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Civil Code Section 945.5, including if the Association or Owner: (1) fails to follow the Declarant's or the <br />manufacturer's reasonable recommendations regarding inspection and maintenance, including schedules; <br />(2) fails to follow commonly accepted homeowner maintenance guidelines; (3) fails to provide Declarantwith <br />timely notice after a discovery of the violation of the Functionality Standard or to allow Declarant reasonable <br />and timely access for repairs; or (4) unreasonably fails to minimize or prevent damages in a timely manner. <br />Civil Code sections 910 through 938 contain prelitigation procedures for resolution of a claim for <br />violation of Functionality Standards. As authorized by Civil Code section 914, Declarant may elect to use <br />these prelitigation procedures or use alternative procedures. Declarant has elected to use the alternative <br />nonadversarial prelitigation procedures set forth in Section 1. <br />1. Nonadversarial Prelitigation Procedures. The Claim is subject to the nonadversarial prelitigation <br />procedures set forth in this Section 1. <br />1.1 Claim Notice. The Claimant shall notify Declarant in writing of the Claim addressed <br />to the agent for service of the Claim Notice described in Section 3. The notice shall: (i) contain the <br />Claimant's name and address and preferred method of contact; (ii) state that the Claimant elects to <br />commence the procedures in this Exhibit to resolve the Claim; (iii) describe the Claim in reasonable detail <br />sufficient to determine the nature and location, to the extent known, of the claimed violation; and (iv) if <br />applicable, state that the Claimant alleges a violation of the Functionality Standards (the "Claim Notice"). <br />1.2 Right to Inspect, and Right to Corrective Action. Within 30 days of Declarant's <br />receipt of the Claim Notice, the Claimant and Declarant's representatives shall meet at the Claimant's <br />property to discuss the Claim. At such meeting or at such other mutually -agreeable time, Declarant's <br />representatives shall have full access to the property for the purposes of inspecting the property and <br />investigating the Claim. The parties shall negotiate in good faith in an attempt to resolve the Claim. If the <br />Claimant and Declarant cannot agree on the validity of the Claim, the corrective action needed, the party to <br />take the corrective action or any other matter related to the Claim within 60 days of Declarant's receipt of the <br />Claim Notice or such longer time as may be mutually acceptable to the Claimant and Declarant, either party <br />may commence the mediation procedures described in Section 1.3 below. If the parties agree on any <br />corrective action, Declarant's representatives shall be provided full access to the property to take and <br />complete corrective action. Declarant shall commence the corrective work no later than 30 days following the <br />Claimant's acceptance of the proposed corrective action, and shall use commercially reasonable efforts to <br />complete the work within 90 days. If Declarant fails to respond to the Claim Notice or fails to meet with the <br />Claimantwithin the time period required herein, the Claimant is released from any further obligation to comply <br />with the nonadversarial procedures in this Section 1 and may proceed to initiate the binding adversarial <br />procedures in Section 2. <br />1.3 Mediation. If the Claim is not resolved in accordance with the procedures described <br />in Section 1.2 and except as otherwise provided in Section 1.2, either the Claimant or the Declarant may <br />submit the Claim to mediation under the mediation procedures adopted by JAMS or any successor thereto or <br />to any other entity offering mediation services that is acceptable to the Claimant and the Declarant. The <br />parties shall cooperate so that the mediation hearing can be held as soon as practicable. If the mediation <br />hearing cannot take place within 90 days of Declarant's receipt of the Claims Notice or such later date as may <br />be acceptable to Claimant and Declarant, the parties are released from any further obligation under this <br />Section 1.3 and either party may proceed to initiate the binding adversarial procedures described in <br />Section 2. <br />Each party shall bear its own mediation expenses provided that the initial mediation administrative fee <br />and the mediator's fee fora maximum of four hours shall be borne by Declarant and thereafter equally by the <br />parties unless they agree otherwise. Any party to the mediation may at any time after a minimum of four <br />hours of mediation terminate the mediation by notifying the other parties and the mediator and proceed to the <br />binding adversarial procedures described in Section 2. <br />No person shall serve as a mediator who has any financial or personal interest in the result of the <br />mediation, except by the written consent of all parties. Prior to accepting any appointment, the prospective <br />EDNB\53295\996553.3 2 August 18, 2016 <br />