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CC&R ARTICLE 07: MORTGAGEE'S PROTECTION
7.1 Definitions. As used in this Declaration, "mortgage", includes any deed of trust or other security instrument, 'mortgagee" includes the beneficiary of a deed of trust a secured party or other holder of a security interest, "foreclosure" includes a notice and sale proceeding pursuant to a deed of trust or sale on default under a security agreement and "eligible mortgagee" means a mortgagee of a unit that has filed with the secretary of the Association a written request that the mortgagee be given copies of notices of any action by the Association that requires the consent of mortgagees. Rights are expressly granted to holders of first-lien mortgages and other mortgagees and to insurers and guarantors of mortgages under the provisions of this Declaration. No amendment to this Declaration shall be effective to modify, change, limit or alter any right or rights expressly conferred upon such parties unless the amendment shall have first been consented to by the holder of each such mortgage which has been given for value, which has been recorded in the county where this Declaration is recorded and which is unsatisfied.
 
7.2 Assignment of Voting Rights. An owner may pledge or assign his voting rights to a mortgagee to be effective only during the period when the mortgage is in default and subject to foreclosure. In such a case, the mortgagee or the mortgagee's designated representative shall be entitled to receive all notices to which the owner is entitled hereunder and to exercise the owner's voting rights during the effective period from and after the time that the mortgagee shall give written notice of such pledge or assignment to the secretary of the Association.
 
7.3 Curing Defaults. Nothing contained herein shall limit or restrict the right of the Association to cure any default under mortgages to which the liens created hereby may be subordinate. The Association is expressly authorized to cure any and all such defaults by payments to the mortgagee or mortgagees of a defaulting owner from common expense funds, and any such payments and expenses incurred incident thereto shall be forthwith repaid by the defaulting owner with interest as a special assessment against the owner's unit.
 
7.4 Notice to Mortgagees. Upon written request to the Association identifying the name and address of the holder, insurer or guarantor of a mortgage of a unit and identifying the number of the unit on which the mortgage has been given, the mortgagee or the insurer or guarantor of a mortgage shall be given timely written notice of:
 
7.4.1 Condemnation or Loss. Any loss by condemnation or casualty affecting a material portion of the condominium subject to the mortgage;
 
7.4.2 Delinquencies. Any delinquency in payment of obligations owed to the Association by the owner of the unit subject to the mortgage remaining uncured for a period of 60 days;
 
7.4.3 Insurance. Any lapse, cancellation or material modification of any insurance or fidelity bond maintained by the Association;
 
7.4.4 Action Requiring Consent. Any proposed action which requires the consent of the holder of the mortgage; and
 
7.4.5 Meetings. All meetings of the Association. 
 
7.5 Rights of Mortgagees. Mortgagees and insurers or guarantors of mortgages shall be entitled to the following:
 
7.5.1 Required Consent. The consent shall be required of holders of mortgages which have requested notice under section 7.4 and which have mortgages on units which have at least 51 percent of the votes held by the owners of all of the units subject to such mortgages for the following action:
 
7.5.1.1 No Restoration. Other action than restoration or repair of the condominium substantially in accordance with the original Declaration and the original plans and specifications of the property in the event of partial condemnation or insurable casualty;
 
7.5.1.2 Termination. Election to terminate the status of the property as a condominium after substantial destruction or taking in condemnation;
 
7.5.1.3 Self-Management. A decision to establish self-management by the Association in lieu of professional management;
 
7.5.1.4 Amendments. Any addition or amendment to any material provision of this Declaration or the Association bylaws which establish, provide for, govern or regulate any of the following: voting; assessments, assessment liens or subordination of such liens; reduction in reserves for maintenance, repair or replacement of the common elements or units; reallocation of interests in the common elements or in the right to their use; insurance or fidelity bonds; rights to use common elements; responsibility for maintenance and repair of the several portions of the condominium; expansion or contraction of the condominium or the addition, annexation or withdrawal of any portion of the condominium; ability to convert units into common elements or of common elements into units; boundaries of any unit; interests in the common elements; leasing of units; or imposition of rights of first refusal or similar restriction of a unit owner to sell, transfer or otherwise convey the owner's unit. If a holder of a mortgage is requested to approve any such addition or amendment and fails to deliver or mail a negative response within 30 days after it receives notice of the request, the holder shall be deemed to have approved the requested addition or amendment; provided that the notice was delivered by certified or registered mail with a "return receipt" requested.
 
7.5.2 Change in Common Elements. Unless the holders of at least 67 percent of the first mortgages of units have given their prior written approval, the Association shall not be entitled by act or omission, to seek to partition, subdivide, encumber, sell or transfer the common elements or to partition or subdivide any unit or to terminate the condominium. The granting of easements for public utilities or for other public purposes consistent with the intended use of the common elements shall not be deemed a transfer within the meaning of this clause.
 
7.5.3 No Change in Priority. Nothing herein contained shall be construed to give any owner or any other party priority over any rights of the mortgagee of a unit pursuant to its mortgage in case of a distribution to such owner of insurance proceeds or condemnation awards for losses to or a taking of units and common elements or either.
 
7.5.4 Financial Statements. If requested, a mortgagee or a guarantor or insurer of a mortgage of a unit will be provided with the last annual audited financial statement of the operation of the Association within a reasonable time and will be permitted after the request to designate a representative who shall be entitled to attend all Association meetings.