SW5201001_Deed Restriction/Protective Covenant Form_20230622

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Nash County North Carolina Sandra D. Davis Repister of Deeds
11K3214 P0182`260
DECLARATION OF PROTECTIVE COVENANTS
FOR
WALNUT COVE
THIS DOCUMENT REGULATES OR PROHIBITS THE DISPLAY OF THE FLAG OF
THE UNITED STATES OF AMERICA OR THE FLAG OF THE STATE OF
NORTH CAROLINA
THIS DOCUMENT REGULATES OR PROHIBITS THE DISPLAY
OF POLITICAL SIGNS
Prepared by and mail after recording to:
Cunningham Law, PLLC
James C. ("Cal") Cunningham III
2128 Clark Avenue #557
Raleigh, North Carolina 27605
Gene Davis Law
3739 National Dr
Suite 105
Raleigh NC 27612
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STATE OF NORTH CAROLINA DECLARATION OF PROTECTIVE
COUNTY OF NASH COVENANTS FOR WALNUT COVE
THIS DECLARATION OF PROTECTIVE COVENN
TS.XOR WALNUT COVE, referred
to herein as the "DecIaration" is made this ' ?/Aday of l�f�
2022 by PINTAIL OILFIELD SERVICES, LLC, an Oklahoma limited liability company,
hereinafter referred to as the "Declarant".
WITNESSETH:
WHEREAS, the Declarant is the owner of the real property in Nash County, North Carolina
described on Exhibit A attached hereto and incorporated by reference and referred to herein as the
"Property";
AND WHEREAS, the Property shall be developed as a residential subdivision known as "Walnut
Cove" (which also is referred to herein as the "Community" or the "Subdivision") under the Legal
Requirements of applicable governmental entities, which development may include, but shall not
be required by this Declaration to include, any one or more of the following: residential dwellings;
public or private streets; utility easements; stormwater drainage systems and facilities; buffers;
greenways; open space; and other uses consistent with the zoning of the Property and the
Governmental Authority approvals for the Subdivision;
AND WHEREAS, Declarant desires, among other things, to establish a general plan of
development for the Subdivision, to provide for the maintenance and upkeep of the Lots,
Dwellings, and Common Elements within the Subdivision, to provide for enforcement of the
Declaration and other covenants and restrictions, if any, applicable to the Subdivision, to protect
the value and desirability of the Property, and, to that end, desires to subject the Subdivision to the
covenants, conditions, restrictions, easements, charges and liens hereinafter set forth, each and all
of which is and are for the benefit of the Subdivision and each owner of any part or all thereof;
AND WHEREAS, in furtherance of the foregoing, at or around the same time as this Declaration,
Declarant is incorporating the Walnut Cove Community Association, Inc. under the nonprofit
corporation laws of the State of North Carolina to own or maintain or administer Common
Elements, to administer and enforce this Declaration and other covenants, restrictions, and
agreements applicable to the Subdivision, and to collect and disburse the assessments and charges
provided for herein.
NOW, THEREFORE, Declarant hereby declares that the Property, together with all Additional
Property, if any, subjected to the Declaration pursuant to Article 11 hereof, and less any real
property withdrawn from this Declaration, all of which together is referred to as the "Property" as
defined herein, is and shall be owned, held, transferred, sold, conveyed, leased, used, occupied,
mortgaged and developed subject to the Declaration, including the covenants, conditions,
restrictions, easements, charges and Iiens set forth herein, all of which shall run with the Property
and, as provided herein, be binding on and inure to the benefit of all Persons owning any right,
title or interest in said Property or any part thereof, and their heirs, personal representatives,
successors and assigns.
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ARTICLE I
DEFINITIONS
The following words and terms, when used in the Declaration (including the Recitals) or any
amendment hereto, or in any Supplemental Declaration, unless amended or unless the context
clearly indicates otherwise, are defined as follows and are subject to the provisions contained in
such definitions (when these and other defined words or terms herein have an initial capital letter
or letters, however, it is not required that their use in the Declaration have initial capital letters in
order to have the defined meaning). Terms and words used herein without definition shall have the
meanings, if any, specified therefor in the "Definitions" section of the Act or, if not defined in the
Act, in the "Definitions" section of the Nonprofit Corporation Act, or if not defined in either the
Act or Nonprofit Corporation Act, any applicable definitions section of the Code, and, in the event
of any conflict between the definitions contained herein and the definitions contained in the Act,
the Nonprofit Corporation Act or the Code, the Act or Nonprofit Corporation Act or Code, in that
order and as appropriate, shall control. It should be noted that one or more definitions contain
provisions in addition to the defined word or terms, and such additional provisions are part of the
Declaration in the same manner and to the same extent as if they had been set out in an Article or
Section of the Declaration other than this Article I.
(a) "Act" is defined as the North Carolina Planned Community Act, currently contained in
Chapter 47F of the North Carolina General Statutes, and including all amendments, supplements
and replacements thereof.
(b) "Additional Property" is defined as all real property allowed by the Declaration to be
annexed or subjected to the Declaration subsequent to the recording of the Declaration (the words
"annex" and "subject" being used interchangeably in the context of adding Additional Property to
the Declaration). As the context allows or requires the term also can apply to such real property
after it has been annexed to the Declaration. No such Additional Property shall be subject to the
terms of the Declaration until it has been annexed or subjected to the Declaration in one of the
ways allowed herein, and, except as required by Legal Requirements, neither the Declarant nor
any other Person is required to annex any Additional Property to the Declaration.
(c) "Allocated Interests" is defined as the Common Expense Iiability and votes in the
association allocated to each Lot.
(d) "Approved Builder" is defined as H&H Constructors of Fayetteville, LLC d/b/a H&H
Homes, a North Carolina limited liability company, party to that Offer to Purchase and Contract --
Vacant Lot/Land with Pintail Oilfield.Smices, LLC, an Oklahoma limited liability company, having
an Effective Date of November 7, 2020, and any other builder who during the Development Period
has been provided written approval by the Declarant to construct a Dwelling according to
Approved Plans. An Approved Builder is subject to or exempt from provisions of this Declaration
as set forth herein. During the Development Period, the Declarant may not subject an Approved
Builder to further or additional standards and requirements except as required by Legal
Requirements. During the Development Period, only Approved Builders may build Dwellings on
Lots in the Community.
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(e) "Approved Plans" is defined as Plans that have been approved by the Architectural
Review Committee (or by the Board, on appeal from the Architectural Review Committee), as
further defined and set forth in Article X. During the Development Period, "Approved Plans" is
also defined to mean the Plans approved solely by Declarant for one or more Approved Builders
in the Community.
(f) "Architectural Guidelines" is defined as the guidelines and standards adopted from time
to time with respect to Dwellings and other Improvements in the Property.
(g) "Articles" is defined as the Articles of Incorporation of the Association, including all
duly adopted amendments thereto.
(h) "Association" is defined as the Walnut Cove Community Association, Inc., a North
Carolina nonprofit corporation, its successors and assigns, which is created as a legal entity by the
filing of its Articles either before or after the recording of the Declaration, but in no event, later
than the first conveyance of a Lot in this Community.
(i) "Board" is defined as the board of directors of the Association and is the "executive
board" as defined in the Act. The Board is responsible for the management and administration of
the Association as provided for herein and in the Act.
0) "Bylaws" is defined as the Bylaws of the Association as they may now or hereafter exist,
including all duly adopted amendments thereto.
(k) "Code" is defined as the Spring Hope, Nash County, North Carolina Code of
Ordinances, including all rules, regulations and policies lawfully adopted pursuant thereto, and
including all amendments, supplements and replacements thereof
(k) "Common Elements", or "Common Property", or "Common Area" is defined as real
property, together with any Improvements situated thereon, intended for the common use and
benefit of Owners and occupants of the Property, regardless of how such real property is described
in a Governing Document. Common Elements may consist of real property or rights in real
property owned or leased by the Association or owned by or dedicated to another Person with the
Association having a right or easement therein. Common Elements may include all of the
following:
(1) All of the items included in the definition of common areas (or other word or term
used to describe common areas; for example, common open space) in the applicable
Section of the Code; and
(2) All other items included in the definition of Common Elements, Common Area or
Common Property in the Governing Documents;
(3) Any private roads the Owners are wholly or partially responsible for maintaining
whether within the Property or servicing any portion thereof; and
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(4) All Common Areas shown on any map or plat of the Property or any part thereof
recorded by Declarant in the Registry.
Common Elements also shall consist of all retaining walls designated as Common Elements as
provided herein and any Impervious Surface lying and being situated in whole or in part in the
Common Elements. All Common Elements shall be maintained by the Association as provided
herein and the costs of such maintenance are Common Expenses. The foregoing definition of
Common Elerrients in the Declaration is broader than the definition of "common elements" in the
Act.
(1) "Common Expense" (also "Common Expenses") is defined as all expenditures made by
the Association and all financial liabilities of the Association, including allocation to reserves, and
including expenditures for all Association liabilities and obligations imposed by the Code and
other Legal Requirements and by the Declaration and other Governing Documents.
(m) "Community Wide Standard" is defined as the standard of conduct, maintenance, or other
activity generally prevailing in the Property, or the minimum standards established pursuant to the
Governing Documents, whichever is a higher standard. Declarant initially may establish the
Community Wide Standard and it may contain both objective and subjective elements. The
Community Wide Standard may change as development of the Property progresses and as the
needs and desires within the Property change, provided, however, such changes shall require the
approval of all Approved Builders during such time as such Approved Builder is an Owner and/or
has the right to purchase additional Lots within the Community, which approval may not be
unreasonably withheld.
(n) "Contiguous" or "adjoining" is defined as having any common boundary with the subject
property or separated from a boundary of the subject property by a public or private street right of
way or a greenway easement or by property owned by a Governmental Authority.
(o) "Declarant" is defined as Pintail Oilfield Services, LLC, an Oklahoma limited liability
company. The term "Declarant" also includes any Person to whom or which Declarant assigns or
delegates the rights or obligations of Declarant under the Declaration by an assignment of
Declarant's rights recorded in the Registry. The term "Declarant" also includes any Person
designated by Declarant as its "affiliate" as defined in the Act.
(p) "Declaration" is defined as this "Declaration of Protective Covenants for Walnut Cove,"
including all duly adopted amendments hereto.
(q) "Development Period" is defined as the period of time beginning on the date of recording
of the Declaration in the Registry through and including 5:00 p.m. on the later of the following
dates to occur:
(1) the date that is ten (10) years following the date of recordation of this Declaration;
or
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(2) the date that is five (5) years after the date of recording of the most recent
Supplemental Declaration executed by the Declarant subjecting Additional Property to the
Declaration but in no event later than the date that is fifteen (15) years after the date of
recordation of this Declaration.
Provided, however, Declarant may terminate the Development Period at any time by recording a
termination instrument in the Registry. In the event of any assignment of Declarant rights, with
respect to the rights assigned, the Development Period shall remain in full force and effect through
the applicable periods of time unless otherwise provided in the assignment document or earlier
terminated by the assignee. Declarant has the sole authority to resolve any issues or disputes
regarding the date on which the Development Period ends.
(r) "Development Plan" is defined as the most current' land use or development plan approved
by a Governmental Authority for the Property or any part thereof, whether the approval is
preliminary or final, and regardless of any name other than Development Plan under which it is
approved by a Governmental Authority (for example, site plan, subdivision plan, cluster unit
development plan, or master plan). Declarant reserves the right, in its sole discretion but subject
to Legal Requirements, to amend or modify any Development Plan in any manner and in whole or
in part, including re -zoning of any portion of the Property subject to a Development Plan, or the
addition or deletion of property to or from a Development Plan, or the reconfiguration of any
portion of the Property subject to a Development Plan.
(s) "Dwelling" or "Dwelling Unit" is defined as any building or portion thereof within the
Property which is used or occupied, or intended for use or occupancy, as a residence by an
individual or by one housekeeping unit, whether by the Owner thereof or by tenants or sub -tenants
of the Owner. Provided, however, a utility dwelling may be part of a Dwelling as allowed herein.
(t) "Exempt Property" is defined as all portions of the Property other than Lots, except that
each Lot owned by the Association also is Exempt Property. Exempt Property is not subject to
assessments under the Declaration and, except with respect to any Exempt Property owned by
DecIarant, owners of Exempt Property have no membership or voting rights in the Association
with respect to such Exempt Property. Exempt Property owned by, dedicated to, or subject to an
easement in favor of, a Governmental Authority or a utility provider, including all Exempt
Property within publicly -dedicated street rights -of -way, is exempt from all of the provisions of the
Declaration, except for the provisions of the Declaration with respect to any easements over such
Exempt Property reserved in the Declaration by or for the Declarant, the Association, a
Governmental Authority or any other Person, and except for provisions of the Declaration
requiring Approved Plans for Dwellings, other buildings, and associated Improvements.
(u) "Fiscal Year" of the Association is defined as the calendar year until such time as the Board
establishes a different fiscal year for the Association.
(y) "Force Majeure" is defined as any one or more of the following: acts of God, earthquakes,
blizzards, tornadoes, hurricanes, fire, flood, malicious mischief, insurrection, terrorism, riots,
strikes, lockouts, boycotts, picketing, labor disturbances, public enemy, war (declared or
undeclared), landslides, explosions, epidemics or pandemics, compliance with any order, ruling,
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injunction or decree by any court, tribunal or judicial authority of competent jurisdiction, inability
to obtain materials or supplies after the exercise of all reasonable efforts, substantial interference
in construction activities resulting from construction activities conducted simultaneously on
adjacent lands by or under the direction of unrelated parties, and any other similar circumstances
beyond the reasonable control of the Person responsible for complying with some provision of the
Declaration.
(w) "Governing Documents" is defined as all of the following, as the same may be amended,
restated, or supplemented from time to time: agreements with Governmental Authorities; the
Declaration; the Articles of Incorporation and Bylaws of the Association; Restrictions and Rules;
Rules and Regulations of the Association; Board resolutions; Architectural Guidelines; all
applicable Supplemental Declarations; plats (or maps, those terms being used interchangeably
herein) of the Property or any portions thereof recorded in the Registry; declarations of restrictive
or protective covenants applicable to the Property or any portion thereof; documents withdrawing
portions of the Property from the Declaration; and all duly adopted amendments and revisions to
any of the foregoing documents or plats.
(x) "Governmental Authority" or "Governmental Authorities" or "Governmental Entity" or
Governmental Entities" is defined as Spring Hope, Nash County, the State of North Carolina, the
United States of America, and all other governmental entities and quasi -governmental entities that
have jurisdiction over the Property or any part thereof, and all applicable departments, divisions,
sections, branches, and agencies of such Governmental Authorities.
(y) "Impervious Surface" is defined as an area that releases as runoff all or a majority of the
precipitation that falls on it, including but not limited to rooftops, sidewalks, driveways, parking
lots and streets, unless specifically designed, constructed and maintained to be pervious.
(z) "Improvements" is defined as any structure and all appurtenances thereto of every kind and
type and any other physical change, including any Impervious Surface, upon, over, across, above
or under any part of the Property, including any clearing of trees or other vegetation and including
grading and any other site preparation, and including any other improvement of, to, or on any
portion of the Property, including Dwellings and other structures (specifically including exterior
materials, colors, size, location and architectural style of same). Improvements also include decks,
patios, porches, driveways, motor vehicle and other parking areas, storage areas located outside of
a Dwelling, recreational areas, equipment and facilities Iocated outside of a Dwelling, mailboxes,
exterior antennae, dishes and other apparatus to receive or transmit radio, television, or microwave
or other signals, fences, walls, hedges, other landscaping (including planted areas, grassed areas,
natural areas and the plant and other materials therein), poles, flags, decorative features and items
attached to or on the exterior of a Dwelling or in the yard, ponds, Iakes, swimming pools, exterior
lights, signs located outside of a Dwelling or visible inside a Dwelling from a street or adjoining
portion of the Property, and all other exterior Improvements and items used or maintained on a
Lot outside of the Dwelling. The definition of Improvements includes both initial Improvements
and all subsequent alterations, changes and additions to same. The term "initial Improvements" is
defined as all of the Improvements constructed or placed or located on any Lot in accordance with
Approved Plans or Architectural Guidelines not requiring Approved Plans at the time of issuance
of a certificate of occupancy for the Dwelling on the Lot (or the time of issuance of the certificate
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of occupancy for the last Dwelling on a Lot on which more than one Dwelling is to be located).
The examples of Improvements stated for the purposes of this definition do not imply that all such
Improvements will be allowed in the Property, and all Improvements are subject to the
architectural approval provisions of the Declaration.
(aa) "Institutional Lender" is defined as a Mortgagee who is a commercial bank, savings bank,
savings and loan association, trust company, credit union, industrial loan association, insurance
company, pension fund or business trust, including real estate investment trust, any other lender
regularly engaged in financing the purchase, construction or improvement of real estate, or any
assignee of loans made by such lender, or any combination of any of the foregoing entities and
who holds a first lien deed of trust encumbering a Lot or any portion of the Property ("first lien"
meaning that it has priority over all other security interests in the Lot). Only for the purposes of
the notice and inspection rights contained in the Declaration in the portions hereof dealing
specifically with Institutional Lenders, the term "Institutional Lender" also shall include the
Federal Housing Administration ("FHA"), the Federal Home Loan Mortgage Corporation
("FHLMC"), the Federal National Mortgage Association ("FNMA"), the Department of Veterans
Affairs ("VA"), the Government National Mortgage Association ("GNMA") and any other public
or private secondary mortgage market agency participating in purchasing, guaranteeing or insuring
mortgages which has notified the Board of such participation in writing (each of whom generically
is referred to herein as a "Secondary Mortgage Market Agency"). Where the approval of
Institutional Lenders is required, such approval consists of any one or more of the following: (i)
written approval; (ii) any written waiver of approval rights; (iii) a letter stating no objection; or
(iv) presumptive approval if an Institutional Lender does not respond to a notice from the
Association requesting approval by notifying the Association, in the manner required herein for
giving notices, within thirty (30) days after the Association gives notice to the Institutional Lender
of the request for approval.
(bb) "Landscaping" is defined as any or all of the following: flowers, plants, shrubs, trees, grass,
natural areas (for example, areas covered with pine straw, mulch, or naturally growing vegetation),
fences, walls, statues, brick pavers or other decorative ground covering of a similar nature,
ornamental water features, and any other items that the Board, in the exercise of its reasonable
discretion, determines should be included in the. term "landscaping" under the Declaration.
(cc) "Legal Requirement" is defined as any or all of the following: any duly adopted and
applicable law, ordinance, regulation or requirement, including the Code, of any Governmental
Authority or quasi -governmental authority or agency having jurisdiction over the Property or any
portion thereof, including any branch, department, division, section, branch, or agency of any of
the foregoing Governmental Authorities or quasi -governmental authorities or agencies. Legal
Requirements apply to the exercise of all rights or the taking of all actions under the Declaration
by Declarant, the Association, or any other Person, whether or not the Declaration states that a
specific right or action is subject to Legal Requirements or must be exercised or taken in
accordance with Legal Requirements.
(dd) "Limited Common Elements", or "Limited Common Property", or "Limited Common
Area" is defined as any Common Elements that are established by the Declarant or the Association
for the benefit of the Owners of less than all of the Lots in the Property, and which have been
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designated (or allocated) as Limited Common Elements for certain Lots by the Declarant or the
Association. Limited Common Elements may include, for example, private streets, private alleys
or landscaped medians in streets, and private alleys adjacent to Lots in particular sections of the
Subdivision.
(ee) "Limited Common Expenses" is defined as all expenses of the type included within the
term Common Expenses, but that are related solely and specifically to Limited Common Elements.
Limited Common Expenses shall be paid out of assessments against Members who own Lots for
which the Limited Common Elements have been designated. All references in the Declaration to
Common Expenses in the context of Limited Common Elements are deemed to refer to Limited
Common Expenses for the applicable Limited Common Elements.
(ff) "Lot" is defined as any numbered or lettered portion of the Property, together with any
Improvements thereon, which is shown upon any recorded plat of any part or all of the Property,
and on which there is a completed or under construction Dwelling or on which it is intended that
a Dwelling be constructed. In the event that any Lot is increased or decreased in size by
recombination or re -subdivision through the recording of a new or revised plat, the newly -platted
lot thereafter shall constitute a Lot under the Declaration, except as otherwise may be provided
herein with respect to allocation of votes and assessments applicable to the newly -platted Lot.
With respect to Class B membership in the Association, unsubdivided Iand also constitutes one
Lot.
(gg) "Maintain", "Maintaining", "Maintenance", or any similar term used herein, is defined to
include any one or more of the following, as the -context requires: acquisition, purchase,
construction, 're -construction, installation, maintenance, inspection, examination, upkeep,
cleaning, renewal, alteration, repair, replacement, repainting, remodeling, restoration, removal,
improvement, administration, operation, use, planting, mowing, cutting, trimming, pruning,
fertilizing, watering and preservation. In addition, maintenance also includes any action necessary
for real or personal property to be maintained so that it functions for the purposes for which it is
intended and so that it complies with the Community Wide Standard.
(hh) "Member" is defined as each Person who owns a Lot in the Property.
(ii) "Mortgagee" is defined as the beneficiary or payee under any deed of trust, and the terms
mortgage and deed of trust are deemed to refer to deeds of trust.
6j) "Nonprofit Corporation Act" is defined as the "North Carolina Nonprofit Corporation
Act", currently contained in Chapter 55A of the North Carolina General Statutes, and including all
amendments, supplements and replacements thereof as enacted from time to time.
(kk) "Notice" or "notices" given under this Declaration shall be in writing and shall comply in
all respects with the terms and manner set forth in Article XX, Section 15.
(11) "Operating Deficit" is defined as the difference between the total amount of the annual
assessments for a Fiscal Year Ievied on all Lots and the amount of actual expenditures by the
Association during the Fiscal Year for Common Expenses, including funding of reserves, but
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excluding (i) amounts levied against a Lot, but which are not paid, and (ii) special assessments for
capital Improvements and other assessments allowed in the Declaration that are not annual
assessments.
(mm) "Owner" is defined as the record Owner, whether one or more Persons, of fee simple title
to any Lot, and shall include Declarant as to any Lot owned by Declarant and shall include an
Approved Builder as to any Lot owned by an Approved Builder. "Owner" shall not include any
Person who holds an interest in a Lot solely as security for the performance of an obligation or as
a tenant.
(nn) "Person" is defined to include any natural person, corporation, business trust, estate, trust,
partnership, limited liability company, association, joint venture, Governmental Authority, or
other entity.
(oo) "Plans" is defined as the plans and specifications for a proposed improvement on a Lot,
showing (where applicable) the size, shape, dimensions, materials, exterior finishes and colors,
location on the Lot, driveway, parking areas, provisions for handling stormwater, decorative
landscape planting and other decorative landscaping features, floor plans and elevations, and other
items specified in any applicable Architectural Guidelines or required by the Architectural Review
Committee or the Board. "Approved Plans" is defined as Plans that have been approved by the
Declarant or by the Architectural Review Committee (or by the Board, on appeal from the
Architectural Review Committee).
(pp) "Present" at a meeting of the Association is defined as being present in person or by a
proxy that has been executed and is effective under Legal Requirements and the Governing
Documents.
(qq) "Property", or "Community", or "Subdivision" is defined as the Property set forth on
Exhibit A, together with all Additional Property annexed to the Declaration pursuant to Article II
hereof, less and except all real property that is withdrawn from the Declaration as allowed herein.
References to the Property includes any part or all of the Property, as applicable, in accordance
with the context of such reference herein, whether or not the reference specifically states that it is
referring to any part or all of the Property.
(rr) "Registry" is defined as the office of the Nash County, North Carolina Register of Deeds
(or any successor office under applicable Iaw) in which deeds, plats, easements, and deeds of trust
for the Property are recorded. All references herein to recording or to any requirement to record a -
document or plat refer to recording in the Registry of the County or Counties in which the
applicable portion of the Property is situated.
(ss) "Restrictions and Rules" or "rules and regulations" is defined as rules, regulations,
requirements, prohibitions, or conditions for any one or more of the following as are adopted,
amended, or repealed by the Declarant or the Association: (i) matters governing use of the Property
or any part thereof, including the Common Elements, or (ii) matters governing conduct of Persons
while in or on the Property or any part thereof, including -the Common Elements, or (iii) providing
for the implementation and enforcement of the Governing Documents, or (iv) any other matters
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that the Declarant or Board, as applicable, determines to adopt as part of the Association's
Restrictions and Rules.
In addition to any other provisions of the Declaration authorizing the Association to adopt rules
and regulations, the Association, separate and apart from the Restrictions and Rules, may adopt,
amend, modify, and enforce reasonable rules and regulations for the use and operation of the
Common Elements or for the implementation and enforcement of the Governing Documents.
(tt) "Service Line" is defined as the portion of the individual household water line for which
the Lot Owner assumes responsibility for maintaining and for which the utility provider assumes
no maintenance responsibility. The Service Line is that portion of the individual household water
line that extends from the utility provider's water meter to the Dwelling. The portion of the line
extending from the water meter to the water main at or near the publicly dedicated street right of
way or private street right of way adjacent to any boundary of such Lot shall not be included in
the term "Service Line".
(uu) "Special Declarant Rights" or "development rights" is defined as all rights granted to, or
reserved by, or established for the benefit of, Declarant in the Act or in the Declaration and other
Governing Documents, whether or not such rights are referred to as Special Declarant Rights or
development rights in the Act, the Declaration, or other Governing Documents. Declarant may
assign Special Declarant Rights, in whole or in part, temporarily or permanently, subject to such
terms and conditions as Declarant specifies in the assignment document. Unless the Declaration
or other Governing Documents specify that Special Declarant Rights may be exercised by any
Person other than the Declarant or that they become rights exercisable in whole or in part by the
Association at any time, any assignment of Special Declarant Rights must be in writing and
recorded in the Registry, executed by the assignee, and the assignment becomes effective only
upon the recording of the document in the Registry or any later date specified therein.
(vv) "Stormwater Control Measures" or "Stormwater Control Facilities" is defined as one or
more of the following devices and measures, together with associated private drainage easements
utilized for conveying stormwater (however identified on a plat, map or in a recorded document)
that serves more than one Lot or parts of more than one Lot in the Property and which are located
outside of public street rights -of -way and drainage easements accepted into public use by the
applicable Governmental Authority, including, but not limited to, conduits, inlets, channels, pipes,
Ievel spreaders, ditches, grassed swales, sand filters, wet ponds, dry detention basins, wetlands,
bio-retention areas, retention or detention ponds, and other devices and measures, necessary to
collect, convey, store, and control stormwater runoff and pollutants for more than one Lot in the
Property. Private drainage easements, however identified on a recorded plat or recorded map or
in a recorded document, that serve more than one Lot in the Property are deemed to be dedicated
to the Association for the benefit of the Property or applicable portions thereof.
(ww) "Supplemental Declaration" is defined as any document, recorded subsequent to the
Declaration and as allowed by the Declaration, that annexes Additional Property to -the
Declaration, withdraws any portion of the Property from the Declaration, or is recorded for any
other purpose for which the Declaration allows a Supplemental Declaration to be recorded. A
document that annexes Additional Property to the Declaration also may be referred to herein or in
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/ ?3 .
that document as an "Annexation Declaration" and a document that withdraws any portion of the
Property from the Declaration also may be referred to herein on in that document as a "Withdrawal
Declaration".
(xx) "Utility" or "public utility" is defined as any one or more of the following used in any part
or all of the Property: electricity; telephone; internet service; water; sanitary sewer; natural gas;
propane gas; television; refuse collection; collection of materials for recycling; and any other
service or facility generally recognized as a public utility or determined to be a public utility by
the Declarant (during the Development Period, and thereafter, by the Board); "utility provider" or
"public utility provider" is defined as the Person who provides a utility to any part or all of the
Property.
ARTICLE II
THE PROPERTY; ANNEXATION; WITHDRAWAL
Section 1. Existing Property. The Property shall be owned, held, transferred, sold, conveyed,
leased, used, occupied, and mortgaged subject to the Declaration. The Existing Property
constitutes the Property at the time of the recording of the Declaration.
Section 2. Annexation of Additional Property.
(a) Annexation by the Declarant. Prior to the end of the Development Period, Declarant, in
its sole discretion and without the approval or joinder of the Association or any Owner or other
Person except the Owner (if not Declarant) of the Additional Property being annexed, may annex
Additional Property to the Declaration by recording an Annexation Declaration extending the
operation and effect of the Declaration thereto. Subject to the requirements or restraints of Legal
Requirements, nothing herein shall be deemed to require the Declarant to annex any Additional
Property to the Declaration or to develop it in any manner whatsoever and nothing herein shall be
deemed to prohibit the Declarant from annexing any Additional Property to the Declaration.
(b) Other Annexation. If the Declarant desires to annex Additional Property to the
Declaration other than as allowed in the immediately preceding subsection (a), or if a Person other
than the Declarant desires at any time to annex Additional Property to the Declaration, such
Additional Property may be annexed to the Declaration only upon obtaining the affirmative vote
of sixty-seven percent (67%) or more of the votes cast by the Members present at a meeting of the
Association for which the notice of the meeting includes notice of the proposal to annex such
Additional Property, and the recording in the Registry of an Annexation Declaration signed by the
owner of such Additional Property and by the appropriate officers of the Association certifying
the required meeting and vote. In addition to the foregoing, at any time during the Development
Period that a Person other than DecIarant desires to annex Additional Property to the Declaration,
to be effectivd such annexation must have the written consent of Declarant, as evidenced by
Declarant's execution of the Annexation Declaration or other document specifically consenting to
the annexation.
(c) Approval by Governmental Entities. Notwithstanding the foregoing subsections (a) and
(b), if any Legal Requirement requires approval of annexation of Additional Property by a
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lqq
Governmental Authority, the annexation shall not be effective until the requisite approval of the
Governmental Authority is obtained.
(d) Annexation Declaration. Each Annexation Declaration shall be effective to annex
Additional Property to the Declaration only upon obtaining all approvals required by the
Declaration and upon its recording in the Registry, and the effective date of such annexation shall
be the later of the date specified therein, if any, or the date of recording. Each Annexation
Declaration shall contain a description of the Additional Property annexed sufficient to determine
its size and location, either by reference to a plat or deed recorded in the Registry or by a metes
and bounds description, and shall indicate that the Additional Property is being annexed to the
Declaration. An Annexation Declaration need not be in any specific form and need not be titled
Annexation Declaration or Supplemental Declaration (for example, the annexation language may
be contained in a deed from the Declarant conveying the Additional Property being annexed), but
it shall indicate clearly the intention to annex such Additional Property to the Declaration. Any
Annexation Declaration may specify such use restrictions and may contain such other terms,
covenants, restrictions, easements, affirmative obligations, assessments, charges and liens
applicable to such Additional Property as the Person annexing such Additional Property to the
Declaration may determine. Provided, however, the Declaration shall control over any provision
of any Annexation Declaration that conflicts with the Declaration.
(e) Votes Allocated to Additional Property. Except as otherwise provided herein or in any
Annexation Declaration annexing Additional Property to the Declaration, votes in the Association
shall be allocated to such Additional Property in the same manner that votes are allocated to the
Property already subject to the Declaration.
(f) Conveyance of Common Elements in Additional Property. Common Elements, if any,
located within any Additional Property or the applicable phase or portion thereof annexed to the
Declaration, shall be conveyed to the Association pursuant to the requirements of the Declaration
for conveyance of other Common Elements to the Association.
Section 3. Development and Annexation. Subject to Legal Requirements that provide otherwise,
no Development Plan shall obligate the Declarant to develop any portion of the Property now or
in the future, whether for the purposes shown therein or for any other purpose. The Declarant shall
not be required to follow any particular sequence or order of development of the Property, and the
Declarant may annex or consent to annex Additional Property to the Declaration whether or not
development of all of the Property previously subjected to the Declaration has been completed.
Section 4. Withdrawal of Portions of the Property from the Declaration.
(a) Withdrawal by the Declarant. Prior to the end of the Development Period, Declarant, in
its sole discretion and without the approval or joinder of the Association or any Owner or other
Person except the Owner (if not Declarant) of the portion of the Property being withdrawn, may
withdraw portions of the Property from the Declaration by recording a Withdrawal Declaration to
withdraw the applicable portion of the Property from the operation and effect of the Declaration.
Provided, however, Declarant may not withdraw from the Declaration Lots on which there are
Dwellings at the time of the withdrawal unless the conditions of subsection (b) of this Section 4
are satisfied with respect to such withdrawal. Except for the foregoing, and subject to the
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1I'�'
requirements or restraints of Legal Requirements, nothing herein shall be deemed to require the
Declarant to withdraw any portion of the Property from the Declaration and nothing herein shall
be deemed to prohibit the Declarant from withdrawing any portion of the Property from the
Declaration.
(b) If the Declarant desires to withdraw any portion of Property from the Declaration other
than as allowed in the immediately preceding subsection (a), or if a Person other than the Declarant
desires at any time to withdraw any portion of the Property from the Declaration, such portion of
the Property may be withdrawn from the Declaration only upon obtaining the affirmative vote of
sixty-seven percent (67%) or more of the votes cast by the Members present at a meeting of the
Association for which the notice of the meeting includes notice of the proposal to withdraw such
portion of the Property, and the recording in the Registry of a Withdrawal Declaration signed by
the owner of such portion of the Property and by the appropriate officers of the Association
certifying the required meeting and vote. Provided, however, the required percentage vote of the
Members for withdrawal of any Lot on which there is a Dwelling at the time of the proposed
withdrawal is eighty percent (80%) or more. In addition to the foregoing, at any time during the
Development Period that a Person other than Declarant desires to withdraw a portion of the
Property from the Declaration, to be effective such withdrawal must have the written consent of
Declarant, as evidenced by Declarant' s execution of the withdrawal declaration or other document
specifically consenting to the withdrawal.
(c) Approval by Governmental Entities. Notwithstanding the foregoing subsections (a) and
(b), if any Legal Requirement requires approval of withdrawal of any portion of the Property by a
Governmental Authority, the withdrawal shall not be effective until the requisite approval of the
Governmental Authority is obtained.
(d) Withdrawal Declaration. Each Withdrawal Declaration shall be effective to withdraw
portions of the Property from the Declaration only upon obtaining all approvals required by the
Declaration and upon its recording in the Registry, and the effective date of such withdrawal shall
be the later of the date specified therein, if any, or the date of recording. Each Withdrawal
Declaration shall contain a description of the portion of the Property withdrawn sufficient to
determine its size and location, either by reference to a plat or deed recorded in the Registry or by
a metes and bounds description, and shall indicate that the applicable portion of the Property is
being withdrawn from the Declaration.
Section 5. Effect of Annexation or WithdrawaI. Other than as specifically limited by the
Governing Documents or any Legal Requirement, the Declarant shall have full power to add to,
subtract from, or make changes in, any Development Plan, and annex real property to and withdraw
real property from the Declaration, regardless of the fact that such actions may affect the relative
voting strength of any Member or class of membership in the Association or increase or reduce
the number of Owners subject to assessment under the Declaration. Any portion of the Property
that is withdrawn from the Declaration may be owned, held, transferred, sold, conveyed, leased,
used, occupied, mortgaged and developed in any manner allowed under Legal Requirements, and
shall be released from the terms and provisions of the Declaration on the date the withdrawal
becomes effective as provided herein, subject to any terms of the withdrawal declaration and
except that all easements specifically affecting such withdrawn portions of the Property, as shown
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M 6
on plats recorded in the- Registry or as described in documents recorded in the Registry, shall
remain in force and effect unless released or terminated by all Persons having rights to exercise
such easements.
ARTICLE III
ASSOCIATION
Section 1. Board Acts for Association. All obligations required or allowed to be performed
by the Association shall be performed in accordance with Legal Requirements and applicable
provisions of the Governing Documents. Unless reserved by or for the Declarant in the
Declaration, other Governing Documents or Legal Requirements, or unless otherwise required by
Legal Requirements, all rights, powers, easements, functions, services, obligations and duties of
the Association may be performed, exercised, directed, or contracted for by the Board on behalf
of the Association. There is no distinction intended in the Declaration between items that may be
adopted, enforced, acted upon, or waived by the Board and items that may be adopted, enforced,
acted upon, or waived by the Association, except where a vote of the Members of the Association
is required therefor. The officers of the Association may act on behalf of the Association as
authorized in the Governing Documents or as directed by the Board.
Section 2. Powers and Obligations. Subject to Legal Requirements and the Governing
Documents, the Association has the following powers and obligations (the matters addressed in
this Section may not constitute a complete list of the powers and obligations of the Association, as
other powers and obligations may be addressed in other Sections of the Declaration, other
provisions of Governing Documents, and in Legal Requirements):
(a) The Association shall satisfy or perform the obligations required of the Association by
Legal Requirements and the Governing Documents, and the Association shall have all powers
conferred upon the Association by the Governing Documents and Legal Requirements.
(b) The Association may acquire, hold, lease (as lessor or lessee), operate and dispose of
tangible and intangible personal property and real property.
(c) The Association has the sole and exclusive power and authority to regulate use of the
Common Elements by Owners and other Persons, including establishment of Rules and
Regulations for use and user fees or charges. The Association may also sale, transfer, convey or
assign to any Approved Builder or Owner rights related to any Impervious Surface lying and being
situate in the Common Elements.
(d) The Association has the power and authority to enter into such encroachment
agreements and other agreements with Governmental Authorities, utility providers, and • other
Persons as are reasonably necessary to enable the Association to maintain Common Elements, and
to perform its obligations under the Declaration. During the Development Period, the Declarant
has the power and authority to enter into encroachment agreements and other agreements with
Governmental Authorities, utility providers, and other Persons as Declarant, in its sole discretion,
determines, each of which agreements are binding on the Association and all Owners, unless
otherwise provided therein.
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Igo
(e) The Association shall accept transfer of ownership from Declarant of any and all
Common Elements and any and all Improvements thereon, including transfer or assignment of any
and all associated rights, easements, permits, and obligations, provided the same are completed in
accordance with and otherwise in compliance with all Legal Requirements.
(f) The Association shall accept from Declarant any and all assignments of Declarant rights
and obligations under any part or all of the Declaration, any Supplemental Declaration, any
easements, any encroachment agreement with a Governmental Authority, or any other agreement
with or permit issued by a Governmental Authority, a utility provider, or any other Person, and
any document required to be executed with respect to the Property by a Governmental Authority,
including assumption of all Declarant or Association obligations which are contained in such
documents and agreements or which are incident to such assignments, as they relate to any
Common Elements, architectural approvals or other functions or services performed or provided
by the Association, provided, however, Declarant shall be in compliance with the obligations
under such agreements, permits and all Legal Requirements related to such obligations at the time
of such assignment.
(g) The Association shall accept from Declarant any and all appointments of the Association
as the agent of Declarant for administration and enforcement of any of the provisions of the
Declaration or any Supplemental Declaration and shall assume all obligations which are incident
to such appointments as they relate to any Common Elements, architectural approvals or other
functions or services performed or provided by the Association.
(h) All rights and powers granted to, or reserved for, or established for the benefit of, the
Association may be exercised by the Association (or, as the case may be, on behalf of the
Association by the Board or a Committee of the Board), at any time and from time to time.
Section 3. Functions and Services. The Association shall or may, as indicated, do, provide,
provide for, perform, accept, or be responsible for the following, the expenses for which are
Common Expenses, and in carrying out these and other functions and providing services as
required or allowed by the Governing Documents, the Association has all of the following
described or referenced rights and powers:
(a) The Association shall carry out the Association's obligations and business under the
terms of Legal Requirements and the Governing Documents, including legal, financial, accounting
and communications services, and shall provide or procure the administrative services necessary
in connection therewith.
(b) The Association shall maintain the Common Elements and any other real or personal
property owned or leased by the Association, or subject to an easement granted to or reserved for
the Association, in such manner and to such extent as reasonably determined by the Board, giving
due consideration to the Community Wide Standard and to the level of maintenance, if any, that
may be performed by a Governmental Authority or other Person (including Owners - for example,
mowing of grass in a stormwater drainage easement on a Lot or in a general utility easement around
the boundaries of a Lot typically would be the responsibility of the Owner of the Lot, unless the
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Association determines it is in the best interest of the Association to provide such maintenance).
(c) The Association shall operate the Architectural Review Committee(s) as and when
provided in the Declaration.
(d) The Association shall keep records of all its acts and corporate business, and, in
particular, the Association shall keep financial records sufficiently detailed to enable the
Association to comply with the Act.
(e) -The Association shall provide an annual financial report to each Member making written
request therefor and paying the reasonable charge for same established by the Board and, upon
either the (i) the affirmative vote of majority of the votes cast by the Members present at a meeting
of the Association, or (ii) the written request of the Members possessing twenty-five percent (25%)
or more of the total number of votes of all the Members of the Association, shall have such report
audited (at the expense of the Association) by an independent certified public accountant, which
audited report shall be made available to each Member making written request therefor.
(f) The Association shall make available for inspection by the Members and Mortgagees,
upon reasonable request, during normal business hours and upon payment of reasonable copying
and administrative costs, current copies of the Governing Documents, and the books, records and
financial statements of the Association.
(g) As required by the Governing Documents and Legal Requirements, the Association shall
establish an annual operating budget, shall establish the amount of and collect assessments, and
shall establish reserve funds.
(h) The Association shall hold meetings and give proper notice thereof, as required by the
Governing Documents and Legal Requirements.
(i) _The Association shall file with applicable Governmental Authority all applications for
tax exempt status and pay all applicable ad valorem property taxes and Governmental Authority
assessments, if any, on the Common Elements owned by the Association and on other property or
assets owned by the Association.
0) The Association shall obtain and maintain insurance and fidelity bonds as required in
the Governing Documents.
(k) The Association shall be responsible for stormwater management and maintenance of
Stormwater Control Measures as provided in the Declaration and in any other Governing
Document or as required by Legal Requirements.
(1) The Association shall be responsible for all financial and other obligations of the
Association pursuant to any agreement entered into by or on behalf of the Association as
contemplated by the Declaration, including the following: encroachment agreement or other
agreement with a Governmental Authority; agreement with a utility provider; agreement with any
other Person.
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19Iq
(m) The Association may take all actions and do all things its deems necessary or desirable
to enforce and implement the provisions of Legal Requirements and the Governing Documents,
and to exercise the rights, satisfy the obligations, and perform the functions or services the
Association is required or allowed to do by the Governing Documents, and in connection
therewith, except as specifically limited by the Declaration the Association shall have all of the
rights and powers under the Act and the Nonprofit Corporation Act.
(n) The Association may grant easements, leases, licenses and concessions through or over
the Common Elements, as the Board determines to be in the best interests of the Association.
(o) The Association may enter into contractual agreements or covenants to share costs with
any neighboring property owner or association of property owners to contribute funds for, among
other things, shared or mutually beneficial property or services or a higher level of Common
Elements maintenance.
(p) Subject to Legal Requirements, the Association may maintain grass, landscaping,
decorative paving or other decorative features, and all equipment and facilities associated
therewith, within street rights of way and on sidewalks in or adjacent to the Property, with such
frequency and in such manner as determined by the Board for determining the level of maintenance
to be performed by the Association, the Board may give due consideration to the extent to which
a Governmental Authority or any other Person is responsible for and performs such maintenance
and to the terms of any encroachment agreement between the Declarant or the Association and a
Governmental Authority. The Association may enter into encroachment and other agreements with
a Governmental Authority or other Persons with respect to such maintenance.
(q) As provided in the Governing Documents, the Association may adopt, amend, and repeal
Restrictions and Rules.
(r) The Association may enter into agreements or contracts with utility companies with
respect to utility installation,. consumption and service matters relating to the Common Elements.
(s) The Association may provide, or provide for, services and facilities for Owners and their
Lots and Dwellings (as distinguished from services and facilities relating to Common Elements)
and may enter into and terminate contracts or agreements with other entities, including Declarant,
to provide such services and facilities. The Board may charge use or service fees for any such
services and facilities provided to or for an Owner or may include the costs thereof in the
Association's budget as a Common Expense and assess it as part of the annual assessment if
provided to all Owners; provided however that the Association's budget is amended concurrently
to properly reflect the costs of such services. By way of example, such services and facilities
might include landscape maintenance, insect and pest control service, cable television service,
security, caretaker, transportation, refuse and recycling collection, fire protection, utilities, and
similar services and facilities. Provided, however, prior to providing any such service to all Owners
that will be paid for as part of the annual assessment, the Association: (i) shall obtain a vote or
consent of the Members that is equal to or greater than sixty-seven percent (67%) of the total
number of votes in the Association (such vote is not required in connection with services that the
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aoo
Association is required to provide by the Governing Documents or Legal Requirements); and (ii)
prior to the end of the Development Period, upon obtaining the written consent of Declarant; and
(iii) during the time that an Approved Builder is the Owner of a Lot or has the right to acquire a
Lot within the Property, upon obtaining the written consent of such Approved Builder. In addition,
the Association shall accept assignment of all such contracts entered into by the Declarant when
the Declarant is the owner of all of the Property or entered into at any time by all of the Owners
(the execution of the contract by any one of multiple owners of a Lot being sufficient with respect
to that Lot).
Nothing in this subsection shall be construed as a representation, promise, warranty, or guaranty
by Declarant or the Association as to what, if any, services will be provided or the extent to which
any service will be provided.
(t) The Association may borrow funds to pay costs of operation of the Association, which
borrowing may be secured by assignment or pledge of Association rights to receive and collect
assessments or by liens on Common Elements or other Association assets, as determined by the
Board, subject to the Governing Documents and Legal Requirements; provided, however, prior to
providing any such service to all Owners that will be paid for as part of the annual assessment, the
Association first shall obtain a vote or consent of the Members that is equal to or greater than sixty-
seven percent (67%) of the total number of votes in the Association.
(u) The Association may maintain one or more bank accounts and enter into contracts or
other agreements reasonably necessary in connection therewith.
(v) The Association may sue or defend in any court of law on behalf of the Association and
may employ attorneys and other necessary professionals in connection therewith.
(w) The Association may adjust the amount, collect, and use insurance proceeds to repair
damage to or replace Common Elements, and if proceeds are insufficient to repair damage to or
replace same, levy special assessments (in the manner provided herein) to cover the deficiency.
(x) The Association may employ a property manager and -may employ or contract with
independent contractors or other Persons as the Board deems necessary.
(y) The -Association may retain the services of attorneys, accountants, and such other
professionals or tradesmen as it deems necessary and appropriate.
W The Association may contract with Declarant or any other Person for performance of
services provided by the Association, such contracts to be at competitive rates and upon such terms
and for such consideration as the Board deems proper, advisable and in the best interests of the
Association.
(aa) The Association may establish and maintain the nonprofit corporation tax status of the
Association for federal and State of North Carolina income tax purposes, as determined by the
Board to be in the best interests of the Association.
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(bb) The Association may contract with other nonprofit corporations or associations which
exist for purposes substantially similar to those for which the Association exists, with respect to
the maintenance of property owned by such corporation or association.
(cc) The Association may impose reasonable charges for Iate payment of assessments and,
subject to any applicable notice and hearing requirements of the Act, may suspend privileges or
services provided by the Association (except rights of access to Lots and rights of access to
easements and facilities in the Common Elements that provide stormwater drainage or public
utility services to Lots) during any period that assessments or other amounts due and owing to the
Association remain unpaid for a period of thirty (30) days or longer after the payment due date.
(dd) Subject to any applicable notice and hearing requirements of the Act, the Association
may impose reasonable fines or suspend privileges or services provided by the Association for
reasonable periods for violations of the Declaration or other Governing Documents, except that
the Association may not suspend rights of access to Lots over Common Elements or rights of
access to easements and facilities in the Common Elements that provide stormwater drainage from
or public utility services to Lots.
(ee) In addition to the insurance coverages required by the Declaration, the Association may
obtain and maintain such other insurance coverage as the Board determines to be in the best
interests of the Association, and may adjust the amount, collect, and use the proceeds of such
insurance as the Board determines.
(ff) As a Common Expense, the Association may provide educational and training
opportunities within the Subdivision, including providing funding and permitting facilities use for
such purposes. As examples, the Association may provide education and training activities as a
tool for fostering Owner and resident awareness of the Subdivision and the facilities and services
provided by the Association, as well as governance and operation of the Association. Other
appropriate educational topics include dispute or conflict resolution, issues involving the
Governing Documents, and benefitting from and contributing to the Subdivision. The Association
also is authorized to fund and support the education and training required for officers, directors,
and committee members.
Section 4. Stormwater Management. Except for maintenance responsibilities (i) placed on
Owners by the Governing Documents or Legal Requirements, or (ii) assumed or undertaken by
other Persons (for example, a Governmental Authority), the Association shall maintain the
Stormwater Control Measures and shall pay for the maintenance thereof as part of the Common
Expenses.
Declarant reserves for itself and the Association a blanket easement across all Lots for maintaining
satisfactory stormwater drainage in the Property; provided, however, such easement area shall not
include any portion of the building pad for a Dwelling on a Lot. It is anticipated that increased
stormwater run-off across downstream Lots may result from the construction of impervious
surface within the Property. Neither the Declarant nor the Association with respect to
Improvements it constructs in accordance with Legal Requirements applicable at the time of
construction, and neither any other Approved Builder or Owner constructing Improvements
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r:2,
according to Approved Plans and Legal Requirements applicable at the time of construction, shall
have any liability to any Owner due to the increased flow or increased velocity of surface water
resulting from construction of such Improvements.
Section 5. Dedication, Conveyance or Exchange of Common Elements. The Association,
(i) upon obtaining the minimum required voting percentage under applicable provisions of the Act
for conveyance of Common Elements (at the time of recording of the Declaration Section 47F-3-
112 of the Act requires the affirmative vote of eighty percent (80%) or more of the total number of
votes in the Association), and (ii) upon compliance with any applicable provisions of the Code and
other Legal Requirements, and (iii) prior to the end of the Development Period, upon obtaining
the written consent of Declarant, may dedicate portions of the Common Elements to public use or
convey or exchange portions of the Common Elements with the Declarant or any other Person, for
any purpose approved by any required vote of the Members, including any one or more of the -
following purposes: (i) to eliminate unintentional encroachments of Improvements or easements;
(ii) to correct any building or other setback violations; (iii) to adjust boundary lines of portions of
the Property; (iv) to facilitate the orderly subdivision and development of the Property; (v) to
conform the configuration of the Property to any applicable Development Plan; (vi) to satisfy, or
correct any violation of, any applicable Legal Requirements related to an impervious Surface; or
(vii) to reallocate impervious Surface to any portion of the Lots or the Common Elements. All
conveyances and exchanges of Common Elements are subject to the following: (i) no such
conveyance or exchange (either alone, or in conjunction with other conveyances or exchanges)
shall result in a reduction of the portion of the Common Elements that constitutes "open space"
below the minimum amount of open space, if any, required by the applicable Governmental
Authority; (ii) if required by Legal Requirements, the applicable Governmental Authority must
approve any exchange or boundary line adjustment; (iii) any boundary line adjustment must be
approved by the Owners of all portions of the Property affected by the adjustment; (iv) Property
received by the Association in an exchange must be of like value and utility as the Common
Elements that are part of the exchange transaction; (v) each Lot contiguous to Common Elements
prior to the conveyance shall remain contiguous to Common Elements after the conveyance, unless
otherwise approved by the Owner of the Lot that no longer will be contiguous; (vi) the conveyance
shall not materially conflict with any applicable Development Plan; (vii) no conveyance of
Common Elements shall deprive any Lot of its rights of access and support; and (viii) any
conveyance of real property to the Association must be -free and clear of all encumbrances except
for the Declaration and any applicable Supplemental Declaration, or other agreement executed as
allowed by the Declaration, Legal Requirements, street rights of way or access easements,
greenway easements, easements for utilities, and stormwater drainage easements.
Section 6. Mortgage and Pledge of Common Elements. The Association, (i) upon
complying with the minimum required voting percentage under applicable provisions of the Act
for conveyance or dedication of Common Elements (at the time of recording of the Declaration
Section 47F-3-112 of the Act requires the affirmative vote of eighty percent (80%) or more of the
total number of votes in the Association), and (ii) prior to the end of the Development Period upon
obtaining the written consent of Declarant, shall have the power and authority to mortgage the
Common Elements and to pledge its assets as security for loans made to the Association, which
loans shall be used by the Association in performing its functions and providing services under the
Declaration. Declarant may, but shall not be required to, make loans to the Association, subject
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to the foregoing and further subject to approval by the Declarant of the use of such loan proceeds
and the terms pursuant to which such loans will be repaid. Notwithstanding anything in the
Declaration to the contrary, at any time that there is any unpaid amount owed to Declarant under
any loan made by it to the Association, without Declarant's written consent the annual assessments
shall not be reduced below the amounts in effect at the time such loan first was made.
Section 7. Liability Limitations. Except as required by Legal Requirements or the
Declaration, or agreed to by any of the following Persons otherwise excluded from liability by the
provisions of this sentence, neither Declarant, nor any Approved Builder, nor any current or former
Member of the Association, nor the Board, nor any director on the Board, nor any officer of the
Association, nor any member of the Architectural Review Committee or any other Association
committee, nor any shareholder, director, officer, partner, member, manager, agent or employee
of any of the foregoing, shall be personally liable for debts contracted or incurred by the
Association or for a tort of another current or former Member, whether or not such other current
or former Member was acting on behalf of the Association, unless such Person specifically agrees
in writing to be obligated for any such debt of the Association or any such tort (but the foregoing
shall not relieve such Person from that Person's obligation, if any, under the Declaration, to pay
assessments to the Association or other obligations as a Member of the Association). Neither
Declarant, nor the Association, nor the Board, nor any director on the Board, nor any officer of the
Association, nor any member of the Architectural Review Committee or any other Association
committee, nor any shareholder, director, officer, partner, member, manager, agent or employee
of any of the foregoing, acting in those official capacities, shall be liable for any incidental or
consequential damages for failure to inspect any Owner's Lot or Improvements thereon, or for
failure to maintain the same (provided, however, and notwithstanding the foregoing, as required
by Legal Requirements and the Governing Documents; Declarant and the Association each shall
maintain all portions of the Property it owns, and, except as otherwise specifically provided herein,
directors on the Board and officers of the Association and members of the Architectural Review
Committee and other Association committees shall have all of the other obligations and liabilities
of an Owner under the Declaration with respect to portions of the Property owned by such
Persons).
Neither the Board or any director of the Board, the Association or any of its officers, the Declarant
or any of its shareholders, directors, officers, partners, members, managers, agents or employees,
nor any current or former Member of the Association, shall be considered as a bailee of any
personal property stored or placed on the Common Elements (including vehicles parked on the
Common Elements), whether or not exclusive possession of the particular area is given to the
Person who owns such personal property, nor shall any of the foregoing Persons (other than the
Person who owns the personal property) be responsible for the security of such personal property
or for any loss or damage thereto. With the exception of liability for gross negligence, the
Association shall not be liable for any personal injury or damage to property arising out of or
resulting from any of the following: (i) failure of or interruption to any service to be obtained by
the Association or paid for as a Common Expense; (ii) weather or other natural events or events
of Force Majeure; (iii) the acts or omissions of any Owner or any other Person; or (iv) electricity,
water, snow or ice which may leak or flow from or over any portion of the Property or from any
pipe, drain, conduit, appliance or equipment, or any incidental or consequential damages of any
type resulting from the foregoing. No diminution, offset or abatement of any assessment or other
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charge shall be claimed or allowed for inconvenience or discomfort arising from maintenance of
the Common Elements or from any action taken by the Association to comply with any Legal
Requirement. This Section is not intended, nor shall it be construed, to relieve any insurer of its
contractual obligations under any policy benefitting the Association or any Owner.
The Association shall indemnify all Association directors and officers, and members of the
Architectural Review Committee and other Association committee members, as required by the
Governing Documents.
Section 8. Merger or Consolidation. Upon a merger or consolidation of the Association with
another association in accordance with all Legal Requirements, the Property, rights and obligations
of the Association, by operation of law, may be transferred to another surviving or consolidated
association or, alternatively, the Property, rights and obligations of another association, by
operation of law, may be added to the Property, rights and obligations of the Association as the
surviving corporation pursuant to a merger or consolidation. The surviving or consolidated
association shall be considered the Association under the Declaration and may administer the terms
and provisions'of the Declaration and any applicable Supplemental Declaration, together with the
terms and provisions of any declarations, covenants and restrictions applicable to other property
under the jurisdiction of the surviving or consolidated Association, as a common plan. Other than
as specifically stated in the plan of merger or consolidation approved pursuant to all Legal
Requirements, no merger or consolidation shall bring about any revocation of the provisions of
the Declaration with respect to the Property, including the limits on any assessment or any other
matter substantially affecting the interests of the members of the Association. In addition to
obtaining the minimum required voting percentage under applicable provisions of the Act for
merger or consolidation with another association, during the Development Period such merger or
consolidation must have the written consent of Declarant and any Approved Builder that is the
Owner of a Lot or that then has the right to acquire a Lot.
ARTICLE IV
RIGHTS IN AND TO COMMON ELEMENTS
Section 1. Owners' Easements of Enjoyment and Access. Except as limited by the
provisions of this Section, or by other provisions of the Declaration or any other Governing
Document, every Owner shall have a non-exclusive right and easement of enjoyment in, use of
and access to, from, and over the Common Elements, which right and easement shall be
appurtenant to and shall pass with title to every Lot, subject to the following:
(a) restrictions, easements, and other matters applicable to the Common Elements.
(b) subject to the provisions of the Code and the Governing Documents, the right of the
Association to regulate the use of any Common Elements by Owners and other Persons.
(c) the right of the Association to regulate or limit -use and access by Owners to Common
Elements to only such use or access as is reasonably necessary to the full use and enjoyment of the
Lot owned by such Owner. In this regard, it is contemplated that there may be some Common
Elements to which no Owners, or only a limited number of Owners, will have any right of use or
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aas
access.
(d) limitation of use of Limited Common Elements to those. Lots and Owners to whom such
Limited Common Elements is allocated or with whom it is associated.
(e) subject to any applicable notice and hearing requirements of the Act and maximum fine
limitations of the Act, the right of the Association to fine an Owner or suspend the voting rights of
an Owner- or suspend other rights and easements of enjoyment in and to the Common Elements of
an Owner and such Owner's family members, tenants, contract purchasers, guests, or other Persons
to whom the Owner has delegated such rights, for any period during which any assessment or other
amount owed by the Owner to the Association remains unpaid, and for a reasonable period of time
for any violation or infraction of the Governing Documents by an Owner or such Owner's family
members, tenants, contract purchasers, guests, or other Persons to whom the Owner has delegated
such rights or who are asserting any rights through such Owner. Provided, however, no such
suspension shall constitute a waiver or discharge of the Owner's obligation to pay any assessment
or other charge under the Declaration. Further provided, the Association shall not suspend the
right of any Owner to any of the following: (i) ingress and egress over any portion of the Common
Elements on which there is a private street or easement that provides access for ingress and egress
from a public street to and from such Owner's Lot; (ii) drainage of stormwater in, on, over, under,
or through, as applicable, any portion of the Common EIements on which there is a stormwater
drainage easement or Stormwater Control Measure that provides storm water drainage for such
Owner's Lot; or (iii) sanitary sewer, water or other utility service in, on, over, under, or through,
as applicable, any portion of the Common Elements on which there is an easement that provides
such utility service to such Owner's Lot. Provided, however, such Owner shall remain subject to
the Rules and Regulations, if any, established by the Association for use of such portion of the
Common Elements.
(f) the right of the Association to dedicate, sell, transfer or exchange all or any part of the
Common Elements, subject to the applicable voting requirements for such actions.
(g) the right of the Declarant, during the Development Period, and the right of the Association,
to grant easements over, across, in, on, under, and through the Common Elements to any
Governmental Authority or utility provider for the installation and maintenance therein of water
and sanitary sewer, natural gas, internet, electric, telephone, cable television, and other utilities,
and Stormwater Control Measures.
(h) the right of the Association, as provided by and consistent with the provisions of the Code,
the Act and the Declaration, to exchange all or part of the Common Elements for other property or
consideration.
(i) Special Declarant Rights and any other rights of the Declarant.
Section 2. Delegation of Use.
(a) Family. Subject to all provisions of the Governing Documents for use of the Common
Elements applicable to Owners, members of the Owner's immediate family who occupy the
Dwelling of the Owner within the Property as their principal residence may use the Common
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�v
EIements in the same manner and to the same extent as the Owner. Provided, however, any use
of the Common Elements by occupants of a utility dwelling is subject to such rules and user fees
as the Board, in the exercise of its discretion, adopts or imposes.
(b) Tenants. Subject to all provisions of the Governing Documents applicable to Owners and
tenants, tenants authorized by the Owner to use the Common Elements may use the Common
Elements in the same manner and to the same extent as the Owner.
(c) Guests. Subject to all applicable provisions of the Governing Documents, guests of
Owners and guests of tenants authorized by the Owner or tenant to use the Common Elements,
may use the Common Elements in the same manner and to the same extent as the Owner.
(d) The Board has the authority to resolve any issue as to whether a Person is a family member,
occupant of a utility dwelling, tenant, or guest of any Owner under this Section and the right of
such Person to use the Common Elements.
(e) Suspension of Use Privilege. All uses of the Common EIements by an Owner's family
members, tenants, and guests constitute a privilege and not a right. The privilege of any Person
under this Section to use the Common Elements may be suspended for violation of the Governing
Documents and as otherwise provided in the Governing Documents, and such privilege shall be
suspended during any period of time that the rights of the Owner through whom the Person derives
his or her privilege to use the Common Elements are suspended.
Section 3. Limitation of Liability. Owners, occupants, tenants, and guests shall use the
Common Elements and other property maintained by the Association at their own risk and shall
assume sole responsibility for their personal belongings used or stored thereon. All Owners,
occupants, tenants, and guests shall have an affirmative duty and responsibility to inspect such
Common Elements and other property maintained by the Association for any defects, perils or
other unsafe conditions relating to the use and enjoyment thereof and to report any of the foregoing
to the Association. The Association, the Declarant and their respective officers, directors,
employees, representatives and agents shall not be held liable for personal injury to any person,
nor for loss or damage to personal belongings used or stored on any of the Common Elements or
other property maintained by the Association. The Association shall not be liable to any Owner,
occupant, tenant, or guest for loss or damage, by theft or otherwise, of any property of Owner,
occupant tenant, or guest. The Association shall not be liable for injury or damage to any Person
or property: (a) caused by the elements or by an Owner or any other Person, (b) resulting from any
rain or other surface water which may leak or flow from any street, pipe, plumbing, drain, conduit,
appliance, equipment, security system, Stormwater Control Facilities, or utility line or facility, or
from any portion of the Common Elements or other property maintained by the Association, unless
resulting from the gross negligence of the Association, or (c) resulting from any street, pipe,
plumbing, drain, conduit, appliance, equipment, security system, Stormwater Control Facilities, or
utility line or facility, the responsibility for the maintenance of which is that of the Association,
becoming out of repair, unless resulting from the gross negligence of the Association.
Section 4. Conveyance of Title to the Association. The Association shall accept conveyance
of Common Elements at any time, provided, however, that the same are in compliance with all
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26-7
Legal Requirements. During the Development Period, the Declarant reserves the right to determine
and designate what real property constitutes Common Elements. During the Development Period
Declarant reserves an easement in, over, across, under and through the Common Elements for the
purpose of constructing Improvements in, on, over, under, and through the Common Elements or
Improvements for the benefit of the Subdivision as it deems necessary or advisable, provided that
any such Improvements must comply with all Legal Requirements. Except as otherwise stated
herein, all conveyances by Declarant to the Association of real property may be by special warranty
deed .but shall otherwise be free of any and all monetary encumbrances.
ARTICLE V
MEMBERSHIP AND VOTING RIGHTS
Section 1. Membership. Each and every Owner of a Lot is a Member of the Association, with
classes of membership as provided herein, and, by execution of the Declaration or by acceptance
of a deed conveying to such Owner title to any Lot, each Owner consents to be a Member of the
Association and to be subject to the terms of the Governing Documents. Membership shall be
appurtenant to and may not be separated from ownership of the Lot. An Owner's membership in
the Association automatically terminates whenever such Person ceases to be an Owner, and
Declarant shall be the Class B Member at all times that Declarant owns at least one Lot (which
may consist of unsubdivided land owned by Declarant if Declarant owns no other Lots in the
Property). Termination of membership shall. not release or relieve any such Owner from any
liability or obligation incurred under the Declaration during the period of such Owner's
membership in the Association, nor impair any rights or remedies which the Association or any
other Owner has with respect to such former Owner.
Section 2. Classes of Voting Members. The Association shall have two (2) classes of voting
Members as follows:
(a) Class A. Class A Members are all Owners of Lots, except for the Class B Member.
With respect to Association matters on which Class A Members are eligible to vote, each Lot
owned by a Class A Member or Members is allocated one vote, regardless of the number of Class
A Members who own the Lot and regardless of size of the Lot.
(b) Class B. The Class B Member is the Declarant. During all times that the Class B
membership exists the CIass B Member is the only Member eligible to vote on Association matters,
unless a Legal Requirement requires that all Members have a right to vote. With respect to each
Association matter on which the Class B Member is eligible to vote, the Class B Member is
allocated 100 votes. Any one or more times that the Class B membership terminates because
Declarant owns no Lots, and Declarant later acquires ownership of one or more Lots, the Class B
membership shall be reinstated until such time as Declarant again owns no Lots.
Section 3. Exercise of Voting Rights. The exercise of voting rights shall be governed by the
Articles or Bylaws of the Association, as applicable, including quorum requirements and exercise
of voting rights by written consent or other method allowed in the Articles or Bylaws instead of a
vote at a meeting of the Association, or by any combination of voting at a meeting and other
method of voting as allowed in the Articles or ByIaws..Any provision of the Declaration or other
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Governing Documents that refers to a vote of the membership of the Association shall not preclude
the exercise of voting rights by such other methods. When there is more than one Owner of any
Lot or Lots, all such Owners shall be Members and the voting rights allocated to their Lot or Lots
shall be exercised as they, among themselves, determine (subject to any applicable provisions of
the Articles or*Bylaws), but fractional voting of the votes allocated to such Lot or Lots shall not
be allowed.
Section 4. Period of Declarant Control. During the Development Period, the Declarant shall
be entitled to appoint, remove, and replace all directors of the Board, and, with respect to quorum
requirements at any meeting of the Association, Declarant's right to appoint directors is also
Declarant's right to elect directors under the Act.
ARTICLE VI
ASSESSMENTS AND OTHER CHARGES
Section 1. Creation of the Lien and Personal Obligation for Assessments and Other
Charges. Each Owner, by execution of the Declaration or by acceptance of a deed or other
instrument conveying title to a Lot, whether or not it shall be so expressed therein, is deemed to
consent and agree to pay to the Association (or to any Person who may be designated by the
Association to collect such monies on behalf of the Association) all assessments for Common
Expenses and other charges as required or allowed by the Declaration, including the following: (i)
annual assessments; (h) working capital assessment; (iii) stormwater assessments; (iv) special
assessments for capital Improvements or other matters as set forth herein; (v) special individual
assessments levied against an Owner to reimburse the Association for maintenance expenses
resulting from the failure of such Owner to maintain adequately that Owner's Lot, or for damages
to Common Elements, or for such other purposes as stated herein; (vi) architectural review fees
and costs as specified herein; (vii) fines for violations of Restrictions and Rules or Association
Rules and Regulations with respect to use of the Common Elements; (viii) late payment penalties
and interest on unpaid assessments and other charges; and (ix) other charges imposed under
authority contained in the Act (specifically including all fees allowed under Section 47F-3-102 of
the Act) or Governing Documents (architectural review fees, fines, penalties, interest and other
fees and charges all being referred to herein collectively as "other charges"), and, in addition to
such assessments and other charges, to pay all costs, fees and expenses, including reasonable
attorneys' fees, incurred by the Association in enforcing or collecting any of the foregoing
assessments or other charges against such Owner or the Lot of such Owner. All assessments and
other charges shall be established and collected as hereinafter provided. All assessments levied
against a Lot and other charges owed by the Owner of a Lot that remain unpaid for a period of
thirty (30) days or longer, together with the costs of collection thereof, including reasonable
attorneys' fees, shall constitute a charge and continuing lien on that. Lot from and after the time of
the filing of a claim of lien by the Association in the office of the Clerk of Superior Court of Nash
County, North Carolina, and shall be the personal and continuing obligation of such Owner at the
time when the assessment or other charge first became due and payable. An Owner's personal
obligation for payment of such assessments and other charges shall not become the personal
obligation of a subsequent Owner unless expressly assumed by the subsequent Owner, although
the lien shall continue against the Lot until the amounts due are paid. No Owner shall be exempt
from liability for any assessment provided for herein by reason of non-use of the Common
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wog
Elements or such Owner's Lot, or abandonment of a Lot, or temporary unavailability of the use or
enjoyment of the Common Elements. If necessary to establish the right to collect reasonable
attorneys' fees under the Declaration, any obligation of an Owner to pay assessments or other
charges or monetary obligations under the Declaration shall constitute evidence of indebtedness
for the purpose of establishing under Section 6-21.2 of the North Carolina General Statutes (or any
successor statute) the right to collect reasonable attorneys' fees in any action or proceeding to
enforce or collect payment of such obligation. Provided, however, the foregoing sentence
specifically is intended to supplement, and not to interfere, limit, invalidate or be in conflict with,
any provisions of the Act or Legal Requirements with respect to reasonable attorneys' fees.
Section 2. Liability for Assessments After Change in Membership Status. No Owner shall
be relieved of, or released from, the obligation to pay assessments and other charges under the
Declaration because of any resignation or attempted resignation by such Owner of membership in
the Association while such Owner owns a Lot, or because of any suspension of such Owner's
membership or membership rights in the Association as allowed under Legal Requirements or the
Governing Documents.
Section 3. Nature Purpose and Use of Assessments. The assessments shall be used by the
Association to pay the Common Expenses. The annual assessment primarily is for the purpose of
funding the Common Expenses of the Association, including monies set aside for reserves, for the
fiscal year to which it applies and in accordance with the annual operating budget adopted by the
Association, although such assessments may be used for payment of any Common Expenses as
determined by theBoard.
All assessments and other charges collected by the Association shall be the separate property of
the Association. As assessments and other charges are paid to the Association by Owners, such
funds may be commingled with assessments and other charges paid to the Association by other
Owners. No Member of the Association shall have the right to assign, hypothecate, pledge or in
any manner transfer, such Member's interest in the assets of the Association, except as an
appurtenance to the Lot owned by such Member. When any Owner ceases to be a Member of the
Association, the Association shall not be required to account to such Owner for any share of the
funds or assets of the Association or any portion thereof which were paid to the Association by
such Owner or acquired with any funds paid to the Association by such Owner.
Section 4. Commencement of Assessments.
(a) Each Lot becomes subject to all assessments under the Declaration from and after the
later of the date on which it becomes a Lot or becomes subject to this Declaration.
(b) With respect to any Lot that is not a Lot on the first day of a fiscal year and first
becomes a Lot during that fiscal year, the annual assessment due and payable for that Lot for that
fiscal year is determined by multiplying the applicable annual assessment amount by a fraction
whose numerator is the number of days remaining in that fiscal year from and after the day on
which it becomes a Lot and whose denominator is the total number of days in that fiscal year.
Such annual assessment is due and payable by the Owner of such Lot on or before the 301h day
following the date on which it becomes a Lot.
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LZ 10.
(c) With respect to any Lot that is conveyed by Declarant to any other Owner during a
fiscal year for which Declarant has elected to fund the Operating Deficit instead of paying annual
assessments, for that fiscal year the annual assessment for such Lot due and payable by such Owner
is determined by multiplying the applicable annual assessment amount by a fraction whose
numerator is the number of days remaining in that fiscal year from and after the day on which the
conveyance occurs and whose denominator is the total number of days in that fiscal year. Such
annual assessment is due and payable by the Owner at the time of the conveyance by the Declarant
to such Owner.
Section 5. Annual Operating Budget and Annual Assessments.
(a) Beginning in 2022 and subsequent years, the Board shall adopt for each fiscal year a
proposed budget, containing an estimate of the total amount believed to be necessary to pay the
Common Expenses for that fiscal year, including such reasonable amounts as the Board deems
necessary to pay for: (i) maintenance of Stormwater Control Measures; (ii) payment of any
amounts the Association is required to pay to a Governmental Authority by agreements with
respect to Stormwater Control Measures; (iii) maintenance of Common Elements other than
Stormwater Control Measures; (iv) working capital (available for day-to-day operating expenses
of the Association and otherwise uncommitted for specific expenses); (v) reserves for
contingencies, including replacement of Common Elements; and (vi) other items determined by
the Board, and the budget shall contain separate line items for each of the foregoing (but no budget
shall be invalid if any one or more of such items are not shown as separate line items).
Notwithstanding anything to the contrary herein, the initial annual assessment shall not exceed
One Thousand Twenty and No/100 Dollars ($1,020.00) per year, without all Approved Builders'
prior written consent, which consent may not be unreasonably withheld.
In adopting a budget and annual assessment, the Board may consider any assessment income
expected to be generated from any additional Lots reasonably anticipated to become subject to
assessment during the applicable fiscal year. The budget shall state the amount of the annual
assessment per Lot proposed by the Board as necessary to pay for the budgeted Common Expenses,
which is the annual assessment that will be assessed upon ratification of the budget. Unless a lower
percentage is specified by the Board in the proposed budget, during the applicable fiscal year, and
without any meeting of the Association to ratify an amended budget (it being deemed that the
additional annual assessment is approved with the ratification of the original budget for that fiscal
year), the Board may assess and collect from the Owners one or more additional annual
assessments, which in aggregate may not exceed a total of fifty percent (50%) of the annual
assessment for that fiscal year, determined by the Board to be necessary to cover actual Common
Expenses that exceed the budgeted amount therefor and new or unexpected additional Common
Expenses incurred during that fiscal year. The amount of the annual assessment resulting from
budget ratification plus any additional amount of annual assessment permitted to be assessed by
the Board is referred to herein as the "maximum annual assessment" (for example, if the annual
assessment is $100.00 per Lot and the additional annual assessment amount that could be assessed
and collected during the applicable fiscal year is $50.00 per Lot, then the maximum annual
assessment for that fiscal year is $150.00 per Lot). The total amount of the annual assessment
actually assessed against each Lot during a fiscal year is referred to herein as the "actual annual
assessment" (for example, if the annual assessment proposed by the Board and ratified in
connection with the budget is $100.00 per Lot and an additional $25.00 per Lot is assessed during
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the fiscal year, the actual annual assessment for that fiscal year is $125.00).
Within thirty (30) days after adoption of the proposed budget, the Board shall provide a copy or
summary thereof to all Members (a copy or summary provided to any one of multiple Owners of
a Lot is deemed to be provided to all Owners of such Lot), together with a notice of the annual or
special meeting of the Association at which ratification of such proposed budget will be
considered, including a statement that the proposed budget may be ratified without a quorum for
the meeting. The annual or special meeting at which ratification of the proposed budget is to be
considered shall be held not less than ten (10) days nor more than sixty (60) days after mailing of
the summary and notice. There shall be no requirement that a quorum be present at the meeting
at which ratification of the proposed budget is to be considered (although if other matters are to be
considered at such meeting applicable quorum requirements are in effect with respect to those
other matters). The budget is ratified unless rejected at that meeting of Members who own eighty
percent (80%) or more of the total number of Lots in the Property. In the event that the proposed
budget is rejected, the budget last ratified by the Members shall be continued until such time as
the Members ratify a subsequent budget proposed by the Board.
(b) The Association shall send notice of each annual assessment and each additional annual
assessment to the Members of the Association (for purposes of notice of all assessments under the
Declaration, notice sent to any one (1) of multiple Owners of a Lot is deemed to be notice sent to
all of such Owners) not less than thirty (30) days in advance of the payment due date specified in
the notice (which shall not be earlier than the first day of the applicable fiscal year), which notice
may be in the form of an invoice for the annual assessment or additional annual assessment. The
failure of the Board to establish the amount of any annual assessment or send timely notice as
required herein shall not constitute a violation, waiver, or modification of the provisions of the
Declaration, or a waiver of the Board's right to establish and collect the annual assessment or
an additional annual assessment at any time during the fiscal year to which it is applicable,
or a release of any Member from the obligation to pay the assessment or any installment thereof
for that or any subsequent fiscal year. Until the Board has established an annual assessment for a
fiscal year, the actual annual assessment for the immediately preceding fiscal year shall continue
in effect, but when the new annual assessment is established, it shall be retroactive to the first day
of the applicable fiscal year and notice of same shall be sent to the Members not less than thirty
(30) days in advance of the payment due date specified in the notice. If the annual assessment for
any fiscal year has not been established by the last day of the immediately preceding fiscal year,
the Board may send a notice of assessment to the Members for the amount of the immediately
preceding fiscal year's annual assessment. Once the new annual assessment is established, any
additional amount owed is due and payable by the payment due date specified in a supplemental
notice to the Members sent not less than thirty (30) days in advance of the payment due date
specified in the supplemental notice.
(c) Except as otherwise provided in the Declaration or by Legal Requirements (for
example, additional or different assessments for Limited Common Elements and stormwater
assessments), all annual assessments shall be the same for all Lots.
Section 6. Declarant's and Approved Builders' Obligation to Pay Annual Assessments.
(a) For any fiscal year during the Development Period, Declarant may satisfy its obligation
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::?-r0;?-1
for payment of annual assessments on Lots it owns either by paying annual assessments in the
amount per Lot assessed for that fiscal year or by paying only the Operating Deficit. Unless
Declarant otherwise notifies the Board prior to the Board's adoption of a proposed annual
operating budget for the next fiscal year, Declarant shall be deemed to have elected to continue
paying on the same basis as during the current fiscal year. Payment of the Operating Deficit may
be enforced against the Declarant and collected by the Association in the same manner as
enforcement and collection of assessments applicable to other Owners. At Declarant' s option, the
Operating Deficit for any fiscal year may not be assessed against Declarant unless the maximum
annual assessment for that fiscal year has been assessed.
(b) Declarant's obligations with respect to payment of annual assessments or payment of
the Operating Deficit may be satisfied by Declarant by any combination of the provision of
services or materials toward satisfaction of Common Expenses, including (i) payment for such
services or materials directly to the providers thereof, or (ii) payment of money to the Association,
or (iii) providing, directly or indirectly, to or for the Association, services or materials related to
Common Expenses (the value of which shall be determined by the Board in its reasonable
discretion, giving due consideration to what the fair market value of such services or materials
would be if they had been furnished by a Person other than Declarant or an entity affiliated with
Declarant).
(c) Notwithstanding anything to the contrary herein, each Lot owned by an Approved
Builder shall not be assessed until the earlier of (i) a final Certificate of Occupancy has been issued
for the Dwelling built on the Lot; or (ii) six (6) months after the date of the closing for each Lot;
provided, however, no annual assessments shall commence as to any Dwelling/Lot upon which a
fully famished and staffed model home exists so long as such Dwelling/Lot is being used as a fully
furnished and staffed model home by the Approved Builder. The assessments shall be prorated
for each Lot as of the date that annual assessments commence as to each Lot.
Section 7. Special Assessments. In addition to all other assessments authorized herein, and
subject to the other requirements of the Declaration, the Association may levy special assessments
for the purpose of defraying, in whole or in part, the costs or expenses of any one or more of the
following:
(a) Maintenance of a capital improvement in or on the Common Elements, including
fixtures and personal property related thereto.
(b) Additions to the Common Elements.
(c) The necessary facilities and equipment to enable the Association to perform the
functions and offer the services required or authorized herein.
(d) The Common Expenses of the Association, to the extent that such Common Expenses
are not covered by annual assessments and applicable reserve funds.
(e) Repayment of any loan made to the Association to enable it to pay the Common
Expenses or to perform the other functions and provide the other services required or authorized
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a 1�
herein.
Each special assessment levied under this Section first shall be approved by the affirmative vote
by sixty-seven percent (67%) or more of the votes cast by the Members present at a meeting of the
Association and, during the Development Period, by written consent of the Declarant. Provided,
however, the Board may impose special assessments against Lots, without a vote of the Members,
for the following:
i. against the Lots in the Property at the time the judgment was entered, a special assessment
to pay for a judgment against the Association; and
ii. against all Lots in the Property at the time the special assessment is levied, a special
assessment to pay for part or all of any assessments against a Lot that remain unpaid after
title to the Lot has been transferred to a new Owner in foreclosure of a first deed of trust
on such Lot or by a deed or other document or proceeding in lieu of foreclosure.
Notices for all meetings of the Association at which there is to be a vote on a special assessment
shall include notice of the purpose and amount of the proposed special assessment. A special
assessment is effective on the later of the date it is approved by the Members or Declarant (if such
approval is required), or such later date adopted by the Members in the vote approving the special
assessment and is due and payable as established by the vote of the Members approving the special
assessment, or, if not established by such vote of the Members, as established by the Board. Except
as otherwise provided in the Declaration or required by Legal Requirements, special assessments
shall be assessed equally against the Lots - for example, if there are 100 Lots subject to a special
assessment, each Lot is assessed an amount equal to 1/100a' of the total amount of that special
assessment.
Section 8. Special Individual Assessment. In addition to all other assessments, the Board
(without any vote of the Members as required for other types of special assessments) may levy a
special individual assessment against any Owner for. (i) the repair of any damage to any portion of
the Property, including, without limitation, Common Elements and public road rights of way (other
than normal wear and tear), caused by the Owner or any such Owner's family members, tenants,
contractors, subcontractors, agents, or guests, or (ii) maintenance expenses resulting from the
failure of such Owner to maintain adequately that Owner's Lot, or (iii) for any other purposes for
which a special individual assessment may be assessed under Legal Requirements or Governing
Documents. The notice of such special individual assessment shall describe the nature of the
damage and the necessary repairs or maintenance, or any other purpose for the special individual
assessment, and any such special individual assessment shall be due and payable to the Association
on or before the tenth (101') day following the giving of the notice by the Association. The Board
may, in its discretion, levy any such special individual assessment prior to the commencement by
the Association of the repairs or maintenance for which such special individual assessment is
levied; provided that, if not already completed, upon the Association's receipt of payment of such
special individual assessment the Association promptly shall undertake to have such repairs or
maintenance performed and shall refund to such Owner any excess of the amount assessed and
paid over the cost of such repairs or maintenance. In the event that the cost of such repairs exceeds
the amount assessed and paid, the Board may assess such Owner for the excess costs.
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Section 9. Stormwater Assessment. Notwithstanding anything to the contrary in the
Declaration, and in keeping with the obligation of the Association under Section 47F-3-107(a) of
the Act to be "responsible for causing the common elements to be maintained, repaired, and
replaced when necessary and to assess the lot owners as necessary to recover the costs of such
maintenance, repair, or replacement", (i) if the Board determines that the amount required in any
fiscal year to pay for the Common Expenses, including the Association's obligation, if any, for
stormwater management, maintenance of Stormwater Control Measures and payment of sums due
from the Association under any Stormwater Agreement for any part or all of the Property, would
cause the Association's total expenses for that fiscal year to exceed the amount that would be due
and payable to the Association if all Lots were assessed in the amount of the maximum annual
assessment for that fiscal year (such excess amount of total expenses for that fiscal year being
referred to in this Section as "excess expenses"), and (ii) the Board determines that there are not
sufficient reserve funds available both to pay the excess expenses and continue to have adequate
reserve funds, and (iii) the maximum annual assessment has been assessed for that fiscal year, and
(iv) Declarant either has paid the maximum annual assessments to the Association or has funded
the deficit for that fiscal year in an amount equal to or greater than the maximum annual assessment
on all Lots owned by Declarant, then the Board may assess for that fiscal year, a "stormwater
assessment" in an amount sufficient to pay for the excess expenses. The amount of such stormwater
assessment shall be determined and assessed against all Lots in the Property at the time the
assessment is made, and no vote of the Members is required. The payment due dates for such
stormwater assessment shall be as determined by the Board and shall be enforceable against
Owners and their Lots in the same manner as annual assessments. Provided, however, during the
Development Period no such stormwater assessment shall be assessed unless the same shall have
been consented to in writing by the Declarant. Further provided, except as may be necessary to
account for different Stormwater Control Measures, or Stormwater Agreements (or other
agreements related to stormwater) applicable to different Lots as allowed in the Declaration, all
stormwater assessments shall be the same for all Lots. Any stormwater assessment for excess
expenses is in addition to all other assessments provided for herein.
Section 10. Collection of Assessments; Penalties for Late Payment.
(a) Assessments may be collected on a monthly, quarterly, annual or other basis, as determined
by the Board, with the payment due date to be specified in the notice of the applicable assessment.
The billing schedule and payment due date shall be the same for all Owners.
(b) Subject to any limitations contained in the Declaration, other Governing Documents, or
any Legal Requirement, the Board has the authority to establish the payment due dates and
penalties for late payment of assessments and other charges. Assessments and other charges not
paid by the payment due date shall bear a Iate payment penalty in an amount established by the
Board, not to exceed the legal rate. In addition to the obligation to pay the assessment and other
charges and penalties thereon, the defaulting Owner also shall pay all of the Association's costs
and expenses of collection thereof, including reasonable attorneys' fees.
(c) The Board may authorize a property manager or management company or other billing
agent, on behalf of the Association, to bill and collect all assessments and other charges payable
under the Declaration.
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Section 11. Certification of Assessments Paid. The Association, or any property manager or
agent authorized by the Association, upon written request and payment of a reasonable charge or
fee established or approved by the Board, shall famish to any Owner or such Owner's authorized
agent, or to any holder of a first lien deed of trust on a Lot, or to an attorney who represents the
Owner or a prospective purchaser of such Lot, or to any other Person approved by the Board, a
certificate signed by an officer of the Association or other Person authorized by the Board to give
such certificate setting forth whether or not there are any unpaid assessments or other charges
against such Lot and the amount of any unpaid assessments or other charges. The certificate shall
be furnished within ten (10) business days after receipt of the request therefor and, except in the
event of any wilIfuI misstatement made by the issuer of the certificate, it shall be binding on the
Association, the Board and every Owner. If requested by the requesting party, the certificate also
shall indicate whether or not the Association has knowledge of any uncured default in, or violation
of, any provision of the Declaration and other Governing Documents with respect to the Lot and
the then -Owners thereof and, if there is any uncured default or violation, the action required to
cure it.
Section 12. Assessment Lien and Foreclosure. The assessments and other charges provided
for herein shall be the personal and individual debt of each Person who, at the time of the
assessment or other charge, is the Person against whom they are charged or is an Owner of the Lot
against which they are assessed or charged. All assessments levied against a Lot and other charges
owed by the Owner of a Lot that remain unpaid for a period of thirty (30) days or longer, together
with the costs of collection thereof, including reasonable attorneys' fees, shall constitute a charge
and continuing lien on that Lot from and after the time of the filing of a claim of lien by the
Association in the office of the Clerk of Superior Court of Nash County, North Carolina, and shall
be the personal and continuing obligation of such Owner at the time when the assessment or other
charge first became due and payable. Prior to filing a claim of lien, the Association must make
reasonable and diligent efforts to ensure that its records contain the current mailing address for the
Owner of such Lot. No fewer than fifteen (15) days prior to filing the claim of lien, the Association
shall mail a statement of the assessment amount due by first-class mail to the physical address of
the Lot and to the Owner's address of record with the Association, and, if different, to the address
for such Owner shown on the Nash County property tax records and Nash County real property
records for the Lot. If the Owner of the Lot is a corporation or other legal entity that has a registered
agent, the. statement also shall be sent by first-class mail to the mailing address of the registered
agent for the corporation or such other legal entity.
Except as otherwise provided in the Governing Documents or by Legal Requirements, such lien
shall be superior to all other liens and charges against such Lot. The Board shall have the power,
in its sole discretion, to subordinate the lien to any other lien. The claim of lien shall set forth the
name and address of the Association, the name of the record Owner of the applicable Lot at the
time the claim of lien is filed, a description of the Lot, and the amount of the lien claimed. In
addition to the claim of lien, the Association may execute, issue or record such other evidence of
the lien as the Board deems necessary. Except as otherwise provided in the Act, the Association
may foreclose the claim of lien in like manner as a deed of trust on real estate under a power of
sale or in any other manner allowed or required by Legal Requirements, if the assessment remains
unpaid for ninety (90) days or more, or the Association may institute suit against the Owner
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2�r �
personally obligated to pay the assessment or charge, or the Association may seek any other
available remedy or relief. Provided, however, the Association shall not foreclose the claim of lien
unless the Board votes to commence the proceeding against the specific Lot. In any foreclosure
proceeding, the Association shall have the right to appoint a trustee or commissioner (or other
appropriately named Person) to implement the foreclosure, and the defaulting Owner shall be
required to pay the costs, expenses, trustee's (or commissioner or other) fees, and reasonable
attorneys' fees incurred by the Association. The Association shall have the power to bid on and
purchase the Lot at foreclosure and to acquire, hold, lease, mortgage, convey or otherwise deal
therewith. The remedies against a defaulting Owner and such Owner's Lot are cumulative and not
mutually exclusive, and the Association may seek none, or any one or more of such remedies,
separately or simultaneously, as deemed appropriate by the Board.
Section 13. Lien Priority. The lien for unpaid assessments and other charges provided for
herein is prior - to all liens and encumbrances on a Lot except (i) liens and encumbrances
(specifically including a first lien deed of trust on a Lot) recorded before the docketing of the claim
of lien in the office of the Nash County Clerk of Court, and (ii) liens for real estate taxes and other
Governmental Authority assessments and charges against the Lot. Provided, however, this Section
does not affect the priority of mechanic's or materialmen's liens. A lien for unpaid assessments
and other charges is extinguished unless proceedings to enforce the lien are instituted within three
(3) years after the docketing of the claim of lien in the office of the Nash County Clerk of Court.
Where the holder of a first deed of trust of record, or other purchaser of a Lot obtains title to the
Lot as a result of foreclosure of a first deed of trust or deed or other proceeding in lieu of
foreclosure, such new Owner of the Lot and its heirs, successors, and assigns, shall not be liable
for the assessments against such Lot which became due prior to the acquisition of title to such Lot
by such new Owner. Such unpaid assessments shall be deemed to be Common Expenses collectible
from all the Owners, including such new Owner, its heirs, successors, and assigns in the event that
the Association is unable to collect, or chooses not to pursue collection, from the Person who was
the Owner of the Lot during the time the assessments were assessed against the Lot.
Section 14. Exempt Property. To the extent provided herein, Exempt Property is exempt from
the assessments, charges and liens established pursuant to the Declaration.
Section 15. Reserve Funds. From the annual assessments and working capital assessments the
Board, in the exercise of its reasonable discretion, shall establish and maintain reserve funds for
contingencies, acquisition and replacements of Common Elements, and other financial obligations
of the Association. Reserve funds are subject to the following:
(a) Extraordinary or contingency expenditures not originally included in the annual
operating budget shall be paid for out of appropriate reserve funds, including (i) major
rehabilitation or repair of the Common Elements (including but not limited to the private roads),
(ii) emergency or other repairs required as a result of storm, fire, natural disaster or other casualty
loss, (iii) as determined by the Board, the initial costs of any new service to be performed by the
Association, and (iv) any other items allowed by the Governing Documents or Legal Requirements
to be paid out of reserve funds. Except for expenses of normal and routine maintenance included
in the annual operating budget, all expenses for repair or replacement of the Common Elements
first shall -be charged against appropriate reserves in such amount as determined by the Board.
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(b) If reserve funds become excessive, as determined by the Board, the Board may adjust
the reserve funds by reallocation to other annual operating budget items or by applying excess
amounts as credits against annual assessments, or by refunding the excess amount to the then
Owners.
Section 16. Working Capital Assessment. Except in those instances in which a working
capital assessment for the Lot has been paid previously, at the closing of the sale by Declarant of
a Lot on which a Dwelling exists, or at the closing of the sale of a Lot by the Declarant to any
Person other than an Approved Builder or a successor or assignee Declarant, or at the closing of
the sale of a Lot by an Approved Builder to any Person, whether or not there is a Dwelling on the
Lot, the purchaser of the Lot or the Lot and Dwelling shall pay to the Association at the time of
the closing of the purchase a "working capital assessment" in the amount of $400.00. The working
capital assessment shall be paid only once with respect to each Lot and is in addition to all other
assessments. All working capital assessments may be enforced and collected in the same manner
as all other assessments.
Section 17. No DefauIt Under Insured Mortgage. Nothing contained in the Declaration shall
be construed as stating or implying that any failure of an Owner to pay assessments constitutes a
default under any deed of trust on such Owner's Lot that 'is insured by the FHA, VA, FNMA,
FHLMC, or any Secondary Mortgage Market Agency, or any mortgage program administered by
any of said agencies.
ARTICLE VII
INSURANCE
Section 1. General Provisions.
(a) The Board shall -have the power on behalf of the Association to: (i) purchase and
maintain in effect insurance policies relating to the Common Elements and the activities, functions,
and obligations of the Association; (ii) purchase and maintain in effect insurance policies required
by Legal Requirements; (iii) purchase and maintain in effect any other policies of insurance as
determined by the Board; (iv) adjust all claims arising under such policies; and (v) sign and deliver
releases upon payment of claims. The cost of all insurance policies purchased by the Board as
allowed or required by the Declaration or required by Legal Requirements is a Common Expense.
Neither the Board, nor a property manager, nor Declarant, shall be liable for failure to obtain any
insurance required by this Article, or for any loss or damage that could have been paid by such
insurance, if such insurance is not reasonably available. With respect to any insurance required by
Legal Requirements, either by hand delivery, or United States Mail, postage prepaid, or by other
method allowed by the Declaration or Legal Requirements, the Association promptly shall notify
the Owners if such insurance is not reasonably available, or if there is any material adverse
modification, lapse, or cancellation of, such insurance that is not being replaced by other
insurance.
(b) All policies of insurance obtained by the Association shall be written by reputable
companies licensed or qualified to do business in North Carolina.
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(c) The deductible or retained limit (if any) on any insurance policy obtained by the
Association shall be in a reasonable amount as determined by the Board and shall be a Common
Expense.
(d) To the extent such policy provisions are reasonably available, as determined by the
Board, Association policies shall provide for the following:
(1) policies shall be written in the name of the Association as trustee for the benefitted
parties. Policies on the Common Elements shall be for the benefit of the Association and
its Members.
(2) no policy obtained by the Association shall be canceled, invalidated or suspended due
to the conduct of any Owner, or such Owner's tenant or such Owner's (or tenant's)
household members, guests, employees or agents, or of any director, officer or employee
of the Board, or the property manager, without a prior demand in writing that the
Association or the property manager cure the defect and a period of not less than thirty'(30)
days within which to cure such defect.
(3) policies shall not be brought into contribution with insurance purchased by Owners,
occupants, tenants, or their Mortgagees individually.
(4) an inflation guard endorsement.
(5) an agreed amount endorsement, if the policy contains a co-insurance clause.
(6) each Owner is an insured person under the policy to the extent of such Owner's
insurable interest;
(7) the insurer waives its right to subrogation under the policy against any Owner or
member of that Owner's household;
(8) no act or omission by any Owner, unless acting within the scope of such Owner's
authority on behalf of the Association, will preclude recovery under the policy; and
(9) if, at the time of a loss under the policy, there is other insurance in the name of an
Owner covering the same risk covered by the Association's policy, the Association's policy
provides primary insurance coverage.
(10) an endorsement excluding Owners' individual policies from consideration under
any "other insurance" clause.
(11) any other provisions determined by the Board to be necessary or desirable.
(e) To the extent reasonably possible, the Association shall require that an insurer who has
issued an insurance policy to the Association for property insurance on the Common Elements or
for liability insurance issue certificates or memoranda of insurance to the Association and, upon
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written request, to any Owner or Mortgagee. If such agreement is reasonably available from the
insurer, the insurer issuing the policy may not cancel or refuse to renew it until thirty (30) days
after notice of the proposed cancellation or non -renewal has been mailed to the Association and
each Owner and Mortgagee to whom certificates or memoranda of insurance have been issued, to
their respective last known addresses.
(f) The Association may procure such fidelity bonds as the Board determines are
reasonable or necessary, including such bonds as may be necessary to comply with Legal
Requirements and to satisfy the applicable requirements of FHA, VA, FNMA, Office of Interstate
Land Sales Registration of the Department of Housing and Urban Development ("OILSR") or
other Secondary Mortgage Market Agency or Governmental Authority.
(g) During the Development Period (i) Declarant shall be named as an additional insured
party under any one or more policies of insurance maintained by the Association, and (ii) any
Approved Builder, as requested by Declarant, shall be named as an additional insured party under
any one or more policies of insurance maintained by the Association; provided, however, any
Approved Builder named as an additional insured under any policy of insurance maintained by the
Association shall pay to the Association any additional premium charged by the insurer for
including the Approved Builder as an additional insured, and the. Association shall not be required
to have any such Approved Builder who does not timely pay such additional premium named as
an additional insured.
Section 2. Property Insurance.
(a) The Association, to the extent that it is reasonably available, shall obtain and maintain
property insurance on all Improvements on all real property owned by the Association and on all
Improvements owned by the Association and located on real property not owned by the
Association, insuring against all risks of direct physical loss commonly insured against, including
fire damage and extended coverage perils. The total amount of such insurance after application of
any deductibles shall be not less than eighty percent (80%) of the replacement cost of the
Improvements at the time the insurance is purchased and at each renewal date, exclusive of land,
excavations, foundations and other items normally excluded from property policies. The foregoing
property insurance shall be obtained by the Association as it becomes the owner of the
Improvements to be insured. As and when determined to be necessary by the Board, the
Association also may obtain and maintain insurance policies on any other personal property owned
'by the Association.
(b) To the extent reasonably possible, the Association shall require the insurer to deliver
to each Institutional Lender who requests the same in writing certificates of property insurance on
the Common Elements, all renewals thereof, and any sub -policies or certificates and endorsements
issued thereunder, together with proof of payment of premiums.
Section 3. Liability Insurance. The Association, to the extent that it is reasonably available,
shall obtain and maintain liability insurance in reasonable amounts, covering all occurrences
commonly insured against for death, bodily injury, and property damage arising out of or in
connection with the use, ownership or maintenance of all real property owned by the Association
and of all Improvements owned by the Association and.located on real property not owned by the
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GTfJ
Association. The foregoing liability insurance shall be obtained by the Association as it becomes
the owner of the real property or becomes the owner of Improvements, as the case may be.
"Umbrella" liability insurance in excess of the primary limits may be obtained in reasonable
amounts as determined by the Board in its sole discretion.
Section 4. Other Insurance or Bonds. The Association may obtain and maintain other
insurance or bonds, as follows:
(a) adequate fidelity coverage to protect against dishonest acts on the part of directors, officers,
trustees, agents and employees of the Association and all others who handle or are responsible for
handling funds of the Association, including any property manager and volunteers. If the
Association has delegated some or all of the responsibility for handling funds to a property
manager, such property manager shall be covered by its own fidelity insurance in such amounts as
required by the Board; however, the Association may purchase additional fidelity coverage for the
property manager as well. Such fidelity insurance (except for fidelity insurance obtained by the
property manager for its own personnel) shall: (i) name the Association as an obligee; (ii) be
written in an amount not less than one-fourth of the total annual assessment for Common Expenses
or the amount required by the Institutional Lenders, the FNMA or the FHLMC, whichever is
greatest; and (iii) contain waivers of any defense based upon the exclusion of persons who serve
without compensation from any definition of "employee" or similar expression.
(b) If required by a majority of the Institutional Lenders or any applicable Legal
Requirement, flood insurance on the real property owned by the Association in accordance with
the then applicable regulations for such coverage.
(c) workers' compensation insurance if and to the extent necessary to meet the
requirements of law (including a voluntary employees endorsement and an "all states"
endorsement).
(d) directors and officers liability insurance.
(e) such other insurance or bonds as the Board may determine in the exercise of its
reasonable discretion, or as may be requested by the affirmative vote of a majority of the Members
present at a meeting of the Association.
Section 5. Owners' Insurance. In addition to any insurance policy issued to the Association,
each Owner shall have the right to acquire and maintain insurance on Common Elements for such
Owner's benefit, at such Owner's expense. Provided, however, no Owner shall acquire or maintain
insurance coverage on the Common Elements so as to: (i) decrease the amount which the
Association may realize under any insurance policy maintained by the Association; or (ii) cause
any insurance coverage maintained by the Association to be brought into contribution with
insurance coverage acquired or maintained by an Owner.
Each Owner acknowledges that the Association has no obligation to provide any insurance for any
portion of Lots or any Improvements thereon (other than any such Improvements owned or
maintained by the Association) or for the personal property of any Owner, occupant, tenant, or
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guest. Each Owner covenants and agrees with all other Owners and the Association that each
Owner at all times shall carry all-risk casualty insurance (including fire and other hazards
commonly insured) on all Improvements located on such Owner's Lot (except for . any
Improvements owned or maintained by the Association) sufficient to cover the full replacement
cost of any repair or replacement of such Improvements, and a liability policy covering damage or
injury occurring on the Owner's Lot.
ARTICLE VIIC
USE OF THE PROPERTY
Section 1. Use of the Property. Except as otherwise allowed by the Declaration, no portion
of the Property shall be used for other than residential purposes, streets, utilities, greenways, open
space, Common Elements, recreational purposes, or other purposes substantially related to
residential use which are allowed under applicable Governmental Authority zoning ordinances for
such portions of the Property (unless such substantially related purposes are prohibited by other
provisions of the Declaration), or any other uses allowed under applicable Governmental Authority
zoning ordinances for such portions of the Property and approved by the Declarant during the
Development Period or thereafter, by the Board. Provided, however, and notwithstanding the
foregoing sentence, during the Development Period: (i) Declarant, and any Approved Builder or
other Person with Declarant's consent, may maintain model homes, sales offices and temporary
construction trailers and other facilities within the Property for the purpose of conducting business
related to the development, improvement, or sale or marketing of any part or all of the Property,
including a reasonable time within which to remove such items following completion of such
construction of initial Improvements; and (ii) Declarant, and any Approved Builder or other Person
with Declarant's consent, may conduct such business and other activities within the Property as
may be necessary or desirable in connection with the development, improvement, or sale or
marketing of any part or all of the Property.
Section 2. Animals. No animals of any kind (including livestock, reptiles or poultry) shall be
kept on any portion of the Property or in any Dwelling except for dogs, cats or other domestic
household pets, which are not used for breeding or other commercial purposes, and provided that
they do not create a nuisance or risk of injury to others (in the judgment of the Board), by number
or type of animal, noise, odor, damage or destruction of property, animal waste, or any other
reason, and further provided that they are kept in compliance with all Legal Requirements and
such Restrictions and Rules and other Rules and Regulations pertaining thereto as the Association
may adopt, which Rules and Regulations may include requirements that animals be kept on a leash
or otherwise restrained or confined whenever they are anywhere on the Property other than on the
Owner's Lot or other areas specifically designated for animals not on leashes, that animals be
restrained or confined inside a fence or other restraint when on a Lot outside of the Dwelling, and
which may prohibit the keeping of animals on the Property that are excluded from coverage or
subject to reduced coverage under liability insurance policies generally available for the Property.
The Board may require any Owner to furnish the Board with evidence that a particular animal is
not excluded or subject to reduced coverage under the liability insurance policy maintained by
such Owner for that Owner's portion of the Property, and the Owner shall furnish the Board with
the required evidence (in the form of a copy of the applicable policy or such other evidence
reasonably satisfactory to the Board) within ten (10) days following the date on which the Board
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gives a notice that it is requiring same. Provided, however, no Board member shall have any
liability for any failure of the Board to adopt a Restriction or Rule or other rule or regulation that
prohibits the keeping of a particular type or breed of animal. The Owner responsible for an animal
being on the Property promptly shall clean up or remove from any portion of the Property not
owned by such Owner all solid bodily wastes from that animal.
Each Owner who keeps any animal on any portion of the Property shall be deemed to have
indemnified and agreed to hold harmless the Association, Declarant and all other Owners, from
and against any loss, claim for damages to person or property, cause of action, or liability of any
kind, including all costs of defending against same (including reasonable attorneys' fees), arising
out of or resulting from such animal, including any actions of the animal. An easement over and
upon the Property hereby is reserved for the applicable Governmental Authority to exercise and
enforce Legal Requirements relating to animal control.
Section 3. Harmful Dischar"es. There shall be no emissions of dust, sweepings, dirt,
cinders, odors, gases or other substances from any portion of the Property into the atmosphere
(other than those resulting from cleaning or reasonable residential chimney or outdoor grill
emissions), there shall be no production, storage or discharge of hazardous wastes from or on any
portion of the Property, and there shall be no discharges of liquid or solid wastes or other harmful
matter into the ground, sewer or any body of water within the Property, if such emission,
production, storage or discharge may adversely affect the use of any portion of the Property, or
may adversely affect the health, safety or comfort of the occupants of the Property. Provided,
however, the foregoing prohibitions shall not prevent or interfere with the reasonable development
or maintenance of any portion of the Property or Improvements thereon by Declarant, any
Approved Builder or any other Person in accordance with Legal Requirements, nor shall they
prevent, as incident to the residential use of the Property, the reasonable use, handling, storage and
disposal of medically related hazardous substances and wastes in compliance with all Legal
Requirements.
Section 4. Home Businesses. An Owner may maintain an office or home business in such
Owner's Dwelling or other improvement in the Property only if: (i) such office or home business
is operated by the Owner or a member of the Owner's household residing in the Dwelling, or by
Owner's residential tenant residing in the Dwelling; (ii) there are no displays or signs indicating
that the Dwelling or improvement or portion of the Property on which it is located is being used
other than as a residence; (iii) such office or business does not generate regular or significant traffic
or parking usage by the business itself or by clients, customers or other Persons, it being in the
discretion of the Board to determine compliance with this requirement; (iv) no vehicles, equipment
or other items related to the office or business are stored, parked or otherwise kept on the streets
in the Subdivision or on the portion of the Property on which such Dwelling is located outside of
the Dwelling or other enclosure approved by the Architectural Review Committee; (v) such Owner
has obtained from the applicable Governmental Authority, and maintains in effect, all required
approvals for such use; (vi) the activity is consistent with the residential nature of the Property and
complies with all Legal Requirements and other provisions of the Declaration; (vii) no person is
employed in such office or home business except for the Owner or the members of the Owner's
household residing in the Dwelling or the Owner's tenant residing in the Dwelling; and (viii) the
Owner has obtained prior written approval from the Board before commencing such business or
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-:2a3 -
office use and thereafter registers annually with the Association and obtains annual re -approval of
such business or office use by the Board as long as the operation of the home business continues.
As a condition to such use, the Association may require the Owner to pay any increase in the rate
of insurance, trash removal, utilities or other costs for the Association or other Owners which result
or reasonably may be anticipated to result from such use. Garage sales, yard sales and similar
activities shall be conducted only in accordance with all Legal Requirements and the Rules and
Regulations, if any, adopted by the Association.
Section 5. Hunting; Discharge of Firearms. Hunting and trapping of wild animals, fowl and
game and the discharge of firearms or bows and arrows or other weapons within the Property is
prohibited, unless required for safety or personal protection reasons.
Section 6. Leases. Every lease for any Dwelling or other portion of the Property shall provide
that the terms of the lease shall be subject in all respects to the provisions of the Declaration and
other Governing Documents, and that each lessee shall comply with the terms of such documents.
Provided, however, the Declaration and other Governing Documents apply to all such leases,
whether or not so stated therein. No Dwelling may be rented or leased for a term less than twelve
(12) months, or listed for rent or lease for a term Iess than twelve (12) months without the prior
written consent of the Association.
Section 7. Leizal Requirements. Nothing herein contained shall be deemed to constitute a
waiver of any Legal Requirement applicable to any portion of the Property, and all Legal
Requirements relative to the construction of Improvements on, or use and utilization of, any
portion of the Property shall be complied with by the Owners and occupants of such portions of
the Property, whether or not the Approved Plans for same are in compliance with such Legal
Requirements. Provided, that in any instance in which the provisions of the Declaration contain a
provision that requires something more than or in addition to, or prohibits something otherwise
allowed under, a Legal Requirement (for example, prohibition of a use allowed under a Legal
Requirement or requirement of a greater distance or size than required under a Legal Requirement),
the provisions of the Declaration shall control, unless prohibited by a Legal Requirement.
Section 8. Noises. No Person shall cause any unreasonably loud noise anywhere on the
Property, except for security devices used in the manner intended therefor, nor shall any Person
permit or engage in any activity, practice or behavior resulting in substantial and unjustified
annoyance, discomfort or disturbance to any Person lawfully present on any portion of the
Property. Provided, however, the prohibition against noises contained in this Section shall not
preclude or limit activities in the Property conducted in accordance with the applicable Restrictions
and Rules or other Rules and Regulations of the Association, including recreational events and
social events. Further provided, the foregoing prohibitions shall not prevent or interfere with the
reasonable development, construction, use, or maintenance of any portion of the Property or
Improvements thereon by the Association, Declarant, an Approved Builder, a Governmental
Authority, a utility provider, or any other Person in accordance with Legal Requirements or the
Governing Documents.
Section 9. Nuisance and Other Matters. No noxious or offensive activity shall be conducted
upon any portion of the Property, nor shall anything be done thereon which may be or may become
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an annoyance or nuisance to the Community or any part thereof, or to any person lawfully residing
in the Subdivision. Provided, however, the usual, customary or reasonable use and maintenance of
a Lot, a Dwelling, or any Common Elements shall not constitute a nuisance. Further provided, the
development of the Property by Declarant and Approved Builders, and the usual, customary or
reasonable construction and maintenance of Dwellings and other Improvements in the Property
shall not constitute a nuisance. Further provided, the operation and use of the Common Elements
in the manner required or allowed by the provisions of the Declaration shall not constitute a
nuisance.
No trade materials or inventories (other than materials used for construction of Dwellings by an
Approved Builder or other approved structures or Improvements) shall be stored upon any portion
of the Property and no tractors, inoperable motor vehicles, rubbish, trash, or unsightly materials of
any kind shall be stored, regularly placed, or allowed to remain on any portion of the Property
unless adequately screened or contained as approved by the Architectural Review Committee,
except that trash, leaves, tree limbs, materials for trash or recycling pick-up and similar items may
be kept or placed temporarily and only for such time as is reasonably necessary to enable the
applicable Governmental Authority or appropriate private entity to remove same, and inoperable
motor vehicles may be stored only if the same are kept entirely in an enclosed garage or other
building. Provided, however, and notwithstanding anything to the contrary herein, (i) as approved
by Declarant during the Development Period, trucks or other construction vehicles, materials and
equipment may be allowed to remain on the Property temporarily during construction of roads,
utilities, Dwellings and other Improvements in the Property, and (ii) such vehicles, materials and
equipment also may be allowed to remain on the Property during construction or maintenance on
the Property of Dwellings or other Improvements which have been approved by the Architectural
Review Committee.
Section 10. Owner Liability. If any Owner or such Owner's family members, tenants, guest,
employees, contractors, subcontractors, or agents is legally responsible for damage inflicted on
any Common Elements, the Association may direct such Owner to repair such damage, or the
Association itself may cause the repairs to be made and recover damages from the responsible
Owner, including costs incurred in seeking and enforcing such recovery or other applicable legal
remedies, including reasonable attorneys' fees. In addition to or as an alternative to the foregoing,
in accordance with Article VI, Section 8, the Association may impose a special individual
assessment against any such Owner.
Section 11. Exclusion for Declarant. Notwithstanding any other provision of the Declaration
or any other Governing Documents, Declarant, during the Development Period (and thereafter, the
Board) has the right, permanently or temporarily (as determined in the discretion of Declarant or
the Board, as applicable) to waive any one or more of the provisions of this Article with respect to
construction or maintenance of any Improvements on the Property, except that there shall be no
waivers with respect to soil erosion controls and Legal Requirements. Any such written waiver
granted by the Declarant to an Approved Builder or other Person during the Development Period
shall be binding on the Board after the Development Period has ended.
ARTICLE IX
RESTRICTIONS AND RULES
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2.42- 5-"
Section 2. Framework for Regulation. As part of the general plan of development for the
Property, the Governing Documents establish a framework of affirmative and negative covenants,
easements, and restrictions. Within that framework, the Declarant, Board, and Members need the
ability and flexibility to supplement the Declaration with additional Restrictions and Rules and to
respond to unforeseen problems and changes in circumstances, conditions, needs, desires, trends,
and technology. Therefore, this Article discusses Restrictions and Rules and procedures with
respect to Restrictions and Rules. This Article does not apply to Rules and Regulations relating to
use and operation of the Common Elements adopted by the Board, unless the Board in its discretion
chooses to submit to such procedures. This Article does not apply to administrative policies which
the Board adopts to interpret, define or implement the Restrictions and Rules or other Governing
Documents, nor does it apply to Architectural Guidelines.
Section 2. Restrictions and Rules. All Owners and occupants of all portions of the Property
and their . guests and invitees shall abide by the Restrictions and Rules. Compliance with the
Restrictions and Rules may be enforced in the same manner and to the same extent that the
Declaration provides for enforcement of the Declaration, and any Person determined by judicial
action to have violated the Restrictions and Rules shall be liable to the Declarant or Association
or other applicable Person for all damages and fines, including all costs incurred in seeking and
enforcing applicable Iegal remedies, including reasonable attorneys' fees.
Section 3. Rule Making Authority.
(a) Subject to the terms of this Article and the Board's duty to exercise business judgment
and reasonableness on behalf of the Association and its Members, the Board may adopt, amend,
modify, cancel, limit, create exceptions to, add to, or expand the Restrictions and Rules. During
the Development Period, no action taken by the Board pursuant to this subsection shall be effective
unless approved in writing by the Declarant.
Prior to any such action taken by the Board becoming effective, the Board shall give notice of the
new rule or explanation of any changes to the Restrictions and Rules to each Owner, which notice
shall state the effective date of the action, which shall be not less than thirty (30) days following
the date on which the action is taken by the Board. The Association shall provide to any requesting
Owner (but not to more than one Owner of a Lot), without cost, one copy of the Restrictions and
Rules then in effect, together with the action taken by the Board. Additional copies may be
provided by the Association upon payment of a reasonable charge as established by the Board.
The action taken by the Board shall become effective on the later of the 3IS' day after the action is
taken by the Board or such later effective date specified in the notice, unless, prior to the effective
date, Members representing more than fifty percent (50%) of the total number of votes in the
Association disapprove such action at a meeting or in writing to the Board. The Board shall have
no obligation to call a meeting of the Members to consider disapproval except upon receipt, prior
to the effective date of the action taken by the Board, of a petition of the Members as required by
the Governing Documents for special meetings of the Association or a written request from the
Declarant. Upon such petition of the Members or written request from the Declarant prior to the
effective date of any Board action under this Section, the proposed action shall not become
effective until after such meeting is held, and then subject to the outcome of such meeting.
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.;2�;Zo;
(b) Alternatively, when they have a right to vote under the Declaration, Class A Members
representing more than fifty percent (50%) of the total number of votes in the Association, at an
Association meeting called for such purpose, may vote to adopt rules that modify, cancel, limit,
create exceptions to, add to, or expand the Restrictions and Rules then in effect. Provided, however,
during the Development Period no such action shall be effective without the written approval of
the Declarant. Upon such action being taken by the Class A Members, the Board shall notify each
Owner of the new rule or explanation of any changes to the Restrictions and Rules, and the action
taken by the Members shall become effective on the later of the 3 1 " day after the action is taken
by the Members or such later effective date specified in the notice.
(c) No action taken by the Board or Class A Members under this Article shall have the
effect of modifying, amending, repealing, limiting, or expanding the Architectural Guidelines or
any provision of the Declaration or other Governing Documents. Prior to the end of the
Development Period, no such action shall be effective unless approved in writing by the Declarant.
In the event of a conflict between the Architectural Guidelines and the Restrictions and Rules, the
Architectural Guidelines shall control.
(d) Notwithstanding the foregoing procedures for amending the Restrictions and Rules,
and notwithstanding anything to the contrary elsewhere in this Article or the Declaration, during
the Development Period the Declarant, in its sole discretion and following the receipt of the written
consent of all Approved Builders that own a Lot or have the right to acquire a Lot, but otherwise
without any prior notice to any Person, may adopt, amend, modify, cancel, limit, create exceptions
to, add to, or expand the Restrictions and Rules. Prior to any action taken by the Declarant
becoming effective, the Declarant, or the Board at the direction of the Declarant, shall give notice
of the new rule or explanation of any changes to the Restrictions and Rules to each Owner (notice
sent to any one Owner of a Lot being sufficient notice), which notice shall state action taken and
the effective date of the action, which date may be any time on or after the date on which the action
is taken by Declarant.
Section 4. Owners' Acknowled ment and Notice to Purchasers. All Owners are given
notice that use of their Lots and Dwellings is subject to the Restrictions and Rules as modified
from time to time. By acceptance of a deed, each Owner acknowledges and agrees that the use
and enjoyment and marketability of such Owner's Lot and Dwelling can be affected by this
provision and that the Restrictions and Rules may change from time to time. All Owners hereby
are notified that, as provided for herein, the Declarant or the Board or the Members may adopt
Restrictions and Rules or changes to any Restrictions and Rules in effect at any particular time.
Section 5. Protection of Owners and Others. Except as may be set forth in the Governing
Documents, all Restrictions and Rules shall comply with the following provisions:
(a) Similar Treatment. Similarly -situated Owners shall be treated similarly, the
determination of which Owners are similarly -situated being in the reasonable judgment of the
Declarant or Board, as applicable.
(b) Displays. The rights of Owners to display religious and holiday signs (the word "sign"
or "display" as used in the Declaration includes signs, banners, flags (including a flag of the United
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a16;k.-7
States of America, a North Carolina flag, or other flag), symbols, decorations, and other displays)
inside Dwellings shall not be abridged, except that there may be rules regulating the number, size,
time, place and manner of posting or displaying such signs that are located outside of or are visible
from outside of the Dwelling, including regulation or specification of design criteria (for example,
color, style, or materials).
No rules shall regulate the content of political signs; however, rules may regulate the number, size,
time, and place and manner of posting or displaying, such political signs that are located outside
of or are visible from outside of the Dwelling, including regulation or specification of design
criteria (for example, color, style, or materials).
Signs required by Legal Requirements to be posted or displayed, and signs prohibited by Legal
Requirements from being excluded or prohibited shall be allowed (for example, a street number
sign for a Dwelling required by a Governmental Authority). However, to the extent that it would
not violate the Legal Requirement, rules may regulate the number, size, time, and place and manner
of posting or displaying, such signs, including regulation or specification of design criteria (for
example, color, style, or materials).
(c) Household Composition. No rule shall interfere with the Owners' freedom to determine
the composition of their households, except that rules may require that all occupants be members
of a single housekeeping unit and reasonably may limit the total number of occupants permitted in
each Dwelling on the basis of the size and facilities of the Dwelling and its fair use of the Common
Elements.
(d) Activities Within Dwellings. No rule shall interfere with the activities carried on within
the confines of Dwellings, except that rules may prohibit activities not normally associated with
property restricted to residential use or otherwise allowed by the Declaration, and may restrict or
prohibit any activities that create monetary costs for the Association or other Owners, that create
a danger to the health or safety of occupants of other Dwellings, that generate excessive noise or
traffic, that create unsightly conditions visible outside the Dwelling, that create an unreasonable
source of annoyance, or that would violate any of the Governing Documents or any Legal
Requirement.
(e) Allocation of Burdens and Benefits. No rule shall alter the allocation of financial
burdens among the various portions of the Property or rights to use the Common Elements to the
detriment of any Owner over that Owner's objection expressed in writing to the Association.
Nothing in this provision shall prevent the Association from changing the Common Elements
available, from adopting generally applicable rules for use of Common Elements, or from denying
use privileges to those who are delinquent in paying assessments, abuse the Common Elements,
or violate the Governing Documents. This provision does not affect the right to increase the
amount of assessments as provided herein..
(f) Alienation. No rule shall prohibit leasing or transfer of any Dwelling or require consent
of the Association or Board for leasing or transfer of any Dwelling; provided, however, this
Declaration requires a minimum lease term of twelve (12) months and rules may require a longer
minimum term and such other rules with respect to leases as are reasonably adopted by the
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i
Declarant or the Board.
(g) Abridging Existing Rights. No rule shall require an Owner to dispose of personal
property that was in a Dwelling or on a Lot prior to the adoption of such rule if such personal
property was in compliance with all rules and Legal Requirements previously in force. This
exemption shall apply only during the period of such Owner's ownership of the Lot and shall not
apply to subsequent Owners who take title to the Lot after adoption of the rule.
(h) Declarant Rights. Without the written consent of Declarant, no rule or action by the
Board or Members shall restrict, impair, prohibit, exclude, impede, interfere with, or in any way
adversely affect any Special Declarant Right or other right of Declarant.
(i) Approved Builders' Rights. Without the written consent of the Approved Builders, no
rule or action by the Board or Members shall restrict, impair, prohibit, exclude, impede, interfere
with, or in any way adversely affect any special rights or exemptions applicable to an Approved
Builder.
The limitations in subsections (a) through (g) of this Section shall only limit the rule making
authority exercised under this Section; they shall not apply to other Sections and provisions of the
Declaration.
ARTICLE X
ARCHITECTURAL APPROVAL
Section 1. Architectural Review Committee -- Jurisdiction and Purpose. Except for
ordinary and routine maintenance to an existing Dwelling or other improvement on a Lot (changes
in exterior colors, architectural style, or materials being examples of items that are not ordinary
and routine), and excluding planting and maintenance of flowers, plants, shrubs, grass and trees
that do not result in any material change in the landscaping for a Lot approved as part of the
Approved Plans ("material" being as determined by the Architectural Review Committee) or
allowed by Architectural Guidelines, and except as otherwise provided herein: no site preparation
of a Lot, no change in grade or slope, no construction of, alteration of, additions to, or changes to
any improvement on a Lot (including a Dwelling or other building or improvement on a Lot, and
including any conversion of a garage or carport into living space) shall be commenced, nor shall
any of the same be placed, altered or allowed to remain, until the "Architectural Review
Committee" has approved in writing the Plans therefor or the Architectural Guidelines allow the
improvement without obtaining Approved Plans. The Architectural Review Committee is
established to assure, insofar as is reasonable and practicable, that.Improvements are constructed
and maintained in a manner that provides for harmony of external design and location in relation
to Dwellings and other Improvements in the Property and to natural features and topography, that
avoids Improvements deleterious to the aesthetic or property values of any portion of the Property,
and that promotes the general welfare of the Owners. Notwithstanding anything to the contrary
expressed or implied herein: (i) all Plans and other architectural approvals given by the Declarant
during the Development Period, all Improvements constructed or maintained by Declarant or the
Association within the Property, all portions of the Property owned by Declarant or the
Association, all Common Elements and Improvements therein maintained by the Association, and
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2a- q
all portions of the Property owned by or subject to easements in favor of a Governmental Authority
or public utility providers (except for any such portions of the Property that contain or are proposed
to contain Dwellings or other buildings and associated Improvements), are specifically excluded
from the requirements of this Article; and (ii) during the Development Period (a) the Declarant has
the right to exercise all rights of the Architectural Review Committee and the Board that are
described in this Article as it determines in its sole discretion, including whether to utilize an
Architectural Review Committee or to serve as the Architectural Review Committee itself, or any
combination thereof, (b) the Declarant determines the matters, if any, to be reviewed by the
Architectural Review Committee, and (c) any decision of the Declarant made during the
Development Period with respect to any matter subject to this Article controls over any contrary
decision of the Architectural Review Committee or the Board. Declarant, in its sole discretion,
may require applicants for approvals being considered by Declarant to follow the procedural
requirements of this Article, or may impose procedural requirements that are different from those
contained in this Article. Notwithstanding anything to the contrary expressed or implied herein,
Plans for Approved Builders are specifically excluded from the requirements of this Article and
will be reviewed and approved only by Declarant during the Development Period and such
approval is not revocable thereafter, including after the expiration of the Development Period.
Section 2. Composition. During the Development Period, to the extent that • the
Architectural Review Committee does not consist solely of Declarant, the Architectural Review
Committee may consist of such number of Persons as determined and appointed by Declarant.
Declarant, in its sole discretion, has the right to appoint, remove, and replace the Persons appointed
by it to the Architectural Review Committee. Following the end of the Development Period, the
Architectural Review Committee shall consist of not less than three (3) Persons, who shall be
appointed by, and shall be subject to removal with or without cause by, the Board (or the Board
may serve as the Architectural Review Committee if it chooses to do so). Persons who serve on
the Architectural Review Committee are not required to be Members of the Association.
Section 3. Procedure for Review by Architectural Review Committee.
(a) Unless otherwise permitted by the Architectural Review Committee in its sole
discretion, prior to the commencement of any construction, alteration, addition, or placement of
any improvement requiring approval by the Architectural Review Committee, Plans for the
proposed improvement shall be submitted to the Architectural Review Committee, in such format
and in such numbers or sets (not to exceed three) as the Architectural Review Committee may
require. The Architectural Review Committee shall have the right to refuse to approve any PIans
for Improvements which are not, in its sole discretion, suitable or desirable for the Property,
including for any of the following: (i) lack of harmony of external design with surrounding
structures and environment; and (ii) aesthetic reasons. Each Owner acknowledges that
determinations as to such matters may be subjective and opinions may vary as to the desirability
or attractiveness of particular Improvements. Unless a written response is given by the
Architectural Review Committee within sixty (60) days following its receipt of the required
number of complete sets of Plans and payment by the applicant of any applicable processing fee
and consulting fees due and payable at the time request for approval of Plans is submitted by the
applicant, the Plans shall be deemed denied. At any time that the Architectural Review Committee
consists of more than one individual, decisions of the Architectural Review Committee shall be by
majority vote of its members present at a meeting thereof (or by the written consent of a majority
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aka
of all the members of the Architectural Review Committee). The written response of the
Architectural Review Committee may be an approval, a denial of approval, a conditional approval,
or a request for additional information. A request for additional information shall be deemed a
determination that the information submitted was incomplete or inadequate, and the thirty (30) day
time period for further Architectural Review Committee response shall commence only upon
receipt of the requested additional information. If conditional approval is granted, the conditions
are part of the Approved Plans. Any material modification or change in the Approved Plans must
again be submitted to the Architectural Review Committee for its review in accordance with the
foregoing requirements or such other procedures as adopted by the Architectural Review
Committee. If the Plans are approved, or conditional approval is given, at least one set of Approved
Plans shall be retained by the Association for not less than three (3) years and at least one set of
Approved Plans shall be returned to the applicant. The Architectural Review Committee shall
keep such other records of its activities as it is instructed to keep by either the Declarant or the
Board, whichever is applicable.
(b) The Declarant or the Board, as applicable, may adopt procedures for the Architectural
Review Committee to conduct the architectural reviews and its other duties, provided that such
procedures adopted by the Board do not conflict with the specific requirements of the Declaration.
Subject to the rights of Declarant with respect to architectural review and approval, as determined
by the Board in its sole discretion the Board may adopt a procedure for architectural review that
utilizes the Architectural Review Committee as a committee to review requests for architectural
approval and to recommend to the Board whether a request for architectural approval should be
approved, denied, or approved subject to conditions, with the Board determining whether or not
the request for architectural is approved, denied, or approved subject to conditions. If the Board
adopts such a procedure, or if the Board elects to serve as the Architectural Review Committee,
then the provisions herein for appeal of an Architectural Review Committee decision to the Board
are not applicable. Such procedures may include reasonable fees for processing requests for
approval, and also may include fees for the services of an architect or other consultant to assist the
Architectural Review Committee in its review of any Plans, the costs of all such fees being the
responsibility of the applicant. Processing fees shall be due and payable to the Association at the
time the Plans are submitted to the Architectural Review Committee, and the fees of the architect
or consultant shall be due and payable to the Association either at the time the Plans are submitted
to it or immediately upon its receipt of an invoice therefor, as determined by the Architectural
Review Committee. Prior to incurring any architect or consultant fees not due and payable at the
time Plans are submitted, the Architectural Review Committee shall afford the applicant a
reasonable opportunity either to agree to pay such fees or to withdraw the request for approval.
The ninety (90) day time period within which the Architectural Review Committee is required to
respond to a request for approval does not commence until all processing fees and architect or
consultant fees due and payable at the time of submission of the request for approval have been
paid. Notwithstanding anything to the contrary in this Article, in no event shall approval of Plans
by the Architectural Review Committee be deemed to have been given until all such processing
fees and architect or consultant fees have been paid by the applicant. The payment of such fees
and costs, as well as other expenses of the Architectural Review Committee required to be paid,
whether or not the applicant's Plans are approved, is deemed to be a special individual assessment,
in accordance with Article VI, Section 8.
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'R3[
(c) The Declarant, during the Development Period and, thereafter, the Board, and the
Architectural Review Committee as authorized by the Declarant or the Board, as applicable, may
establish, amend, revise or delete Architectural Guidelines for one or more types of Improvements
to be constructed or maintained on any portion of the Property, which Architectural Guidelines
shall not conflict with the specific terms of the Declaration or any applicable Supplemental
Declaration, shall be fair and reasonable, shall carry forward the spirit and intention of the
Declaration.
Architectural Guidelines may be enforced in the same manner and to the same extent as the
provisions of the Declaration may be enforced. If there is any conflict between Approved Plans
and Architectural Guidelines, the Approved Plans control, it being within the discretion of the
Architectural Review Committee to approve Plans that differ in one or more respects from the then
existing Architectural Guidelines. Compliance with Architectural Guidelines does not guarantee
approval by the Architectural Review Committee of Plans for Improvements that must be
submitted for approval. With respect to Improvements other than initial construction of a Dwelling,
the Architectural Guidelines may, but shall not be required to, allow construction or maintenance
of one or more types of Improvements in accordance with the Architectural Guidelines without
submitting the Plans therefor to the Architectural Review Committee and going through the formal
approval process provided for herein, and subject to such conditions and requirements as specified
in the Architectural Guidelines. Provided, however, this shall not prohibit the Declarant, Board, or
Architectural Review Committee from taking action against any Owner with respect to an
improvement on that Owner's Lot that does not comply with the applicable Architectural
Guidelines. Architectural Guidelines may include any or all of the following: types of
Improvements allowed; types of materials allowed; permitted colors; architectural styles;
minimum or maximum square footage for Dwellings, garages, and other buildings or structures;
minimum distances that Dwellings and other Improvements must be located from Lot boundary
lines; landscaping requirements; and screening requirements.
(d) The Declarant or the Board, as applicable, in its sole discretion, may appoint more than
one Architectural Review Committee, with the specific division of authority between or among
such Architectural Review Committees to be as specified by the Declarant or Board, as applicable.
Each such Architectural Review Committee separately shall be subject to and shall comply with
the provisions of the Declaration applicable to the Architectural Review Committee, including the
appointment, removal and replacement of its members and the review of Plans by the Architectural
Review Committee. The members of each Architectural Review Committee may consist of one or
more of thesame Persons.
(e) Approval by the Architectural Review Committee of any Plans shall not relieve the
owner of the applicable Lot from any obligation to obtain all required Governmental Authority
approvals and permits and shall not relieve such Owner of the obligation and responsibility to
comply with all Legal Requirements with respect to such Improvements. An Owner also must
comply with all applicable Legal Requirements with respect to Improvements constructed, placed,
or used on a Lot in compliance with Architectural Guidelines.
(f) Approval of any particular Plans does not waive the right of the Architectural Review
Committee to disapprove the same or substantially similar Plans subsequently submitted, nor does
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a3;L�
such approval relieve an applicant of the requirement to resubmit such Plans for approval in
connection with any portion of the Property other than the portion for which the PIans were
approved. Each Owner acknowledges that the Persons reviewing Plans, as well as compliance with
Approved Plans and Architectural Guidelines, may change at any time and that opinions on
aesthetic matters, as well as interpretation and application of the Architectural Guidelines, may
vary accordingly. In addition, each Owner acknowledges that it may not always be possible to
identify objectionable features until work is completed, in which case it may be unreasonable to
require changes to the Improvements involved, but the Architectural Review Committee may
refuse to approve similar proposals in the future and may revise Architectural Guidelines with
respect to such Improvements.
(g) Notwithstanding anything to the contrary herein, architectural approvals given in
writing prior to the end of the Development Period by the Declarant or by an Architectural Review
Committee appointed by the Declarant shall remain in effect following the end of the Development
Period, but subject to expiration if the construction or installation of the approved Improvements
is not completed within any applicable time limits required by any Governing Documents or the
Approved Plans. In addition, with respect to each Lot for which there are no Approved Plans in
effect at the end of the Development Period, Declarant shall continue to have all of the Declarant
rights under this Article for a period of one year following the end of the Development Period.
Approved PIans may not be revoked or withdrawn by the Architectural Review Committee for
Approved Builders or without the written consent of the Person who owns the portion of the
Property to which the Approved Plans are applicable.
(h) The Architectural Review Committee shall have the right, but not the obligation, to
inspect Improvements that are being constructed or maintained on any portion of the Property to
monitor compliance with the provisions of this Article, with the Approved Plans for such
Improvements, and with the Architectural Guidelines, such right to include entry onto such portion
of the Property at reasonable times to inspect the Improvements. Provided, however, without the
consent of an Owner or occupant of the Dwelling, no member of the Architectural Review
Committee shall have the right to enter an occupied Dwelling, or a Dwelling for which a certificate
of occupancy has been issued, or a Dwelling in which doors and windows capable of being locked
have been installed and are locked. With respect to such Improvements, the Architectural Review
Committee has the right and authority to require the Owner on whose portion of the Property the
Improvements are being constructed or maintained to take such actions as may be required, in the
sole discretion of the Architectural Approval Committee, to comply with this Article, the
Approved Plans, or the Architectural Guidelines, as applicable.
(i) Except for matters with respect to which the Declarant or Board is serving as the
Architectural Review Committee or with respect to which the Architectural Review Committee is
serving only in an advisory capacity to the Board, an applicant Owner who disagrees with any
decision of the Architectural Review Committee may appeal the decision to the Board by giving
written notice of appeal within fifteen (15) days following receipt of notice of disapproval or of
approval with conditions not agreeable to the applicant Owner. Additionally, the Board may allow
a decision of the Architectural Review Committee to be appealed to the Board when the decision
is not unanimous by the members of the Architectural Review Committee who have voted on the
decision. The Board then shall review the Plans and any additional information requested by the
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Board and shall give the applicant Owner and the Architectural Review Committee a reasonable
opportunity, at one or more meetings of the Board, to present evidence and arguments as to why
the decision should be affirmed or overruled. Following the last such meeting the Board, by
majority vote, either shall affirm or overrule, in whole or in part, the decision of the Architectural
Review Committee, and shall notify the Architectural Review Committee and the applicant Owner
of its decision within thirty (30) days following its decision. The decision of the Board is final,
subject to the rights of Declarant during the Development Period to overrule any such decision of
the Board.
Section 4. Landscaping; Utility Lines. No fence, wall, sign, tree, hedge, shrub, or other
vegetation or other improvement which obstructs sight lines for vehicular traffic on public or
private streets in the Property shall be placed or permitted to remain on any portion of the Property.
Pavement, fences, walls, signs, trees, hedges, shrubs, and other vegetation shall not be placed or
permitted to remain on any portion of the Property: (i) if such materials may damage or
unreasonably interfere with any easement for the installation or maintenance of utilities; or (ii) in
violation of the requirements of such easements; or (iii) unless in conformity with applicable
standards of the holder of the easement; or (iv) if such materials may unreasonably change,
obstruct or retard direction or flow of any stormwater drainage. Otherwise, the installation and
maintenance of such materials within utility easements shall be permitted as allowed by Approved
Plans or Architectural Guidelines. Except for hoses, gauges and controls for well pumps,
temporary lines and other equipment reasonably necessary in connection with construction or
maintenance activities or normal landscape or yard maintenance, no water pipe, sewer pipe, gas
pipe, stormwater drainage pipe, television or telephone cable, electric line or other, similar
transmission line shall be installed or maintained on any Lot above the surface of the ground,
except for those Iocated in easements maintained by a Governmental Authority or applicable
public utility provider or otherwise required by a Governmental Authority or applicable public
utility provider, or as necessary for such pipes, lines and other facilities to function properly, unless
the same are adequately screened, as determined by the Architectural Review Committee, or the
same are approved by Approved Plans or allowed by Architectural Guidelines.
Section 5. Commencement_ and Completion of Construction. Unless the time period is
extended -by the Architectural Review Committee, Approved Plans for a Dwelling or other
improvement expire unless construction or installation of the Dwelling or other improvement
commences within six (6) months after the date of the approval. Provided, however, and
notwithstanding the foregoing, the Declarant may allow Approved PIans that have been approved
by Declarant to continue in effect for longer than six (6) months after the date of approval and,
also notwithstanding the forgoing, this Section 5 does not apply to the Approved Plans of
Approved Builders. Construction or installation of all such Improvements shall be completed not
later than twelve (12) months immediately after construction or installation is commenced or shall
continence and be completed by such later dates as specified in the Approved Plans. For the
purposes of this Section, construction or installation is "commenced" when a building permit has
been issued by the applicable Governmental Authority (or if no building permit is required, when
work commences or materials for the improvement are delivered to the applicable portion of the
Property), and construction or installation is "completed" when it has been completed in
compliance with Approved Plans or Architectural Guidelines and the applicable Governmental
Authority has issued a certificate of occupancy or completion for the improvement (or if no
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certificate of occupancy is required, when the improvement has been substantially completed as
determined by the Architectural Review Committee). The Architectural Review Committee, in its
sole discretion, may grant waivers or extensions of the foregoing time periods for commencement
and completion of construction or installation of Improvements, and, when requested and upon
reasonable evidence of the existence thereof, shall grant reasonable waivers or extensions for
events of Force Majeure that delay or prevent a Person from commencing or completing
construction or installation within the foregoing time periods. Each Owner is responsible for
providing that maintenance of Improvements not addressed in the foregoing provisions of this
Section (for example, repainting of a Dwelling) is diligently pursued until completion.
Section 6. Compensation. No member of the Architectural Review Committee shall be
compensated for service as _ a member of the Architectural Review Committee. However, the
Association may reimburse members of the Architectural Review Committee for reasonable out-
of-pocket expenses incurred in serving on the Architectural Review Committee.
Section 7. Limitation of Liability. Neither the Architectural Review Committee nor the
members thereof, nor Declarant, nor the Association, nor any shareholders, directors, officers,
partners, members, managers, agents.or employees of Declarant or the Association, shall be liable
in damages or otherwise to any Person by reason of: (i) mistake of judgment, negligence or
nonfeasance arising out of or in connection with the approval or disapproval of PIans, or the failure
to approve or disapprove any Plans, except where the foregoing results from gross negligence or
willful misconduct; or (ii) any failure of Approved Plans to comply with any Legal Requirements,
including. zoning and building codes; or (iii) any defect in, or lack of structural soundness or
integrity of, any Improvements constructed, placed, or maintained on any portion of the Property.
Section 8. Violation, Enforcement. Each failure of an Owner or any other Person to construct
or maintain any Improvement in accordance with the Approved Plans or applicable Architectural
Guidelines shall be a violation of the Declaration. Declarant, each Owner and the Association
each shall have the right, but not the obligation, to enforce the provisions of this Article against an
Owner or any other Person who violates or attempts to violate same, either to restrain the violation,
recover damages, or seek other available legal or equitable remedies. Any failure to enforce this
Article of the Declaration or seek any applicable remedy with respect to any specific violation
hereof shall not constitute a waiver of the right to do so thereafter, nor shall it constitute a waiver
of the right to enforce this Article of the Declaration at any other time with respect to the same or
substantially similar matter. All such rights, remedies and privileges granted in this Section are
cumulative, and the exercise of any one or more of such rights, remedies or privileges shall not
constitute an election of remedies or preclude subsequent exercise of other rights, remedies and
privileges.
ARTICLE XI
EASEMENTS AND OTHER RIGHTS
Section 1. Exercise of Easement Rights. Each easement described in this Article include the
following rights as reasonably necessary for the full exercise of the easement: vehicular and
pedestrian ingress, egress, and regress (together referred to as "access") over other portions of the
Property as reasonably necessary to go to and from the easement area (the "easement area" being
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defined as the portion of the Property subject to the easement, but which easement area affecting
a platted Lot on which a Dwelling may be constructed shall be outside the building pad for such
Dwelling and shall be shown on the plat for such Lot) and to transport equipment and materials to
and from the easement area; the right to maintain equipment, structures, facilities and soil and
water impoundments in the easement area; the right to remove any obstruction within the easement
area that interferes with the use of the easement or with the maintenance of any equipment or
structures or facilities or soil or water impoundments located therein; and the right to use as
temporary work space such portions of the Property immediately adjacent to and outside of the
easement areas as may be reasonably necessary for the full exercise of such easements. Provided,
with respect to any portion of the Property outside of the applicable easement area damaged as a
result of the exercise of such access or temporary work space rights, the Person who exercises the
access or temporary work space rights, as soon as practicable after completion of the work (and
during the performance of the work if such restoration is necessary to prevent injury or death to
any Person or damage to any other property or damage to any Dwelling), shall restore all such
portions of the Property to substantially the same condition as they were in immediately prior to
the occurrence, of the damage.
The easements established in this Article may be exercised in the discretion of the Declarant, the
Association, or other Person for whom they are established, but this Article does not impose any
obligation on the Declarant, the Association, or other Person to exercise any such easements or
rights.
Section 2. Easements Reserved by Declarant. Declarant, for itself, and its successors and
assigns and transferees (which may include Approved Builders, the Association, Governmental
Authorities, and public utility providers), reserves the following easements and rights in, over,
under, across and through the Property, which may be exercised by Declarant or its successors or
assigns in its sole discretion, in whole or in part, without any obligation to exercise any of same.
These easements specifically include the right to connect to and use and maintain new and existing
wires, poles, lines, pipes, conduits, meters, equipment, structures, facilities, and soil and water
impoundments and other Stormwater Control Measures in the easement areas, without payment of
any charge or fee to the Association -or any Owner of any part or all of the Property, and during
the Development Period the right (without obligation) to exercise all of the easements reserved for
the Association in this Article:
(a) Perpetual, non-exclusive and alienable easements for commencement and completion
of development of any portion of the Property or any Additional Property, for the exercise of any
Special Declarant Right or other right granted to or reserved by Declarant under the Declaration
or any other Governing Documents, and for Declarant to conduct any activity necessary to fulfill
any obligation to any Governmental Authority, the Association, an Approved Builder or any
Owner with respect to any portion of the Property. Such easement rights include the right to
maintain streets (both publicly dedicated and private streets), water, sanitary sewer and other
utilities and related appurtenances and equipment, retaining walls, and soil and water
impoundments and other Stormwater Control Measures, including wires, poles, lines, pipes,
conduits, meters, equipment, structures, and facilities related thereto, in, over, under, across, and
through all of the following:-(i) easement areas that have been identified as easements on plats or
in documents that have been executed by the Declarant or other Owner of such portions of the
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Property and recorded in the Registry; (ii) all streets in the Property, including both publicly
dedicated and private streets; (iii) an area on each Lot that is five (5) feet in width and adjacent to
each side boundary line thereof (and -ten (10) feet in width adjacent to each side boundary line of
a Lot that does not adjoin another Lot or Common Elements) and an area on each Lot that is ten
(10) feet in width adjacent to each front and rear boundary line thereof; (iv) portions of Lots and
Common Elements on which retaining walls are located and a fifteen (15) foot wide area
immediately adjacent to each side of each retaining wall, (v) any other portion of a Lot, subject to
the written approval of an Owner of the Lot, which approval shall not be unreasonably withheld,
delayed, or conditioned; and (vi) the Common Elements. Provided, however, neither the foregoing
reservation of easement rights nor any similar reservation of easement rights contained in the
Declaration shall create or impose any obligation upon Declarant, or its successors and assigns, to
provide or maintain any such street, wire, pole, line, pipe, conduit, meter, equipment, structure,
facilities, or soil and water impoundment or other Stormwater Control Measures following
Declarant's (1) conveyance of the same to the Association; or (2) dedication to and acceptance of
the same by the applicable Governmental Authority and/or public utility provider. Declarant's
rights under this Section include the right to assign its rights under the easements or to grant
easements to other Persons in, over, under, across and through those portions of the Property
described in items nos. (i), (ii), (iii), (iv), (v), and (vi) in this subsection.
(b) The non-exclusive right and power, with respect to any portion of the Property, to grant
and record in the Registry such specific easements as may be necessary, in Declarant's sole
discretion, for the complete and orderly development of the Property or any Additional Property.
The Owner of any portion of the Property to be burdened by any such easement granted by
Declarant shall be given written notice in advance of the grant. The location of any such easement
on the Lot of an Owner, except for those portions along the boundaries of such Lot as described in
the immediately preceding subsection (a), shall be subject to the written approval of the Owner of
the Lot to be burdened by the easement (written consent of any one of multiple Owners of the Lot
being deemed sufficient), which approval shall not be unreasonably withheld, delayed, or
conditioned.
(c) The right to subject the Property or the Association to a contract with Duke Energy (or
other utility provider) for the installation and maintenance of above ground or underground electric
cables and lines or the installation and maintenance of street lighting (including poles and light
fixtures), either or both of which may require an initial payment or a continuing monthly payment
by each Owner or by the Association as part of the Common Expenses. The Association shall
accept assignment from Declarant of contracts entered into by the Declarant with Duke Energy (or
other utility provider) for such electrical or lighting services.
(d) A perpetual, non-exclusive, and alienable easement to maintain all vegetation required
or allowed under any planting, landscaping, tree conservation plan, or replanting plan required or
approved for the Subdivision pursuant to a Development Plan or Legal Requirements.
Section 3. Agreements With Other Persons. In connection with its exercise of any
easements or rights reserved in this Article, Declarant reserves the additional right, which may be
exercised by Declarant or its successors or assigns in its sole discretion, in whole or in part, without
any obligation to exercise such right, to enter into agreements on behalf of and binding on the
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Association with other Persons (including other associations of property owners) for any one or
more of the following: (i) use and maintenance of any easements and associated Improvements
and facilities therein located on the Property or on the Property owned or used by such other
Persons, which agreements may provide for financial or management responsibilities for the
Association or for such Persons; and (ii) use and maintenance of Stormwater Control Facilities in
the Property or on the Property owned or used by such Persons.
Section 4. Easements Reserved for the Association. Easements are reserved for the Association
as follows, which may be exercised by the Association in its sole discretion, without any obligation
to exercise any of same, but subject to any restraints on the exercise of such easements contained
in any other Sections of the Declaration. These easements specifically include the right to connect
to and use and maintain new and existing wires, poles, lines, pipes, conduits, meters, equipment,
structures, facilities, and soil and water impoundments and other Stormwater Control Measures in
the easement areas, without payment of any charge or fee to any Owner of any part or all of the
Property:
(a) A perpetual, non-exclusive and alienable easement in, over, under, across and through
all portions of the Property to enable the Association to perform its functions and provide the
services under the Declaration, and specifically including the same easement reserved for
Declarant herein with respect to retaining wails. Provided, however that any such entry by the
Association upon any portion of the Property shall be made with as minimum inconvenience to
the Owner of such portion of the Property as reasonably practicable, and any damage caused by or
resulting from the gross negligence or willful misconduct of the Association's employees,
contractors or agents shall be repaired by the Association at the expense of the Association.
(b) In addition to the foregoing, and in order to implement effective and adequate soil
erosion controls or stormwater management, a perpetual, non-exclusive easement to enter upon
any portion of the Property, before and after Improvements have been constructed or placed
thereon, to maintain or cause to be maintained soil erosion control or stormwater management;
provided, however, the Association shall not at any time be required to exercise this easement, and
no exercise of the easement shall interfere unreasonably with any permanent Improvements
constructed on any such portion of the Property (which Improvements have been approved by the
Architectural Review Committee as required herein). If the need for stormwater management or
soil erosion controls results from the construction of Improvements on any portion of the Property
or any excavation, grading, removal, reduction, addition or clearing of any portion of the Property,
the cost of any such work performed by the Association for the purpose of implementing effective
and adequate stormwater management or soil erosion control shall be assessed against the Owner
of such the portion of the Property on which such work has been performed as a special individual
assessment, in accordance with Article VI, Section 8. Provided, however, if the Association
determines that appropriate corrective action is necessary on any portion of the Property, prior to
exercising this easement the Association shall give the Owner of such portion of the Property
written notice of the proposed corrective action and a reasonable opportunity to take the corrective
action specified in such notice. If such Owner fails to complete the corrective action by the date
specified in the Notice, the Association then may exercise this easement. A perpetual, non-
exclusive, and alienable easement to maintain all vegetation required or allowed under any
planting, landscaping, tree conservation plan, or replanting plan required or approved for the
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Subdivision pursuant to any Development Plan or Legal Requirements.
(c) The Association has the right to assign its rights under its easements as it deems
reasonable in the best interests of the Property.
Section 5. Easement Reserved for the Governmental Entities and Public Utilities.
Perpetual, non-exclusive and alienable easements are hereby reserved and established over all
portions of the Property for governmental entities and for all public utility providers serving the
Property, and their agents, employees and contractors, for the purposes, as applicable to the
Governmental Authority or utility provider, of setting, removing and reading utility meters,
maintaining Stormwater Control Measures, maintaining utility equipment, facilities and
connections, and acting for other purposes consistent with the public safety and welfare, including
garbage removal, police protection, fire protection (including access to any and all fire hydrants
located outside of public street rights of way or easements dedicated to a Governmental Authority)
and delivery of mail. Except in an emergency, these easements shall be exercised in a reasonable
manner and at reasonable times. Any pedestrian access easement established by Declarant or the
Association over any portion of the Property for the purpose of providing pedestrian access to and
from Governmental Authority greenway or Governmental Authority greenway easements are
established for the benefit of the applicable Governmental Authority and the public in general.
Section 6. Easements Shown On Recorded Plats. Declarant, for itself and its successors
and assigns (which may include the Association, the applicable Governmental Authority, and
public utility providers), and in addition to all other easements reserved in the Declaration, hereby
reserves perpetual, non-exclusive and alienable easements in the locations and for the purposes
shown and indicated on all plats of the Property recorded in the Registry by Declarant and/or
recorded after the date of this Declaration. These easements specifically include the right to
maintain in the easement areas identified on such plats all Improvements deemed necessary, in the
reasonable discretion of the Person who exercises the easement rights, for the full exercise of such
easements. Except as otherwise required by the Governing Documents or Legal Requirements, the
Persons who have the foregoing easement rights shall have no obligation to exercise any part or
all of same.
Section 7. Easement for Encroachments. If, in accordance with Approved Plans, any
Dwelling is closer than five (5) feet to any boundary line of the Lot on which that Dwelling is
Iocated (for the purposes of this Section, the "subject Lot"), then the Owner of the Dwelling, and
such Owner's tenants and contractors, shall have a perpetual, non-exclusive access easement over
the adjoining Lot or other portion of the Property as reasonably necessary to facilitate maintenance
of the Dwelling on the subject Lot. All such maintenance shall be done expeditiously and the
exercise of this easement shall in all respects be reasonable and, upon completion of the
maintenance, as reasonably practicable the Owner of the subject Lot shall restore the Lot or other
portion of the Property on which the easement has been exercised, including all Improvements
thereon that are damaged by the exercise of this easement, to substantially the same or better
condition as it was prior to the maintenance. When the foregoing easement exists, except in
accordance with Approved Plans no fence, wall, storage shed, or similar structure or any other
kind of obstruction to the exercise of the easement shall be permitted on the adjoining Lot or other
portion of the Property. Provided, however, the easement established by this Section shall not
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restrict or impair any other easements established herein in favor of the Declarant, the Association,
an Owner, a Governmental Authority, or any public utility provider.
Section S. Restriction on Entry. Notwithstanding anything to the contrary contained in this
Article, no right or easement granted, reserved or established in the Declaration shall be construed
to give Declarant, the Association, an Owner, a Governmental Authority or any other Person the
right to enter any Dwelling or other building located on any portion of the Property, except as
otherwise specifically stated in the provision of the Declaration relating to the particular right or
easement or as reasonably and necessarily implied in order for the right or easement to be exercised
(for example, maintenance of a party wall), or as allowed by the Owner of the applicable portion
of the Property. Provided, however, each Owner hereby is given notice that Legal Requirements
may allow such entry by a Governmental Authority or other Persons, even though the particular
easement granted, reserved or established in the Declaration does not allow such entry.
Section 9. Dedication and Transfer of Easements for Roadways. Declarant shall have the
right and power (i) to convey or dedicate all or any part of any of the easements reserved and
established by this Declaration, to public use and benefit, (ii) to grant easements over and across
any of the private roads, streets and drives that are developed, constructed and installed by
Declarant for access, ingress and egress to and from any portion of the Subdivision, (iii) to grant
easements on, in, under, over, through and across any of the private roads, streets and drives that
are developed, constructed and installed by Declarant for the purpose of installing, replacing,
repairing, Maintaining and using master television antenna systems, security and similar systems,
and all utilities, including, but not limited to, storm sewers and electrical, cablevision, internet
fiber, gas, telephone, water and sanitary sewer lines, and (iv) to permit any Governmental
Authority or utility to exercise any of the rights and easements reserved and established in this
Declaration. Prior to their acceptance for public maintenance, any roads, streets, entranceways
and cul-de-sacs in the Subdivision shall be maintained by the Declarant. Such maintenance shall
include repair and reconstruction, when necessary, and shall conform to the standard of
maintenance (if one is ascertainable) which would be required by the North Carolina Department
of Transportation or other Governmental Entity before it would accept such roads, streets,
entranceways and cul-de-sacs for maintenance.
ARTICLE XII
OWNER MAINTENANCE RESPONSIBILITIES
Section 1. Duty to Maintain. Except for those items for which the Association has
maintenance responsibility under the Governing Documents, or except as otherwise provided in
the Governing Documents, each Owner, at such Owner's sole cost and expense, shall maintain
such Owner's Lot, including all Improvements thereon, in a clean and attractive condition at all
times, subject to and in a manner consistent with the Governing Documents and Community Wide
Standard, including all of the following:
(a) . Prompt removal of all litter, trash, refuse and wastes.
(b) Lawn mowing and maintenance on a regular basis, including, subject to any Legal
Requirements, any portions of a publicly dedicated street right of way or private street right of way
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;2,7 6
adjacent to any boundary of such Lot that are not maintained in accordance with the Community
Wide Standard by either the Association or a Governmental Authority.
(c) Tree and shrub pruning and removal of dead or diseased trees, shrubs and other plant
material.
(d) Maintenance of flower and plant gardens.
(e) Maintenance of exterior lighting and mechanical facilities.
(f) Maintenance of parking areas and driveways.
(g) Complying with all Legal Requirements.
(h) . Soil erosion control as required by the Declaration.
(i) Maintenance of drainage easements and Stormwater Control Measures as required by
the Declaration.
0) Maintenance of Service Lines serving the Lots.
The foregoing responsibilities shall be performed in a manner that does not unreasonably disturb
or interfere with the reasonable enjoyment of the Property by Persons entitled thereto. Provided,
however, and notwithstanding anything to the contrary appearing herein, Declarant and Approved
Builders are exempt from the required maintenance provisions of this Article with respect to all
portions of the Property they own, except for any of same on which Dwellings are located.
Section 2. Enforcement. If any Owner fails to perform any of the foregoing maintenance
responsibilities, then the Association may give such Owner written notice of the failure and such
Owner must, within ten (10) days after such notice is given by the Association, perform the
required maintenance. If any such Owner fails to perform the required maintenance within the
allotted time period, then the Association, acting through its authorized agent or agents, shall have
the right and power, but not the obligation, to enter such Owner's Lot and perform such
maintenance without any liability for damages for wrongful entry or trespass. Such Owner shall
be liable to the Association for the expenses incurred by the Association in performing the required
maintenance and shall reimburse the Association for such expenses within thirty (30) days after
the Association mails or delivers to such Person an invoice therefor. If any Owner fails to
reimburse the Association as required, in accordance with Article VI, Section 8, the Association
may impose a special individual assessment against the Owner and such Owner's Lot for the
amount owed.
Section 3. Unimproved Portions of the Property. Notwithstanding the foregoing provisions
of this Article, but subject to the other applicable provisions of the Declaration, Owners of
unimproved Lots or other unimproved portions of the Property shall be required to maintain same
only in accordance with such maintenance standards, if any, as are established by the Declarant,
during the Development Period, and thereafter, in accordance with such reasonable maintenance
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standards established by the Board.
ARTICLE XIII
INSTITUTIONAL LENDERS; MORTGAGEES
Section 1. Notice to Board. Upon request from the Board, any Owner who grants a deed of
trust on such Owner's Lot shall notify the Association of the name and address of the Mortgagee.
No Institutional Lender shall be entitled to any rights under the Declaration unless it has notified
the Association as required in this Article and has requested Institutional Lender rights under the
Declaration.
Section 2. R_ eguirements of Institutional Lender. Whenever any Institutional Lender
desires to avail itself of the rights afforded Institutional Lenders under the Governing Documents,
it shall furnish written notice thereof to the Association by certified or registered mail, or by
overnight delivery service, identifying the Lot upon which such Institutional Lender holds a first
lien deed of trust, specifying which rights it wishes to exercise, specifying notices or other
information it wishes to receive, and designating the name of the person and mailing address to
which notices, reports or information are to be sent by the Association. The Institutional Lender
shall be responsible for updating the information required by this Section, and the Association is
obligated to give the required notices only to the most current name and address it has received
from the Institutional Lender. Such notice shall be deemed to have been received by the
Association only upon actual delivery thereof, as evidenced by the return registry receipt or records
of the overnight delivery service.
Upon assignment or other transfer, or payment in full, of the indebtedness secured by the lien of
the deed of trust subject to the notice given to the Association by the Institutional Lender, the
Institutional Lender promptly shall notify the Association that it no longer wishes to exercise the
rights requested in the previously given written notice, such new notice to be given in the same
manner as the previously given notice. To avail itself of the rights of Institutional Lenders under
the Governing Documents, any such assignee or transferee must first notify the Association in the
manner provided for in this Article of the Declaration.
Section 3. Obligation of Association to Institutional Lenders. Any Institutional Lender
who has notified the Association as required in the immediately preceding Section of this Article,
shall have each of the following rights that are specifically requested in the notice to the
Association, until the earlier of such time as the indebtedness secured by the lien of the deed of
trust subject to the notice given to the Association has been paid in full or the Institutional Lender
has transferred or assigned ownership thereof to another Person.
(a) To inspect and receive copies of Governing Documents and other Association
documents and records on the same terms as the Members of the Association. The Association has
the right to charge a reasonable amount to Members and Institutional Lenders for production and
delivery of copies of such Governing Documents and other Association documents and records.
(b) To receive a financial statement of the Association for the immediately preceding fiscal
year of theAssociation.
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(c) To be notified of any proposed amendments to the Declaration and any meetings of the
Association at which such proposed amendments are to be voted on.
(d) To be notified of any proposed action of the Association that requires the consent of a
specified percentage of Institutional Lenders.
(e) To be notified of any condemnation or casualty loss affecting either a material portion
of the Common Elements or the Lot securing its deed of trust.
(f) To be notified of any Iapse, cancellation or material modification of any insurance
policy or fidelity bond maintained by the Association.
(g) With respect to the Lot that secures its deed.of trust, to be notified of any delinquency
in the payment of any assessment or -charge (which delinquency remains uncured for a period of
sixty (60) days), and to be notified of any other default of the provisions of the Declaration by the
Owner of such Lot. Provided, however, any failure of the Association to notify the Institutional
Lender of the delinquency or default shall not affect the validity of any Association lien, or any
other Association rights and remedies, against the defaulting Owner or such Owner's Lot.
(h) To be notified of any other matters for which applicable Institutional Lender Rules and
Regulations or other Governmental Authority rules or regulations require the Association to give
notice to Institutional Lenders, and the Institutional Lender desiring to be notified of such matters
shall described the matters and applicable Rules and Regulations in the notice it gives to the
Association.
Section 4. Institutional Lenders Not Obligated to Collect Assessments. No Institutional
Lender shall have any obligation to collect any assessment under the Declaration.
ARTICLE XIV
AMENDMENT OF DECLARATION
Section 1. Amendment by Declarant. In addition to specific amendment rights, if any,
granted elsewhere in the Declaration, during the Development Period, Declarant may unilaterally,
and in its sole discretion, without the consent, approval, or joinder of any other Owner, the
Association, or any other Person (except to the extent that Legal Requirements or this Declaration
may require the consent or joinder of a Governmental Authority), and without any Notice or any
meeting of the Association, amend the Declaration for any purpose that is not prohibited by the
Act or other Legal Requirement. Any amendment of the Declaration by the Declarant shall be
effective upon the later of the date of its recording in the Registry or the effective date specified
therein,
Section 2. Amendment by the Members. Unless amended as allowed under Section 1 of
this Article, the Declaration may be amended only as follows:
(a) Unless a higher percentage or different voting requirement is specified herein or by Legal
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13
Requirements, the Declaration may be amended only by the written agreement or consent of those
Members, or the affirmative vote at a meeting of the Association of those Members, to whom are
allocated sixty-seven percent (67%) or more of the total number of votes in the Association, and
with the consent or joinder of any applicable Governmental Authority if Legal Requirements or
this Declaration require the consent or joinder of a Governmental Authority and, during the
Development Period, with the written consent or joinder of Declarant.
(b) Written notice of an annual or special meeting of the Association at which any proposed
amendment to the Declaration is to be voted on, together with at least a summary description of
the proposed amendment, shall be given to all Members not less than ten (10) days nor more than
sixty (60) days in advance of the date of such meeting.
(c) When any amendment to the Declaration is approved by Members of the Association
(and Declarant, when applicable) as provided in this Section, the appropriate officers of the
Association (and Declarant, when applicable) shall execute in the same manner as a deed and
record in the Registry, a document setting forth the following: the amendment; the effective date
of the amendment (if no effective date is stated the amendment shall be effective upon the
recording of same in the Registry); and if applicable, the date of the meeting of the Association at
which such amendment was adopted, the date that notice of such meeting was given, the total
number of votes required to constitute a quorum at such meeting, the total number of votes present
at such `meeting, the total number of votes necessary to adopt the amendment, the total number of
votes cast in favor of such amendment and the total number of votes cast against the amendment.
The document shall be recorded in the Registry within thirty (30) days following the date of the
meeting at which the amendment was adopted or the written agreement for the amendment is
completed. Provided, however, and notwithstanding the foregoing or anything to the contrary
appearing herein, no amendment to the Declaration duly adopted by the Members of the
Association shall be void or invalid solely because the document describing the amendment is not
recorded in the Registry within said thirty (30) day period, and any such duly adopted amendment
to the Declaration recorded following the end of said thirty (30) day period shall become effective
on the later of the effective date specified therein, if any, or on the date it is recorded in the Registry.
Section 3: Consent of Mortgagees. Unless required by a Legal Requirement, no consent,
joinder, or approval of any Mortgagee to any amendment of the Declaration by Declarant during
the Development Period is required. No consent, joinder, or approval of any Mortgagee to any
other amendment of the Declaration is required unless (i) the amendment materially, adversely
affects the rights of Mortgagees under the Declaration, or (ii) a Legal Requirement requires the
consent of Mortgagees or a percentage of Mortgagees, or (iii) the deed of trust held by such
Mortgagee specifically requires the Mortgagee's consent with respect to the Member's Lot subject
to the deed of trust, and if either (ii) or (iii) is applicable, the Mortgagee has notified the Association
of its rights regarding consent to amendments in the same manner required for an Institutional
Lender to notify the Association in the Article of the Declaration dealing with Institutional
Lenders. If the amendment is adopted by the required percentage of Members exclusive of the
Member or Members who own Lots for which consent of a Mortgagee is required under this
Section, then the amendment is valid whether or not the necessary Mortgagees have consented to
the amendment.
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aciL(
Section 4. Prohibited Effects of Amendment. No amendment to the Declaration, whether
adopted by the Declarant, by the Association, or by the Members or any applicable group of
Members -of the Association, shall do or result in any of the following:
(a) increase the financial obligations of an Owner in a discriminatory manner.
(b) further restrict development on any portion of the Property in a discriminatory manner.
(c) diminish or impair, or in any way adversely affect the rights or protections of Declarant
without the written consent of Declarant.
(d) impose additional obligations upon Declarant without the written consent of
Declarant.
(e) diminish or impair the express rights of Institutional Lenders under the Declaration
without the prior written approval of a majority of the Institutional Lenders who have requested
the exercise of such rights as provided herein.
(f) terminate or revise any easement established by the Declaration, without the written
consent of the Persons whose Lots or other real property is benefitted by the easement and, with
respect to a revision, the written consent of the Persons whose Lots or other real property is
burdened by the easement.
(g) without the consent of the applicable Governmental Authority, terminate, reduce,
amend, revise, or alter any obligation of the Association or the Members of the Association under
any Legal Requirement or under any encroachment agreement, or other agreement entered into
with a Governmental Authority by the Association or, as allowed by the Declaration, by the
Declarant on behalf of the Association.
(h) alter or remove or attempt to alter or remove any Legal Requirement.
(i) diminish or impair, or in any way adversely affect the rights or protections of the
Approved Builders without the written consent of the Approved Builders.
ARTICLE XV
DURATION OF DECLARATION; DISSOLUTION OF ASSOCIATION
Section 1. Duration. Unless sooner terminated as required by Legal Requirements, the
Declaration shall run with and bind the Property and each Owner, and shall inure to the benefit of
the Association and each Owner of any portion of the Property, and their respective heirs,
successors, and assigns, from and after the recording of the Declaration in the Registry until such
time as it is terminated by a written termination agreement, executed or ratified in the same manner
as a deed, by those Members to whom eighty percent (80%) or more of the total number of votes
in the Association are allocated. The termination agreement shall specify a date after which it will
be void unless it is recorded in the Registry before that date. The termination agreement may not
be recorded in the Registry unless and until the requisite number of signatures have been obtained
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as provided herein, and it shall be effective only upon recording. If, pursuant to the termination
agreement, any real estate in the Property is to be sold following termination of the Declaration,
the minimum terms of the sale shall be set forth therein.
The Declaration shall be deemed incorporated in all deeds and conveyances hereinafter made by
Declarant or any other Owner. Every Person, including a Mortgagee, acquiring or holding any
interest or estate in any portion of the Property shall take or hold such interest or estate, or the
security interest with respect thereto, with notice of the terms and provisions of this Declaration;
and in accepting such interest or estate in, or a security interest with respect to, any portion of the
Property, such Person shall be deemed to have assented to this Declaration and all of the terms and
provisions hereof.
Section 2. Dissolution of the Association. The Association shall be dissolved upon the
termination of the Declaration. Provided, however, until any sale of the Common Elements
authorized by the termination agreement or approved by the Owners in the same manner as
required for approval of the termination agreement is completed and the sale proceeds distributed,
the Association shall continue in existence with all of the powers it had before termination. The
Association, on behalf of the Owners, may contract for the sale of the Common Elements, but the
contract is not binding unless such sale has been authorized in the termination agreement or it has
been approved by the Owners in the same manner as required for approval of the termination
agreement. Proceeds of the sale of Common Elements shall be distributed to the Owners and
lienholders as their interests may appear, as provided in the termination agreement or other
agreement approved by the Owners in the same manner as required for approval of the termination
agreement. If the Common Elements are not to be sold following termination of the Declaration,
title to the Common Elements vests in the Owners upon termination, as tenants in common in
proportion to their respective interests as provided in the termination agreement.
Upon dissolution of the Association or upon loss of ownership of all of the Common Elements by
the Association for any reason whatsoever (except for exchange or dedication or conveyance of
any part or all of the Common Elements as allowed by the Declaration, or by reason of merger or
consolidation with any other association as allowed by the Declaration), except as otherwise
provided in the termination agreement, other agreement approved by the Owners in the same
manner as required for approval of the termination agreement, or Legal Requirements (in
particular, Section 4717-2-118 of the Act, or any successor Section of the Act), any portion of the
Common Elements not under the jurisdiction of and being maintained by another association
substantially similar to the Association, together with all other assets of the Association, first shall
be offered to Spring Hope, Nash County, North Carolina (the "Town") (or, if the Town refuses
such offer, then to some other appropriate Governmental Authority or public agency as determined
by the Board) to be dedicated for public use for purposes similar to those to which the Common
Elements and such assets were required to be devoted by the Association. If the Town or other
Governmental Authority or public agency accepts the offer of dedication, such portion of the
Common Elements and assets shall be conveyed by the Association to such Governmental
Authority or public agency, subject to the superior right of an Owner to an easement (if necessary)
for reasonable ingress and egress to and from such Owner's Lot and the public or private street(s)
on which that Lot is located, subject to all other applicable rights of way and easements, and subject
to ad valorem property taxes subsequent to the date of such conveyance.
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If the Town or other appropriate Governmental Authority or public agency refuses the offer of
dedication and conveyance, the Association may transfer and convey such Common Elements and
assets to any nonprofit corporation, association, trust or other entity which is or shall be devoted
to purposes and uses that would most nearly conform to the purposes and uses to which the
Common Elements were required to be devoted by the Declaration, such transfer and conveyance
to be made subject to the rights of Owners and the other matters set forth in the immediately
preceding paragraph of this Section. If there is no nonprofit corporation, association, trust or other
entity who will accept such transfer and conveyance of the Common Elements and assets of the
Association, then such Common Elements and assets shall be distributed as provided in the plan
of termination/dissolution adopted by the Association.
ARTICLE XVI
RECREATIONAL AMENITIES
Nothing in the Declaration or other Governing Documents shall be construed as imposing any
obligation on the Declarant or any other Person to construct or provide for any recreational
amenities on or for any part or all of the Property or any Owner, occupant, or user thereof, except
to the extent, if any, that Declarant or such other Person is so obligated under Legal Requirements.
ARTICLE XVII
DISCLOSURES AND WAIVERS
The following are in addition to any other disclosures and waivers in the Declaration.
Section 1. Construction Activities. All Owners and other Persons who use the Property
hereby are notified that Declarant and Approved Builders or their agents, contractors,
subcontractors, licensees, and other designees, successors, or assigns, may, conduct blasting,
excavation, construction, and other activities within the Property. By the acceptance of a deed or
other conveyance, leasehold, license, or other interest, and by using any portion of a Lot or the
Property generally, such Owners and such other Persons acknowledge, stipulate, and agree: (i)
such activities shall not be deemed nuisances, or noxious or offensive activities, under any
applicable covenants or at law generally; (ii) not to enter upon, or allow their children or other
Persons under their control or direction to enter upon (regardless of whether such entry is a trespass
or otherwise) any property within or in proximity to the portion of the Property where such
activities are being conducted (even if not being actively conducted at the time of entry, such as at
night or otherwise during non -working hours); (iii) that Declarant and Approved Builders and their
agents, contractors, subcontractors, licensees, and other designees, successors, and assigns,
shareholders, directors, officers, partners, members, managers, agents and employees shall not be
liable but, rather, shall be held harmless for any and all losses, damages (compensatory,
consequential, punitive, or otherwise), injuries, or deaths arising from or relating to the aforesaid
activities; (iv) that any purchase or use of any portion of the Property has been and will be made
with full knowledge of the foregoing; and (v) this acknowledgment and agreement is a material
inducement to Declarant and Approved Builders to sell, convey, lease, or allow the use of the
Property.
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Section 2. Conveyance of Common Elements. Subject to the express requirements set forth
in other provisions of this Declaration, Declarant may convey or transfer all Common Elements,
including all Improvements thereon, to the Association in an "AS IS, WHERE IS" condition, and
in such conveyances may reserve such easements as Declarant, in its sole discretion, deems
necessary or advisable for completion or maintenance of any Improvements in the Common
Elements and any development of the Subdivision. Declarant hereby disclaims and makes no
representations, warranties or other agreements, express or implied, by law or fact, with respect to
the Common Elements and Improvements thereon, including, without limitation, representations
or warranties of merchantability regarding the condition, construction, accuracy, completeness,
design, adequacy of size or capacity thereof in relation to the utilization, date of completion, or the
future economic performance or operations of, or the materials, furniture, or equipment used
therein. Neither the Association nor any Owner or any other Person shall make any claim against
Declarant, its successors and assigns, relating to the condition, operation, use, accuracy or
completeness of the Common Elements, or for incidental or consequential damages arising
therefrom.
Declarant shall transfer and assign to the Association, without recourse, all warranties received
from manufacturers and suppliers relating to any of the Common Elements or Improvements
thereon, or relating to any personal property transferred by Declarant to the Association, which
exist at the time of transfer and are assignable, but Declarant's failure to do so shall not constitute
any grounds for any claim, cause of action or other legal recourse against Declarant for failing to
do so, other than to compel Declarant to transfer or assign same.
Section 3. Liability for Association Operations. The Association shall, to the fullest extent
permitted by Iaw, indemnify, defend, and hold harmless Declarant, its successors and assigns,
and its shareholders, directors, officers, partners, members, managers, agents and employees from
and against any and all losses, claims, demands, damages, costs, and expenses of whatever kind
or nature (including, without limitation, reasonable attorneys' fees and costs at all tribunal levels
and whether or not suit is instituted, including those incurred in establishing the right to be
indemnified, defended, and held harmless pursuant hereto), which relate to or arise out of
Association management and operations, including, without limitation, improvement,
maintenance, and operation of Common Elements and the collection of assessments.
ARTICLE XVIII
ALTERNATIVE DISPUTE RESOLUTION
Section 1. Agreement to Encourage Resolution of Disputes Without Litigation.
(a) Declarant, the Association and its officers, directors, and committee members, all
Owners (including an Approved Builder for such time as it is also an Owner) and other Persons
subject to the Declaration, and any other Person not subject to the Declaration who agrees to submit
to this Article (collectively, "Bound Parties"), agree or are deemed to agree that it is in the best
interest of all concerned to encourage the amicable resolution of disputes involving the Community
without the emotional and financial costs of litigation. Accordingly, each Bound Party agrees not
to file suit in any court with respect to a Claim described in subsection (b), unless and until it has
first submitted such Claim to the alternative dispute resolution procedures set forth in this Article
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in a good faith effort to resolve such Claim.
(b) As used in this Article, the term "Claim" shall refer to any claim, grievance, or dispute
arising out of or relating to any of the following:
(1) the interpretation, application, or enforcement of the Governing Documents;
(2) the rights, obligations, and duties of any Bound Party under the Governing Documents;
or
(3) the design or construction of Improvements within the Community, other than matters
of aesthetic judgment, which shall not be subject to review.
(c) Provided, however, that the following shall not be considered "Claims" unless all
parties to the matter otherwise agree to submit the matter to the procedures set forth in this Article
(the word "action" includes any legal or equitable action or procedure filed in any court, as well
as any other procedure):
(1) any action by the Association to collect assessments or other amounts due from any
Owner, or to enforce any financial or monetary obligation of any Person under the
Governing Documents.
(2) any action by the Association to obtain a temporary restraining order or other
emergency equitable relief and such ancillary relief as the court may deem necessary in
order to maintain the status quo and preserve the Association's ability to enforce the
provisions of the Declaration relating to the Community Wide Standard or Restrictions and
Rules;
(3) any action between Owners, which does not include Declarant or the Association as a
party, if such action or matter asserts a Claim which would constitute a cause of action
independent of the Governing Documents;
(4) any action in which any indispensable party is not a Bound Party;
(5) any action as to which any applicable statute of limitations or statute of repose would
expire within one hundred eighty (180) days of date of the fling of the action, unless the
party or parties against whom the Claim is made agree to toll the statute of limitations or
statute of repose as to such Claim for such period as may reasonably be necessary to comply
with this Article; and
(6) any action to enforce any financial or monetary obligation of any Person under the
Governing Documents.
Section 2. Dispute Resolution Procedures.
(a) Notice. The Bound Party asserting a Claim ("Claimant") against another Bound Party
("Respondent") shall give written notice (the "Notice") to each Respondent and to the Board
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stating plainly and concisely:
(1) the -nature of the Claim, including the Persons involved and the Respondent's role in
the Claim;
(2) the legal basis of the Claim (i.e., the specific authority out of which the Claim arises);
(3) the Claimant's proposed resolution or remedy; and
(4) the Claimant's desire to meet with the Respondent to discuss in good faith ways to
resolve the Claim.
Within thirty (30) days of receipt of the Notice, the Respondent, subject to all of the foregoing
requirements for the giving of the Notice, shall give the Claimant a Notice of any Claim the
Respondent has against the Claimant.
(b) Negotiation. The Claimant and Respondent shall make every reasonable effort to meet
in person and confer for the purpose of resolving the Claim by good faith negotiation. If requested
in writing by either the Claimant or the Respondent, the Board may appoint a representative to
assist the parties in negotiating a resolution of the Claim.
(c) Mediation. If the Bound Parties have not resolved the Claim through negotiation within
thirty (30) days of the date of the Notice, or within such other period as the Bound Parties may
agree upon, either of the Bound Parties shall have thirty (30) additional days to submit the Claim
to mediation with an entity designated by the Association (if the Association is not a party to the
Claim) or to an independent agency providing dispute resolution services in the Nash County,
North Carolina area.
If the Claim is not submitted to mediation within such time, or if the Bound Party who submitted
the Claim to mediation does not appear for the mediation when scheduled, that Bound Party shall
be deemed to have waived the Claim, and the other Bound Party shall be relieved of any and all
liability to the Bound Parry who submitted the Claim to mediation (but not third parties) on account
of such Claim.
If the Bound Parties do not settle the Claim within thirty (30) days after submission of the matter
to mediation, or within such time as determined reasonable by the mediator, the mediator shall
issue a notice of termination of the mediation proceedings indicating that the parties are at an
impasse and the date that mediation was terminated. Either the Claimant or Respondent thereafter
shall be entitled to file suit or to initiate administrative proceedings on the Claim, as appropriate.
Each Bound Party shall bear its own costs of the mediation, including attorneys' fees, and each
Bound Party shall share equally all fees charged by the mediator.
(d) Right to File Action. Notwithstanding anything to the contrary herein, a Bound Party
may file an action with respect to any matter subject to a pending negotiation or a pending
mediation, if the applicable statute of limitations or statute of repose would expire within ninety
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c;?;,_!5_o
(90) days or less of the date of the filing of the action.
(e) Resolution of Claim. Any resolution or settlement of the Claim through negotiation or
mediation shall be documented in writing and signed by the Claimant and Respondent. If either
of such Bound Parties thereafter fails to abide by the terms of any negotiated or mediated
settlement, then the other Bound Party may pursue an action to enforce the settlement without the
need to again comply with the procedures set forth in this Section. In such event, the Bound Party
taking action to enforce any settlement, upon prevailing, is entitled to' recover from the non-
complying Bound Party (or if more than one non -complying Bound Party, from all such Bound
Parties in equal proportions) all costs incurred in enforcing such settlement, including, without
limitation, attorneys' fees and court costs.
ARTICLE XIX
RETAINING WALLS
All retaining walls installed in the Property by or on behalf of Declarant that are located on more
than one Lot or that are located partially on a Lot and partially on Common Elements, are Common
Elements and are the property of the Association. With respect to initial construction or installation
and subsequent maintenance of retaining walls, Declarant and the Association shall have all of the
easements reserved for Declarant and the Association in Article XI of the Declaration. Declarant,
during the Development Period, and thereafter the Association, has the right to determine what
constitutes a retaining wall and to resolve all issues and other matters related to retaining wails.
ARTICLE XX
GENERAL PROVISIONS
Section 2. Assignment. Declarant specifically reserves the right, in Declarant's sole
discretion, to assign temporarily or permanently any or all of its rights, privileges, powers or
obligations under the Declaration or under any Supplemental Declaration, including assignment
of any or all of same as security for any obligation of Declarant to one or more Persons. Except as
otherwise provided in this Section, no such assignment shall be effective unless (i) it is in writing,
(ii) it is executed by the assignee (unless, with respect to an assignment to the Association of a
Governmental Authority permit, execution of the assignment by the assignee is not required by
the applicable Governmental Authority or Legal Requirement), (iii) it is recorded in the Registry
or other Governmental Authority office required under Legal Requirements, with the date of
recording or such later effective date stated in the assignment being the effective date thereof (and
the terms of the recorded assignment shall be conclusive and binding as to the matters assigned),
and (iv) if it purports to assign any obligations of the Declarant to complete initial capital
Improvements within the Subdivision required by a Development Plan or other Legal
Requirements, it describes the specific obligations assigned.
Upon Declarant's request, the Association shall execute any such assignment by Declarant to the
Association, and Declarant is designated by the Declaration as the Association's agent or attorney -
in -fact to execute any such assignment on behalf of the Association, which agency and power of
attorney shall be effective until the end of the Development Period, unless sooner terminated in
writing by Declarant. Provided, however, and notwithstanding anything herein to the contrary,
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-;2-5-1
Declarant may not assign to the Association any obligation to complete initial capital
Improvements within the Subdivision required by a Development Plan or other Legal
Requirements to be completed by Declarant. With respect to assignments described in any
instrument under which Declarant rights specifically or impliedly are given as security for an
obligation of Declarant, the terms of such instrument shall control over the provisions of this
Section, including execution and recording requirements and the matters assigned thereby. Upon
any completed foreclosure sale pursuant to any instrument under which the Declarant rights
become security for an obligation, or the recording or filing of a deed or other instrument in lieu
bf foreclosure, the purchaser at the foreclosure sale, or the grantee under any deed or other
instrument in lieu of foreclosure, shall receive the rights, privileges, powers or obligations that
were assigned as security for the Declarant's obligation, unless the foreclosure documents or
conveying document specifically exclude such rights, privileges, powers or obligations.
Notwithstanding anything to the contrary in this Section, with respect to Common Elements,
Stormwater Control Measures and utilities in the Subdivision, and subject to the express provisions
contained in other sections of this Declaration Declarant may assign to the Association, and the
Association shall accept assignment of and execute the assignment document with respect to, any
or all of the following in whole or in part, including the costs thereof. all rights, duties, liabilities,
obligations and indemnities of the Declarant under all permits issued by a Governmental Authority
(but execution of the assignment by the Association- is not required unless required by the
applicable Governmental Authority or Legal Requirement); and all easements and agreements with
any provider of utilities to any part or all of the Subdivision or under all agreements between the
Declarant and a Governmental Authority or any provider of utilities to any part or all of the
Subdivision, with respect to maintenance of Common Elements, Stormwater Control Measures or
utilities in the Subdivision. Provided, however, and notwithstanding the foregoing, Declarant may
not assign to the Association any of its obligations or liabilities or indemnities directly related to
the initial construction or installation of Improvements for Common Elements, Stormwater
Control Measures, utilities, or publicly dedicated streets in the Subdivision as required by a
Governmental Authority or a utility provider for development of the Property in accordance with
a Development PIan. Declarant shall have the authority to resolve any dispute as to what rights,
duties, liabilities, obligations or indemnities can be assigned to the Association pursuant to this
Section.
Any approvals, waivers, or variances granted by the Declarant under the Governing Documents
shall be binding upon all assignees and successors to Declarant's approval, waiver, or variance
authority.
Section 2. Duration of Special Declarant Rights. Unless otherwise specifically provided in
the Governing Documents, or unless waived or released by the Declarant or other Person
possessing such rights, all Special Declarant Rights under this Declaration shall exist and continue
through the end of the Development Period.
Section 3. Association Contracts and Leases. All Association contracts and leases which
affect or relate to the Property or any part thereof and which (i) are entered into prior to the time
that the first Board whose majority of directors is elected by the Class A Members takes office,
and (ii) are not bona fide or were unconscionable to the Owners at the time entered into under the
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2-151:1-1
circumstances then prevailing, may be terminated without penalty by the Association at any time
after such first Board whose majority of directors is elected by the Class A Members takes office,
upon not less than ninety (90) days written notice to the other parties to the contract or lease (or
any different minimum time period provided for in the Act), and all such contracts and leases are
terminable as provided in this Section, whether or not the right of the Association to terminate is
stated therein.
Section 4. Conflicts. Whenever there exists a conflict among the Governing Documents of
the Association, the order in which Governing Documents control is as follows: agreements with
Governmental Authorities; the Declaration; other Governing Documents, except that as to matters
of compliance with the Nonprofit Corporation Act, the Articles shall control. Whenever there is a
conflict between the provisions of the Articles and Bylaws, the provisions of the Articles shall
control. The provisions of the Bylaws shall control over any conflicting provision of -any
Restrictions and Rules, Board resolutions or Rules and Regulations, or Architectural Guidelines.
With respect to the foregoing, specific provisions shall control general provisions, except that a
construction consistent with the Act, the Nonprofit Corporation Act and the Code shall in all cases
- control over any construction inconsistent therewith.
The provisions of the Code and other Legal Requirements control over any conflicting provisions
of the Declaration, and any other Governing Documents.
Whenever the Act, the Nonprofit Corporation Act, or the Code provides for limitations on any
amount of assessments, fines, late payment fees, charges, or attorney fees that may be assessed,
fined, charged, imposed, or collected by the Association, and the amount of any such assessment,
fine, late payment fee, charge, or attorney fee allowed or authorized by the Declaration or other
Governing Documents (including any assessment, fine, late payment fee, charge, or attorney fee
amount established by the Board as allowed by the Declaration or other Governing Documents)
exceeds the applicable limitation of the Act, the Nonprofit Corporation Act, or the Code, unless
the applicable limitation specified by the Act, the Nonprofit Corporation Act, or the Code is a
mandatory limitation that cannot be exceeded by provisions in the Declaration or other Governing
Documents allowing or providing for the possibility of a greater amount than the applicable
limitation otherwise allows, the provisions of the Declaration or other Governing Documents
control and are deemed to constitute an express provision contrary to the limitation contained in
the Act, the Nonprofit Corporation Act, or the Code. The provisions of the Act and Nonprofit
Corporation Act shall in all cases control over any conflicting provisions of the Code. The
Governing Documents shall be construed together with the construction that avoids, insofar as
possible, conflicts among them.
For the purposes of this Article and any other references in the Declaration to similar conflicts, a
"conflict" is a situation in which the provisions in question cannot be reconciled or where
enforcement of one provision necessarily would prohibit enforcement of another provision - for
example, where one provision allows a certain action and the other provision prohibits the same
action. Two provisions that are different, but not mutually exclusive or prohibitive of each other
do not constitute a conflict for the purposes of this Article.
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Section 5. Consent and Notice. Except as otherwise may be specifically required by the
Governing Documents or Legal Requirements, when a Lot is owned by more than one Person: (i)
with respect to any matter under the Declaration requiring the consent of an Owner is required, the
consent of any one of such Owners is sufficient; and (ii) the Notice provisions of the Declaration
are deemed satisfied if Notice is given to any one of such Owners.
Whenever the written consent of Declarant is required for the effectiveness of some action under
the Declaration in addition to any required vote of the Members of the Association, the votes in
the Association allocated to Declarant shall be counted in determining the vote of the Members,
the written consent requirement being in addition to the voting requirement, whether or not
Declarant actually participates in the voting.
Section 6. Costs and Reasonable Attorneys' Fees. In any action to enforce the provisions
of any Governing Documents, the court may award reasonable attorneys' fees to the prevailing
party, even if such action is settled prior to any trial, judgment or appeal. It also is the specific
intent of this Section that it constitutes the allowance of the award of reasonable attorneys' fees as
required under Section 47F-3-120 of the Act.
Section 7. Determination of Class of Membership. If at any time during the Development
Period there is a question or dispute as to what class of membership is applicable to the Owner of
a particular portion of the Property, the Declarant has the right and authority to resolve such
question or dispute. Following the end of the Development Period, the Board has the right to
resolve any such question or dispute.
Section 8. Enforcement. Subject to applicable alternative dispute resolution provisions of the
Declaration, and subject to any rights of enforcement provided for any Governmental Authority
by the Declaration or any Legal Requirement, (i) the Declarant and the Association shall have the
right, but not the obligation, to enforce the provisions of the Declaration and other Governing
Documents relating to the collection of assessments and other charges payable to the Association,
and (ii) the Declarant, the Association, each Owner, and, when enforcement rights are granted by
the Declaration, an Institutional Lender or other Secondary Mortgage Market Agency, shall have
the right, but not the obligation, to enforce the other provisions of the Declaration and other
Governing Documents, by any proceeding at law or in equity (or otherwise, as provided in the
Declaration) against any Person who has violated, is violating, or is attempting to violate, any part
of the Declaration or other Governing Documents, either to restrain the violation, recover damages,
or seek other available legal or equitable remedies. Any failure by the Declarant, the Association,
an Owner, or any other Person to enforce the Declaration or other Governing Document or seek
any applicable remedy with respect to any specific violation or lien shall not constitute a waiver
of the right to do so thereafter, nor shall it constitute a waiver of the right to enforce the Declaration
at any other time with respect to the same or substantially similar matter. All rights, remedies and
privileges granted to the Declarant, the Association, any Owner, or any other Person herein are
cumulative, and the exercise of any one or more of such rights, remedies or privileges shall not
constitute an election of remedies or preclude subsequent exercise of other rights, remedies and
privileges.
Section 9. Exclusive Rialits to Use Name of Subdivision. During the Development Period,
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no Person other than an Approved Builder shall use the name "Walnut Cove" or any derivative of
such name in any logo or depiction in any printed or promotional material without Declarant's
prior written consent. However, Owners may use the name "Walnut Cove" in printed or
promotional materials where such term is used solely to specify that a particular Lot, Dwelling or
address is located within the Subdivision and the Association shall be entitled to use the words
"Walnut Cove" in its name and for other purposes related to the functions of the Association under
the Declaration.
Section 10. Legal Actions Against Declarant. The affirmative vote or consent of the Class A
and Class B Members that is equal to or greater than sixty-seven percent (67%) of the total number
of votes in the Association first shall be required prior to the Association doing any or all of the
following with respect to the Declarant or any successor Declarant, regardless of whether such
Person is the Declarant at the time the Association takes the action or obtains the necessary vote
or consent required to take such action: (i) rile a complaint, on account of any act or omission of
Declarant, with any Governmental Authority which has regulatory or judicial authority over the
Property or any part thereof, or (ii) assert a claim against Declarant or sue Declarant or request
legal or equitable relief against Declarant in any court, before any Governmental Authority board,
or otherwise.
Section 11. Legal Requirements. All Governing Documents shall be subject to and
construed in accordance with all Legal Requirements, including all applicable provisions of the
Code. It shall be the responsibility of each Owner to comply with all Legal Requirements, whether
or not any approval, disapproval, waiver or variance of the terms of any Governing Documents
has been given by Declarant, the Association or the Architectural Review Committee. It is the
express intention of the Governing Documents to comply with the Act, and any provisions of the
Governing Documents that are not in compliance with the Act shall be deemed reformed to comply
therewith..Provided, however, it also is the intention of the Governing Documents that, unless its
provisions violate the Act, such provisions shall control, and, insofar as reasonably possible, the
provisions of the Governing Documents shall be construed in such manner as to be consistent with,
and not in violation of, the Act.
Section 12. Marketable Title Act. It is the intention of the Declarant that the Declaration exist
and continue until terminated as provided herein, and that it constitute an exception to any
automatic termination or expiration provision that might be applicable under the Real Property
Marketable Title Act as contained in Chapter 47B of the North Carolina General Statutes, or under
any successor or replacement statute or any other Legal Requirement that would or could terminate
the Declaration other than in the manner provided for termination herein. Accordingly,_ the
Association, in its discretion, may re-record in the Registry the Declaration or some memorandum
or other notice hereof in order to continue the Declaration in full force and effect or to qualify the
Declaration as an exception to any such automatic termination or expiration provision of the Real
Property Marketable Title Act or any other Legal Requirement.
Section 13. No Exemption, No Owner may become exempt from any obligations imposed
hereby by non-use or abandonment of the Common Elements or any portion of the Property, Lot
or Dwelling owned by such Owner.
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Section 14. No Timesharing or Short -Term Lease. No Dwelling shall be used for
operation of a timesharing, fraction -sharing, or similar program whereby the right to use or
occupancy of the Dwelling rotates among participants in the program on a fixed or floating time
schedule over any period of time. No Dwelling may be rented or leased for a term less than six
(6) months, or listed for rent or lease for a term less than six (6) months without the prior written
consent of the Association, which consent may be granted or withheld in the Association's sole
discretion.
Section 15. Notice. Except as otherwise provided herein, whenever written notice to any
Person is required hereunder, such notice may be hand delivered to such Person, or given by first
class United States mail, postage prepaid, or given in such other manner specifically allowed or
required by Legal Requirements, or given in such other manner determined by the Board to be
proper (such as by electronic means) and which does not violate any Legal Requirements,
addressed to the address or electronic mail address of such Person appearing on the records of the
Association or to the address for such Person appearing in the records of the Nash County Revenue
Department. Properly addressed notice shall be deemed to have been given by the Association as
follows: (i) in the absence of any delays in delivery by the United States Postal Service resulting
from acts of war or terrorism, on the third day following the date the notice was deposited in the
United States mail, first class postage prepaid; or (ii) on the date of personal delivery to the Person
or an adult residing with the Person, as evidenced by a receipt signed by the Person or such other
Person; or (iii) on the delivery date indicated on a return certified or registered mail receipt, or (iv)
on the date indicated by the records of a national, regional or local same day or overnight courier
service, or (v) on the date acknowledged in writing by the recipient Person or other adult residing
with such Person, or (vi) upon execution of a written waiver of such notice by the Person. Notice
to the Association may be given and shall be deemed to have been given in the same manner as
notice to a Person, when addressed to the principal business office of the Association or the
property manager employed by the Association. 'It shall be the duty of each Owner and other
Person entitled to receive a notice from the Association to keep the Association informed of such
Owner's or other Person's current mailing address, email address and telephone number. If an
Owner or other Person has not provided the Association with such current mailing or email address
the Association may use as the mailing address the street address of the portion of the Property
owned by such Owner or other Person or the address for such Owner or other Person in the records
of the Nash County Revenue Department. If no address for an Owner other Person or is reasonably
available to the Association, the Association shall not be required to give notice to that Owner or
other Person. Notice given to any one of multiple Owners of any portion of the Property shall be
deemed to have been given to all of such Owners. When an Owner requests that communications
from the Association be given by electronic mail, then notices under the Declaration also may be
given to that Owner by electronic mail by an officer, director, or agent of the Association (which
may include a property manager) and shall be deemed to have been given on the date that it is sent
by the sending Person to the Owner to the electronic mail address of the Owner most recently
given to the Association.
Section 16. Number and Gender. Whenever the context of the Declaration requires, the
singular shall include the plural and one gender shall include all.
Section 17. Reserved Rights. Whenever the Declaration reserves a right for, or requires or
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authorizes a consent, approval, variance, or waiver by Declarant, and thereafter confers such right
upon, or requires or authorizes such consent, approval, variance, or waiver by the Association or
Board, the applicable right may be exercised, or the applicable consent, approval, variance, or
waiver may be given, only by Declarant (or its assigns, which may include the Board) during the
applicable period, and, thereafter, only by the Board or its authorized designee (unless a vote or
consent of the Members of the Association also is required or alone is required).
All rights of Declarant and the Association under the Declaration, unless otherwise specifically
provided or limited, may be exercised at any time and from time to time.
Section 18. Rule Against Perpetuities. As provided in Section 47F-2-103(b) of the Act, the
Rule Against Perpetuities may not be applied to defeat any provision of the Declaration, or the
Bylaws, rules, or regulations adopted pursuant to Section 47F-3-IO2(1) of the Act. In the event of
the absence of the protection of Section 47F-2-103(b) of the Act, if the Declaration or any
provision thereof violates any applicable Rule Against Perpetuities, the Declaration or such
provisions shall be deemed reformed to continue in effect for the maximum period of time that the
Declaration or such provision could exist without violating such applicable Rule Against
Perpetuities.
Section 19. Severability of Provisions. If any paragraph, section, sentence, clause or phrase
of -the Declaration shall be or become illegal, null or void for any reason or shall be held by -any
court of competent and final jurisdiction to be illegal, null or void, the remaining paragraphs,
sections, sentences, clauses and phrases of the Declaration shall continue in full force and effect
and shall not be affected thereby. To the extent that any provision of the Governing Documents is
determined to be overly broad or unenforceable and a narrower or partially enforceable
construction may be given to such provision without destroying its intent, then the narrower or
partially enforceable provision shall be applied and, to the extent lawful, shall be enforced. It is
hereby declared that said remaining paragraphs, sections, sentences, clauses and phrases would
have been and are imposed irrespective of the fact that any one or more other paragraphs, sections,
sentences, clauses or phrases shall become or be illegal, null or void.
Section 20. Subdivision, Combination of Lots; Plat Re-recording. Any portion of the
Property may be subdivided, and the boundaries of any portion of the Property may be altered,
only with the written consent of the Owner thereof and the Declarant, during the Development
Period (and, thereafter, the Board), and with any prior approval required by a Governmental
Authority. Provided, however, and notwithstanding the foregoing sentence, such written consent
of the Declarant is not required for leases, deeds of correction, deeds to resolve boundary line
disputes or similar corrective instruments, or deeds or other instruments granting any easement,
right-of-way or license to Declarant, the Association, a Governmental Authority, or a public utility
provider, provided that the number of then existing LotsIn the Property is not changed by any such
action.
One or more Lots may be combined into a single Lot, and a Lot may be subdivided into two or
more Lots, only with the written consent of the Owner thereof and the Declarant during the
Development Period and, when the Development Period is not in existence, only with the written
consent of such Owner and the Board. Unless otherwise provided on the plat that records the
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�s7
combined Lot or in a written instrument recorded in the Registry and executed by Declarant, the
Association, or the Owner, as applicable, when two or more such Lots are combined into one Lot,
the resulting Lot shall continue to be assessed and have voting rights in the Association based on
the number of Lots that existed prior to the combination into one Lot. When one Lot is subdivided
into two or more Lots, the resulting Lots each shall be considered as a separate Lot and each shall
be subject to assessments and have voting rights in the Association in accordance with the
assessments and voting rights then applicable to a Lot. When the boundaries of two or more such
Lots are changed but the resulting number of Lots is the same as the original number of Lots, the
assessments and voting rights in the Association for those resulting Lots shall continue as they
were immediately prior to the change. When two or more such Lots are combined into one Lot,
the easements reserved by the Declaration around the boundaries of the former Lots shall continue
in effect, except that any such easements reserved along the former common boundary line(s)
between the combined parcels and not actually being exercised or used by any Person at the time
of the combination shall terminate. Provided, however, it shall be the responsibility of the Owner
of such resulting Lot to obtain any documentation that is necessary or required to confirm such
termination and to obtain termination or relocation of any such easements that are actually being
exercised ' or used at .the time of the combination of Lots. When a Lot is subdivided into two or
more Lots, the easements established herein adjacent to the boundaries of a Lot shall apply to all
of the resulting Lots.
Nothing contained herein shall prohibit or restrict the right of Declarant, during the Development
Period to (i) subdivide, combine, re -subdivide or recombine, or to record or re-record maps relating
to, any portion of the Property owned by Declarant, or (ii) to approve or disapprove such activities
with respect to portions of the Property owned by other Owners or (iii) sell or assign to a third
party builder any right related to an Impervious Surface on any portion of the Property owned by
Declarant or the Common Elements or (iv) sell or assign to the Association any right related to an
Impervious Surface on any portion of the Property owned by Declarant or the Common Elements.
The provisions of the immediately preceding paragraph with respect to the effects of subdivision
or combination of Lots are applicable to subdivision or combination of Lots owned by the
Declarant unless the Declarant otherwise indicates on the plat of such subdivision or combination
recorded in the Registry or in an instrument recorded in the Registry prior to the end of the
Development Period.
Section 21. Titles. The titles, headings and captions which have been used throughout the
Declaration are for convenience only and are not to be used in construing the Declaration or any
part thereof, except as necessary with respect to any cross-referencing of any provisions of the
Declaration.
(Execution Page and Exhibits Follow)
VV
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Page 77 of 79
f
IN WITNESS WHEREOF, Declarant has caused this Declaration to be executed in legal and
binding form, by its duly authorized Manager, all by authority of its Members, on the day and year
first written above.
DECLARANT
PINTAIL OILFIELD SERVICES, LLC,
an Oklahoma limited liability company
Name: Thomas White
Title: Manager
STATE OF NORTH CAROLINA
COUNTY OF NASH
I, ```�( E�'"1e`L� Y�`�' El", a Notary Public of the County of W z%t
NO
. State of North Carolina, do hereby certify that Thomas White, personally came before me
this day and acknowledged that he is the Manager of Pintail Oilfield Services, LLC, an Oklahoma
limited liability company, and that by authority duly given as an act of the limited liability
company, the foregoing instrument was signed in its name by its Manager.
Witness my hand and official seal, this the 7 day of Pr' + , 2022.
�����nuiriep►f ` � h�v - ■
;-L� �'QG''•, Notary Public
= i\A�%j ZZ� Zn.ZL�
'a=
U 8 LPL o =
.GPI`-'
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EXHIBIT A: PROPERTY
Tract One:
BEGINNING at an iron, comer for Tract 4, 5 and 6 on the map hereinafter referred to;
thence with the northem line of Tract 5, S. 48' 30' W. 959.53 feet to an iron, the northwest corner
for Tract 5; thence N. 2° 54' E. 136 feet to an iron, the southeast corner for Homer Sykes; thence
with the eastern line for Homer Sykes, N. 3° 57' E. 701.79 feet to an iron, the northeast corner for
Homer Sykes in the line of J. C. Brantley; thence with the southern line for Brantley, S. 84' 15' E.
27.15 feet to a concrete monument; thence with the eastern line for Brantley, W. 05' 07' E. 472.68
feet to an iron, corner for Tract 6; thence with the western Iine for Tract 6, S. 41 ° 34' E. 894.67
feet to an iron, the point of BEGINNING, containing 10.07 acres and being Tract 7 as shown on
the plat entitled "Division of the David Mills Estate" by William B. McIntyre, C. E. dated
September 4, 1974, which plat is recorded in Plat Book 11, page 212; Nash County Registry, and
being a portion of that certain tract of land conveyed from Leon T. Vaughan, Trustee, to Mattie
Mills, by deed dated November 30, 1938, recorded in Book 435, page 143, Nash Registry. .
This conveyance includes a non-exclusive right of ingress, regress and egress over and
along a path extending northerly from McLean Street (S.R. 1332) so the dividing line between
Tract 4 and Tract I and thence in a northwesterly direction along the dividing line between Tract
4 and Tracts 1. and 2; thence in a westerly direction along the dividing line between Tract 4 and
Tracts 3B and 6 to the southeastern comer for Tract 7 as shown on the map above referred to,
which right of ingress, egress and regress is appurtenant to and runs with the land.
Tract Two:
BEGINNING at a stake in the northern property line of property now or formerly owned
by the Nash County Board of Education, the Southwest corner for Tract No. 4 as shown in the map
hereinafter referred to; thence with the northern property line of the Nash County Board of
Education, South 51 ° 44' West 160.51 feet to an iron found; thence continuing with the northern
property line of the Nash County Board of Education, South 52' 01' West 1108.06 feet to an iron,
comering; thence North 5° 68' East 324.64 feet to an iron and North 2° 54' East 169.15 feet to an
iron, the southwest corner for Tract No. 7; thence with the southern line for Tract No. 7, North 48"
30' East 959.53 feet to a stake, comer for Tracts Nos. 7, 6 and 4; thence with the western line for
Tract No. 4, South 35' 13' East 423.50 feet to a stake, the point of BEGINNING, containing 9.93
acres and being Tract No. 5 as shown on the plat entitled "Division of the David Mills Estate" by
William B. McIntyre, C.E., dated September 4, 1974, which plat is recorded in Plat Book I I Page
212, Nash Registry, and being a portion of that certain tract of Iand conveyed from Leon T.
Vaughan, Trustee to Mattie Mills, by deed dated.November 30, 1938, and recorded in Book 435,
Page 143, Nash Registry.
Tract 3•
BEING New Lot B, containing 1.36 acres, including 0.09 acres of right of way, as shown
on a map, entitled "Marsha M. Jeffreys, Minor Subdivision, 508 N. Pine St., Spring Hope, NC
27886" dated January 6, 2017 by Civitak East, Surveying Planning Subdivision Design recorded
in Plat Book 39. Page 370, Nash County Registry, and being part of the property conveyed from
Anita M. Richard and husband, Jerome Richard and Marsha M. Jeffreys to Marsha M. Jeffreys
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and husband, Edgar Lynn Jeffreys by deed dated June 28, 1996, recorded in Book 1531, page 256,
Nash Registry.
79 aSa, a o
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