Introduction to the CC&Rs and Ground Lease
The following is a summary of some of the provisions of the Covenants, Conditions and Restrictions, as amended ("CC&Rs") and the Ground Lease, as amended (the "Lease"), and is merely an introduction to the concept of condominium ownership in the Pepperdine Campus View Condominiums housing Project. The California Coastal Commission has imposed certain restrictions on the ownership and sale of each unit. Such restrictions are reflected in the CC&Rs and the Lease. The legal status and uses of the entire project and each unit therein are governed by the project's CC&Rs, the Lease, and the Bylaws and House Rules of the Campus View Condominiums Homeowner's Association.
This introduction is intended only as a tool to give you a general idea of the structure of the project. IT IS NOT A COMPLETE DESCRIPTION OF THE CC&Rs, THE LEASE, OR THE BYLAWS, AND ANYTHING CONTAINED IN THOSE DOCUMENTS WILL BE CONTROLLING OVER ANY REPRESENTATIONS CONTAINED HEREIN. Therefore, anyone wishing to buy a unit should carefully read the CC&Rs, the Lease, the Bylaws, and the House Rules.
1. Ownership. The project consists of 63 separate residential units plus the common area. Units constructed in the future may also be added to the project. The common areas include green belts, landscaped areas, some parking, roads and walkways, and the structural portions of the buildings within which the units are located. The units themselves consist of all the interior living space within the residential buildings. Certain portions of the project (e.g., balconies, patios, yard space, etc.) may be part of the common area, but are designated for exclusive use of one owner.
Each owner receives a fee interest in his/her specific unit and an undivided fractional fee interest in the building improvements, both of which will terminate at the end of the lease period. In addition, each owner receives an undivided leasehold interest in the land within the footprint of the residential buildings plus a three‑foot area around the footprint and an undivided leasehold interest in a 1% undivided interest in the common area. The undivided fractional interest is the owner's proportion of the living space in his/her unit to the total living space in all the units. The lease terminates on June 30, 2080. The University owns the 99% undivided interest in the common area, but the owners have a right to use the common areas.
2. Qualified Owners. The University determines the qualifications for ownership and use of the condominium units, and, with limited exceptions provided in the CC&Rs and Lease, ownership by persons who are not current or retired University employees meeting specific qualifications is effectively prohibited. Therefore, sales and resales are limited to qualifying members of the University community.
The primary purpose of the housing project is to enhance the value‑centered goals of the University through the encouragement of non‑classroom contact among members of the University community. Therefore, the University will maintain priorities among various categories of faculty and staff, and will prioritize among applicants based on recruiting needs, perceived contribution to the purposes of the housing, and other criteria in the University's discretion. Employees interested in being considered for a unit should submit a letter of interest to the Provost's office. Persons with highest priority will be given first opportunity to purchase the units, both on initial sale and upon resale.
3. Restrictions Upon Occupancy, Possession and Use. With limited exceptions provided in the CC&Rs and Lease, no person may occupy a condominium unless he or she is: (i) a qualified person under University policy, (ii) a person living with such qualified person and who is related by blood, marriage, guardianship, etc., or a full‑time Pepperdine student, or a full‑time employee of the University, (iii) certain surviving spouses of qualified persons, or (iv) certain retired faculty and staff.
4. Subsequent Disqualification. Any owner who becomes disqualified (e.g., leaves the employ of the University) must notify the Homeowner's Association and Pepperdine University (Vice Chancellor's office) promptly and within a specified period must either sell his/her unit to another qualified person (subject to the right of first refusal of Pepperdine and the Association discussed below) or to Pepperdine University or the Association. If title to a condominium is transferred by gift or death or to a spouse in any marital settlement proceeding, the transferee must provide evidence to the Association and Pepperdine University that the transferee is a qualified person or must sell the condominium as above provided.
5. Right of First Refusal. If an owner desires to sell his/her condominium and has received a bona fide purchase offer from a qualified buyer with the highest priority, he must so notify both the Association and Pepperdine. The University will have the right to accept the offer within 10 days. If the University fails to accept within the 10‑day period, then the Association has the right to accept the offer within 5 days thereafter. If neither accepts the offer within the time allowed, the owner may sell his/her condominium to the prospective qualified purchaser. It has been the University's practice to purchase all units as they have been sold.
6. Restrictions on Resale. The units may be sold by an owner only to the University, the Association, or a qualified person as defined by University policy, unless no such qualified party is willing to purchase at the price determined by the CC&Rs and/or Lease. All successive owners are subject to the same restrictions on use, possession, and resale.
If the unit was purchased after 12/31/91 or the owner so elected, the price upon resale is limited to the lower of the fair market value or an amount determined by reference to the initial base purchase price increased by a New Index (a four-year moving average of median single family dwelling prices in Ventura and Los Angeles Counties as published by the California Association of Realtors, weighted at 50%, and a four-year moving average of a certain faculty salary index for four-year private institutions of higher learning nationwide as published by the American Association of University Professors, weighted at 50%, but the total index not to exceed a cumulative, compounded average of 6% per year), plus the cost and less the depreciation of certain capital improvements. If the unit was purchased before 1/1/92 and the owner so elected (or in certain purchases after 12/31/91, the owner was entitled to so elect), the price upon resale is limited to the lower of the fair market value or an amount determined by reference to the initial base purchase price increased by an Old Index (a four-month moving average of median single family dwelling prices in Ventura and Los Angeles Counties as published by the California Association of Realtors), plus the cost and less the depreciation of certain capital improvements. The purpose of these price restrictions is to give the owners the benefit of some equity appreciation, while attempting to maintain the prices at levels affordable by employees of the University.
7. Sublease, Residential Use. Under limited circumstances, an owner may sublet a unit to a qualified person, or if written consents of the Board and the University are first obtained, to a person who would not otherwise be qualified. Such subletting is permitted if the owner becomes disqualified or if the owner is on temporary leave of absence from the University for a period up to a maximum of one year. In the case of an owner who is required as part of his job to reside in University‑provided housing, such term may be extended for successive terms not to exceed one year each. Rent from subletting in excess of a specified amount must be paid to the University. In the event a buyer cannot be found for one or more units, they may be leased by the University to students.
Except for such permitted subleasing, the condominium must be used by the owner solely for residential purposes. Limited business activities compatible with residential use are permitted in the units.
8. Upgrades and Capital Improvements. The owners are allowed to upgrade their units, subject to prior approval of the Association and the University. If the upgrades are authorized, then the cost of the upgrades will be added to the resale price, subject to a standard depreciation schedule.
9. Maintenance. General maintenance of the interior of the units, as well as decks, balcony's, and other single-user spaces, is the responsibility of the owner. At the time of resale, the unit will be thoroughly inspected, and the owner is required to make sure that all systems are functional and that the unit is in good condition and repair.
10. Homeowner's Association. Each qualified owner is a member of the Campus View Condominiums Homeowners Association, (the "Association"). The Association operates, manages and controls the Project on behalf of all the owners according to its Articles, Bylaws, and House Rules. Each qualified owner/member is entitled to one vote for each unit owned on all matters submitted to the vote of the Association's membership, including the right to vote for the Association's Board of Directors (who will operate the Association on a day‑to‑day basis). Except in a limited number of situations where a vote of the membership is required, the Board will act on behalf of the Association and the owners in all matters.
11. Duties of the Association. The Association acting through its elected Board of Directors or by direct vote of the qualified owner/members has the following primary duties and obligations:
a. Maintenance. Each owner will be responsible for maintaining and repairing his/her unit, storage areas, decks, patios, and all equipment which services only his/her unit. The Association is responsible for maintaining and repairing the common areas, the non‑glass exteriors of the buildings, and all improvements within the common areas, except the main roads which are maintained by the University. The use restrictions, operation, control and protection of, and approval of all construction and alterations within the common areas, including decks, patios, and other exclusive use areas, is vested in the Association. The Association may enter any part of the Project and may do any acts required to perform necessary maintenance and repair, or to enforce the CC&Rs or House Rules, or to perform certain obligations of owners under the Leases if the owners do not or cannot perform them within a reasonable time after written notice, or to perform any of its other duties. If the Association or any owner fails to perform their respective maintenance responsibilities or otherwise breaches the CC&Rs, the University may perform the necessary work at the expense of the owner and/or the Association, entering any part of the Project in order to do so.
Also, the Association pays for all services provided to the project to the extent such services are not separately charged to individual units, including, but not limited to, utilities, sanitation services, security, landscaping, etc. The University is voluntarily providing much of the cost and labor for operating and maintaining the two swimming pools available to the condo owners, but may elect to cease such expenditures at any time.
b. Insurance. The Association is responsible for obtaining public liability insurance and property damage, fire and extended coverage insurance covering the project, including each unit. Owners are responsible for obtaining their own personal property insurance, condominium dwellers insurance, and such liability coverage not provided by the Association.
c. Rules. The Association may enact rules necessary or desirable to preserve the benefits of the project, including rules governing the use of the common area (including recreational facilities) and the charging of fees for the use thereof, the use of roads and parking areas, the use, appearance, repair and maintenance of units, decks and patios, and the presence, prohibition, or control of animals, radios, televisions, musical instruments or other matters affecting the quality of the living environment.
The Association is also empowered to enforce such rules and to take such actions as are reasonably necessary to correct infractions, including the levying of assessments, after giving the Owner an opportunity to be heard.
d. Manager. The Association, through its Board of Directors, may employ the services of a Manager, and may delegate to such person such powers and duties as are appropriate to the management of the project.
12. Funds and Assessments. The Association has the responsibility for maintaining an operating fund into which will be placed all moneys collected in the form of assessments. A summary of the types of assessments follows:
a. Maintenance Assessment. The Board is required annually to estimate the expenses (such as management, common area maintenance and operation, and insurance) to be incurred by the Association during the next fiscal year. The proposed Association budget and assessments will be sent to each owner near the commencement of the fiscal year. An annual or special meeting of the membership may thereafter be held to consider the budget and assessments. If the initial estimates should prove to be inadequate for any reason, the Association may levy further assessments to make up the deficiency.
b. Special Assessments. Special assessments may be levied against an owner who is in violation of the CC&Rs, the Lease, or the House Rules, or on whose behalf the Association is required to expend funds.
c. Use Fees. Use fees may be levied for use of any recreational facilities.
d. Capital Improvements. The Association may elect to maintain a Capital Improvement Fund into which will be paid all capital improvement assessments approved by the Association.
e. Reserves for Replacements. The Association may levy assessments to establish reserves for repairs and replacements.
f. Reconstruction. As needed, the Association shall maintain a reconstruction fund into which will be paid all moneys collected as proceeds from property insurance and any reconstruction assessments.
g. Ground Rent. Ground rent will be collected by the University, as Lessor, to cover any services it shall provide under the Lease. Such rent may be collected and paid to the University by the Association.
13. Default in Payment of Assessments. If an owner does not pay any assessment when due, a reasonable late charge may be required by the Board, and after 30 days from the due date the amount of the assessment not paid, plus interest at the maximum rate allowed by law and costs, can become a lien upon his/her condominium and may be foreclosed as provided in the CC&Rs.
14. Damage or Destruction. If the project is damaged by fire or other casualty, the insurance proceeds after payment of lienholders entitled thereto will be paid to the Association as trustee for the owners. The Association will then be required to make arrangements for the repair of the damaged area. The Association will be required to maintain casualty insurance in the amount of the full replacement value of the improvements, but if necessary, the Association will levy a reconstruction assessment in order to pay for the costs of any rebuilding or repair not covered by the insurance. Upon the written consent of at least two‑thirds (2/3) of the owners, the obligation to reconstruct can be waived, in which event the Association will be obligated to sell to Pepperdine, at a price agreed upon, all rights and titles of the Association and of all the owners of the project, whereupon the condominium project will be terminated.
15. Amendment of Restrictions. The CC&Rs may generally be amended upon the written consent of the University and two‑thirds (2/3) of the owners or, in some cases, a larger percentage as specifically required in the CC&Rs. In certain cases, the consent of governmental agencies must be obtained before an amendment can be made.
NOTE: PLEASE READ THE CC&Rs, THE GROUND LEASE, AND THE BYLAWS CAREFULLY. THIS INTRODUCTION IS A SUMMARY ONLY AND ANY INCONSISTENCIES SHALL BE CONTROLLED BY THE OFFICIAL DOCUMENTS.