Article IV – Covenant for Maintenance Assessments

Section 1. Creation of the Lien and Personal Obligation of Assessments. The Declarant, for each Home Site owned by Declarant within tile Property, hereby covenants and agrees to pay, and each Owner of any Home Site by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association: (1) annual assessments or charges and (2) special assessments for capital improvements, repairs and maintenance and other purposes. Any such assessment or charge, together with interest, costs and reasonable attorney’s fees, shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made. Each such assessment, together with interest, costs and reasonable attorney fees, shall also be the personal or corporate obligation of the person(s), firm(s), or corporation(s) owning such property at the time when the assessment fell due, but such personal obligation shall not be imposed upon such Owner’s successors in title unless expressly assumed by the successor in title, but such unpaid assessment charges shall continue to be a lien upon the property against which the assessment has been made.

Section 2. Purposes of Assessments and Duties of Association. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety and welfare of the residents of the Property and in particular for the acquisition, improvement, and maintenance of properties, services and facilities devoted to this purpose and related to the use and enjoyment of the Common Areas, Common Open Space, Common Area Access Easements, Landscape and Easement Areas, and Home Sites including but not limited to, the cost of repair, replacement and additions thereto, the Designated Maintenance Items, the cost of labor, equipment, materials, management and supervision thereof, the payment of taxes assessed against any such property, the procurement and maintenance of insurance in accordance with the By‑Laws of the Association, the employment of attorneys to represent the Association when necessary, payments of principal and interest on funds borrowed for Association purposes, payment of amounts due to the Master Association and such other needs as may arise.

Without limiting the generality of the above‑described purposes, the Association shall be responsible for performing the following in a diligent and reasonable manner and the assessments levied by the Association may be used for the following purposes:

(a)       To maintain all trails or paths in the Common Areas and Common Open Spaces in reasonably passable condition, free from fallen trees, undergrowth, and other obstructions, and to keep all dead, diseased or decaying trees, shrubs and bushes removed from such areas and to replace such items with new trees, shrubs and bushes;

(b)       To maintain all Common Areas and Common Open Spaces in accordance with the highest standards for such private facilities;

(c)       To keep all Common Areas, Common Open Spaces, Common Area Access Easements, and Landscape and Easement Areas clean and free from refuse and debris and to maintain any other amenities in a clean and orderly condition, and to maintain the landscaping therein in  accordance with the highest standards for private parks including any necessary removal and replacement of landscaping;

(d)       To pay all ad valorem taxes levied against the Common Areas, Common Open Spaces and any other property owned by the Association;

(e)       To pay the premiums on all hazard insurance carried by the Association and all public liability insurance carried by the Association and officers’ and directors’ liability insurance;

(f)        To pay all legal, management, accounting and other professional fees incurred by the Association in carrying out its duties as set forth herein or in the Bylaws;

(g)       To maintain the signs and landscaping on any Landscape and Easement Area or Common Area Access Easement shown on the recorded maps or reserved by Declarant in deeds to Home Sites;

(h)       To maintain any brick or stone wall erected by Declarant on any portion or the Property, any private water/sewer lines located on the Property, the Landscape and Easement Areas and all other Designated Maintenance Items located on Common Areas, Common Area Access Easements, Common Open Spaces or within Landscape and Easement Areas;

(i)        To pay dues and assessments from the Association’s funds to the Master Association as set forth in the Master Declaration;

(j)        To provide such maintenance in addition to that provided by the applicable governmental authorities with respect to public streets located within the Property as the Association shall deem appropriate, including the clearance of storm drainage inlets to remove debris: and

(k)       To pay for the cost of street light lease charges, if any, for street lights located within public right‑of‑ways within the Property.

Section 3. Maximum Annual Assessments. Until January 1, 1996, the maximum annual assessment for each Home Site shall be $250.00.

(a)       From and after January 1, 1996, the maximum annual assessment for each Home Site may be increased or decreased by the Board of Directors effective January I of each year, Without a vote of the membership, but subject to the limitation that the percentage of any such increase shall not exceed 10% of the maximum assessment for each Home Site for the previous year without a vote of the membership. In the event the maximum assessment for each Home Site is not increased for any particular year or years, the amount which it might have been increased for such year shall be added to the maximum amount the assessment could be increased for each succeeding year, to the effect that the maximum increase shall be cumulative for the current year and all prior years.

(b)       The Board of Directors may fix the annual assessment at an amount not in excess of the permitted maximum.

(c)       From and after January I of the year immediately following the conveyance of the first Home Site to an Owner, the maximum annual assessment may be increased in excess of the above maximum assessment set forth in paragraph (a) without limitation if such increase is approved by no less than two‑thirds (2/3) of the votes appurtenant to each class of Home Sites (Class A and Class. B), cast in person or by proxy, at a meeting duly called for this purpose.

(d)       Any annual assessment established by the Board of Directors shall continue thereafter from year to year as the annual assessment until changed by said Board.

(e)       The annual assessment hereunder includes and shall include the annual assessment payable to the Master Association as determined pursuant to the Master Declaration. With respect to each Home Site, the amount of the annual assessment payable to the Master Association for any year and included in the annual assessment under this Declaration for such year shall be the amount obtained by dividing (i) the aggregate amount of the annual assessment payable under the Master Declaration for such year with respect to the Association as a Member of the Master Association or payable with respect to the Property by (ii) the number of Home Sites then subject to this Declaration and to the jurisdiction of the Association.

Section 4. Special Assessments for Capital Improvements and Other Matters. In addition to the annual assessments authorized above, the Association may levy, in any assessment year, special assessment(s) for the purpose of defraying, in whole or in part, the cost of any construction, repair, or replacement of a capital improvement upon any Common Area(s) or Common Open Space(s) including fixtures and personal property related thereto, any Designated Maintenance Items or any brick or stone wall erected by Declarant or any private water or sewer line owned by Declarant or the Association, repayment of indebtedness and interest thereon, providing funds to pay for unforeseen or unbudgeted expenditures, borrowing the funds to make the Property comply with zoning ordinance(s), borrowing of money for capital improvement and pledging or mortgaging of Association property as security for loans, provided that any such assessment shall have the same assent of the Members as provided in subsection 3(c) of this Article. The Master Association also has the right and power pursuant to the Master Declaration to levy special assessment(s) for defraying the cost of any construction, repair or replacement of capital improvements upon the Master Association Common Areas, and for other purposes, all as provided in the Master Declaration.

Section 5. Collection. Annual assessments shall be collected annually or semi‑annually in two (2) equal installments as determined by the Association (or more frequently by separate agreement with the Owner) and special assessments shall be collected on a semi‑annual or yearly basis as billed by the Association.

Section 6. Notice of Quorum for any Action Authorized Under Sections 3 and 4. Written notice of any meeting called for the purpose of taking any action authorized under Section 3 or 4 of this Article shall be sent to all members not less than fifteen (15) days nor more than forty‑five (45) days in advance of the meeting. At the first such meeting called, the presence of members or of proxies entitled to cast fifty‑one (51%) percent of all the votes appurtenant to each Class A Home Site and Class B Home Site shall constitute a quorum. If the required quorum is not present, subsequent meetings may be called subject to the same notice requirement, and if the same is called for a date not later than sixty (60) days after the date of tile first meeting, the required quorum at the subsequent meetings shall be one‑half (1/2) of the required quorum at the preceding meeting

Section 7. Date of Commencement of Annual Assessments. Due Date, Certificate of Payment. The annual assessment provided for herein shall commence as to all Home Sites on the earlier of April 1, 1995 or the date the first Home Site is conveyed by Declarant and thereafter shall be assessed as of January 1 of each year. The assessment made as of the earlier of April 1, 1995 or the date the first Home Site is conveyed by Declarant shall not exceed the “maximum annual assessment” set forth in Section 3 of this Article. From and after January 1, 1996 the maximum annual assessment for each Home Site may be increased or decreased by the Board of Directors as provided in Section 3 of this Article. At least thirty (30) days before January 1 of each year, the Board of Directors shall fix the amount of the annual assessment against each Home Site and at least fifteen (15) days before January 1 of each year shall send written notice of each assessment to every Owner subject thereto; provided, however, the failure of the Board of Directors to establish such assessment amounts and to give notice thereof by such dates shall not prohibit the establishment of an increase at a later date nor prohibit the Association from collecting such increased assessment. The due dates for the payment of annual and special assessments shall be established by the Board of Directors. The Association shall, upon demand, and for a reasonable charge, furnish a certificate signed by an officer of the Association setting forth whether the assessments on a specified Home Site have been paid. All annual assessments levied by the Master Association pursuant to the Master Declaration (and collected by the Association as part of the annual assessments under this Declaration) and all special assessments levied by the Master Association pursuant to the Master Declaration shall be immediately tendered by the Association to the Master Association for use as provided in the Master Declaration.

Section 8. Effect of Nonpayment of Assessments, Remedies of the Association. Any assessment not paid within ten (10) days after the due date shall incur a one‑time late charge in the amount of $10.00 and if not paid within thirty (30) days after the due date shall bear interest from the due date at a maximum rate of ten (10%) percent per annum, or at the rate established by the Board of Directors at the beginning of the fiscal year of the Association, whichever is less. The Association may bring an action at law against the Owner personally obligated to pay the same or foreclose the lien against the Owner’s property, and interest, costs and reasonable attorney’s fees of such action or foreclosure shall be added to the amount of such assessment. Any foreclosure of the lien may be in such manner as is prescribed by the laws of the State of North Carolina for foreclosure of deeds of trust under powers of sale or may be in any other manner permitted by applicable law. No Owner may waive or otherwise escape liability for the assessments provided for herein by non‑use of the Common Area, Common Open Space, or other property of the Association or by abandoning his Home Site. The Master Association (or a designated representative thereof) shall also have the right to enforce and collect assessments (both annual and special) levied under this Declaration as well as under the Master Declaration. Any assessments under this Declaration collected by the Master Association shall be collected as collection agent for the Association and shall be used for the purposes set forth in this Declaration (including the payment of dues and assessments from the Association’s funds to the Master Association as set forth herein and in the Master Declaration) and/or shall be remitted to the Association for such purposes.

Section 9. Subordination of the Lien to Mortgages. The liens provided for herein shall be subordinate to the lien of any first mortgage or first deed of trust on a Home Site. Sale or transfer of any Home Site shall not affect any assessment lien.  However, the sale or transfer of any Home Site which is subject to any mortgage or deed of trust, pursuant to a foreclosure thereof or any proceeding in lieu of foreclosure thereof, shall extinguish the lien of such assessments as to the payment thereof which became due prior to such sale or transfer. No such sale or transfer shall relieve such Home Site from liability for any assessments thereafter becoming due or from the lien thereof, but the liens provided for herein shall continue to be subordinate to the lien of any first mortgage or deed of trust.

Section 10. Exempt Property. All portions or the Property dedicated to, and accepted by, a local public authority and portions of the Property owned by a charitable or non‑profit organization exempt from taxation by the laws of the State of North Carolina shall be exempt from the assessments created herein. All Common Areas shall also be exempt from the assessments created herein. However, no land or improvements devoted to residential dwelling use shall be exempt from said assessments.