WHEREAS the Plat of the Property of Mountain Valley Acres #2, Unit 2, (known herein as "the Property") has been recorded on March 11, 1965 in Volume 2, Page 127, and refilled in Cabinet B, Page 23-B of the Records of Maps and Plats, Taos County, New Mexico;

WHEREAS the Plat of said Property shows certain common roadway easements, for access and egress, and there exists a shared water well for the benefit of certain Lot Owners, their guest, family members and invitees; and whereas there are other common elements and facilities;

WHEREAS the recorded plat shows 6 lots, #42, #43, #44, #45, #30, and #31

WHEREAS it is beneficial to these Lot Owners that the Grantor form an unincorporated owners’ association for the maintenance repair, and upkeep of the common elements and sharing of the common expenses. The purpose of the Owners' Association is to maintain the common elements of the Property and share common expenses as equitably and fairly as possible.

NOW, THEREFORE the Grantor (or his Agent-in-Fact, known herein as "the Grantor") does create the Mountain Valley Owners' Association #1, consisting of the above listed six lots, under and in accordance with New Mexico Statutes 53-10-1 and -4 with the following By-Laws:

I. The Grantor does hereby appoint Roger N. Lerman as the original Administrator and Roberta Lerman as the original Vice-Administrator of the Mountain Valley Owners’ Association #1 for a term of one year. Administrators are and shall be lot owners.

II. The Administrator shall call for an annual meeting of the Lot Owners. Adequate notice shall be mailed to absentee Lot Owners. At such meeting an Administrator and Vice-Administrator shall be elected for a term of one year, by a majority vote of those Lot Owners present or represented by proxy. At such time, the current Administrators shall present an accounting of the income and expenses of the Owners’ Association for the past year and an estimated budget for the present year.

III. The duties of the Administrators shall be, but not limited to, the keeping of a bank account for the Owners’ Association, the imposing and collecting of Owners’ Association fees or dues, maintaining liability insurance for the benefit of the Owners’ Association, its Administrators and all Lot Owners, and the hiring of contractors for the removal of snow, grading and blading of the roads, adding gravel, and affecting general road repairs and maintenance, for the adequate access and egress of all Lot Owners and for the general repair and maintenance of any other common facilities, structures, appliances and equipment, including the shared well and water system. For the purpose of maintaining roads or other common elements, the Association may share expenses with any other association or individual(s) in Mountain Valley Acres #2. It is an obligation of the Grantor or the Administrators to report the well water meter readings on a quarterly basis to the New Mexico State Engineer’s Office (File # RG 84830). Pumping from the well is limited to 3 acrefeet of water per year (977,486 gallons) and no lot owner may exceed usage of 0.5 acrefeet per year. Should an Active Lot owner drill their own well and not be connected into the common well, that Lot Owner is not required to pay that part of the common expenses, as best determined by the Administrators.

IV. The Administrators shall be held harmless from and against any and all claims, damages, costs, or losses of any kind except grossly negligent or intentional actions.

V. In the event of a breach of these By-Laws or rulings of the Administrators, the Owners’ Association shall be entitled to a reasonable attorney fee in addition to damage and/or specific performance.

VI. These By-Laws may be added to or amended by a 2/3 vote of the Lot Owners.

VII. These By-Laws shall hereby create two classes of lot owners: Active Lot Owner, meaning a lot owner who has made any improvement whatsoever to their lot (whether they reside there or not), and Passive Lot Owner, meaning a lot owner who has made no improvements whatsoever to their lot. Once a lot owner has become an Active lot owner, he/she can not return to becoming a Passive Lot Owner.

VIII. Dues and fees, as established by the Administrators, are payable on July first of every year and are late if not paid by July 31 and subject to late fees as determined by the Administrators. Dues are hereby established at $100.00 for the year July 1, 2006-June 30, 2007. (Lot owners becoming Active lot owners after January first and before July first of any year shall only have to pay half of the annual dues for the first year). All lot owners will have made an original capital contribution at the time of purchase of their lot of $100 or equal to the then prevailing annual dues amount, if higher, and is separate from any annual dues. A distinction can be made by the Administrators and Lot Owners as to an on-going maintenance expense (such as snow removal, well repair, etc.), payable by Active Lot Owners only, and a capital expense (such as paving a road), payable by all Lot Owners.

IX. Association dues may be filed as a lien against the Lot if unpaid after one year and water service to the Parcel may be terminated.

X. The platted roads shall not be used as parking areas or driveways by individual lot owners or their guests. The roads shall be kept open and unimpeded for the free passage of traffic, maintenance equipment, and emergency vehicles. Vehicles shall be parked on lot owners’ private property.

XI. It is strongly recommended that lot owners install culverts of a minimum size of 8 inches where their driveways join into the roads. It is mandatory to do so if the placement of the driveway causes run-off water to flow into the road rather than flow in the bar ditch.

XII. It shall be the responsibility of a Lot Owner to repair any damage to the roads or any other equipment or property on the Property (in which the Owners’ Association has an interest), caused by a Lot Owner or a contractor or employee working for that Lot Owner.

XIII. These By-laws bind and benefit the Lot Owners’ heirs, personal representatives, successors and assigns. These By-Laws shall be effective upon the date of execution and shall be recorded with the Taos County Clerk.

STATE OF NEW MEXICO) Grantor: _________________________
                                              )ss.           Roger N. Lerman
COUNTY OF TAOS)
The foregoing instrument was acknowledged before me this _________ day of ________, 20__ by Roger N. Lerman. ____________________
 
NOTARY PUBLIC
My Commission Expires: ____________________
 
Acceptance of Appointment as:
Administrator ______________________ ___________________
                         Roger N. Lerman                  Date
Vice-Administrator ______________________ ___________________
                                Roberta Lerman                        Date