Section 5.04. Basis of Maximum Annual Assessment. Until the first day of the Association’s fiscal year next following the Close of Escrow for the sale of the first Condominium in the Project, the maximum Annual Assessment under this Article V shall be determined in accordance with the initial budget of the Association as filed with the California Department of Real Estate and reflected in the most recent Final Subdivision Public Report for the sale of Condominiums in the Project. A copy of such initial budget is attached hereto, marked Exhibit “D” and incorporated herein by this reference. Should the Board of Directors determine that such initial maximum Annual Assessment is insufficient to meet the Common Expenses of the Association during the remainder of the Association's initial fiscal year, the Board of Directors may, by majority vote , increase that Annul Assessment by not more than twenty percent (20%) above the maximum Annual Assessment for such year reflected in the budget for the Association. Any proposed Annual Assessment in excess of twenty percent (20%) above the maximum Annual Assessment prior to the end of the Association's initial fiscal year shall be subject to approval by a majority vote of each class of Members.

1. Commencing on the first day of the fiscal year next following the Close of Escrow for the sale of the first Condominium in the Project, the maximum Annual Assessment may be increased by the Board, above the maximum Annual Assessment for the previous year, without a vote of the Membership and effective no sooner than the first day of each fiscal year, in an amount no more than the greater of (1) ten percent (10%), or (2) the percentage by which the U.S. Bureau of Labor Statistics, Los Angeles-Long Beach-Anaheim, Consumer Price Index For All Urban Consumers, as of the date of the increase, has increased over the level of such Index as of the date the Annual Assessment was last established, provided, however, that in no event shall the Board have the authority to increase he maximum Annual Assessment above the maximum Annual Assessment for the previous year by more than twenty percent (20%) without a vote of the membership.
   
   
2. Commencing on the first day of the fiscal year next following the Close of Escrow for the sale of the first Condominium to a purchaser pursuant to a Final Subdivision Public Report, the maximum Annual Assessment may be increased above the greater of (1) ten percent (10%) or (2) said percentage by which the Index has so increased, by the vote or written assent of Members representing at least fifty-one percent (51%) of the voting power residing in each class of Members of the Association.
   
   
3. The Board of Directors may not fix an Annual Assessment at any amount in excess of the maximum Annual Assessment for that fiscal year.