the DECLARANT is the Principal of the Property Right of at least fifty per cent of the private property areas located inside the Urbanization Project, the DECLARANT shall be able to make any construction work, modification, maintenance or improvement of any kind and plant all types of trees and plants in the Common Use Areas of the Urbanization Project, if said DECLARANT deems said works or improvements necessary for any system installed inside the Urbanization Project or for the building of any recreational area or it is desirable to improve the access or to make use of said Common Use Areas inside the Urbanization Project more enjoyable.

e3. – With the exception of the provision in the preceding paragraph number 2, all the improvements, works or constructions must comply with the procedures established in this Joint Ownership Property System and these By-laws.

ARTICLE SIX – JOINT OWNERSHIP OF COMMON AREAS

Each joint owner shall be proprietor of a percentage of the Joint Ownership Right over the Common Use Areas pursuant to the provisions in items number 2 (two), 3 (three), and 4 (four) of Clause Six of the Condominium Regime of which these Bylaws are part of. The percentages of Joint Ownership Rights over the mentioned Common Use Areas are included in same which are listed in the second paragraph of clause Seven of the Condominium Regime of which these Bylaws are part of, and which also determine the percentage corresponding to each Joint Owner in his/her obligation in paying the Maintenance fees of the Common Areas of the Development that correspond to him/her, as well as the number of votes corresponding to each Joint Owner in the Joint Owners General and Special Assemblies, as the case may be.
Any change approved by the Joint Owners General Assembly on the percentage of
Joint Ownership Rights over the Common Use Areas mentioned in the preceding paragraph, will modify the percentage that each Joint Owner is bound to pay for the Maintenance of the Common Areas, as well as the number of votes that the same Joint Owner should have in the Joint Owners General and Special Assemblies, as the case may be.

Additionally, all of the Joint Owners who own a private property area within the Development, have a corresponding joint ownership right over the Common Use Areas of the Tourist Urban Joint Ownership Development denominated “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, of which this urbanization is part of, therefore all of the Joint Owners of the Condominium Regime will also have the rights and obligations stated in the Master Condominium Regime and its Bylaws, which regulate said Tourist Urban Joint Ownership Development.

ARTICLE SEVEN – SECURITY NORMS

Each Joint Owner shall be bound to respect and obey all the norms and restrictions established in the Joint Ownership Property System and in these By-laws, as well as by the Joint Owners General and Special Assemblies and by the Condominium Administrator, including the norms relating to the access to the Urbanization Project, operation schedule, measures and identification procedures and procedures intended to make safe the Urbanization Project for the Joint Owners and for their visitors.

ARTICLE EIGHT – EXCEPTION IN FAVOR OF THE DECLARANT

Notwithstanding what is set forth in this Chapter Three herein, the DECLARANT shall not be subjected to the restrictions in relation to the use of the Common Use Areas of the Urbanization Project or the use of the private property areas.

ARTICLE NINE – OBLIGATIONS OF THE JOINT OWNERS

No Joint Owner shall be exempt from the personal responsibility and is bound to pay the maintenance expenses of the Common Use Areas of the Urbanization Project, nor is exemption possible from the responsibility of Joint Owner or proprietor of a private property area, through waiving the use of the existing facilities in the Urbanization Project or by leaving his (her) private property area.

ARTICLE TEN – WALLS OR COMMON FENCES

Joint Owners sharing common walls or fences which divide their respective private property areas, shall have the right to the equitable right of said walls or fences and the exclusive right to use them in their inner part corresponding to their private property area. No Joint Owner could use the common walls or fences in such a way that interferes with the right of use of the other Joint Owner. In the event of damage to say common walls or fences, brought about by any cause other than negligence on the other party’s side, the repair shall be paid by both Joint Owners.

ARTICLE ELEVEN – MERGING OF PRIVATE PROPERTY AREAS

When the same Joint Owner is the proprietor of two or more private property areas that are adjacent, they shall be able to merge them into one providing that said Joint Owner accepts the obligations of fee payments for maintenance corresponding to the joined or merged areas, by virtue of the addition of the Right of Co- Ownership over said areas and that said union or merging has been approved in writing by the Condominium Administrator, unless the union or merging is performed by the DECLARANT, who shall not need said approval.

As a consequence of the union or merging of two private property areas, the restriction lines for the joined constructions could be eliminated or modified, if approved in writing by Condominium Administrator, who should consider if the elimination of said restriction lines do not block the view of other private property areas and providing that the interested Joint Owner has obtained the authorization of the proper authorities if that is the case.

CHAPTER FOUR
JOINT OWNERS RIGHT TO VOTE

ARTICLE TWELVE – RIGHT TO VOTE

The Joint Owners have the obligations and rights established by the law, by the Joint Ownership Property System and by these By-laws. Each Joint Owner proprietor of a private property area, shall be subject to provisions included in the Joint Ownership Property System and in these By-laws, and he (she) shall also be subjected to the norms established in the Principal Joint Ownership Property System which regulates the administration, operation, alienation and maintenance of the projects that must be carried out inside the whole Tourist Urban Development in Joint Ownership Property System.

In each transfer of ownership, or property assignment of a private property area, the respective voting rights shall be automatically transferred to the purchaser. All the accessory rights of the private property area are transferable only in the case of assignment of said private property area. When a Joint Owner is no more for having sold or transferred his (her) private property area, he (she) will not be the holder of all the rights  pertaining to the Joint Owner status. The accessory rights derived from the ownership right of a private property area can not be encumbered or alienated in any way, but only when encumbering or alienating the property right of the private property area. Any Joint Owner can assign his (her) right of use to a private property area to a lessee or user, but the obligations derived from his (her) position as a Joint Owner can not be delegated or assigned, especially with reference to the payment of maintenance expenses of the Common Use Areas of the Urbanization Project. The rights, obligations, privileges and duties of a Joint Owner are acquired pursuant to the provisions of the law, by the Joint Ownership Property System, by these By-laws and by Architectural Norms and must be exercised pursuant to the provisions by the law of the same Joint Ownership Property System of these By-laws and of Architectural Norms that regulate the Urbanization Project.

ARTICLE THIRTEEN (A) – VOTES OF EACH JOINT OWNER

The Development is divided into private property areas, as set forth in the Condominium Regime of which these Bylaws are part of. Each private property area within the Development has a certain number of votes assigned in the Joint Owners General and Special Assemblies, based on the percentage of Joint Ownership Rights over the Common Use Areas of the Development pursuant to “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF ”, the “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS ” and “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS ”, same which are listed in the second paragraph of clause Seven of the Condominium Regime of which these Bylaws are part of.
Each Joint Owner who has complied with the obligations set forth in the
Condominium Regime and these Bylaws has the right to participate in the Joint Owners General and Special Assemblies and to cast the corresponding number of votes, pursuant to the following rules:

a) The votes of those joint owners whose private property area has been transmitted to a Fiduciary Bank shall correspond to the trustee or beneficiary, who shall be the person to attend the corresponding assemblies and who shall vote according to his/her own interests.

b) If a private property area is owned by several persons in joint ownership, the joint owners votes shall be cast by a common representative designated in writing and notified to the Condominium Administrator prior to the date of the corresponding Joint Owners Assembly, General or Special, as the case may be. Any vote cast in contravention of the preceding rules shall be null.

c) The right a Joint Owner to vote is acquired when the Joint Owner is bound to the obligation of paying his/her corresponding fee in the maintenance expenses of the Common Use Areas of the Development. The right to vote is subject to the restrictions and limitations established by the Condominium Regime and by these Bylaws.

ARTICLE THIRTEEN (B) – VOTING SYSTEM TO TAKE URGENT DECISIONS

In the cases where there is any urgent situation which due to its nature must be resolved upon by a General or Special Joint Owners Assembly, and whose solution may not be postponed to be decided upon by a duly summoned and celebrated assembly, the following voting procedure shall be followed.

1.- The Condominium Administrator, with the authorization of a majority of the members of the Surveillance Committee, shall decide if the issue or situation is urgent and if due to its nature, should not be postponed, to be decided upon at the next General or Special Assembly Meeting, as the case may be.

2.- Once decided a situation is urgent, the Condominium Administrator shall issue a notice addressed to the Joint Owners, indicating the details of the problem or the opportunity, and any possible recommendations, including costs, estimated time, benefits it would bring to the community and any other manifestation considered necessary for the Joint Owners to be able to cast their vote or make the corresponding observations.

3.- The aforementioned notice shall be sent to all Joint Owners to the e-mail address they have registered in the Joint Owners Register Book, which the Condominium Administrator must keep updated. Also, it may be handed personally to any Joint Owner who at that time is living in his private property area, or it may be mailed to the foreign address registered in the aforementioned register book, to those Joint Owners who do not have registered or do not have an e-mail address.

4.- Urgent matters to which this section refers, shall, be solved by those Joint Owners whose interests are affected pursuant to the Condominium Regime and the corresponding regulations, in agreement with the attributions conferred on the General and Special Joint Owners Assemblies, as the case may be. In this order an urgent situation that affects interests of all joint owners must be notified and be resolved by all and each of the Joint Owners of Lot 16-A, while those urgent situations that only affect the interest of the Joint Owners who live in the “Lot Area” shall be notified to and resolved exclusively by the Joint Owners who are proprietors of the 39 land lots of the development, and the urgent situations which solely affect the interests of the Joint Owners who live in the “Apartment Building” shall be notified to and resolved by the Joint Owners who are proprietors of the 64 apartments of the development.

5.- The Joint Owners shall cast their vote, and shall make the corresponding observations or recommendations within a 14 day period from the day the notice was sent to their e-mail address, or if the case, from the day it was delivered personally, or from the day it was mailed to the foreign address in the Joint Owners Register Book. The Joint Owners shall send their respective vote using the same method of delivery that was used to inform them. The vote shall be addressed directly to the Condominium Administrator.

6.-Once the votes are received, the Administrator and the members of the Surveillance Committee that are on site shall, as soon as possible, make the respective count and will execute the authorized resolution made by the voting Joint Owners, considering the observations or recommendations made by the Joint Owners and that, in their opinion, are feasible.

7.- Votes received from the Joint Owners after the 14 days stated in the preceding item 5 shall not be considered in the voting. Furthermore, a majority of the total available votes must be received in order for the results of the vote to take effect. A simple majority of the votes that are returned are needed to pass the resolution, as long as a majority of the total available votes were received from the affected Joint Owners, except that all resolutions that are of an ornamental nature, and would be governed by clause 11 D) of this regime, require the consent of 75% of the available votes to take effect.

8.- All and each of the conditions and restrictions set forth in this Condominium Regime and its Bylaws, regarding who have the right to vote in the assemblies, are applicable to these votings.

9. For the votings referred to in this section the Proprietor or Joint Owner of each one of the private property areas shall have the number of votes set forth in the Article 13 (A) (thirteen A) contained here-in.

10.- The resolutions issued under the terms and conditions aforementioned, bind all the Joint Owners, including absentees and dissidents. In any case, the resolutions made with this voting system shall be ratified by the immediately following General or Special Assembly held after said voting.

ARTICLE FOURTEEN – VOTE BY PROXY

Each Joint Owner or legal representative, with the right to vote in a Joint Owners General or Special Assembly, shall be able do it personally or by means of a proxy letter given in writing or by a written authorization signed or ratified before a Notary Public, which shall be given to the Condominium Administrator before the holding of a Joint Owners Assembly. The powers may be revoked at any time with a notice in writing to the Condominium Administrator or by the attendance of the Principal or Grantor to the respective Assembly.

Besides the manner provided in the preceding paragraph, the Joint Owners may be represented in any of the manners set forth for Mandate in the Civil Code of Sinaloa. Mandates which, likewise, may be revoked in the terms set forth in said legislation.

There will be a Joint Owners General Assembly every year, and it shall be held in the city of Mazatlan, Sinaloa, preferably inside the tourist urban development denominated  “ESTRELLA DEL MAR GOLF AND BEACH RESORT COMMUNITY”, stating in the respective summons, exactly the place where it will be held, under the Condominium Administrator’s responsibility, which shall be in writing and be sent to each Joint Owner or Legal Representative, as the case may be, at least twenty calendar days in advance of the appointed date for the holding of the Assembly.

Additional general assemblies may also be call at any time, by means of summons in writing, which shall be sent by the Condominium Administrator or by the Surveillance Committee, when requested by twenty-five percent of the total number of votes of the Joint Owners of the Development, or when authorized by the law. The summons must comply with the same aforementioned requirements, stating the time and place where the Assembly will be held, as well as the items included in the agenda.

The quorum required for the validity of a Joint Owners General Assembly shall be the one required by the law and by the Condominium Regime, which these Bylaws derive from.

The Joint Owners must appoint the President of the Assembly and the resolutions must be taken by the majority vote of the total votes represented in the Assembly.

ARTICLE FIFTEEN – SPECIAL ASSEMBLIES

The Special Assemblies will be held with the same formalities, requirements and conditions provided for General Assemblies, in what may be applicable, being held in those cases and under the terms stated in the Condominium Regime, which these Bylaws derive from. Each Joint owner shall have the number of votes stated in the Tables which are listed in clause Twenty-one of the Condominium Regime; in the understanding that there is a chart that states the percentage of votes each Joint Owner has in TABLE 4 (A) “Proportion of Joint OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF ALL JOINT OWNERS”, as well as in TABLE 4(B) “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE LOT AREA” and in TABLE 4(C) “PROPORTION OF JOINT OWNERSHIP RIGHTS OVER THE COMMON USE AREAS OF THE APARTMENT BUILDING”.

Joint Owners General Assemblies, and two charts that indicate the percentage of votes each Joint Owner has in the Joint Owners Special Assemblies, that is, one chart for the “Lot Area” and one for the “Apartment Building”.

ARTICLE SIXTEEN – SUSPENSION OF THE RIGHT TO VOTE DUE TO DEFAULT

A Joint Owner shall not be able to vote in the Joint Owners General or Special Assemblies, if he/she is late or is in default on the obligations that correspond to him/her, related to the maintenance expenses, as approved by the General of Special Assemblies


Joint Owners, 
of the Common Use Areas of  Condominium Regime 16A, or if he (she) ha of the respective Joint Owners not complied with any other obligation established by the Condominium Regime or by these Bylaws. Additionally, the Joint Owner who does not comply with his/her obligations, shall not be able to vote in the Joint Owners Assemblies by means of a power of attorney or by any other kind of legal representation, nor shall he (she) be able to cast the vote granted from other joint owners by a power of attorney, proxy letter or any other kind of mandate.

CHAPTER FIVE

PROVISIONS RELATED TO MAINTENANCE EXPENSES

ARTICLE SEVENTEEN – CLASSIFICATION OF EXPENSES

Each Joint Owner who owns a private property area, upon formalizing his/her Sales Contract, shall be bound to pay the corresponding following expenses related to the Common Use Areas in the Development pursuant to the Condominium Regime:

1.- Ordinary Expenses.
2.- Improvement Expenses. 3.- Reimbursement Expenses.

All the maintenance expenses of the Common Use Areas will be approved by the corresponding General or Special Joint Owners Assembly pursuant to clauses Twenty-four and Twenty-five of the Condominium Regime, from which these Bylaws derive, and must be paid according to the terms and conditions stated in said Regime and in these Bylaws.

The Ordinary Expenses must be sufficient to pay all the expenses related to the administration, surveillance, maintenance and repair of the Common Use Areas in the Development, and the maintenance, repair and replacement of machinery and equipment necessary for the care and maintenance of the same Common Use Areas, including the Beach Front Area, as well as to cover the expenses related to all kinds of fiscal obligations derived from the property of the Common Use Areas and from the use of the Beach Front Area, including expenses and fees for insurance premiums, internal surveillance and security expenses of the Development, administration expenses of all kind, communication expenses, expenses for the concession of the Federal Zone in the Beach Front Area, accounting and legal expenses and fees, as well as every expense made by the Condominium Administrator in the performance of his/her work at administrating the Common Use Areas of the Development .

The obligation to pay the aforementioned expenses is inherent to the capacity of being a Joint Owner and said obligation is unavoidable for all the Joint Owners and their successors.

Notwithstanding any provision to the contrary included in the Condominium Regime and these Bylaws, the DECLARANT shall be bound to pay the maintenance expenses of the private property areas in the Development that has not been sold, only in the proportion in which the maintenance expenses paid by the Joint Owners from already sold areas are not sufficient to cover all the expenses of the Common Use Areas of the Development”.

ARTICLE EIGHTEEN – DESTINATION OF THE EXPENSES

The maintenance expenses must be destined exclusively to promote the recreation, health, security and well being of the Joint Owners and to improve, operate and keep in working order the Common Use Areas and the Beach Front Area and be in compliance with the obligations provided by the Joint Ownership Property System and these By-laws.

1. – Ordinary Expenses. – The Annual Budget for the upcoming fiscal year for Ordinary Expenses shall be submitted for the approval of the Joint Owners General and Special Assemblies, as the case may be.
The Ordinary expenses relative to each of the private property areas of the Urbanization Project shall be determined by multiplying the Annual Budget of each of the Common Use Areas of all owners, the Common Use Areas of the Lots and the Common Use Areas of the Apartment Building of the respective fiscal year, by the corresponding Co-ownership percentage of each private property area that relates to the area that they are in, be that the Lots Area or the Apartment Building.
Additionally, the Joint Owners of the Urbanization Project shall be bound to pay in their respective proportion, the maintenance expenses of the Common Areas of the Tourist Urban Development in the Joint Ownership Property System, pursuant to the provisions established in the Principal Joint Ownership Property System and its By-laws.
Said maintenance expenses of the Common Use Areas of the Tourist Urban Development in Joint Ownership Property System must be included in the amounts that the Joint Owners of the Urbanization Project must pay, to cover the Annual Expense Budget that the Joint Owners General and Special Assemblies shall approve.

2. – Improvement Fees. – In addition to the obligation to pay the respective fees for ordinary expenses referred to in the preceding paragraph, the Joint Owners General and Special Assemblies shall be able to approve each year improvement fees charged to the respective Joint Owners, to cover the cost of any construction, reconstruction, restoration, repair or replacement of necessary improvements in the Common Use Areas for all Joint Owners, the Common Use Areas of the Lots Area or the Common Use Areas of the Apartment Building, including all sorts of accessories and equipment. The Joint Owners General and Special Assemblies and the Condominium Administrator shall have the right to charge the Joint Owners the Improvement Fees, in a similar manner to the aforementioned Ordinary Fees.

3.- Reimbursement Fees.- The Joint Owners General Assembly shall be able to establish Reimbursement Fees to any Joint Owner that does not fulfill his obligations derived from the Joint Ownership Property System and these By-laws or that does not fulfill any obligation approved by the Joint Owners General Assembly, especially when the non-compliance of said Joint Owner produces a distribution by the Condominium Administrator or when the non-compliance of the Joint Owner forces the Joint Owners General Assembly to establish fines or conventional penalties. The Reimbursement Fees must be collected by the Condominium Administrator and with the exception of the fines, they shall have as a main objective the recovery of the amounts expended through the non-compliance of the Joint Owner. The Joint Owners General Assembly must approve the fines or economic sanctions applicable to the Joint Owners that fall into non-compliance, in a general manner and they shall be in force as long as they are not modified or abolished by decision of the Joint Owners General Assembly.

ARTICLE NINETEEN – PAYMENT OF MAINTENANCE FEES

All the maintenance fees charged to the Joint Owners shall be collected according to the rates approved by the General and Special Joint Owners Assemblies, as the case may be, and in accordance with the corresponding Annual Expenses Budgets, pursuant to the Condominium Property Regime, which these Bylaws derive from.

The Joint Owners shall pay the Ordinary Fees monthly, by the first day of the month in progress, or on the dates indicated by the Joint Owners General or Special Assemblies and by the Condominium Administrator and shall be in default if not received by the end of the same month. The Joint Owners shall be notified in writing once a year, on the amount they must pay monthly on account of ordinary fees. The Condominium Administrator shall make said notification as soon as possible, once the Joint Owners General and Special Assemblies, in which said fees are approved, have been held.

The Joint Owners who have acquired their private property area by means of a Sales Contract formalized with the DECLARANT, must pay the maintenance fees in the proportion which corresponds to the time of the year when they formalized their acquisition and shall be bound to make the corresponding payment thirty days after said legalization.

When any of the Joint Owners Assemblies deem that the amount approved in the Annual Expenses Budget will be insufficient to pay for all the expenses of the Fiscal Year, they shall determine the corresponding complementary amount and approve it so that it is notified to the Joint Owners in order to make their payment in accordance to the new Budget”.

ARTICLE TWENTY – PROOF OF PAYMENT

The Condominium Administrator must issue, at a reasonable cost, written evidence requested by any Joint Owner, in which is indicated that the maintenance fees charged to that Joint Owner had been paid. Said written evidence could be used as proof of what is said on it, but in the event of an error, will not relieve any Joint Owner of the obligation to pay the fees that have not been actually paid.

ARTICLE TWENTY-ONE – RESERVES

The Ordinary Fees must include the amounts of all the cost items the General or Special Joint Owners Assembly, as the case may be, has approved, including the items for reserves which are deemed necessary for the adequate maintenance of the Common Use Areas of the Development. The amounts corresponding to said reserves must be deposited by the Condominium Administrator in an account, separate from the rest of the money assigned for ordinary expenses.

ARTICLE TWENTY-TWO – NON-COMPLIANCE

The Joint Owners are bound to pay all the corresponding maintenance expenses of the Common Use Areas in the Development that the corresponding General or Special Joint Owners Assembly has approved. The non-compliance in the payment of said fees shall compel the defaulting Joint Owner to pay all the expenses and fees that the Condominium Administrator has to make in order to obtain the payment of the amounts owed, including the expenses arising from the hiring of attorneys, and as the case may be, the legal expenses by the exercise of legal actions before the Courts.

The Condominium Administrator, on behalf of all the Joint Owners, shall have the right to take the necessary steps and to ensure the collection of the amounts owed by the Joint Owners by any means allowed by law and also by means of a lawsuit in a trial before the competent Courts of Law, through which a judgment is obtained to make the defaulting Joint Owners comply with their obligations, including the payment of damages and losses, interest and conventional penalties established by the Condominium Regime and these Bylaws, as well as the expenses and costs disbursed as a result of the trial proceedings.

The Joint Owners who do not comply with their obligations may be forced to sell in public auctions their private property areas.

The Condominium Administrator, on behalf of all the Joint Owners, shall have the right to sue in or out of court, by any allowed law, the payment of any amount owed by any Joint Owner and the fulfillment of any obligation levied to any Joint Owner pursuant to the provisions of the Condominium Regime and these Bylaws. The Joint Owners General Assembly shall be able to, at any time, authorize the Condominium Administrator to exert the actions granted by law for said purpose and to obtain in or out of court, by means of any agreement the sale in judicial auction of the private property area of the non complying Joint Owner, who must also pay the respective expenses and costs and the legal expenses disbursed.

No Joint Owner shall be able to avoid the compliance of his/her obligations by abandoning his/her private property areas.

ARTICLE TWENTY-THREE – PAYMENTS FOR NON-COMPLIANCE

Any amount of money disbursed under the terms of the preceding article, shall be considered as a Reimbursement Fee charged to the non-compliant Joint Owner, pursuant to the provisions of article Eighteen hereof.

ARTICLE TWENTY-FOUR – DOCUMENTARY INFORMATION

Each Joint Owner shall be bound to provide the person who wishes to acquire the right of property of a private property area within the Development, a copy of the Condominium Regime and of these Bylaws, as well as a copy of the last Annual Expenses Budget and the last Financial Statement approved by the corresponding General and Special Joint Owners Assembly, and a written proof signed by the Condominium Administrator, stating whether the owner of said private property area has any debts for payments of administration and maintenance fees of the Common Use Areas or due to any other cause.

The Condominium Administrator shall be bound to provide the Joint Owner who requests it, within a period of twenty days, a copy of the Joint Ownership Property System and of its attachments and of these By-laws, a copy of the last Annual Expenses Budget and of the last Financial Statement approved by the Joint Owners General Assembly, as well as a written proof in which is indicated whether there is any amount charged to the requesting Joint Owner for maintenance fees of the Common Use Areas of the Urbanization Project or for any other cause. The Condominium Administrator shall be able to charge a reasonable amount for the delivery of the aforementioned documents, which shall not exceed the cost of the respective copies and of the preparation of said documents.

ARTICLE TWENTY-SIX – ARREARS INTEREST

In addition to any charge for damages and losses, the Condominium Administrator shall be empowered, on behalf of the Joint Owners General Assembly, to charge any Joint Owner in arrears, a monthly interest of 5% on any balance owing.

The interest will be applied in the following manner:

a) Maintenance fees are due on the first day of each month.

(b) The balance owing and the joint owner will be considered to be in arrears if the maintenance fee is not received by the end of the same month.

(c) The Condominium Administrator will charge 5% interest on the balance in arrears for every full and partial month that the balance remains unpaid.

ARTICLE TWENTY-SEVEN – PAYMENTS IN MEXICAN CURRENCY

Any amount included in the Annual Expenses Budget, fees of any type, charges or applicable penalties, if that is the case, shall be calculated and expressed in the currency of the United States of America, but they can be paid in Mexican pesos, at the exchange rate of the day when the payment is made, according to the exchange rate of the day for sale of Dollars of the Banco Nacional de Mexico, S.A. or of Bancomer, S.A.

CHAPTER SIX

ADMINISTRATION OF THE DEVELOPMENT

ARTICLE TWENTY-EIGHT – ADMINISTRATION

The Joint Owners shall have all the powers related to the administration of the Development and to the operation and administration of the Common Use Areas, the Beach Front Area and the Personal Property in Common. They shall carry out said powers by means of the resolutions of the Joint Owners Assemblies, either General or Special, as it may correspond, in accordance to the powers granted to each type of assembly by the Condominium Property Regime and by these Bylaws.

The General Joint Owners Assembly will appoint a Condominium Administrator. The main and specific purpose of the General Joint Owners Assembly is to endeavor for an efficient and adequate administration of the Development and the administration, operation, control, maintenance and repair of the Common Use Areas and the Beach Front Area of the

In addition to any charge for damages and losses, the Condominium Administrator shall be empowered, on behalf of the Joint Owners General Assembly, to charge any Joint Owner in arrears, a monthly interest of 5% on any balance owing.

(a) Maintenance fees are due on the first day of each month.

(b) The balance owing and the joint owner will be considered to be in arrears if the maintenance fee is not received by the end of the same month.

(c) The Condominium Administrator will charge 5% interest on the balance in arrears forevery full and partial month that the balance remains unpaid.

Development, as well as to endeavor the architectural control of the constructions built in the Development and to execute and apply the provisions of the Condominium Regime and these Bylaws.

The General or Special Joint Owners Assemblies, as the case may be, shall be able to decide and do whatever they deem necessary, convenient or desirable for the administration

of the Development, with the limitations established in the Condominium Regime and these Bylaws. The Joint Owners shall have the power to delegate their powers to the Condominium Administrator or to any hired entity to help in the administration of the Condominium.

ARTICLE TWENTY-NINE – SURVEILLANCE COMMITTEE

The Surveillance Committee shall be composed of a minimum of three members. The first members of the Surveillance Committee will be appointed by the DECLARANT. The Committee members shall remain in their position. The  Committee shall have the powers and obligations provided by the law, the Condominium Regime and these Bylaws.

ARTICLE THIRTY – ADMINISTRATOR

The General Joint Owners Assembly will have the obligation to hire the services of a Condominium Administrator and of other employees and people rendering their services, in the manner which is deemed to be reasonable and appropriate in order to operate and maintain the Development and comply with the obligations set forth by the Condominium Regime, and these Bylaws.

The General Joint Owners Assembly shall be able to delegate some of its powers to the Condominium Administrator and shall do its best effort to hire the physical person or legal entity who can adequately undertake the role as Condominium Administrator. For this purpose the Joint Owners Assembly shall formalize an Administration Contract which shall contain the following elements:

a).- It shall establish that the Condominium Administrator is obliged to comply with all the corresponding obligations pursuant to the Condominium Regime and these Bylaws.

b).- The contract will be formalized for a term not exceeding one year, with the possibility of an annual renewal, if so decided by the General Joint Owners Assembly.

c).- The Condominium Administrator shall be able to resign to his/her position only by notifying the Surveillance Committee ninety days in advance that he/she will be quitting from a certain date, as long as he/she opportunely hands in to said Surveillance Committee, all accounting books and records related to the administration of the Development.

d).- A salary for the Condominium Administrator, which is acceptable to the Surveillance Committee or to the General Joint Owners Assembly, as the case may be.

ARTICLE THIRTY-ONE – POWERS OF THE ADMINISTRATOR

Besides the powers established in the Joint Ownership Property System and in the present By-laws, the Administrator of the Condominium shall have the following powers and obligations:

1. – Operate and maintain in the best possible condition of cleanliness and conservation the Common Use Areas and the Beach Front Area of the Urbanization project and be the one responsible for the administration of the Urbanization project.

2. – Pay all the expenses relative to the administration, operation, maintenance, repair and replacement of the Common Use Areas, the Beach Front Area, of the Common movable property as well as all administrative expenses of the Urbanization project.

3. Comply and ensure compliance with all dispositions established in the Joint Ownership Property System, in the present By-laws, in the Architectural norms and in the decisions of the General and Special Assemblies of Joint Owners and the Surveillance Committee.

4. Contract with third parties for the rendering of services and pay all expenses relevant to the administration of the Urbanization Project including fees paid to third parties to provide services as well as the expenses of said third parties for services for the benefit of the Joint Owners.

5. – Contract legal, accounting and other professional services for the administration of the Urbanization project and for compliance with the Joint Ownership Property System and the present By-laws. Furthermore, the Administrator of the Condominium will contract the lawyers deemed necessary and will grant them powers that may be required to obligate non-complying Joint Owners to comply with the dispositions of the Joint Ownership Property System, these By-laws, architectural norms and the decisions of the General and Special Assemblies of Joint Owners or the Surveillance Committee.

6. – Obtain or supervise security personnel and overall security within the Urbanization project.

7. – Communicate to the Joint Owners the decisions of the General and Special Assemblies of Joint Owners and the Surveillance Committee when necessary, and facilitate communication between the Joint Owners on decisions pertaining to the Urbanization project.

8. – Receive payments for the maintenance fees from all of the Joint Owners.

9. – Maintain the insurance policies that the General or Special Assemblies of Joint Owners decides to contract in order to protect the assets of the Urbanization. The Administrator of the Condominium must maintain insurance against fire and every insurable risk, all insurable assets, which make up a part or will make up a part of the Common Use Area of the Urbanization project and their improvements are insured to the sum judged appropriate by the General or Special Assemblies of Joint Owners, as the case may be.

10. – Contract the utilities that the Urbanization requires such as drinking water, sewage and electricity.

11. – Do maintenance work on the whole sewage system and rights of easement located within the Common Use Areas and the Beach Front Area of the Urbanization project.

12. Pay taxes and fiscal levies relative to the Common Use Areas and the Beach Front Area of the Urbanization Project.

13- To prepare the budgets and financial statements of the Urbanization Project and to present said documents and reports regularly to the Joint Owners General and Special Assemblies and to the Surveillance Committee of the Urbanization Project if it is deemed necessary.

14. – To perform and execute disciplinary actions against Joint Owners, for non-compliance of the provisions set forth in the Joint Ownership Property System and of these By-laws or those established by the Joint Owners General Assembly pursuant to the procedures stated in the Joint Ownership Property System and in these By-laws.

15. – To provide the Joint Owners, their creditors and their underwriters, copies of the Joint Ownership Property System, these By-laws and the accounting records related to the administration of the Urbanization Project.

16. – To establish and charge fees for the use of the recreational facilities or other type of facilities, if that is the case.

17. – To obtain loans when expressly authorized by the Joint Owners General Assembly.

18. – To retain the services of a real Estate advisor for the Joint Owners who are interested in renting their private property areas, in the periods when they do not use their Joint Ownership Property Unit, providing said lease agreement and real estate advisor have been approved in writing by the DECLARANT.

19. – To create, organize and establish regulations and safety measures to protect the Urbanization Project and the Joint Owners and visitors and to supervise the enforcement of said rules and safety measures.

20. – To collect and deliver inside the Urbanization Project, mail and all types of packages and postal items.

21. – The Condominium Administrator shall be able to deny access to the Urbanization Project to any Joint Owner or person authorized by him (her), when the Joint Owner is in default or non-compliance of any of the payment obligations in relation to maintenance fees of the Common Use Areas of the Urbanization Project. To exercise this right, the Condominium Administrator must notify in writing the non-compliant Joint Owner that his (her) access to the Urbanization Project shall be denied. Said notification must be delivered to the non- compliant Joint Owner at least fifteen days in advance of the date when the access shall be denied and it must contain information regarding the unfulfilled obligations and if this is the case, the amount owed.
Once the service has been delivered and the period indicated has expired and the non-compliant Joint Owner hasn’t fulfilled his (her) obligations the access to the Urbanization Project will be denied to the Joint Owner as well as to his (her) visitors, guests, lessee, or users of the Joint Ownership Property Unit, throughout the period of the default.

22. – To perform all the actions that the Joint Owners General and Special Assemblies and the Surveillance Committee deem convenient or necessary for the operation, maintenance and administration of the Urbanization Project.


ARTICLE THIRTY-TWO – SPECIAL EXPENSES
The Condominium Administrator, on behalf of the Joint Owners shall have the power to spend money for improvements to the Common Use Areas of the Urbanization Project, that exceed ten percent as a maximum of the agreed to ones in the respective Annual Expenses Budget, provided there is a written consent from the Joint Owners General or Special Assemblies, as the case may be.

ARTICLE THIRTY-THREE – SANCTIONS

The Joint Owners General Assembly shall be able to approve, modify, and apply the rules and regulations that it deems reasonable, including a penalty and sanctions system that the Condominium Administrator shall be bound to execute as Reimbursement Expenses charged to the Joint Owner who incurs in said fines or sanctions. Said rules and regulations that the Joint Owners General Assembly approves shall have as their purpose to support and promote the goals established in the Joint Ownership Property System and these By- laws, including the possession, use and enjoyment of the Urbanization Project. Any rule that establishes a system of fines and sanctions should provide that the Condominium Administrator inform the Joint Owner accused of breaching the rules and regulations, that he (she) can give his (her) reasons to the Condominium Administrator in relation to the alleged unfulfillment, before any sanction or fine is imposed upon him (her). A copy of the aforementioned rules and regulations, once they are approved by the Joint Owners General Assembly, shall be sent to all the Joint Owners with the same formalities provided by the Joint Ownership Property System and these By-laws for any notification of the Joint Owners. Once the notification provided for in the previous paragraph is carried out, the rules and regulations approved by the Joint Owners General Assembly shall have the same obligatory quality as if they were part of the Joint Ownership Property System or of these By-laws and the Joint Owners shall be bound by said rules, which will be made available to all Joint Owners at the Condominium Administrator’s office where they can request a copy should they want to. In the event of conflict between said rules and regulations and the Joint Ownership Property System and its By-laws, the latter shall prevail over the former.

ARTICLE THIRTY-FOUR – RIGHT OF ACCESS

The Condominium Administrator and its representatives shall have the right to enter any private property area, when said entry is necessary in relation to the performance of the responsibilities, powers and obligations of the Condominium Administrator pursuant to the Joint Ownership Property System, including the construction, maintenance, or urgent repairs for the benefit of the Joint Owner proprietor of said private property area, of the Common Use Areas, of the Beach Front Area or of any of the Joint Owners of the Urbanization Project.

ARTICLE THIRTY-FIVE – FINANCIAL INFORMATION

The Condominium Administrator shall make or hire the making of the accountancy information and financial statements, indicated below, to present them to the Joint Owners General and Special Assemblies for their approval, all of which shall be available to the Joint Owners who request a copy:

I. – At the beginning of each fiscal year a budget for the Fiscal Year shall be made, that includes at least the following:

A). – Income estimate and expenses estimate.

B). – The total amount of reserves in available cash for replacements or major repairs of the Common Use Areas of the Urbanization Project, Beach Front Area and Common Movable Property and for contingencies.

II. – As soon as it is feasible, at the end of the Fiscal Year, an Annual Report shall be made which shall include at least the following:

A). – The Balance at the end of the exercise or Fiscal Year.
B) A Profit and Loss Statement during the exercise or Fiscal Year.
C). – Any other financial report that must be made as a result of the laws and by-laws in force in Mexico.

ARTICLE THIRTY-SIX – NON-AUDITED FINANCIAL INFORMATION

If the report referred to in the second item of the preceding article, is not made by an Independent Chartered Accountant, at the written request of any Joint Owner, the Condominium Administrator shall give proof that the financial report was made with the information taken from the books and accounting records of the Joint Ownership Property, without auditing or independent revision.

The Condominium Administrator or his/her representatives, shall be able to enter and repair or make repairs to any private property area in the Urbanization Project that is not being maintained or repaired by the respective Joint Owner, and in this case the Condominium Administrator shall have the power to impose a reimbursement fee to be charged to the respective Joint Owner. The purpose of this power given to the Condominium Administrator is to keep the optimum aesthetic quality of all the private property areas and to prevent the deterioration due to a Joint Owner’s neglect.

ARTICLE THIRTY-EIGHT – SERVICES BY CONTRACT

With the approval of the Joint Owners General or Special Assemblies, as the case may be, the Condominium Administrator shall be able to contract with the DECLARANT or any third party for water, sewage, electricity, telephone, cable or satellite television, garbage disposal services, or any other similar service.

ARTICLE THIRTY-NINE – MANDATE OF THE ADMINISTRATOR

For the performance of its obligations, the Condominium Administrator shall have the powers and obligations pertaining to a General Representative for suits and collections and for Administrative Actions, with all the general powers and special ones that require a special clause pursuant to the law, under the provisions of the first two paragraphs of Article 2436 two thousand four hundred and thirty six of the Civil Code for the State of Sinaloa, correlative to article 2554 two thousand, five hundred and fifty four of the Civil Code for the Federal District. The Condominium Administrator shall be empowered to initiate claims and complaints of a criminal nature on behalf of all the Joint Owners, in relation to the common property assets of the Urbanization Project or Common Use Areas, as well as to initiate habeas corpus proceedings and waive them, become a helper of the General or District Attorney and to enter into labor agreements with employees hired to tend the Common Use Areas of the Urbanization Project, without any limitation; also to represent the Joint Owners in any labor procedure before labor authorities, whether federal or local, in relation to workers hired to repair or maintain the Common Use Areas of the Urbanization Project. The Condominium Administrator shall be able to substitute only the powers granted for suits and collections, but it shall not be able to substitute the conferred powers for administration actions unless the Joint Owners General Assembly authorizes it expressly. The Condominium Administrator shall not be empowered to perform acts of ownership, or to subscribe credit instruments. Only the Joint Owners General Assembly shall be able to grant additional powers, under the terms provided by the Joint Ownership Property System and these By-laws. Additionally, the Condominium Administrator shall have the powers and obligations established in articles Twenty-nine and Thirty of the Law on Joint Ownership Property System for Real Estate of the State of Sinaloa.

CHAPTER SEVEN

REPAIRS AND MAINTENANCE

ARTICLE FORTY – GENERAL OBLIGATION OF THE ADMINISTRATOR

With the exception of those cases when a Joint Owner must do it and without limiting the pertaining powers, pursuant to the Joint Ownership Property System and these by-laws, the Condominium Administrator, on behalf of the Joint Owners General Assembly must comply, in the way it deems best, with the general obligation under its responsibility that includes maintaining, repairing, restoring and replacing the Common Use Areas of the Urbanization Project, the Beach Front Area and the Common Movable Property. The cost of said maintenance and repair must be included in the Ordinary Expenses of the Urbanization Project. 

ARTICLE FORTY-ONE – OBLIGATIONS OF THE JOINT OWNERS

With the exception of the cases in which the Condominium Administrator must do it pursuant to the provisions of the Joint Ownership Property System and of these By-laws, all the Joint Owners are bound to pay for all the expenses of maintenance, repair, restoring and replacement of all the constructions or improvements that are necessary in their private property area, including the surface of the walls and all the buildings constructed or installed inside or on their private property area, in such a manner that these be kept in good condition and maintenance and so that that it doesn’t become unsafe, unhealthy, an eyesorea danger to health or a fire hazard.

ARTICLE FORTY-TWO – NON-COMPLIANCE

In the event that a Joint Owner does not perform the maintenance of His (her) private property area in the manner established by the Joint Ownership Property System and by these By-laws, the Condominium Administrator, could, although it shall not be obliged to, perform said maintenance and repair of the respective facilities, in which case the cost of maintenance and repairs shall be charged to the Joint Owner as a Reimbursement Expense.

ARTICLE FORTY-THREE – OBLIGATION TO COMPLY WITH THE ARCHITECTURAL NORMS

The maintenance of the external side of the buildings or structural improvements, including walls, fences and roofs, shall be carried out by the Joint Owners pursuant to the Architectural norms, and if said norms require it, said maintenance shall be carried out until it is approved by the Architectural Committee.
The gardens and the aesthetic care of all the Common Use Areas shall be object of maintenance by the Condominium Administrator in order for them to keep always an aesthetic, attractive and decorative aspect, according to the norms approved by the Joint Owners General and Special Assemblies and by the Architectural Committee. The expenses of said maintenance and replacement should be included in the Ordinary Expenses of the Annual Expenses Budget of the Urbanization Project.

CHAPTER EIGHT

PRIVATE RECREATIONAL AREA

ARTICLE FORTY-FOUR – DEFINITION

The phrase “Private Recreational Area” used in these By-laws refers to all Real Estate Property located inside a private property area, in which commercial or recreational facilities are built, such as golf courses, golf clubs, tennis courts, tennis clubs, swimming clubs, athletic clubs, commercial business displaying ecological or tourist activities, or anything of a similar nature.

ARTICLE FORTY-FIVE – RESTRICTED ACCESS

With the exception of the proprietor Joint Owner of a Private Recreational Area, no other person or Joint Owner will be able to enter to said area, since his (her) capacity as Joint Owner does not entitle him (her) to enter to the private property areas that are the property of other Joint Owners.
The entry, membership or right of use of a Private Recreational Area shall depend entirely of the conditions and requirements that at his (her) discretion the proprietor Joint Owner of said private property area indicates or imposes.

CHAPTER NINE

INSURANCE

ARTICLE FORTY-SIX – INSURANCE CONTRACTS

The Condominium Administrator must contract and keep current, as much as possible given availability in the insurance market, the following insurance contracts:
a). – Wide Coverage Insurance that covers the proprietor Joint Owners of the Common Use Areas and of the Beach Front Area of the Urbanization Project, for any civil liability resulting from damages and losses to visiting persons or guests or Joint Owners, inside the Urbanization Project, Common Use Areas and the Beach Front Area.

The insured amount and the risks covered by said Civil Liability Insurance must be those that the Condominium Administrator deems adequate, according to the circumstances.
b). – An Insurance for Damages caused by Fire, Hurricane, Flood and all insurable hazards, that covers the possible damages to the Common Use Areas facilities of the Urbanization Project. The insured amount shall be that which the Condominium Administrator deems adequate, according to the circumstances.

c). – The insurance contracts contracted by the Condominium Administrator on behalf of the Joint Owners, shall indicate as beneficiaries or insured, the proprietor Joint Owners of the Common Use Areas of the condominium or the person or persons indicated by the Joint Owners General or Special Assemblies as the case may be.

Each and every one of the insurance contracts negotiated by the Condominium Administrator shall indicate in an express manner that the beneficiaries or insured waive any right of subrogation they might have against the DECLARANT and its special agents and employees, as well as every right of subrogation they might have against any of the Joint Owner or proprietors of the private property areas.

ARTICLE FORTY-SEVEN – WAIVING OF RIGHTS

The Joint Owners General Assembly shall have the right of waiving and relieving of all liability the Condominium Administrator, the DECLARANT, and the employees, agents or representatives of one and the other, in relation to any loss covered by any of the insurance contracts, whether that loss had been caused by negligence or by unfulfilment of any covenant or agreement, but said waiving shall only refer to the insured sum received as compensation for the loss suffered.

ARTICLE FORTY-EIGHT – DECISION OF THE ASSEMBLIES
The Joint Owners General or Special Assemblies, as the case may be, shall decide and instruct the Condominium Administrator to contract any other additional insurance that it deems necessary. The Condominium Administrator shall determine each year whether the contracted insurance and the agreed sums covered provide adequate coverage and shall inform the Joint Owners General and Special Assemblies, which shall receive the report of the Condominium Administrator and shall decide whatever is necessary. 

ARTICLE FORTY-NINE – INSURANCE EXPENSES
The premiums of the insurance contracts that the Condominium Administrator negotiates and the premiums of the additional Insurance Contracts, which are contracted by a decision of the General or Special Assemblies of Condominium Owners, is an expense, which must be included in the General Expenses of the Budget. The Administrator of the Condominium shall have the power to negotiate with the insurance companies any covenant or transaction relative to losses derived from the insurance contracts as well as to sign the claims applications for damages and documents which express the conformity of the Joint Owners with the insured sum received or with the damages paid by the insurer or with the transaction or covenant of payment of the sum insured and said Administrator’s signature is compulsory for all Joint Owners.

CHAPTER TEN
DAMAGE OR DESTRUCTION OF THE COMMON USE AREAS

ARTICLE FIFTY – DAMAGES TO THE COMMON USE AREAS

If a part of the Common Use Areas of the Urbanization project is damaged or destroyed by fire or for any other force majeure event and the sum insured in the insurance contract in force is insufficient to cover the cost of reconstruction, neither the Administrator of the Condominium nor the Declarant can make the repairs to the damaged portions or insure that the aforesaid damaged portions are repaired without the previous consent of the General Assembly or Special assembly of Joint Owners, as the case may be, granted pursuant to the respective law.

CHAPTER ELEVEN
ARCHITECTURAL CONTROL OF CONSTRUCTION AND IMPROVEMENTS

ARTICLE FIFTY-ONE – ARCHITECTURAL COMMITTEE

Any construction, repair or improvement which a Joint Owner of a lot of land located within the Urbanization project wishes to carry out must obtain the previous authorization in writing of the

Architectural Committee of the Tourist Urban Development in Joint Ownership property system pursuant to the provisions set forth in the Principal Joint ownership property system. Said authorization must be given pursuant to the procedures, requirements and conditions established in the Principal Joint Ownership Property System, of which the Joint Ownership Property System of the Urbanization project is part, and these By-Laws.

ARTICLE FIFTY-TWO – OBLIGATION TO OBTAIN PREVIOUS AUTHORIZATION

With the exception of the provisions in articles Fifty-Four and Sixty of this same chapter, no construction, building, repair or improvement can be started, erected or maintained within the Urbanization nor can additions or changes be made to the exterior of any construction, including the painting of exterior walls and fences, nor can any change be made in the garden, nor can they install, affix, or keep any signs, notices, posters or any other publicity on any part of the condominium without having presented the respective request, plans and specifications to the Architectural Committee of the Tourist Urban Development in Condominiums and this body has given its approval in writing, which body may also negate or condition its approval of the plans and specifications until they have made the changes deemed necessary by them on the aforesaid plans and specifications including:

1. – A revision and modification of the plans and specifications;
2. – A revision and modification of the schedule and time period for construction;
3. – Condition the approval of the request to the consent of the applicant to his granting of rights of ways to carry out the maintenance of the constructions or improvements or for any other purpose deemed necessary by the Architectural Committee; 4. – Condition the approval of the request to the consent of the applicant to reimburse the Administrator of the Condominium for the cost of said maintenance.


ARTICLE FIFTY-THREE – ARCHITECTURAL NORMS
The Architectural norms will be created by the Architectural Committee and revised and approved by the majority vote of the General Assembly of Joint Owners and will be applied by the Architectural Committee. The Architectural Norms, once approved, are an integral part of the present Condominium By-laws. The Architectural Norms include the following requirements, restrictions and limitations:

a). – Time limit for the start and termination of constructions or improvements.

b).- Conformity or adherence of the constructions or improvements already finished, to the plans and specifications approved by the Architectural Committee.

c). – Any other requirements, limitations and restrictions which the General Assembly of Joint Owners reasonably approve, including the regulation of the construction, re-construction, exterior addition, change or alteration of any construction or improvement or the maintenance of same including the nature, class, form, height, materials used, illumination, exterior colors and surface and location of said improvements and the harmony of the exterior design and the color in relation to other dwellings and constructions located within the Urbanization project.

ARTICLE FIFTY-FOUR – EXCEPTION IN FAVOR OF THE DECLARANT

Notwithstanding anything contrary to the contents of the present By-laws, should the Declarant or the persons that he/she designates carry out any construction or improvement inside the Urbanization project, they are not obliged to obtain the approval of the Architectural Committee consequently, the restrictions and conditions set forth in these By-laws shall not be applied to the DECLARANT.

ARTICLE FIFTY-FIVE – SUSPENSION OF WORKS

The Condominium Administrator shall have the power to exercise legal actions necessary to stop any construction that has not been approved in writing by the Architectural Committee of the Tourist Urban Development of which the Urbanization Project is a part, or that is not carried out according to the authorization granted by said Architectural Committee.

ARTICLE FIFTY-SIX – ADDITIONAL NORMS

The Joint Owners General Assembly shall be able to establish the additional norms and by-laws that it deems appropriate and that are not opposed to the provisions of the Principal Joint Ownership Property System or its By-laws, of the Joint Ownership Property System of the Urbanization Project or of these By-laws.

ARTICLE FIFTY-SEVEN – NOTIFICATIONS IN WRITING

All the notifications and communications that must be made pursuant to these By-laws, must be made in writing and shall be deemed carried out correctly when they are delivered personally, or when they are sent by email. Notifications shall also be considered carried out correctly, when they are sent by a courier service, but in that case, the notification shall be considered delivered three days after the day of being sent, and when the notification is sent by airmail, it shall be considered delivered six days after the date when the item was handed over to the post office of the sender. All notifications must be sent to all Joint Owners at the last address or the last email address recorded in the Book of Joint Owners that the Condominium Administrator must keep. If the address or email address of one of the Joint Owners is not registered because it has not been provided by him (her) to the Condominium Administrator, the notifications must be made to the address of his (her) private property area.

Any notification that must be made to the Condominium Administrator, to the Joint Owners General Assembly or to the DECLARANT, must be addressed by email to the Condominium Administrator, or if by mail, courier, or in person, to the following address:

Estrella del Mar Golf and Beach Resort Community Administrador
Regimen de Condominio Secundario Lote 16-A Camino Isla de la Piedra, Kilómetro número 10 Mazatlán, Sinaloa, México, C.P. 82280

CHAPTER THIRTEEN

SERVICES AND OTHER RIGHTS OF USE

ARTICLE FIFTY-EIGHT – INFRASTRUCTURE OF SERVICES

All the service systems built or that are going to be built in the Common Use Areas of the Urbanization Project, whether on the surface or underneath, to provide services to the Joint Owners of the Urbanization Project, such as electric systems, irrigation systems, drinking water and sewage systems, storm drainage systems, telephone line systems, cable or satellite television line systems, fiber optic systems, as well as any other systems for services or facilities built over or under the Common Use Areas of the Urbanization Project, shall be denominated “Services Infrastructure” and shall be an integral part of the Common Use Areas of the Urbanization Project. The operation, maintenance, repair and replacement costs of the Services infrastructure shall be paid by the Joint Owners and will constitute a part of the Ordinary Expenses. Said services shall be provided by the Service Enterprise decided and hired by the Joint Owners General or Special Assemblies of the Tourist Urban Development in Joint Ownership Property System, pursuant to the norms and conditions provided in the Principal Joint Ownership Property System. The Joint Owners of the Urbanization Project shall be bound to fulfill the obligations charged to all the Joint Owners of private property area arising from the hiring of services legalized by the Principal Condominium Administrator or the Joint Owners General Assembly or Special Assemblies, as the case may be, of the Tourist Urban Development in Joint Ownership Property System, as is established in the Principal Joint Ownership Property System and its by-laws, the Joint Ownership Property System of the Urbanization Project and these By-laws. Similarly, the Joint Owners General Assembly or Special Assemblies shall grant to the Service Enterprise and to the people it indicates, when it becomes necessary and appropriate, the Right of Entry to any part of the Urbanization Project for the benefit, exploitation or use of all types of water and for the installation, maintenance, administration, repair, replacement and operation of all types of water systems, drinking water supply lines, hoses and ducts, pumps and connections. Both the fees and the expenses charged by the Services Enterprise shall be a part of the Ordinary Expenses of the Common Use Areas of the Urbanization Project and must be paid by all Joint Owners, or by the owners in the Lots Area or the Apartment Building, as the case may be.

The Services Enterprise shall also have the power to charge all Joint Owners a Connection Fee to each of the service systems, for each of the private property areas, payable before making the connection to each private property area with each of the service systems of the Urbanization Project. The fees for the administration and the connection fees shall be established pursuant to a written agreement that must be legalized by the Service Enterprise and the Joint Owners General Assembly of the Principal Joint Ownership Property System. 

ARTICLE FIFTY-NINE – PAYMENT OF SERVICES

Each Joint Owner shall be bound to pay periodically and opportunely upon their due date, each and every one of the charges or fees relative to the services received in their private property area.

ARTICLE SIXTY – RIGHT OF ACCESS IN FAVOR OF THE DECLARANT

The DECLARANT reserves expressly through this action for itself and for its successors, a Right of access over each part of the Common Use Areas of the Urbanization Project, to perform all types of constructions on the surface and underneath and to carry out all kinds of sales tender and negotiations made by the DECLARANT and its successors, employees and agents, without any limitation and at its exclusive discretion, including the building of all type of contractions and improvements that the DECLARANT deems necessary, convenient or useful for its ends and purposes, thus they shall be able to store temporarily all kinds of material and equipment during the diverse construction processes, as well as to build and preserve constructions of any nature, permanent or temporary that they deem necessary to perform their work of sale and promotion, including performing all the activities that directly and indirectly are related with the marketing and sale of private property areas, without any limitation, as well as to install and keep all kind of notices, signs and advertising signs or sale advertisements, to build temporary or permanent buildings for sale and promotion activities, model houses and apartments, administration offices for promotion or sale, public relations and marketing, to welcome guests, visitors and potential clients, to show them and give them a tour of the entire Urbanization Project, the Common Use Areas and the Private Recreational Areas. Any person or Joint Owner, either a physical or legal entity, through the simple fact of acquiring a right of property or of trust beneficiary rights over a private property area accepts unconditionally, conforms to and acknowledges the Right of access indicated in this article in favor of the DECLARANT and its Successors and for the same action of legalizing its acquisition or right, is bound to respect unconditionally and without limitation said Right of access. No stipulation in the Joint Ownership Property System or in these By-laws, shall be able to limit or restrict the Right of Access that is now established in favor of the DECLARANT and none of the Joint Owners can initiate any legal action that limits the rights of the DECLARANT established in this article to make all sorts of sales activities or negotiations anywhere in the Common Use Areas of the Urbanization Project. Additionally, the DECLARANT shall be able, at any time, to use buildings built inside some of the private property areas as sales offices or model houses or apartments to show potential buyer clients and shall be able to use the Common Use Areas of the Urbanization Project or any of the private property areas that belongs to it, to perform promotion or sale operations or negotiations or for temporary vehicle parking purposes. The DECLARANT shall not require at any time and under no circumstance, permission or authorization from the Condominium Administrator or from the Joint Owners General Assembly, to carry out sales operations or negotiations anywhere in the Urbanization Project. Additionally, no stipulation of the Joint Ownership Property System or of these By-laws shall be able to limit the unlimited right of the DECLARANT to start and conclude improvements anywhere in the Urbanization Project or to alter those already concluded, to alter the plans and designs or to build the buildings or additional improvements that the DECLARANT deems necessary or convenient, without any limitation and under its total discretion and decision, for the benefit of the Urbanization Project. The Joint Owners General Assembly and each and every one of the Joint Owners, by the simple fact of signing their Sale/Purchase or Trust Agreement, accept that some of the activities of the DECLARANT may block the view or landscape of some of the Joint Owners and their signature on the respective Agreement shall mean the acceptance of said limitation, if this is the case, as well as any nuisance or inconvenience resulting from the activities of the DECLARANT. Similarly, the DECLARANT makes clear that it reserves the right to make, directly or indirectly, any construction or improvement inside the Urbanization Project over the surface or underneath, without needing the authorization of the Joint Owners General Assembly or the Condominium Administrator, providing said constructions or improvements are consistent with the use of each part of the Urbanization Project consigned in the Development Master Plan included in the Principal Joint Ownership Property System.

ARTICLE SIXTY-ONE – RESTRICTIONS TO JOINT OWNERS

The Joint Owners shall have the following rights and restrictions:
1. – Each one of the Joint Owners has the non-exclusive right of entry and exit, to enjoy and use the Common Use Areas of the Urbanization Project and the Beach Front area, the same right that is part of the Co-ownership Right of each private property area, pursuant to the provisions, rules and limitations established in the Principal Joint Ownership Property System and its By-laws, in the Joint Ownership Property System of the Urbanization Project, in these By-laws, in the Development Master Plan and in the Architectural Norms and especially, pursuant to the rules indicated in this Article.

2. – The Condominium Administrator shall have the right to limit, on behalf and for the benefit of all Joint Owners, the number of guests of the Joint Owners that can use the Common Use Areas and the Beach Front Area.

3. – The Joint Owners General and Special Assemblies, as the case may be, shall have, at all times, the right to establish rules and general By-laws, in relation to the Common Use Areas and of the Beach Front Area for the proper administration and operation of the Urbanization Project.

4. – The DECLARANT shall have the rights indicated in the Joint Ownership Property System and in these By-laws, to use in a non-exclusive manner the Common Use Areas and all the facilities in the same, to carry out all kinds of promotion and sale activities and to permit third parties the use of the same Common Use Areas and their facilities, without any cost, as well as to enter, leave, use and enjoy, facilitate the improvement of the Urbanization Project or of any part of the same.

5. – The Condominium Administrator, on behalf of the Joint Owners General Assembly, shall have the right to deny any Joint Owner the right to use and enjoy the Common Use Areas of the Urbanization Project and the Beach Front Area, when said Joint Owner defaults any of the maintenance payments of the Common Use Areas of the Urbanization Project, keeping said restrictions in effect as long as the respective Joint Owner remains non-compliant. Similarly, the Condominium Administrator shall be able to impose on non-complying Joint Owners, after following the proper procedure, the sanctions established by the Joint Owners General Assembly for said faults, that can be fines, or the suspension of the right to use the Common Use Areas of the Urbanization Project, when the norms established by the Principal Joint Ownership Property System and its By-laws, the Joint Ownership Property System of the Urbanization Project, these By-laws, the Development Master Plan or the Architectural Norms are unfulfilled, knowing that non- compliance by any Joint Owner does not relieve him (her) of said obligations.

6. – The Condominium Administrator shall have the right to restrict the entry or the use of some parts of the Common Use Areas of the Urbanization Project, when the Joint Owners General or Special Assemblies thus decide.


ARTICLE SIXTY-TWO – RIGHT OF ACCESS IN FAVOR OF THE ADMINISTRATOR
The Condominium Administrator shall have the right to enter, leave, cross and use any part of the Urbanization Project, without any limitation, when it is required to install, maintain, or repair the gardens, irrigation devices or any aesthetic aspect inside the Urbanization Project. The Joint Owners shall be bound to respect this right of the Condominium Administrator, by the simple fact of signing the respective Sale/Purchase or Trust Agreement.


ARTICLE SIXTY-THREE – RECORDING OF THE JOINT OWNERSHIP PROPERTY SYSTEM Each of the rights and obligations established in the Joint Ownership Property System and in these By-laws shall be understood as being in force when the Joint Ownership Property System is entered into the Property Public Records of the Municipality of Mazatlan.

CHAPTER FOURTEEN

GENERAL PROVISIONS

ARTICLE SIXTY-FOUR – OBLIGATION CHARGED TO THE ADMINISTRATOR

The Condominium Administrator shall have the right to ensure compliance by any legal means, all the restrictions, conditions, stipulations, obligations, and charges imposed by the Joint Ownership Property System or by these By-laws and their future amendments, including the right to avoid the non-compliance of said restrictions, conditions, stipulations, and obligations and the right to claim damages and losses caused by the non-compliance. The inability or the omission of the Condominium Administrator to enforce the established stipulations, conditions or restrictions, shall not relieve the liable parties from compliance to said obligations. 

ARTICLE SIXTY-FIVE – MANDATORY NATURE OF THE BY-LAWS

In the event that some of the stipulations included in these By-laws are unenforceable or non-applicable, the rest of the stipulations shall have, in spite of this, full force and effect.


ARTICLE SIXTY-SIX – AMENDMENTS TO THE BYLAWS

These Bylaws may be modified only with the majority of votes of the General Joint Owners Assembly, pursuant to the provisions of the Condominium Regime.

The amendments shall be in force and shall be applicable to all the Joint Owners, including absentees and dissidents, as soon as they are approved by a Joint Owners General Assembly.

Any amendment that does not comply with the requirements stated in this Article shall be null and shall have no effect whatsoever.

ARTICLE SIXTY-SEVEN – EXEMPTION FROM LIABILITY

Neither the Condominium Administrator, nor the members of the Surveillance Committee, nor the members of the Architectural Committee, nor the members of any other committee formed pursuant to the provisions of the Principal Joint Ownership Property System and its By-laws, of the Joint Ownership Property System of the Urbanization Project and of these By-laws, shall be liable before the Joint Owners for any claim resulting from any damages or losses suffered by any decision, approval or rejection of plans or specifications, whether these were correct or incorrect, or because of any action, activity, omission, error, negligence or the like, made in good faith during the exercise of the duties entrusted by the Joint Owners General or Special Assemblies or by the provisions of the Principal Joint Ownership Property System and its By-laws, of the Joint Ownership Property System of the Urbanization Project or these By-laws.

ARTICLE SIXTY-EIGHT – INTERPRETATION OF THE BY-LAWS

The provisions of these By-laws should be interpreted in a broad sense, with the purpose of creating a general program for the administration and operation of the Urbanization Project under optimum quality norms. The titles of the chapters and articles are indicated only to facilitate the reading and must not be considered as elements of interpretation.

ARTICLE SIXTY-NINE – SINGULAR AND PLURAL

When in the context of the provisions of these By-laws this is required, the singular also includes the plural and the masculine gender also includes the feminine.

ARTICLE SEVENTY – EXPENSES FOR CONTROVERSIES

In the event of any controversy, or claim in relation to the interpretation and fulfillment of these By-laws, the winning party shall have the right of receiving the reimbursement of all the expenses made and ensured that its attorneys get their fees paid, based on a reasonable estimate, independently whether the controversy is exposed before a court of law and whether a final judgment is granted.

ARTICLE SEVENTY-ONE – OBLIGATIONS OF JOINT OWNERS

Upon signing a Sale/Purchase or Trust Agreement or any other document through which a person acquires the right of property or Trust Beneficiary Rights in any of the properties included in the Joint Ownership Property System and in these By-laws, the Joint Owner is bound to comply with all the stipulations, conditions, restrictions, rules and by-laws included in said Joint Ownership Property System and these By- laws, in the Architectural Norms and any decision approved by the Joint Owners General or Special Assemblies and said obligations shall be equally binding for their successors. Additionally, upon becoming a Joint Owner, the respective physical person or legal entity accepts and recognizes implicitly that the Joint Ownership Property System and these By-laws establish a system or general project for the improvement of and enhancement of the Urbanization Project, thus, for this reason, the Joint Owners, just by being Joint Owners, are bound to comply with all the norms that have the purpose of keeping the optimum quality of the Urbanization Project and accept its fulfillment, acknowledging also that the provisions of the Joint Ownership Property System and of these By-laws shall be mandatory for all subsequent acquirers or Trustees and that any person that has the status of Joint Owner, has the obligation to comply with said norms, by virtue of the provisions of the Law on Joint Ownership Property System for Real Estate in the State of Sinaloa.

ARTICLE SEVENTY-TWO – PROPERTY ASSIGNMENT

When the property of a private property area located inside the Urbanization Project is sold or transferred, the Notary Public legalizing the transaction must include the respective instrument, that the purchaser of the Property Rights or the Trust Beneficiary Rights is bound to comply with all the terms, restrictions and conditions included in the Principal Joint Ownership Property System and its By-laws, in the Joint Ownership Property System of the Urbanization Project and these By-laws, in the Development Master Plan and the Architectural Norms.

ARTICLE SEVENTY-THREE – CONSTRUCTION BY THE DECLARANT

The DECLARANT and the persons designated by him/her shall be able to initiate directly or indirectly construction work on single-family homes and other construction or improvements inside the Urbanization Project. The termination of said construction work and the sale or rent of said buildings and improvements is essential for the creation and well-being of the Urbanization Project. In order to carry out the construction work as soon as possible, the DECLARANT establishes expressly that none of the provisions of the Joint Ownership Property System or of these By-laws shall be interpreted as limiting the rights of the DECLARANT for the following:

a). – That the DECLARANT by himself/herself or through third parties, carries out any construction work that he/she deems necessary or convenient inside the Urbanization Project.

b). – That the DECLARANT by himself/herself or through third parties, can perform all types of activities to finish the construction works and to be able to sell or rent his/her facilities.

c). – That the DECLARANT by himself/herself or through third parties, performs the construction and maintenance of any part of the Urbanization Project, of all kinds of buildings that are reasonably necessary for the termination of its construction works and to carry out the sale or rent of said facilities.

d). – That the DECLARANT by himself/herself or through third parties, uses the private property areas that belong to him/her as Joint Owner, to build model houses or apartments, sale offices or for any other purpose that eases the improvement operation or sale of any part of the Urbanization Project.

e). – That the DECLARANT by himself/herself or through third parties, installs, builds and preserves all type of signs, advertisements or publicity anywhere in the Urbanization Project, as he/she deems necessary or convenient for the operation, sale or leasing of the private property areas that belong to the DECLARANT.

Mazatlan, Sinaloa, Nine of March of the year two thousand
(Illegible signature)
ARTHUR JOHN MARTORI
“STONE ISLAND DEVELOPMENT”, SOCIEDAD DE RESPONSABILIDAD LIMITADA DE CAPITAL VARIABLE

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