SW3140903_Recorded Document_20210809 (2)

FILED
UNION COUNTY, NC
CRYSTAL CRUMP
REGISTER OF DEEDS
FILED Jan 03, 2017
AT 10:54 am
BOOK 06853
START PAGE 0853
END PAGE 0800
INSTRUMENT # 00055
EXCISE TAX (None)
KSE
DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS
FOR
OAK GROVE ESTATES
THE FOLLOWING STATEMENTS ARE REQUIRED BY THE NORTH
CAROLINA PLANNED COMMUNITY ACT:
THIS DOCUMENT REGULATES OR PROHIBITS THE DISPLAY OF THE
FLAG OF THE UNITED STATES OF AMERICA OR THE STATE OF NORTH
CAROLINA.
THIS DOCUMENT REGULATES OR PROHIBITS THE DISPLAY OF
POLITICAL SIGNS.
Prepared by and when recorded return to:
Matthew G. St. Amand, Esq.
St. Amand & Efird, PLLC
Lincoln at Belle Grove
3315 Springbank Lane
Charlotte, NC 28226
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DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR
OAK GROVE ESTATES
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR
Oak Grove Estates ("Declaration") is made on the date of its recordation in the Union County
Registry by CALATLANTIC GROUP, INC, a Delaware corporation ("Declarant"). With
TRATON HOMES, LLC, a Georgia limited liability company ("Consenting Party") executing
this Declaration simply for purposes of consenting to the annexation of its Lots (described on
Exhibit A) hereunder.
WITNESSETH:
WHEREAS, Declarant owns all of that certain real property described more particularly
on Exhibit A as being owned by Declarant, and Consenting Party owns the real property
described on Exhibit A as being owned by Consenting Party (all together, all such property
described on Exhibit A, however owned, being, the "Property"); and
WHEREAS, Declarant desires to provide for the development of the Property
(and additional property as may be added thereto pursuant hereto) as a single-family residential
subdivision (including related common areas); and
WHEREAS, this Declaration establishes a planned community under the North Carolina
Planned Community Act (N. C. Gen. Stat. Chap. 4717; as amended from time to time, the "Act");
and
WHEREAS, Declarant deems it desirable for the management and administration of the
planned community and for the preservation of the values and amenities of the planned
community to cause Oak Grove Estates Owners Association, Inc., a nonprofit corporation under
the laws of the State of North Carolina, to administer the limitations, covenants, conditions,
restrictions, easements, liens and equitable servitudes created by or imposed in accordance with
the provisions hereof and the provisions of the Act, collect and disburse the assessments and
charges imposed in accordance with the provisions hereof and the provisions of the Act, and
exercise such other powers as may be authorized by this Project Documents (defined below) and
by the Act; and
WHEREAS, Declarant has furthermore reserved such rights are described in Article 12
herein or otherwise herein and in the other Project Documents to add real property to the
Property or to withdraw portion of the Property from the encumbrance of this Declaration.
NOW, THEREFORE, the Declarant (and Consenting Party, as to the Property it owns)
hereby declares that the Property described above shall be subject to the following reservations,
easements, limitations, restrictions, servitudes, covenants, conditions, charges and liens
(hereinafter sometimes collectively termed "Covenants and Restrictions") which are for the
purpose of protecting the value and desirability of the Property, and which shall run with the
land, and be binding on all parties having any right, title or interest in the Property or any part
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thereof, their heirs, successors and assigns, and shall inure to the benefit of each Owner of any
portion of the Property.
ARTICLE I
DEFINITIONS
Section I. L "Act" means and refers to the North Carolina Planned
Community Act, Chapter 47F, North Carolina General Statutes, as same may be amended from
time to time.
Section 1.2. "Architectural Committee" means the committee established by
the Board pursuant to Section 3.4 of this Declaration.
Section 1.3. "Architectural Committee Rules" means the rules adopted by the
Architectural Committee as such rules may be amended from time to time.
Section 1.4. "Articles" means the Articles of Incorporation of the Association
which have been filed in the Office of the Corporation Commission of the State of North
Carolina, as said Articles may be amended from time to time.
Section 1.5. "Assessment Lien" means the lien granted to the Association by
this Declaration and codified by the Act to secure the payment of Assessments and all other
amounts payable to the Association under the Project Documents.
Section 1.6. "Assessments" means the annual, special and/or individual
assessments levied and assessed against each Lot pursuant to Article IV of the Declaration.
Section 1.7. "Association" means Oak Grove Estates Owners Association,
Inc., a North Carolina nonprofit corporation organized to administer and enforce the Project
Documents and to exercise the rights, powers and duties set forth therein, and its successors and
assigns.
Section 1.8. "Association Rules" means the rules and regulations adopted by
the Association, as the same may be amended from time to time.
Section 1.9. "Board" means the Board of Directors of the Association.
Section 1.10. `Bylaws" means the bylaws (or by-laws) of the Association, as
such bylaws may be amended from time to time.
Section 1.11. "County" means Union County, North Carolina.
Section 1.12. "Common Area" means all real property owned by the
Association or held in trust for the benefit of the Association or any real or personal property that
the Association owns, leases or holds possessory use rights in whether now or in the future for
the benefit of the Members, including, without limitation, all Stormwater Facilities that serve
3

more than one Lot and are not maintained by any governmental authority, but such definition
shall not preclude the Association from operating, maintaining or repairing any other real
property for the benefit of the Members of the Association (e.g. public street rights of way and
landscaping in public street rights of way) or any other real property maintained by the
Association pursuant to a written agreement entered into by the Association for the benefit of the
Members or pursuant to a written agreement entered into by Declarant that is assigned to and
assumed by the Association for the benefit of the Members. The Common Area shall include all
real property designated as such or a similar designation on the Plats of the Property and any real
or personal property hereinafter designated as Common Area by Declarant or the Association in
a written document recorded in the office of the register of deeds, including without limitation
any swimming pool or other amenity, if any, created for the benefit of the Owners and
designated as Common Area in any recorded plat or instrument (including real property owned
by Declarant and so designated). The Association shall be responsible for the repair,
maintenance and repaving of the public street rights of way as shown on the Plats until such time
as said streets are accepted for public maintenance; provided, however, at such time as an Owner
acquires its Lot for use as a residence, such Owner shall be responsible for the maintenance of
the shoulders of the streets located within the right-of-way fronting its Lot.
Section 1.13. "Common Expenses" means expenditures made by, or financial
liabilities of, the Association, together with any allocations to reserves.
Section 1.14. "Declarant" means CalAtlantic Group, Inc., and its successors
and assigns, and any assignee of Declarant's rights, if any. A Declarant may assign its rights by
express recorded instrument to a subsequent Owner of all or part of the Property. At any time
when there is more than one Declarant, except as otherwise expressly provided in this
Declaration, any approval or other action required or permitted by the "Declarant" under this
Declaration shall require the written consent of the Declarants owning a majority of all Lots then
owned by all Declarants.
Section 1.15. "Declaration" means the provisions of this document and any
amendments hereto.
Section 1.16. "First Mortgae" means any mortgage, deed of trust, or contract
for deed on a Lot which has priority over all other mortgages, deeds of trust and contracts for
deed on the same Lot. A contract for deed is a recorded agreement whereby the purchaser of a
Lot acquires possession of the Lot but does not acquire legal title to the Lot until a deferred
portion of the purchase price for the Lot has been paid to the seller.
Section 1.17. "First Mortgagee" means the holder of any First Mortgage.
Section 1.18. "Improvement" means buildings, roads, residences, driveways,
parking areas, fences, walls, rocks, hedges, plantings, equipment, structures, recreational
amenities and/or fixtures, planted trees and shrubs, and all other structures or landscaping
improvements of every type and kind.
Section 1.19. "Lot" or "lot" means any Lot shown on a Plat (Common Area
designated on a plat and owned by the Association shall not be a Lot). For purposes of voting on
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any issue required to receive the approval of Lot Owners, the Owner of a parcel not yet subject
to the Plat but zoned for residential use shall be deemed to be the Owner of the maximum
number of Lots into which such parcel may be subdivided under then applicable zoning and
other legal requirements. Furthermore, for purposes of determining whether any person or entity
(including Declarant) owns a "Lot," ownership of any parcel subject hereto shall count as
owning one or more "Lots."
Section 1.20. "Member" or "member" means any person, corporation,
partnership, joint venture or other legal entity who is a member of the Association.
Section 1.21. "Notice and Opportunity for Hearing" or "notice and opportunity
for hearing" means giving at least fifteen (15) days' prior notice of a proposed action and the
reasons therefor, and an opportunity to be heard by the Board or such other body or group as
may be required by the Act, orally or in writing, not less than five (5) days before the effective
date of the proposed action.
Section 1.22. "Owner" or "owner" shall mean the record owner, except as
provided below, whether one or more persons or entities, of fee simple title to any lot, including
without limitation, one who is buying a lot under a recorded contract, but excluding others
having an interest merely as security for the performance of an obligation. In the case of a lot
where fee simple title is vested of record in a trustee under a deed of trust, legal title shall be
deemed to be in the trustor. In the case of a lot where fee simple title is vested in a trustee
pursuant to a trust agreement, the beneficiary entitled to possession shall be deemed to be the
Owner.
Section 1.23. "Plat" means any recorded subdivision plat of any portion of the
Property and all amendments thereto.
Section 1.24. "Project" means the Property together with all buildings and
other Improvements located thereon and all easements, rights and privileges appurtenant thereto.
Section 1.25. "Project Documents" means this Declaration and the Articles,
Bylaws, Association Rules, Architectural Committee Rules and Stormwater Agreements.
Section 1.26. "Purchaser" means any person other than a Declarant, who by
means of a voluntary transfer becomes the Owner of a Lot except for an Owner who purchases a
Lot and then leases it to a Declarant for use as a model in connection with the sale of other Lots.
Section 1.27. "Residential Unit" means any building situated upon a Lot and
designed and intended for independent ownership and for use and occupancy as a residence by a
Single Family.
Section 1.28. Intentionally Deleted.
Section 1.29. "Single Family" shall mean an individual living alone, a group of
two or more persons each related to the other by blood, marriage or legal adoption, or a group of
not more than three persons not all so related, who maintain a common household in a dwelling.

Section 1.30. "Single Family Residence" shall mean a building, house or
dwelling unit used as a residence for a Single Family, including any appurtenant garage or
storage area.
Section 1.31. "Single Family Residential Use" shall mean the occupation or
use of a Single Family Residence in conformity with this Declaration and the requirements
imposed by applicable zoning laws or other state, county or municipal rules and regulations.
Section 1.32. "Stormwater Facility" or "Stormwater Facilities" is defined as
any one or more of the following that serves or benefits any part or all of the Property or is
required by the applicable legal requirements in connection with any part or all of the Property,
whether located in the Property or outside of the Property: (i) "drainage easements" (also
referred to herein as "stormwater easements" or "stormwater drainage easements") that are
shown on plats of the Property recorded in the registry or established by written instruments
recorded in the registry, and which either are located on the Common Area or benefit or serve
more than one (1) Lot; and (ii) all stormwater management facilities for the Property including
ponds, man-made or natural areas and/or planted or landscaped areas into which stormwater
drains, or in which stormwater is collected, or from which it is discharged, drains, pipes,
conduits, inlets, swales, creeks, streams, channels, dams, ditches, filters, buffers, bio-retention
areas, level spreaders, constructed wetlands, and other equipment, facilities and stormwater
management measures used for inspecting, monitoring, measuring, testing, collecting,
controlling, transporting, conveying, handling, storing, discharging and/or managing stormwater.
Except as otherwise provided herein, Stormwater Facilities are part of the Common Area, and
maintenance of Stormwater Facilities is a Common Expense. References in the Declaration to
stormwater management include all applicable Stormwater Facilities and Stormwater Facility
Agreements.
Section 1.33. "Stormwater Agreement" or "Stormwater Facility Agreements"
(which term includes any other agreement under applicable legal requirements, by whatever
name denominated therein, relating to Stormwater Facilities) is defined as any agreement, if any,
required by any applicable legal requirement between the governing authorities and the
Declarant or between the governing authorities and the Association, or among the governing
authorities, Declarant and Association, or between or among any combination of the governing
authorities and the Declarant, the Association and one or more Owners, relating to maintenance
of Stormwater Facilities.
Section 1.34. "Visible from Neighboring Property" or "visible from
neighboring_ property" shall mean that an object is or would be visible to a person six feet (6')
tall standing on a neighboring lot, neighboring Common Area, or street at an elevation not
greater than the elevation at the base of the object being viewed.
Section 1.35. Intentionally Deleted.
Section 1.36. Intentionally Deleted.
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ARTICLE II
PLAN OF DEVELOPMENT
Section 2.1. Property Initially Subject to the Declaration. This Declaration is
being recorded to establish a general plan for the development and use of the Project in order to
protect and enhance the value and desirability of the Project. All of the Property within the
Project shall be held, sold and conveyed subject to this Declaration. By acceptance of a deed or
by acquiring any interest in any of the Property subject to this Declaration, each person or entity,
for himself or itself, his heirs, personal representatives, successors, transferees and assigns, binds
himself, his heirs, personal representatives, successors, transferees and assigns, to all of the
provisions, restrictions, covenants, conditions, rules, and regulations now or hereafter imposed
by this Declaration and any amendments thereof. In addition, each such person by so doing
thereby acknowledges that this Declaration sets forth a general plan for the development and use
of the Property and hereby evidences his intent that all the restrictions, conditions, covenants,
rules and regulations contained in this Declaration (including all rights to amend the same as
described herein) shall run with the land and be binding on all subsequent and future Owners,
grantees, purchasers, assignees, lessees and transferees thereof. Furthermore, each such person
fully understands and acknowledges that this Declaration shall be mutually beneficial,
prohibitive and enforceable by the Association and all Owners. Declarant, its successors, assigns
and grantees, covenants and agrees that the Lots and the membership in the Association and the
other rights created by this Declaration shall not be separated or separately conveyed, and such
shall be deemed to be conveyed or encumbered with its respective Lot even though the
description in the instrument of conveyance or encumbrance may refer only to the Lot.
ARTICLE III
THE ASSOCIATION• RIGHTS AND DUTIES,
MEMBERSHIP AND VOTING RIGHTS
Section 3.1. Rights, Powers and Duties. The Association shall be a non-profit
North Carolina corporation charged with the duties and invested with the powers prescribed by
the North Carolina Non -Profit Corporation Act, the Act, or other applicable law and set forth in
the Project Documents together with such rights, powers and duties as may be reasonably
necessary to effectuate the objectives and purposes of the Association as set forth in the Project
Documents. Unless the Project Documents or the Act specifically require a vote of the
Members, approvals or actions to be given or taken by the Association shall be valid if given or
taken by the Board. A copy of the Articles and Bylaws of the Association shall be available for
inspection at the office of the Association during reasonable business hours.
Section 3.2. Board of Directors and Officers. The affairs of the Association
shall be conducted by a Board of Directors and such officers and committees as the Board may
elect or appoint in accordance with the Articles and the Bylaws. Until termination of the Class B
membership, Declarant shall have the right to appoint and remove members of the Board and
officers of the Association. After termination of the Class B membership, the Members shall
elect the Board as provided in the Bylaws and the Board shall appoint the officers as provided in
the Bylaws.
VA

Section 3.3. Association Rules. The Board may, from time to time and
subject to the provisions of this Declaration, adopt, amend and repeal rules and regulations,
provided, however, that such Association Rules shall not be effective at any time that Declarant
owns any Lot unless (i) such Association Rules have been approved by Declarant in writing or
(ii) the Class B Membership still exists. The Association Rules may restrict and govern the use
of any area by any Owner, by the family of such Owner, or by any invitee, licensee or lessee of
such Owner except that the Association Rules may not discriminate among Owners and shall not
be inconsistent with this Declaration, the Articles or Bylaws. Upon adoption, the Association
Rules shall have the same force and effect as if they were set forth in and were a part of this
Declaration.
Section 3.4. Architectural Committee. The Board shall establish an
Architectural Committee consisting of not less than three (3) members to regulate the external
design, appearance and use of the Property and to perform such other functions and duties as
may be imposed upon it by this Declaration or the Board. So long as the Declarant owns any
Lot, the Declarant shall have the right to appoint and remove members of the Architectural
Committee. At such time as the Declarant no longer owns any lot, the Board shall have the right
to appoint and remove members of the Architectural Committee.
Section 3.5. Identity of Members. Membership in the Association shall be
limited to Owners of Lots. An Owner of a Lot shall automatically, upon becoming the Owner
thereof, be a member of the Association and shall remain a member of the Association until such
time as his ownership ceases for any reason, at which time his membership in the Association
shall automatically cease.
Section 3.6. Transfer of Membership. Membership in the Association shall
be appurtenant to each Lot and a membership in the Association shall not be transferred, pledged
or alienated in any way, except upon the sale of a Lot and then only to such Purchaser, or by
intestate succession, testamentary disposition, foreclosure of mortgage of record or other legal
process. Any attempt to make a prohibited transfer shall be void and shall not be reflected upon
the books and records of the Association.
Section 3.7. Classes of Members. The Association shall have two classes of
voting membership:
Class A. Class A members shall be all Owners, with the exception of each Declarant
until the termination of the Class B membership. Each Class A member shall be entitled to one
(1) vote for each Lot owned.
Class B. The Class B member shall be the/each Declarant. Each Class B member shall
be entitled to four (4) votes for each Lot owned by such member. The Class B membership shall
cease and be converted to Class A membership on the happening of either of the following
events, whichever occurs earlier:
(i) When one hundred percent (100%) of the Lots have been conveyed
to Purchasers; or

(ii) When Declarant notifies the Association in writing that it
relinquishes its Class B membership.
Section 3.8. Joint Ownership. When more than one person is the Owner of
any Lot, all such persons shall be Members. The vote for such Lot shall be exercised as they
among themselves determine, but in no event shall more than one ballot be cast with respect to
any Lot. The vote or votes for each such Lot must be cast as a unit, and fractional votes shall not
be allowed. In the event that joint Owners are unable to agree among themselves as to how their
vote or votes shall be cast, they shall lose their right to vote on the matter in question. If any
Owner casts a ballot representing a certain Lot, it will thereafter be conclusively presumed for all
purposes that he was acting with the authority and consent of all other Owners of the same Lot.
In the event more than one ballot is cast for a particular Lot, none of said votes shall be counted
and said votes shall be deemed void.
Section 3.9. Corporate Ownership. In the event any Lot is owned by a
corporation, partnership, limited liability company, or other association, the corporation,
partnership, limited liability company or association shall be a Member and shall designate in
writing at the time of acquisition of the Lot an individual who shall have the power to vote said
membership, and in the absence of such designation and until such designation is made, the
president, general partner, manager, managing member, or chief executive officer of such
corporation, partnership, limited liability company or association shall have the power to vote the
membership.
Section 3.10. Suspension of Voting Rights. In the event any Owner is in
arrears in the payment of any Assessments or other amounts due under any of the provisions of
the Project Documents for a period of thirty (30) days, said Owner's right to vote as a Member of
the Association may be suspended for each infraction of the Project Documents after Notice and
Opportunity for Hearing, and if suspended after Notice and Opportunity for Hearing shall remain
suspended until all payments, including accrued interest and attorneys' fees, are brought current.
Section 3.11. Fines. The Association, acting through its Board of Directors,
shall have the right to adopt a schedule of fines for violation of any provision of the Project
Documents by any Owner or such Owner's licensees and invitees. No fine shall be imposed
unless the Owner is provided Notice and Opportunity for Hearing. If it is decided after Notice
and Opportunity for Hearing that a fine should be imposed, a fine not to exceed one hundred
dollars ($100.00) may be imposed for the violation without further hearing for each day more
than five (5) days after the decision that the violation occurs. All fines shall constitute a lien on
all lots owned by the Owner and shall be paid within thirty (30) days following imposition.
Except as otherwise limited by the Act or other applicable law, failure to pay any fine shall
subject the Owner to the same potential penalties and enforcement as failure to pay any
assessments under Article IV.
Section 3.12. Limitation on Claims. No claim arising against Declarant or any
officer, director, member, manager, employee or other representative of Declarant, including
without limitation any claims arising from Declarant's exercise of any right arising from
Declarant's Class B membership or arising from any action or inaction by any person in such
person's capacity as an officer, director, member or manager of the Association, shall be asserted
2

by the Association more than six (6) months following the later of termination of the Class B
membership or the termination of such person's service as an officer or director of the
Association. All claims that are not filed in a proper court within the foregoing time period shall
be deemed forever waived and released. This section shall not be subject to amendment without
the written approval of the Declarant.
ARTICLE IV
COVENANT FOR MAINTENANCE ASSESSMENTS
Section 4.1. Creation of the Lien and Personal Obligation of Assessments.
The Declarant, for each Lot owned by it, hereby covenants, and each Owner of a Lot, by
becoming the Owner thereof, whether or not it is expressed in the deed or other instrument by
which the Owner acquired ownership of the Lot, is deemed to covenant and agree to pay to the
Association annual assessments, special assessments, and any applicable individual assessments.
The annual, special, and individual assessments, together, with interest, costs and reasonable
attorney's fees, shall be a charge on the land and shall be a continuing lien upon the Lot against
which each such Assessment is made as provided in the Act. Each such Assessment, together
with interest, costs, and reasonable attorneys' fees, shall also be the personal obligation of the
Owner of such Lot at the time when the Assessment became due. The personal obligation for
delinquent Assessments shall not pass to the Owner's successors in title unless expressly
assumed by them.
Section 4.2. Purpose of the Assessments. The Assessments levied by the
Association shall be used exclusively for payment of Common Expenses, including, without
limitation (i) the upkeep, maintenance and improvement of the Common Area, (ii) maintenance,
repair, replacement, and operation of rights -of -way and easements within or immediately
adjacent to the Project (e.g. landscaping and sidewalks within the right-of-way of adjoining
streets) to the extent that such actions are required by government entities or deemed appropriate
by the Board, (iii) promoting the recreation, health, safety and welfare of the Owners and other
lawful occupants of Lots within the Property, (iv) the performance and exercise by the
Association of its rights, duties and obligations under the Project Documents, (v) maintaining
any Stormwater facilities located on portions of Common Areas to the standard required by the
governmental entity or agency having jurisdiction over such areas, and (vi) to allocate to reserves
that can then be used to pay any other Common Expenses. Notwithstanding the foregoing,
individual assessments shall be used for fixing or remedying that problem which they were
collected to address, and shall be accounted for separately from annual and special assessments.
Section 4.3. Annual Assessment.
(A) For each fiscal year of the Association commencing upon the first
conveyance of a Lot to a Purchaser, the Board shall adopt a budget for the Association
containing an estimate of the total amount of funds which the Board believes to be required
during the ensuing fiscal year to pay all Common Expenses including, but not limited to (i) the
amount required to pay the cost of insurance, maintenance, management, operation, repair and
replacement of the Common Area and those parts of the Lots, or other real property (such as any
Common Area conveyed out of the Association pursuant to Section 12.3 herein), if any, which
the Association has the responsibility of insuring, maintaining, repairing or replacing under the
10

Project Documents, (ii) the cost of wages, materials, insurance premiums, services, supplies and
maintenance or repair of the Common Area and for the general operation and administration of
the Association, (iii) the amount required to render to Owners all services required to be rendered
by the Association under the Project Documents, and (iv) such amounts as may be deemed
necessary by the Board to provide general operating reserves and reserves for contingencies and
replacement. The Board shall send written notice of a summary of the proposed budget as well
as the amount of the payment due to each Owner within thirty (30) days after the adoption by the
Board of such budget. To the extent required by Section 47F-3-103(c) of the Act or other
applicable law, such notice shall include notice of a meeting of the Members to consider
ratification of the budget, including a statement that the budget may be ratified without a
quorum. If such a meeting is required by Section 47F-3-103(c) of the Act, or other applicable
law, the Board shall set a date for a meeting of the Members to consider ratification of the budget
to be held not less than ten (10) nor more than sixty (60) days after mailing of the summary and
notice. If such meeting is required as set forth above, there shall be no requirement that a
quorum be present at the meeting. The budget is ratified unless at such meeting Members
exercising a majority of all of the votes eligible to be cast in the Association reject the budget. In
the event the proposed budget is rejected, the periodic budget last ratified by the Members shall
be continued until such time as the Members ratify a subsequent budget proposed by the Board.
The failure of the Board to send, or of a Member to receive, any budget notice shall not relieve
any Member of the obligation to pay Assessments.
(B) For each fiscal year of the Association the total amount of the estimated
Common Expenses as established by the approved budget shall be assessed by the Board.
Except to the extent that this Declaration expressly provides otherwise, and except with respect
to individual assessments all assessments shall be equal on all Lots.
(C) Declarant shall be exempt from payment of annual assessments on Lots or
parcels owned by the Declarant. If a Lot ceases to be owned by Declarant and therefore becomes
subject to assessment during the period to which an annual assessment is attributable, the
assessment shall be prorated based on the basis of the number of days in the assessment period
that the Lot is not owned by Declarant.
(D) Declarant shall pay to the Association any amounts (hereinafter "Subsidy
Amounts") which, in addition to the annual assessments levied by the Association, may be
required by the Association in order for the Association to fully perform its duties and
obligations under the Project Documents. Notwithstanding the foregoing, Declarant shall not
have any obligation to pay any combination of Subsidy Amounts and assessments during any
calendar year in excess of the total amount that Declarant would have paid during such calendar
year if Declarant were paying full assessments. Any estimated payment by the Declarant to fund
Subsidy Amounts under this section in excess of Declarant's actual obligation for Subsidy
Amounts under this section shall, at Declarant's option, be credited toward payment of
Declarant's next due assessment payment(s) or refunded to the payors thereof; for example, if
Declarant pays $25,000 to the Association in the middle of a calendar year to fund estimated
Subsidy Amounts and the actual Subsidy Amounts required as of the end of the year would have
been only $20,000 in the absence of such payment, Declarant shall be entitled to a $5,000 credit
toward its next due assessment payment or a refund of $5,000.
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(E) The Board shall adopt a proposed budget and give notice of the estimated
annual assessment to each Owner at least thirty (30) days prior to the beginning of each fiscal
year of the Association, but the failure to give such notice shall not affect the validity of the
annual assessment established by the Board nor relieve any Owner from its obligation to pay the
annual assessment.
(F) Until January 1 of the year immediately following the conveyance of the
first Lot to a Purchaser, the maximum annual assessment for each Lot shall be $2,000.00.
Section 4.4. S12ecial Assessments and Individual Assessments. In addition to
the annual assessments authorized above and individual assessments authorized below, the
Association may levy, in any fiscal year, a special assessment applicable to that fiscal year only
for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction,
repair or replacement of a capital improvement of the Common Area, including fixtures and
personal Property related thereto, or for any other lawful Association purpose, provided that any
such special assessment shall have the assent of Members having at least two-thirds (2/3) of the
votes entitled to be cast by Members who are voting in person or by proxy at a meeting duly
called for such purpose. Special assessments shall be levied at a uniform rate for all Lots.
In addition to the annual and special assessments authorized above, the Association,
acting through the Board may assess individual assessments against Owners and their Lots for:
(i) any costs incurred by the Association by reason of the Owner's failure to maintain its Lot and
Residential Unit to the standard required herein, or (ii) any costs incurred by the Association as a
result of such Owner's (or its tenant's, agent's, contractor's, family member's or invitee's)
negligence, willful misconduct, or default under its obligations under the Project Documents,
including any costs for maintenance or repair and reasonable attorney's fees.
Section 4.5. Notice and Quorum for AM Action Authorized Under Sections
4.3 or 4.4. Written notice of any meeting called for the purpose of obtaining the consent of the
Members for any action for which the consent of the Members is required under Sections 4.3 and
4.4 shall be sent to all Members no less than ten (10) days nor more than sixty (60) days in
advance of the meeting. At the first such meeting called, the presence of Members or of proxies
entitled to cast ten percent (10%) of all the votes of each class of Members shall constitute a
quorum. If the required quorum is not present, another meeting may be called subject to the
same notice requirement, and the required quorum at the subsequent meeting shall be one-half
(1/2) of the required quorum at the preceding meeting. No such subsequent meeting shall be
held more than sixty (60) days following the preceding meeting.
Section 4.6. Date of Commencement of Annual Assessments. Due Dates.
The annual assessments shall commence as to all Lots on the first day of the month following the
conveyance of the first Lot to a Purchaser. The first annual assessment shall be adjusted
according to the number of months remaining in the fiscal year of the Association. The Board
may require that the annual assessment be paid in installments and in such event the Board shall
establish the due dates for each installment. The Association shall, upon demand, and for a
reasonable charge, furnish a certificate signed by an officer of the Association or the
Association's designated agent setting forth whether the Assessments on a specified Lot have
been paid.

Section 4.7. Effect of Non-payment of Assessments; Remedies of the
Association.
(A) Any Assessment, or any installment of an Assessment, not paid for a
period of thirty (30) days or longer after the Assessment, or the installment of the Assessment,
first became due shall have added to such Assessment or installment, a late payment charge not
to exceed the greater of (i) ten percent (10%) of the amount of the unpaid Assessment, or (ii)
twenty dollars ($20.00) per month. Any amounts paid by a Member shall be applied first to
unpaid principal and then to late charges or interest. Any Assessment, or any installment of an
Assessment, which is delinquent shall become a continuing lien on the Lot against which such
Assessment was made as provided in §47F-3-116 of the Act. The Assessment Lien may be
placed of record in the office of the clerk of superior court in the county in which the Lot is
located by filing a "Claim of Lien" in the manner set forth in §47F-3-116 of the Act.
(B) The Assessment Lien shall have priority over all liens or claims created
subsequent to the recordation of this Declaration except for (i) tax liens for real Property taxes on
the Lot, (ii) assessments on any Lot in favor of any municipal or other governmental body and
(iii) the lien of any First Mortgage or the lien of any other encumbrance recorded before the
docketing of the claim of lien in the office of the clerk of court.
(C) Before filing a Notice of Claim of Lien against any Lot, the Association
shall make reasonable and diligent efforts to ensure that its records contain the Owner's current
mailing address and make a written demand to the defaulting Owner for payment of the
delinquent Assessments together with late charges, interest, reasonable collection costs and
reasonable attorneys' fees, if any. The demand shall state the date and amount of the
delinquency. Each default shall constitute a separate basis for a demand or claim of lien but any
number of defaults may be included within a single demand or claim of lien. If the delinquency
is not paid within fifteen (15) days after delivery of the demand, the Association may proceed
with filing a Claim of Lien against the Lot of the defaulting Owner. The Association shall not be
obligated to release the Assessment Lien until all delinquent Assessments, late charges, interest,
lien recording fees, reasonable collection costs and reasonable attorneys' fees have been paid in
full. The Owner shall be notified in writing of the Association's intent to seek payment of
attorneys' fees and court costs in accordance with §47F-3-116(e l) of the Act.
(D) The Association shall have the right, at its option, to enforce collection of
any delinquent Assessments together with late charges, interest, lien recording fees, reasonable
collection costs, reasonable attorneys' fees and any other sums due to the Association in any
manner allowed by law including, but not limited to, (i) bringing an action at law against the
Owner personally obligated to pay the delinquent Assessment Lien securing the delinquent
Assessments or (ii) bringing an action to foreclose the Assessment Lien against the Lot in the
manner set forth in §47F-3-116 of the Act. The Association shall have the power to bid in at any
foreclosure sale and to purchase, acquire, hold, lease, mortgage and convey any and all Lots
purchased at such sale.
Section 4.8. Subordination of the Lien to Mortgages. The Assessment Lien
shall be subordinate to the lien of any First Mortgage or the lien of any other encumbrance
recorded before the docketing of the claim of lien in the office of the clerk of court. The sale or
IN

transfer of any Lot shall not affect the Assessment Lien except that the sale or transfer of a Lot
pursuant to judicial or nonjudicial foreclosure of a first mortgage or any bona fide, good faith
proceeding in lieu thereof shall extinguish the Assessment Lien as to payments which became
due prior to the sale or transfer. Such unpaid Assessments shall be deemed Common Expenses
collectible from all Owners, including the Purchaser at foreclosure. In addition, no sale or
transfer shall relieve the Lot from liability for any Assessments thereafter becoming due or from
the lien thereof.
Section 4.9. Exemption of Owner. No Owner of a Lot may exempt himself
from liability for Assessments levied against his Lot or for other amounts which he may owe to
the Association under the Project Documents by waiver and non-use of any of the Common Area
and facilities or by the abandonment of his Lot.
Section 4.10. Intentionally Deleted.
Section 4.11. No Offsets. All Assessments and other amounts payable to the
Association shall be payable in accordance with the provisions of the Project Documents, and no
offsets against such Assessments or other amounts shall be permitted for any reason, including,
without limitation, a claim that the Association is not properly exercising its duties and powers as
provided in the Project Documents.
Section 4.12. Stormwater Assessments. The Assessments of the Association
shall include amounts for upkeep and reconstruction of the Stormwater Facilities. The
Association shall maintain two (2) separate line items in its budget for the Stormwater Facilities.
The first line item, the "Inspection and Maintenance Fund," shall be for routine inspection and
maintenance expenditures and shall be used for annual inspections, maintenance, and minor
repairs. The funds for this purpose may be maintained as part of the Association's general
account. The second line item, the "Major Reconstruction Fund," shall be a separate, increasing
reserve fund that will build over time and provide money for major repairs to and eventual
reconstruction of the Stormwater Facility. The Major Reconstruction Fund shall be maintained
in an account that is separate account from the Association's general account. Each Lot shall be
subject to Assessments by the Association for the purpose of fulfilling the Association's
obligations under this Declaration as it relates to Stormwater Facilities and under any
Stormwater Facility Agreement.
Section 4.13. Intentionally Deleted.
Section 4.14. Initial Working Capital. Upon the closing of any sale of any Lot
by Declarant, to a homeowner, and only upon such initial sale, the Owner shall pay to the
Association a one-time initial capital contribution in the one-time amount of: the greater of the
amount of the current full annual Assessment for the applicable Lot OR $1,000. This
contribution shall be collected at the applicable closing and shall be part of the general operating
funds of the Association.
Section 4.15. Declarant Audit Right.
membership and so long as Declarant owns any Lot,
the books and records of the Association.
Following the termination of the Class B
the Declarant shall have the right to audit
14

Section 4.16. Surplus Funds. The Association shall not be obligated to spend
in any year all the Assessments and other sums received by it in such year, and may carry
forward as surplus any balances remaining. The Association shall not be obligated to reduce the
amount of the Annual Assessment in the succeeding year if a surplus exists from a prior year,
and the Association may carry forward from year to year such surplus as the Board in its
discretion may determine to be desirable for the greater financial security of the Association and
the accomplishment of its purposes.
Section 4.17. Intentionally Deleted.
ARTICLE V
USE RESTRICTIONS
Section 5.1. Residential Use. Except as otherwise provided herein, all lots
shall be improved and used only for Single Family Residential Use. No gainful occupation,
profession, trade or other commercial activity shall be conducted on any lot; provided, however,
the Declarant may use the lots for such facilities as in its sole opinion may be reasonably
required, convenient or incidental to the construction and sale of residential units, including,
without limitation, a business office, storage areas, construction yards, signs, a model site or
sites, and a display and sales office. Notwithstanding the foregoing, home businesses are
permitted on the lots provided they are in accordance with applicable municipal ordinances for
home business in residential districts, and provided that they do not generate vehicle traffic
within the Property above and beyond what would generally be generated without the operation
of said business.
Section 5.2. Building Type and Size. No building shall be constructed or
permitted to remain on any lot other than one detached Single Family Residence not to exceed
two stories in height and a private one to three car garage. Unless otherwise approved in writing
by the Architectural Committee, all buildings shall be of new construction and no prefabricated
structure shall be placed upon any lot; storage structures and/or a sales office may be maintained
upon any lot or lots by the Declarant or a building contractor for the purpose of erecting and
selling dwellings on the Property or for the purpose of constructing improvements on the
Common Area, but such temporary structures shall be removed upon completion of construction
or selling of a dwelling or the Common Area, whichever is later. No structure of a temporary
character, trailer, basement, tent, shack, garage, barn or other out buildings shall be used on any
lot at any time as a residence, either temporarily or permanently. Declarant and contractors for
Declarant shall have the right to place temporary construction trailers and store materials on the
Common Areas for the purpose of constructing improvements on the Common Areas. Storage
sheds shall be allowed if properly screened and if approved by the Architectural Committee,
provided, however, that no storage sheds shall be allowed on any Lot unless they have siding
materials consistent with those used to construct the house on a Lot in the discretion of the
Architectural Committee and unless the doors of such structures are not Visible from the
Neighboring Property.
Section 5.3. Signs. No sign of any kind which is Visible From Neighboring
Property shall be installed or displayed on any Lot or Common Area without the prior written
approval of the Association as to size, color, design, message content, number and location
15

except: (i) such signs as may be used by Declarant in connection with the construction,
development and sale of Lots and/or Residential Units or Common Area in the Project need not
be approved; (ii) such signs as may be required by legal proceedings, or which by law, may not
be prohibited; (iii) one temporary sign per Lot no larger than 30" x 24" used exclusively to
advertise the Lot for sale (but not for rent); (iv) a maximum of one political sign with maximum
dimensions of 24 inches by 24 inches (or such greater number and/or greater size of political
signs permitted by ordinances if the governing body regulates the size and number of political
signs on residential property) may be placed on a Lot by the Owner of that Lot; provided,
however, that no political signs may be displayed pursuant to this Section 5.3 earlier than 45
days before an election day or more than 7 days after an election day, or (v) such signs as may be
desired by Declarant or required for traffic control, construction job identification, builder
identification, and subdivision identification as are in conformance with governmental
requirements. All other signs must be approved in advance in writing by the Architectural
Committee as provided above (and no rental signs shall be allowed, if at all, except in windows
of houses and not outside of any house). All signs must conform to applicable ordinances and
other governmental requirements. Furthermore and notwithstanding the foregoing, in no event
shall any signs advertising residential property for lease or rent be displayed within 24 months
after the initial conveyance of a Lot with a Residential Unit constructed thereon to an Owner
from Declarant.
Section 5.4. Noxious and Offensive Activity. No noxious or offensive
activity shall be allowed on the lots nor shall anything be done thereon which may be, or may
become, an annoyance or nuisance to the neighborhood, or which shall in any way interfere with
the quiet enjoyment of each of the Owners and tenants of their respective lots and residences.
Without limiting the generality of the foregoing, no speakers, horns, sirens or other sound
devices, except security devices used exclusively for security purposes, shall be located or used
on a lot. The provisions of this section shall not apply to any activity of Declarant or its
respective employees, agents, or contractors during the course of construction activities or sales
activities upon or about the Property.
Section 5.5. Parking. Parking of Vehicles (as defined in Section 5.6) is
prohibited in the front yard of lots except on a driveway. Parking of Vehicles on any street
within the Property is prohibited except that Vehicles that are too large to fit on a driveway may
park on the portion of the street directly adjacent to the Owner's lot during daylight hours only
and must either be put into the garage or removed from the Property during nighttime hours.
Parking of any inoperable Vehicle anywhere on a lot or anywhere on a street within the Property
is prohibited. No part of any Vehicle may be parked over any part of a sidewalk because such
parking may impede use of the sidewalks, particularly for persons with disabilities using the
sidewalks. The provisions of this Section 5.5 shall not apply to (a) Vehicles that are exempt
from this subsection under applicable law, (b) Vehicles of Declarant or its employees, agents, or
contractors during the course of construction activities or sales activities upon or about the
Property, or (c) Vehicles used by the Association in repairing, maintaining and replacing the
Common Areas and all Improvements thereon, and in performing all other rights, duties and
obligations of the Association under this Declaration.
Section 5.6. Motor Vehicles.
16

(A) No automobile, truck, motorcycle, mobile home, travel trailer, tent trailer,
trailer, camper shell, detached camper, recreational vehicle, boat trailer or other similar
equipment or motor vehicle of any kind (collectively, "Vehicles" and individually a "Vehicle")
shall be parked, kept or maintained on the Common Area or in any side or rear yard of any lot.
Vehicles that exceed 18.5 feet in length, 6.25 feet in height or 7 feet in width are prohibited on
the Property unless (i) owned by any guest or invitee of any Owner or tenant and parked on a Lot
only during such time as the guest or invitee is visiting the Owner or tenant, but in no event shall
such a motor vehicle be parked on a Lot for more than seven (7) days during any six (6) month
period of time.
(B) Except for emergency Vehicle repairs on a Lot, no Vehicle of any kind
shall be constructed, reconstructed or repaired on any Lot or the Common Area. No inoperable
Vehicle or Vehicle which because of missing fenders, bumpers, hoods or other parts or because
of lack of proper maintenance is, in the sole opinion of the Architectural Committee, unsightly or
detracts from the appearance of the Project shall be stored, parked or kept on any Lot. All
emergency repairs must be completed with 48 hours. No boats may be kept on the Property
except in a closed garage.
(C) No Vehicle classed by manufacturer rating as exceeding one ton and no
commercial Vehicle may be parked or stored on any area in the Project; provided, however, this
provision shall not apply to Vehicles that are pickup trucks of less than one ton capacity with
camper shells not exceeding 7 feet in height and 18.5 feet in length which are parked as provided
in Section 5.5 and are used on a regular and recurring basis for transportation. For purposes of
this section, commercial Vehicles shall mean any Vehicle that (i) displays the name, tradename,
telephone number or other identifying information of any business or governmental entity or (ii)
otherwise bears the appearance of a commercial Vehicle by reason of its normal contents (e.g.
trade goods, extensive tools, ladders), as reasonably determined by the Architectural Committee.
(D) The provisions of this Section 5.6 shall not apply to (a) Vehicles that are
exempt from this subsection under applicable law, (b) Vehicles of Declarant or its employees,
agents, or contractors during the course of construction activities or sales activities upon or about
the Property, or (c) Vehicles used by the Association in repairing, maintaining and replacing the
Common Areas and all Improvements thereon, and in performing all other rights, duties and
obligations of the Association under this Declaration.
Section 5.7. Towing of Vehicles. The Association shall have the right to
have any Vehicle parked, kept, maintained, constructed, reconstructed or repaired in violation of
the Project Documents towed away at the sole cost and expense of the owner of the Vehicle or
equipment. Any expense incurred by the Association in connection with the towing of any
Vehicle shall be paid to the Association by the owner of the Vehicle. If the Vehicle towed is
owned by an Owner, then the cost incurred by the Association in towing the vehicle or
equipment shall be assessed against the Owner and his Lot and be payable on demand, and such
cost shall be secured by the Assessment Lien.
Section 5.8. Machinery and Equipment. No machinery or equipment of any
kind shall be placed, operated or maintained upon or adjacent to any lot except such machinery
or equipment as is usual and customary in connection with the use or maintenance of
17

improvements constructed by the Declarant or approved by the Architectural Committee. The
provisions of this section shall not apply to any activity of Declarant or its employees, agents, or
contractors during the course of construction activities or sales activities upon or about the
Property.
Section 5.9. Restrictions and Further Subdivision. No lot shall be further
subdivided or separated into smaller lots or parcels by any Owner other than the Declarant, and
no portion less than all or an undivided interest in all of any lot shall be conveyed or transferred
by any Owner other than the Declarant.
Section 5.10. Easements and Restrictions relating to Protected Areas.
Declarant hereby reserves, for the benefit of itself, its successors in interest and assigns, and
grants to the Association, its successors and assigns, any such easements as are referenced on
any Plats, relative to stormwater management, utilities, landscaping and other easements as may
be necessary or desirable and reserved on a Plat in order for Declarant to access, develop, repair,
replace and maintain and in order for the Association to access, repair, replace and maintain any
portion of the Property in accordance with this Declaration.
Section 5.11. HVAC. Except as initially installed by the Declarant and except
for replacement units as described below, no heating or air conditioning unit shall be placed,
constructed or maintained upon any lot without the prior written approval of the Architectural
Committee. In the event a heating or air conditioning unit needs to be replaced, an Owner may
install a replacement unit in the same or substantially same location as the original unit without
the approval of the Architectural Committee.
Section 5.12. Landscaping,; Fencing. No landscaping improvements shall be
installed or removed on Lots by the Owners thereof except with the written approval of the
Architectural Committee and no landscaping improvements that are not comprised of native
vegetation shall be allowed whatsoever. This Section 5.12 shall not apply to landscaping
installation or removal by Declarant. No fence shall be allowed on any Lot except with the
approval of the Architectural Committee, and in any event, no fencing other than black
aluminum fencing shall be allowed.
Section 5.13. Declarant's Exemption. Nothing contained in this Declaration
shall be construed to prevent the construction, installation or maintenance by a Declarant (or its
designated agents and contractors) during the period of development, construction, performance
of warranty work, sales and marketing on the Property, or any production homes, model homes
and sales offices and parking incidental thereto, construction trailers, landscaping or signs
deemed necessary or convenient by a Declarant, in is sole discretion, to the development,
construction, sale and marketing of property within the Property. The Association shall take no
action that would interfere with access to or use of model homes; without limitation of the
foregoing, the Association shall have no right to close private streets to access by members of the
public desiring access to model homes.
Section 5.14. Leasing Restrictions. All tenants shall be subject to the terms
and conditions of this Declaration and the other Project Documents. Each Owner shall cause his,
her or its tenants or other occupants to comply with this Declaration and the Project Documents
18

and, to the extent permitted by applicable law, shall be responsible and liable for all violations
and losses caused by such tenants or occupants, notwithstanding the fact that such tenants or
occupants are also fully liable for any violation of each and all of those documents. No Lot may
be leased for a period of less than thirty (30) days. In no event shall any signs advertising
residential property for lease or rent be displayed within 24 months after the initial conveyance
of a Lot with a Residential Unit constructed thereon to an Owner from Declarant. The
provisions of this Section 5.14 shall not apply to any Declarant's use of Lots owned by (or leased
to) a Declarant, as applicable, as a model home or for marketing purposes.
Section 5.15. Animals. No animals, insects, livestock, or poultry of any kind
shall be raised, bred, or kept on or within any Lot or structure thereon except that non -dangerous
dogs, cats or other common household pets (as determined by the Board) may be kept on or
within the lots, provided they are not kept, bred or maintained for any commercial purpose, or in
unreasonable numbers as determined by the Architectural Committee. Notwithstanding the
foregoing, no animals or fowl may be kept on any lot which results in a nuisance to, which is an
annoyance to, or which are obnoxious to other Owners or tenants in the vicinity. All pets,
required by any law, must be kept within a fenced yard or on a leash under the control of the
Owner at all times. No structure for the care, housing or confinement of any animal or fowl shall
be allowed outside of any Residential Unit.
Section 5.16. Drilling and Mining. No oil drilling, oil development operations,
oil refining, quarrying, or mining operations of any kind, shall be permitted upon or in any lot
nor shall oil wells, tanks, tunnels or mineral excavations or shafts be permitted on any lot. No
"fracking" shall be permitted and no derrick or other structure designed for use in boring for or
removing water, oil, natural gas or other minerals shall be erected, maintained or permitted upon
any lot.
Section 5.17. Refuse. All refuse, including without limitation all animal
wastes, shall be regularly removed from the lots and shall not be allowed to accumulate thereon.
Until removal from the lots, refuse shall be placed in closed refuse containers with operable lids
so that such containers are not open to the air. Refuse containers shall be kept clean, sanitary and
free of noxious odors. Refuse containers shall be kept inside of Residential Units, or otherwise
so as not to be Visible from Neighboring Property, except to make the same available for
collection and then only for the shortest time reasonably necessary to effect such collection.
Section 5.18. Antennae / Satellite Dishes. No exterior antenna or satellite dish
(all together "Receiver") greater in size than 21 inches in diameter may be placed on any
Residential Unit or otherwise on any Lot except in a location where it is not visible to a person
six feet (6') tall standing on any portion of the street(s) on which the applicable Lot fronts.
Furthermore, the location, appearance, screening from view, installation, and all other aspects of
the Receiver and placement of the same shall be subject to the prior written approval of the
Architectural Committee to the extent said Architectural Committee adopts further rules and
regulations regarding placement and screening of Receivers.
Section 5.19. Utility Services. All lines, wires, propane gas tanks, or other
devices for the communication or transmission of electric current or power, including telephone,
television, gas and radio signals, shall be contained in tanks, conduits or cables installed and
12

maintained underground or concealed in, under, or on buildings or other structures approved by
the Architectural Committee. Temporary power or telephone structures incident to construction
activities approved by the Architectural Committee are permitted.
Section 5.20. Diseases and Insects. No Owner or resident shall permit
anything or condition to exist upon a lot which shall induce, breed or harbor infectious plant
diseases or noxious insects.
Section 5.21. Architectural Control.
(A) No excavation or grading work shall be performed on any Lot without the
prior written approval of the Architectural Committee. Each Owner altering any grading or
drainage on a Lot shall ensure that such alterations comply with all requirements of any grading
or drainage plan approved by any governmental entity having jurisdiction over the Property and
that such alterations do not alter or impede the flow of storm water from the manner existing
prior to such alterations; approval of plans or proposed improvements by the Architectural
Committee shall not constitute a waiver of this requirement or a warranty that such plans or
improvements are consistent with this requirement or any other requirement of this Declaration,
the Association Rules or Architectural Committee Rules, any governmental requirement or
construction industry standard.
(B) No Improvements shall be constructed or installed on any Lot without the
prior written approval of the Architectural Committee.
(C) No addition, alteration, repair, change or other work which in any way
alters the exterior appearance, including but without limitation, the exterior color scheme, of any
Lot, or the Improvements located thereon, shall be made or done without the prior written
approval of the Architectural Committee.
(D) Any Owner desiring approval of the Architectural Committee for the
construction, installation, addition, alteration, repair, change or replacement of any Improvement
which would alter the exterior appearance of the Improvement, shall submit to the Architectural
Committee a written request for approval specifying in detail the nature and extent of the
construction, installation, addition, alteration, repair, change or replacement of any Improvement
which the Owner desires to perform. Any Owner requesting the approval of the Architectural
Committee shall also submit to the Architectural Committee any additional information, plans
and specifications which the Architectural Committee may request. In the event that the
Architectural Committee fails to approve or disapprove an application for approval within sixty
(60) days after the application, together with all supporting information, plans and specifications
requested by the Architectural Committee have been submitted to it, approval will not be
required and this section will be deemed to have been complied with by the Owner who had
requested approval of such plans.
(E) The approval by the Architectural Committee of any construction,
installation, addition, alteration, repair, change or other work pursuant to this section shall not be
deemed a waiver of the Architectural Committee's right to withhold approval of any similar

construction, installation, addition, alteration, repair, change or other work subsequently
submitted for approval.
(F) Upon receipt of written approval from the Architectural Committee for
any construction, installation, addition, alteration, repair, change or other work, the Owner who
had requested such approval shall proceed to perform, construct or make the construction,
installation, addition, alteration, repair, change or other work approved by the Architectural
Committee as soon as practicable and shall diligently pursue such work so that it is completed as
soon as reasonably practical and within such time as may be prescribed in writing by the
Architectural Committee.
(G) The approval of the Architectural Committee required by this section shall
be in addition to, and not in lieu of, any approvals, consents or permits required under the
ordinances or rules and regulations of any county or municipality having jurisdiction over the
Project.
(H) The provisions of this section shall not apply to, and approval of the
Architectural Committee shall not be required for, the construction, erection, installation,
addition, alteration, repair, change or replacement of any Improvements made by, or on behalf
of, the Declarant.
(1) In no event shall the Association, the Architectural Committee or any
member of the Architectural Committee have any liability for any action or inaction by the
Architectural Committee or its members, including without limitation any approval or
disapproval of plans by the Architectural Committee. The sole remedy for an Owner asserting
that the Architectural Committee has improperly withheld approval or has improperly granted
approval shall be an action to compel the Architectural Committee to take appropriate action. In
no event shall any damages of any nature be awarded against the Association, the Architectural
Committee or any member of the Architectural Committee of any nature arising from any action
or inaction described in this Section 5.22.
(J) Each Owner is strongly advised to consult with independent architects and
engineers to ensure that all improvements or alterations made by such Owner are safe and in
compliance with applicable governmental requirements. No approval by the Architectural
Committee shall constitute a guaranty or warranty by the Association, the Architectural
Committee or any member of the Architectural Committee that the matters approved will comply
with this Declaration, any Association Rules or Architectural Committee Rules, or any
applicable governmental requirements or that any plans or improvements are safe or properly
designed. The Owner constructing or altering any improvements shall indemnify, defend and
hold the Association harmless from (i) any claims or damages of any nature arising from such
improvements or alterations or any approval thereof by the Architectural Committee and (ii) any
claim that the Association, the Architectural Committee or any member of the Architectural
Committee breached any duty to other Owners in issuing approval of such Owner's
improvements or alterations.
Section 5.22. Clothes Drying Facilities. No outside clotheslines or other
outside facilities for drying or airing clothes shall be erected, placed or maintained on any Lot.
21

Section 5.23. Overhead Encroachments. No tree, shrub, or planting of any
kind on any Lot shall be allowed to overhang or otherwise to encroach upon any sidewalk, street,
pedestrian way or other area from ground level to a height of eight (8) feet without the prior
written approval of the Architectural Committee.
Section 5.24. Drainage. No Residential Unit, structure, building, landscaping,
fence, wall or other Improvement shall be constructed, installed, placed or maintained in any
manner that would obstruct, interfere with or change the direction or flow of water in accordance
with the drainage plans for the Project, or any part thereof, or for any Lot as shown on the
approved drainage plans on file with the municipality or other governing body in which the
Project is located. In addition, no Owner or other Person shall change the grade or elevation of a
Lot in any manner that would obstruct, interfere with or change the direction or flow of water in
accordance with the approved drainage plans.
Section 5.25. Basketball Goals and Backboards. No basketball backboard,
hoop or similar structure or device shall be permitted except in accordance with the Architectural
Committee Rules.
Section 5.26. Playground Equipment. No jungle gyms, swing sets or similar
playground equipment shall be erected or installed on any Lot without the prior written approval
of the Architectural Committee.
Section 5.27. Lights. Except as initially installed by the Declarant, no
spotlights, floodlights or other high intensity lighting shall be placed or utilized upon any Lot or
any structure erected thereon which in any manner will allow light to be directed or reflected on
any other property except as approved by the Architectural Committee.
Section 5.28. Flags. The official flag of the United States and/or the State of
North Carolina may be displayed on any Lot provided (i) such flag is displayed in the manner
required under the federal flag code from a pole attached to a Residential Unit on the Lot, (ii) the
pole is no higher than the top of the Residential Unit, (iii) the pole is no longer than ten feet in
length and does not extend more than ten feet from the edge of the Residential Unit, (iv) the flag
is no more than twenty four square feet in size, (v) any flag lighting does not violate Section 5.28
of this Declaration, and (vi) the flag is maintained in good condition. The flag of another nation
may be displayed in lieu of the United States Flag on national holidays of such nation provided
such display complies with the requirements for displaying the United States Flag.
Section 5.29. Yard Sales. Owners may hold "yard sales" to sell personal
property of such Owners only in compliance with the following requirements: (i) yard sales shall
be limited to two days per year on any Lot, (ii) no yard sale shall commence prior to 8 AM EST
or continue after 5 PM EST, (iii) no Owner shall post any signs advertising any yard sale
anywhere on the Property except that a temporary sign may be posted on such Owner's Lot on
the day that a yard sale is being held, and (iv) if the Association ever adopts standard yard sale
dates for the Property, yard sales shall be held only on such dates. The Association shall give
reasonable notice to all Owners if it adopts standard yard sale dates for yard sales on the
Property.
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Section 5.30. Holiday Displays. Owners may display holiday decorations
which are Visible from Neighboring Property only if the decorations are of the kinds normally
displayed in single family residential neighborhoods, are of reasonable size and scope, and do
not disturb other Owners and residents by excessive light or sound emission or by causing an
unreasonable amount of spectator traffic. Holiday decorations may be displayed between
November 1 and January 31 of each year and, during other times of year, from one week before
to one week after any nationally recognized holiday.
Section 5.31. Firearms. The carrying, use or discharge of firearms or other
weapons within the Property is prohibited. The term "firearms or other weapons" includes, but
is not limited to, `13-13" guns, pellet guns, knives, swords, cross -bows and other firearms or other
weapons of all types, regardless of size.
Section 5.32. Solar Collectors.
(A) This section applies to solar collectors ("Solar Collectors") that gather
solar radiation as a substitute for traditional energy for water heating, active space heating and
cooling, passive heating, or generating electricity for the residential Unit that is serves.
(B) As of the date of recordation of this instrument, Solar Collectors are
subject to the provisions of North Carolina General Statutes §2213-22 ("State Regulations").
"Regulated Solar Collectors" shall mean Solar Collectors subject to State Regulations as such
regulations may be amended or modified in the future or subject to any other applicable federal,
state or local law, ordinance or regulation ("Other Laws") that would render the restrictions in
this section on Unregulated Solar Collectors (hereinafter defined) invalid or unenforceable as to
a particular Solar Collector. "Unregulated Solar Collector" shall mean all Solar Collectors that
are not Regulated Solar Collectors.
(C) Unless approved in writing by the Architectural Committee, no
Unregulated Solar Collectors shall be permitted on any Lot, whether attached to a building or
structure or on any Lot, unless approved in writing by the Architectural Committee, with such
screening as such Committee may require. Unregulated Solar Collectors must be fagade or roof
mounted and not visible from areas open to common or public access.
(D) Regulated Solar Collectors shall be subject to the following requirements:
(i) If permitted by applicable State Regulations or Other Laws, no
Regulated Solar Collector shall be permitted on any Lot, whether attached to a building or
structure or on any Lot, unless approved in writing by the Architectural Committee, in a location
or with such screening as such Committee may require. If such restriction is not so permitted,
the provisions of subsections (ii) and (iii) below shall apply.
(ii) A Regulated Solar Collector shall be placed so as not to be visible
by a person on the ground (a) on the facade of a structure that faces areas open to common or
public access, (b) on a roof surface that slopes downward towards the same areas open to
common or public access that the facade faces, or (c) within an area set off by a line running
across the facade of the structure extending to the property boundaries on either side of the
fagade, and those area of common or public access faced by the structure.
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(iii) A Regulated Solar Collector shall be placed and screened as
directed by the Architectural Committee if such placement and screening will not have the effect
of preventing the reasonable use of a Solar Collector.
(iv) Owners shall install and maintain screening improvements
("Screening") around Solar Collectors to screen items that would otherwise be Visible from
Neighboring Property unless such requirement would violate the requirements of subsection (iii)
above, if an Owner is not required to install and maintain Screening due to an unreasonable delay
in installation of the Solar Collector that such Screening would cause, the Owner shall install
such screening within thirty (30) days following installation of the Solar Collector and shall
thereafter maintain such Screening, unless such Screening installation or maintenance will
violate the provisions of subsection (iii) above. If an Owner is not required to install Screening
due to an unreasonable increase in the cost of installing the Solar Collector caused by the cost of
such Screening, the Association shall have the right, at the option of the Association, to enter
onto the Lot and install such Screening and, in such event, the Owner shall maintain the
Screening following installation, unless such Screening installation or maintenance will violate
the provisions of subsection (iii) above.
The provisions of this section are severable from each other; the invalidity or
unenforceability of any provision or portion of this section shall not invalidate or render
unenforceable any other provisions or portions of this section, and all such other provisions or
portions shall remain valid and enforceable. The invalidity or unenforceability of any provisions
or portions of this section to a particular type of Solar Collector or to a particular Solar Collector
on a particular Lot shall not invalidate or render unenforceable such provisions or portions
regarding other Solar Collectors on other Lots.
Section 5.33. Minimum House Size. No Residential Unit that is smaller in size
than 1,500 heated square feet shall be constructed on any Lot. For purposes hereof, heated
square footage shall exclude the square footage of any unheated basement, vaulted ceiling areas
and unfinished attics, unheated porches of any type, attached or detached garages, porte-
cocheres, decks, patios or other unheated areas.
Section 5.34. Intentionally Deleted.
Section 5.35. Intentionally Deleted.
ARTICLE VI
RESERVATION OF RIGHT TO RESUBDIVIDE AND REPLAT
Subject to the approval of any and all appropriate governmental agencies having
jurisdiction, Declarant hereby reserves the right at any time, without the consent of other
Owners, to resubdivide and replat any Lot or Lots or parcels which the Declarant then owns and
has not sold.
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ARTICLE V I I
INTENTIONALLY DELETED
ARTICLE VIII
MAINTENANCE BY OWNER
Each Owner shall maintain his Residential Unit and Lot in good repair. The yards and
landscaping on all improved Lots shall be neatly and attractively maintained, and shall be
cultivated and planted to the extent required to maintain an appearance in harmony with other
improved Lots in the Property. If any sidewalk is partially or completely located on an Owner's
Lot and third parties have an easement to use such sidewalk, then the Association (and not the
Owner) shall be responsible for the maintenance and repair of such sidewalk. During prolonged
absence, an Owner shall arrange for the continued care and upkeep of his Lot. Except for areas
owned by the Association or that the Association has elected in writing to maintain, which
election may be terminated by the Association at any time, each Owner shall also maintain in
good condition and repair any landscaping and sidewalk improvements that are within the
portion of any adjacent right of way that is located between such Owner's Lot and the curb of the
adjacent street and/or the shoulders of the streets located within the right-of-way fronting its Lot.
In the event a Lot Owner fails to fulfill his maintenance and repair obligations under this Article
or in the event an Owner fails to landscape his Lot as required by Section 5.12 of Article V, the
Architectural Committee may have said lot and residence landscaped, cleaned and repaired and
may charge the lot Owner for said work in accordance with the provisions of said section. An
Owner shall not allow a condition to exist on his Lot which will adversely affect any other Lots
and Residential Units or other Owners. Any repainting or redecorating of the exterior surfaces of
a residence which alters the original appearance of the Residential Unit will require the prior
approval of the Architectural Committee.
ARTICLE IX
EASEMENTS
Section 9.1. Owner's Easements of Enjoyment.
(A) Every Member, and any person residing with such Member, shall have a
right and easement of enjoyment in and to the Common Area which shall be appurtenant to and
shall pass with the title to every Lot and Parcel, subject to the provisions of the Act and to the
following provisions:
(i) The right of the Association to charge reasonable admission and
other fees for the use of any recreational or other facility situated upon the Common Area,
including, but not limited to, any recreational vehicle storage area located upon the Common
Area. The Association shall also have the right to restrict the use of such recreational vehicle
storage area to only those Owners or lawful occupants of a Residential Unit who do not have
such a recreational vehicle storage area available to them through a neighborhood association.
The Association may permit the use of any recreational vehicle storage area situated upon the
Common Area by persons who are not Members of the Association provided the Association
charges such persons a reasonable admission fee or use fee for the use of such recreational
vehicle storage area.
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(ii) The right of the Association after Notice and Opportunity for
Hearing to suspend the voting rights and right to the use of the recreational facilities, if any,
located upon Common Area by any Member for any period during which any Assessment
against his Lot remains delinquent.
(iii) Subject to §47F-3-112 of the Act, the right of the Association to
convey or encumber all or any part of the Common Area to any public agency, authority, or
utility for such purposes and subject to such conditions as may be agreed to by the Board,
provided, however, that any such action taken at any time that Declarant owns any Lot shall be
subject to the approval of Declarant. If ingress or egress to any Lot is through the Common
Area, any conveyance or encumbrance of the Common Area shall be subject to the Lot Owner's
easement of ingress and egress.
(iv) The right of the Association to regulate the use of the Common
Area through the Association Rules and to prohibit or limit access to such portions of the
Common Area, such as landscaped right-of-ways, not intended for use by the Owners or other
lawful occupants of a Residential Unit.
(B) If a Lot is leased or rented by the Owner thereof, the tenant and the
members of his family residing with such tenant pursuant to the lease shall have the right to use
the Common Area during the term of the lease, and the Owner of such Lot shall have no right to
use the Common Area until the termination or expiration of such lease.
(C) The guest and invitees of any Member or other person entitled to use the
Common Area pursuant to this Declaration may use any recreational facility located on the
Common Area provided they are accompanied by a Member or other person entitled to use the
recreational facilities pursuant to this Declaration. The Board shall have the right to limit the
number of guests and invitees who may use the recreational facilities located on the Common
Area at any one time and may restrict the use of the recreational facilities by guests and invitees
to certain specified times.
Section 9.2. Drainayze Easements. There is hereby created a blanket
stormwater management easement for drainage of ground water on, over and across each lot in
such locations as Stormwater Facilities are located. An Owner shall not at any time hereafter fill,
block or obstruct any Stormwater Facilities on his lot and each Owner shall repair and maintain
all Stormwater Facilities located on his lot. No structure of any kind shall be constructed and no
vegetation shall be planted or allowed to grow within the drainage easements which may impede
the flow of water under, over or through the easements or which may materially increase the
flow of water onto another lot. All drainage areas shall be maintained by the Owner of the lots
on which the easement area is located.
Section 9.3. Utility Easements. Except as installed by the Declarant or
approved by the Architectural Committee, no lines, wires, or other devices for the
communication or transmission of electric current or power, including telephone, television,
cable and radio signals, shall be erected, placed or maintained anywhere in or upon any lot unless
the same shall be contained in conduits or cables installed and maintained underground or
concealed in, under or on buildings or other structures. No structure, landscaping or other

improvements shall be placed, erected or maintained upon any area designated on the Plat as a
public utility easement which may damage or interfere with the installation and maintenance of
utilities. Such public utility easement areas, and all improvements thereon, shall be maintained
by the Owner of the lot on which the easement area is located unless the utility company or a
county, municipality or other public authority maintains said easement area. There is hereby
created a blanket easement upon, across, over and under the Property for ingress to, egress from
and the installation, replacing, repairing and maintaining of all utility and service lines and
systems including, but not limited to, water, sewer, gas, telephone, electricity, cable or
communication lines and systems, such as utilities are installed in connection with the initial
development of each Lot. Pursuant to this easement, a providing utility or service company may
install and maintain facilities and equipment on the Lots and Common Areas and affix and
maintain wires, circuits and conduits on, in and under the roofs and exterior walls of buildings
thereon. Notwithstanding anything to the contrary contained in this section, no sewers, electrical
lines, water lines, or other utility or sewer lines may be installed or relocated within the Property
except as initially created or approved by Declarant without the prior written approval of, in the
case of a Common Area, the Association and the Architectural Committee or, in the case of a
Lot, the Owner of such Lot and the Architectural Committee. Nothing contained herein shall
entitle Declarant or any utility in exercising the rights granted herein to disturb any Residential
Unit constructed in accordance with the requirements hereof. Declarant further reserves
temporary construction easements for utility lines, maintenance of storage tanks and facilities
and access to and from such facilities.
Section 9.4. Encroachments. The lots shall be subject to an easement for
overhangs and encroachments by walls, fences or other structures upon adjacent lots as
constructed by the original builder or as reconstructed or repaired in accordance with the original
plans and specifications or as a result of the reasonable repair, shifting, settlement or movement
of any such structure.
Section 9.5. Declarant's Easement. Easements over the lots for the
installation and maintenance of electric, telephone cable, communications, water, gas, drainage
and sanitary sewer or similar or other lines, pipes or facilities: (i) as shown on the recorded Plat
or (ii) as may be hereafter reasonably necessary or desirable for Declarant to develop, construct,
install or otherwise provide any service to any lot (provided, however, no utility other than a
connection line to a Residential Unit served by the utility shall be installed in any area upon
which a Residential Unit has been or may legally be constructed on the lot) are hereby reserved
by the Declarant, together with the right to grant and transfer the same.
Section 9.6. Easements to Facilitate Development. Declarant hereby reserves
to itself, and to its successors and assigns the right to: (a) use any Lots owned or leased by
Declarant, or any other Lot with written consent of the Owner thereof or, any portion of the
Common Area as models, management offices, sales offices, a visitors' center, construction,
construction offices, customer service offices or sales office parking areas; and (b) install and
maintain on the Common Area, any Lot owned or leased Declarant, or any other Lot with the
consent of the Owner thereof, such marketing, promotional or other signs which the Declarant
deems necessary for the development, sale or lease of the Property.
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Section 9.7. Dedications and Easements Required by Governmental
Authority. Declarant hereby reserves to itself and its successors and assigns, the right to make
any dedications and to grant any easements, rights -of -way and licenses required by any
government or governmental agency over and through all or any portion of the Common Area.
Section 9.8. Duration of Development Rights; Assi ng ment. The rights and
easements reserved by or granted to the Declarant pursuant to this Article 9 shall continue so
long as any Declarant owns one or more Lots or holds an option to purchase one or more Lots.
Declarant may make limited temporary assignments of its easement rights under this Declaration
to any person or entity performing construction, installation or maintenance on any portion of the
Property.
Section 9.9. Easement for Maintenance and Enforcement. The Association
and its directors, officers, agents, contractors and employees, the Architectural Review
Committee and any other persons and entities authorized by the Board are hereby granted the
right of access over and through any Lots (excluding the interior of any Residential Unit), for (i)
the exercise and discharge of their respective powers and responsibilities under the Project
Documents; (ii) making inspections in order to verify that all Improvements on the Lot have
been constructed in accordance with the plans and specifications for such Improvements
approved by the Architectural Committee and that all Improvements are being properly
maintained as required by the Project Documents; (iii) correcting any condition originating in a
Lot or in the Common Area threatening another Lot or the Common Area; (iv) performing
installations or maintenance of utilities, landscaping or other improvements located on the Lots
for which the Association is responsible for maintenance; or (v) correcting any condition which
violates the Project Documents.
Section 9.10. Rights of Declarant. Notwithstanding any other provision of this
Declaration to the contrary, Declarant has the right to maintain construction trailers, model
homes and sales offices on Lots owned or leased by Declarant and to construct and maintain
parking areas for the purpose of accommodating persons visiting such construction trailers,
model homes and sales offices and employees and contractors of Declarant.
ARTICLE X
MAINTENANCE
Section 10.1. Maintenance by the Association. The Association shall be
responsible for the maintenance, repair and replacement of the Common Area and may, without
any approval of the Owners being required, do any of the following:
(A) Reconstruct, repair, replace or refinish any Improvement or portion
thereof upon any such area (to the extent that such work is not done by a governmental entity, if
any, responsible for the maintenance and upkeep of such area);
(B) Construct, reconstruct, repair, replace or refinish any portion of the
Common Area used as a road, street, walk, driveway and parking area;
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(C) Replace injured and diseased trees or other vegetation in any such area,
and plant trees, shrubs and ground cover to the extent that the Board deems necessary for the
conservation of water and soil and for aesthetic purposes;
(D) Place and maintain upon any such area such signs as the Board may deem
appropriate for the proper identification, use and regulation thereof;
(E) Construct, maintain, repair and replace landscaped areas on any portion of
the Common Area;
(F) Maintain any portion of the Common Area on which Stormwater Facilities
are located; and
(G) Intentionally Omitted.
(H) Do all such other and further acts which the Board deems necessary to
preserve and protect the Common Area and the appearance thereof, in accordance with the
general purposes specified in this Declaration.
Declarant shall not be responsible for maintenance, repair or replacement of Common Areas or
improvements thereon owned by the Association, provided, however, that any express or implied
warranties provided by any provider of labor or materials in connection with improvements shall
be deemed assigned to the Association when the Common Area is transferred to the Association.
This paragraph shall not be subject to amendment without the written approval of the Declarant.
Section 10.2. Damage or Destruction of Common Area by Owners. No Owner
shall in any way damage or destroy any Common Area or interfere with the activities of the
Association in connection therewith. Any expenses incurred by the Association by reason of any
such act of an Owner shall be assessed against (as an individual assessment) and paid by said
Owner, upon demand, to the Association.
Section 10.3. Payment of Utility Charges. Each Lot shall be separately
metered for water and electrical service and all charges for such services shall be the sole
obligation and responsibility of the Owner of each Lot. The cost of water and electrical service
to the Common Area shall be a Common Expense of the Association and shall be included in the
budget of the Association.
Section 10.4. Cluster Mailboxes. Declarant may install one (1) or more cluster
mailboxes on the Property and may assign a single box in each cluster to each Lot. If cluster
mailboxes are installed and assigned to a Lot then the Owner of said Lot may not install any
additional mailbox on its Lot. The Association shall be responsible for the maintenance, repair
and replacement (if necessary) of all cluster mailboxes, with any and all costs associated with the
same being a Common Expense. Declarant may install, maintain, repair and/or replace cluster
mailboxes on any portion of the Common Area or in any easement area shown on any record
Plat (including any easement on a Lot if applicable). Notwithstanding the foregoing, if at the
time of any conveyance, cluster mailboxes are located on any portion of any Lot, the Association
shall have an easement over said Lot as reasonably necessary for maintenance, repair and
replacement of the same, regardless of whether or not said easement is shown on a record Plat.
W

Except that the Association shall maintain, repair and replace any cluster mailboxes so as to keep
the same in good working order (with each Owner having the duty to report any problems with
its mailbox to the Board), neither the Association, the Board, nor Declarant shall have any
liability relative to condition, operation or access of/to the cluster mailboxes (or any
events/actions/occurrences arising from the same or lack of the same) AND BY ACCEPTANCE
OF THE DEED FOR ANY LOT, EACH OWNER THEREBY WAIVES ANY OR ALL
CLAIMS, ACTIONS AND/OR DAMAGES REGARDING OR ARISING OUT OF THE
SAME, AGAINST THE BOARD, THE ASSOCIATION OR THE DECLARANT.
Section 10.5. Landscaping Replacement. Landscaping originally planted on
the Common Areas may exceed the landscaping that is ultimately planned for Common Areas
due to over -planting in anticipation of normal plant losses. The Board is hereby granted the
authority to remove and not replace dead or damaged landscaping if, in the reasonable discretion
of the Board, (a) the remaining landscaping is acceptable to the Board and (b) the remaining
landscaping is generally consistent in quality and quantity with the landscaping shown on
approved landscaping plans filed with governmental entities in connection with Property, even if
the location of specific plants is different than the locations shown on such approved landscaping
plans. Neither Declarant nor any other installer of landscaping in Common Areas shall be
responsible for replacement of landscaping that dies more than ninety days following installation
or that requires replacement due to vandalism, lack of proper watering or maintenance by
Association, or damage due to negligence; the Association shall be solely responsible for such
replacement (subject to potential recovery by the Association from any vandal or negligent
person).
Section 10.6. Alteration of Maintenance Procedures. Following the
termination of the Class B membership and so long as Declarant owns any lot, the Association
shall not, without the written approval of Declarant, alter or fail to follow the maintenance and
repair procedures recommended by the Association's management company as of the
termination of the Class B membership unless such alteration will provide for a higher level of
maintenance and repair. Declarant shall have the right, but not the obligation, to perform any
required maintenance or repair not performed by the Association within ten business days
following notice from Declarant that such maintenance or repair is required under this section; if
Declarant performs such maintenance or repair, the costs incurred by Declarant shall be
reimbursed by the Association within thirty days following written demand for reimbursement
accompanied by copies of invoices for such costs. This section shall not be subject to
amendment without the written approval of the Declarant.
ARTICLE XI
INSURANCE
Section 11.1. Scope of Coverage. Commencing not later than the time of the
first conveyance of a Lot to a person other than the Declarant, the Association shall maintain, to
the extent reasonably available, the following insurance coverage:
(A) Property insurance on the Common Area insuring against all risk of direct
physical loss, insured against in an amount equal to the maximum insurable replacement value of
the Common Area, as determined by the Board; provided, however, that the total amount of
30

insurance after application of any deductibles shall not be less than one hundred percent (100%)
of the current replacement cost of the insured Property, exclusive of land, excavations,
foundations and other items normally excluded from a Property policy,
(B) Comprehensive general liability insurance, including medical payments
insurance, in an amount determined by the Board, but not less than $1,000,000.00. Such
insurance shall cover 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 the
Common Area, and shall also include hired automobile and non -owned automobile coverages
with cost liability endorsements to cover liabilities of the Owners as a group to an Owner and
provide coverage for any legal liability that results from lawsuits related to employment
contracts in which the Association is a party;
(C) Workmen's compensation insurance to the extent necessary to meet the
requirements of the laws of North Carolina;
(D) Such other insurance as the Association shall determine from time to time
to be appropriate to protect the Association or the Owners;
(E) The insurance policies purchased by the Association shall, to the extent
reasonably available) contain the following provisions:
(i) Each Owner is an insured owner under the policy to the extent of
the Owner's insurable interest.
(ii) That there shall be no subrogation with respect to the Association,
its agents, servants, and employees, with respect to Owners and members of their household;
(iii) No act or omission by any Owner, unless acting within the scope
of his authority on behalf of the Association, will void the policy or be a condition to recovery on
the policy;
(iv) That the coverage afforded by such policy shall not be brought into
contribution or proration with any insurance which may be purchased by Owners or their
mortgagees or beneficiaries under deeds of trust;
(v) A "severability of interest" endorsement which shall preclude the
insurer from denying the claim of an Owner because of the negligent acts of the Association or
other Owners;
(vi) The Association shall be named as the Insured;
(vii) For policies of hazard insurance, a standard mortgagee clause
providing that the insurance carrier shall notify the first mortgagee named in the policy at least
thirty (30) days in advance of the effective date of any substantial modification, reduction or
cancellation of the policy;
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(F) If the Property is located in an area identified by the Secretary of Housing
& Urban Development as an area having special flood hazards, a policy of flood insurance on the
Common Area must be maintained in the lesser of one hundred percent (100%) of the current
replacement cost of the buildings and any other Property covered by the required form of policy
or the maximum limit of coverage available under the National Insurance Act of 1968, as
amended;
(G) "Agreed Amount" and "Inflation Guard" endorsements.
Section 11.2. Certificates of Insurance. An insurer that has issued an insurance
policy under this Article shall issue certificates or a memorandum of insurance to the Association
and, upon request, to any Owner, mortgagee or beneficiary under a deed of trust. Any insurance
obtained pursuant to this Article may not be cancelled until thirty (30) days after notice of the
proposed cancellation has been mailed to the Association, each Owner and each mortgagee or
beneficiary under deed of trust to whom certificates of insurance have been issued.
Section 11.3. Fidelity Bonds.
(A) The Association shall maintain blanket fidelity bonds for all officers,
directors, trustees and employees of the Association and all other persons handling or responsible
for funds of or administered by the Association, including, but without limitation, officers,
directors and employees of any management agent of the Association, whether or not they
receive compensation for their services. The total amount of fidelity bond maintained by the
Association shall be based upon the best business judgment of the Board, and shall not be less
than the greater of (i) the amount equal to one hundred percent (100%) of the estimated annual
operating expenses of the Association, (ii) the estimated maximum amount of funds, including
reserve funds, in the custody of the Association or the management agent, as the case may be, at
any given time during the term of each bond, (iii) the sum equal to three (3) months assessments
on all Lots plus adequate reserve funds. Fidelity bonds obtained by the Association must also
meet the following requirements:
(i) The fidelity bonds shall name the Association as an obligee;
(ii) The bonds shall contain waivers by the issuers of the bonds of all
defenses based upon the exclusion of persons serving without compensation from the definition
of "employees" or similar terms or expressions;
(iii) The bonds shall provide that they may not be canceled or
substantially modified (including cancellation from non-payment of premium) without at least
ten (10) days prior written notice to the Association.
(B) The Association shall require any management agent of the Association to
maintain its own fidelity bond in an amount equal to or greater than the amount of the fidelity
bond to be maintained by the Association pursuant to subsection (A) of this section. The fidelity
bond maintained by the management agent shall cover funds maintained in bank accounts of the
management agent and need not name the Association as an obligee.
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Section 11.4. Payment of Premiums. The premiums for any insurance
obtained by the Association pursuant to this Article shall be a Common Expense and included in
the budget of the Association and shall be paid by the Association.
Section 11.5. Insurance Obtained by Owners. Each Owner shall be
responsible for obtaining Property insurance for his own benefit and at his own expense covering
his Lot, and all Improvements and personal property located thereon. Each Owner shall also be
responsible for obtaining at his expense personal liability coverage for death, bodily injury or
Property damage arising out of the use, ownership or maintenance of his Lot.
Section 11.6. Payment of Insurance Proceeds. With respect to any loss to the
Common Area covered by Property insurance obtained by the Association in accordance with
this Article, the loss shall be adjusted with the Association and the insurance proceeds shall be
payable to the Association and not to any mortgagee or beneficiary under a deed of trust.
Subject to the provisions of Section 11.7 of this Article, the proceeds shall be disbursed for the
repair or restoration of the damage to Common Area.
Section 11.7. Repair and Replacement of Damaged or Destroyed Property.
Any portion of the Common Area damaged or destroyed shall be repaired or replaced promptly
by the Association unless (i) this Declaration is terminated, or (ii) repair or replacement would be
illegal under any state or local health or safety statute or ordinance, or (iii) Owners owning at
least eighty percent (80%) of the Lots vote not to rebuild, including one hundred percent (100%)
approval assigned to the limited common elements (if any) not to be rebuilt as provided in the
Act. The cost of repair or replacement in excess of insurance proceeds and reserves shall be paid
by the Association. If the entire Common Area is not repaired or replaced, insurance proceeds
attributable to the damaged Common Area shall be used to restore the damaged area to a
condition which is not in violation of any state or local health or safety statute or ordinance and
the remainder of the proceeds shall be distributed in accordance with the provisions of §47F-3-
113(g) of the Act. Notwithstanding the provisions of this subsection, §47F-2-118 of the Act
governs the distribution of the insurance proceeds if this Declaration is terminated.
ARTICLE XII
TERM AND ENFORCEMENT
Section 12.1. Enforcement. Subject to the provisions of Section 12.4 and of
Article XIII, the Association, the Architectural Committee or any Owner shall have the right (but
not the obligation) to enforce the Covenants and Restrictions in this Declaration and any
amendment thereto. Failure by the Association, the Architectural Committee or any Owner to
enforce the Covenants and Restrictions shall in no event be deemed a waiver of the right to do so
thereafter. Deeds of conveyance of the Property may contain the Covenants and Restrictions by
reference to this Declaration, but whether or not such reference is made in such deeds, each and
all such Covenants and Restrictions shall be valid and binding upon the respective grantees.
Violators of any one or more of the Covenants and Restrictions may be restrained by any court
of competent jurisdiction and damages awarded against such violators, provided, however, that a
violation of these Covenants and Restrictions or any one or more of them shall not affect the lien
of any first mortgage or first deed of trust. If the Architectural Committee enforces any
provision of the Project documents, the cost of the enforcement shall be paid by the Association.
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In addition to any enforcement rights otherwise available to the Association, the Association
shall have the right to enforce any provision of this Declaration by directly taking action
necessary to cure or remove a breach of this Declaration, including without limitation, removal,
repair or replacement of any improvement, sign or landscaping on any portion of the Property; in
such event, the Association shall be entitled to recover the costs incurred by the Association in
connection with such cure. Pursuant to such cure/removal right of the Association, the
Association or its authorized agents may, upon reasonable written notice (or immediately, for
willful and recurrent violations, when written notice has previously been given), enter any Lot in
which a violation of these restrictions exists and may correct such violation at the expense of the
Owner of such Lot; the Association and its agents are hereby granted an easement for such
purpose. Such expenses, and such fines as may be imposed pursuant to this Declaration, the
Bylaws, or Association Rules, shall constitute and be secured by an Assessment Lien upon such
Lot enforceable in accordance with the provisions of this Declaration. All remedies available at
law or equity shall be available in the event of any breach of any provision of this section by any
Owner, tenant or other person.
Section 12.2. Term. This Declaration shall remain in force and shall run with
and bind the Property until terminated in accordance with §47F-2-118 of the Act.
Section 12.3. Amendment. Except as otherwise expressly provided herein, this
Declaration may be amended or modified at any time by the vote or written consent of Owners
having sixty-seven percent (67%) of the votes entitled to be cast in the Association; provided,
however, that any amendment or modification to this Declaration must be consented to by
Declarant so long as Declarant is the Owner of any Lot or other portion of the Property, which
consent Declarant may grant or withhold in its sole discretion. Any amendment or modification
upon which the vote of Owners is required pursuant to this Without implication that a vote is
required, where it is not, an amendment pursuant to this Section 12.3 shall become effective
when an instrument executed by the Owners voting for such amendment or modification is filed
of record in the office of the Registry; provided, however, such an amendment or modification,
in lieu of being executed by the Owners voting for such amendment or modification, may
contain a certification of the Secretary of the Association stating that the amendment or
modification has been voted on and approved by the requisite number of votes of the Owners, as
provided in this Section 12.3. A properly executed and recorded amendment may alter the
restrictions in whole or in part applicable to all or any portion of the Property and need not be
uniform in application to the Property.
Notwithstanding the terms of the immediately preceding paragraph of this Section 12.3,
until the termination of the Class B Membership, Declarant, without obtaining the approval of
any Owner or Owners other than Declarant, shall have the unilateral right, in its sole and
absolute discretion, to make any amendments or modifications hereto which Declarant deems
necessary or desirable, including, without limitation, amendments or modifications to any
procedural, administrative or substantive provisions of this Declaration.
Any action to challenge the validity of an amendment to this Declaration must be brought
within one (1) year of the amendment's effective date. No action to challenge any such
amendment may be brought after such time.
34

Section 12.4. Approval of Litigation. Except for any legal proceedings
initiated by the Association to (i) enforce the use restrictions contained in this Declaration; (ii)
enforce the Association Rules; (iii) enforce the Architectural Committee Rules; (iv) collect any
unpaid Assessments levied pursuant to this Declaration, or (v) enforce a contract entered into by
the Association with vendors providing services to the Association, the Association shall not
incur litigation expenses, including without limitation, attorneys' fees and costs, where the
Association initiates legal proceedings or is joined as a plaintiff in legal proceedings, without the
prior approval of a majority of the Members of the Association entitled to cast a vote who are
voting in person or by proxy at a meeting duly called for such purpose, excluding the vote of any
Owner who would be a defendant in such proceedings. The costs of any legal proceedings
initiated by the Association which are not included in the above exceptions shall be financed by
the Association only with monies that are collected for that purpose by special assessment and
the Association shall not borrow money, use reserve funds, or use monies collected for other
Association obligations. Each Owner shall notify prospective Purchasers of such legal
proceedings initiated by the Board and not included in the above exceptions and must provide
such prospective Purchasers with a copy of the notice received from the Association in
accordance with Section 13.3 of this Declaration. Nothing in this section shall preclude the
Board from incurring expenses for legal advice in the normal course of operating the Association
to (i) enforce the Project Documents; (ii) comply with the statutes or regulations related to the
operation of the Association; (iii) amend the Project Documents as provided in this Declaration;
(iv) grant easements or convey Common Area as provided in this Declaration or (v) perform the
obligations of the Association as provided in this Declaration. Subject to the exceptions in the
first sentence of this section, with respect to matters involving property or improvements to
property, the Association (or Board of Directors) additionally shall not initiate legal proceedings
or join as a plaintiff in legal proceedings unless (1) such property or improvement is owned
either by the Association or jointly by all Members of the Association, (2) the Association has
the maintenance responsibility for such property or improvements pursuant to this Declaration,
or (3) the Owner who owns such property or improvements consents in writing to the
Association initiating or joining such legal proceeding.
Section 12.5. Annexation of Additional Property. Until the later of (a) fifteen
(15) years following recordation of this Declaration or (b) termination of the Class B
Membership, and thereafter with the approval of the Board, Declarant shall have the right, from
time to time or at any time, in its sole discretion and without the consent of any person (other
than consent of the owner of the property being annexed), to annex and bring under the
encumbrance of the Project Documents: i) any of that property described on Exhibit B as
"Additional Property" and ii) any other real property that is adjacent to any real property that is
then subject to this Declaration; property shall be deemed adjacent if contiguous at any point or
if separated only by a street, alley, right-of-way or easement. Annexation shall be effective upon
recordation by Declarant of a signed and acknowledged declaration of annexation in the Registry
stating that such adjacent real property has been annexed to this Declaration; no consent or
approval of such annexation by the Board of Directors or Members of the Association shall be
necessary for an annexation by Declarant. Upon annexation, the annexed real property shall be
deemed to be part of the "Property" and shall have the same rights, privileges and obligations as
the Property originally subject to the terms of this Declaration, including membership in the
Association, except that such rights, privileges and obligations shall not include matters arising
35

or accruing prior to annexation; annual assessments shall be prorated for annexed property
through the date of annexation.
Section 12.6. De -Annexation of Property. Until the later of (a) fifteen (15)
years following recordation of this Declaration or (b) termination of the Class B Membership,
Declarant shall have the right, from time to time or at any time, in its sole discretion and without
the consent of any person (other than consent of the owner of the property being de -annexed), to
delete from the Property and remove from the effect of this Declaration, one or more portions of
the Property, provided, however, that a portion of the Property may not be deleted from this
Declaration unless at the time of such deletion and removal no Residential Units or material
Common Area improvements have been constructed thereon (unless the de -annexation is for the
purpose of accomplishing minor adjustments to the boundaries of Lots or the Property). No
deletion of Property shall occur if such deletion would act to terminate access to any right-of-
way or utility line unless reasonable alternative provisions are made for such access. No deletion
of Property shall affect the Assessment Lien on the deleted Property for Assessments accruing
prior to deletion. Any deletion of Property hereunder shall be made by Declarant recording a
notice thereof. Notwithstanding the foregoing, and by way of additional reservation of rights to
Declarant, Declarant may at any point during the Class B Membership, unilaterally withdraw any
portion of the Property which has not been sold as a Lot to another Owner, and convey the same
to any authority/county/municipality.
ARTICLE XIII
CLAIM AND DISPUTE RESOLUTION/LEGAL ACTIONS
It is intended that the Common Area, each Lot, and all Improvements constructed on the
Property by persons or entities, including Declarant where applicable (all together
"Developers"), in the business of constructing improvements will be constructed in compliance
with all applicable building codes and ordinances and that all Improvements will be of a quality
that is consistent with the good construction and development practices in the area where the
Project is located for production housing similar to that constructed within the Project.
Nevertheless, due to the complex nature of construction and the subjectivity involved in
evaluating such quality, disputes may arise as to whether a defect exists and the responsibility
therefor. It is intended that all disputes and claims regarding alleged defects in any design or
construction of Improvements on any Common Area or on any area (an "area of Association
responsibility") for which the Association otherwise has insurance, maintenance, repair or
replacement responsibility (individually or together, and not including any disputes or claims
regarding any other on -Lot Improvements (including Residential Units), the "Alleged Defects"),
will be resolved amicably, without the necessity of time-consuming and costly litigation.
Accordingly, all Developers, Declarant, the Association, the Board, and all Owners shall be
bound by the following claim resolution procedures.
Section 13.1. Right to Cure Alleged Defect. If a person or entity ("Claimant")
claims, contends, or alleges an Alleged Defect, each Developer shall have the right to inspect,
repair and/or replace such Alleged Defect as set forth herein.
Section 13. L I. Notice of Alleged Defect. If a Claimant discovers an Alleged
Defect, then, within fifteen (15) days after discovery thereof, Claimant shall give written notice
36

of the Alleged Defect ("Notice of Alleged Defect") to the Developer constructing the
Improvement with respect to which the Alleged Defect relates.
Section 13.1.2. Right to Enter, Inspect, Repair and/or Replace. Within a
reasonable time after the receipt by a Developer of a Notice of Alleged Defect, or the
independent discovery of any Alleged Defect by a Developer, Developer shall have the right,
upon reasonable notice to Claimant and during normal business hours, to enter onto or into the
Common Area, areas of Association responsibility, any Lot or Residential Unit, and/or any
Improvements for the purposes of inspecting and/or conducting testing and, if deemed necessary
by Developer at its sole discretion, repairing and/or replacing such Alleged Defect. In
conducting such inspection, testing, repairs and/or replacement, Developer shall be entitled to
take any actions as it shall deem reasonable and necessary under the circumstances.
Section 13.2. No Additional Obligations; Irrevocability and Waiver of Right.
Nothing set forth in this Article shall be construed to impose any obligation on a Developer to
inspect, test, repair, or replace any item or Alleged Defect for which such Developer is not
otherwise obligated under applicable law or any warranty provided by such Developer in
connection with the sale of the Lots and Residential Units and/or the Improvements constructed
thereon. The right reserved to Developer to enter, inspect, test, repair and/or replace an Alleged
Defect shall be irrevocable and may not be waived or otherwise terminated with regard to a
Developer except by a written document executed by such Developer and recorded in the
Registry.
Section 13.3. Legal Actions. All legal actions initiated by a Claimant shall be
brought in accordance with and subject to Section 13.4 and Section 12.4 of this Declaration. If a
Claimant initiates any legal action, cause of action, regulatory action, proceeding, reference,
mediation, or arbitration against a Developer alleging (1) damages for costs of repairing Alleged
Defect ("Alleged Defect Costs"), (2) for the diminution in value of any real or personal property
resulting from such Alleged Defect, or (3) for any consequential damages resulting from such
Alleged Defect, any judgment or award in connection therewith shall first be used to correct and
or repair such Alleged Defect or to reimburse the Claimant for any costs actually incurred by
such Claimant in correcting and/or repairing the Alleged Defect. If the Association as a
Claimant recovers any funds from a Developer (or any other person or entity) to repair an
Alleged Defect, any excess funds remaining after repair of such Alleged Defect shall be paid in
to the Association's reserve fund. If the Association is a Claimant, the Association must provide
a written notice to all Members prior to initiation of any legal action, regulatory action, cause of
action, proceeding, reference, mediation or arbitration against a Developer(s) which notice shall
include at a minimum (1) a description of the Alleged Defect; (2) a description of the attempts of
the Developer(s) to correct such Alleged Defect and the opportunities provided to the
Developer(s) to correct such Alleged Defect; (3) a certification from an architect or engineer
licensed in the State of North Carolina that such Alleged Defect exists along with a description
of the scope of work necessary to cure such Alleged Defect and a resume of such architect or
engineer; (4) the estimated Alleged Defect Costs; (5) the name and professional background of
the attorney retained by the Association to pursue the claim against the Developer(s) and a
description of the relationship between such attorney and member(s) of the Board or the
Association's management company (if any); (6) a description of the fee arrangement between
such attorney and the Association; (7) the estimated attorneys' fees and expert fees and costs
37

necessary to pursue the claim against the Developer(s) and the source of the funds which will be
used to pay such fees and expenses; (8) the estimated time necessary to conclude the action
against the Developer(s); and (9) an affirmative statement from a majority of the members of the
Board that the action is in the best interests of the Association and its Members.
Section 13.4. Alternative Dispute Resolution. Any dispute or claim between
or among (a) a Developer (or its brokers, agents, consultants, contractors, subcontractors, or
employees) on the one hand, and any Owner(s) or the Association on the other hand; or (b) any
Owner and another Owner; or (c) the Association and any Owner regarding any controversy or
claim between the parties, including any claim based on contract, tort, or statute, arising out of or
relating to (i) the rights or duties of the parties under this Declaration; or (ii) an Alleged Defect,
but excluding disputes relating to the payment of any type of Assessment (collectively a
"Dispute"), shall be subject first to negotiation, then mediation, and then arbitration as set forth
in this Section 13.4 prior to any party to the Dispute instituting litigation with regard to the
Dispute.
Section 13.4.1. Negotiation. Each party to a Dispute shall make every
reasonable effort to meet in person and confer for the purpose of resolving a Dispute by good
faith negotiation. Upon receipt of a written request from any party to the Dispute, the Board may
appoint a representative to assist the parties in resolving the dispute by negotiation, if in its
discretion the Board believes its efforts will be beneficial to the parties and to the welfare of the
community. Each party to the Dispute shall bear their own attorneys' fees and costs in
connection with such negotiation.
Section 13.4.2. Mediation. If the parties cannot resolve their Dispute pursuant
to the procedures described in Subsection 13.4.1 above within such time period as may be agreed
upon by such parties (the "Termination of Negotiations"), the party instituting the Dispute (the
"Disputing Part") shall have thirty (30) days after the termination of negotiations within which to
submit the Dispute to mediation pursuant to the mediation procedures adopted by the American
Arbitration Association or any successor thereto or to any other independent entity providing
similar services upon which the parties to the Dispute may mutually agree. No person shall
serve as a mediator in any Dispute in which such person has a financial or personal interest in the
result of the mediation, except by the written consent of all parties to the Dispute. Prior to
accepting any appointment, the prospective mediator shall disclose any circumstances likely to
create a presumption of bias or to prevent a prompt commencement of the mediation process. If
the Disputing Party does not submit the Dispute to mediation within thirty days after
Termination of Negotiations, the Disputing Party shall be deemed to have waived any claims
related to the Dispute and all other parties to the Dispute shall be released and discharged from
any and all liability to the Disputing Party on account of such Dispute; provided, nothing herein
shall release or discharge such party or parties from any liability to persons or entities not a party
to the foregoing proceedings.
Section 13.4.2.1. Position Memoranda; Pre -Mediation Conference.
Within ten (10) days of the selection of the mediator, each party to the Dispute shall submit a
brief memorandum setting forth its position with regard to the issues to be resolved. The
mediator shall have the right to schedule a pre -mediation conference and all parties to the
Dispute shall attend unless otherwise agreed. The mediation shall commence within ten (10)
38

days following submittal of the memoranda to the mediator and shall conclude within fifteen
(15) days from the commencement of the mediation unless the parties to the Dispute mutually
agree to extend the mediation period. The mediation shall be held in the County where the
property is located or such other place as is mutually acceptable by the parties to the Dispute.
Section 13.4.2.2. Conduct of Mediation. The mediator has discretion to
conduct the mediation in the manner in which the mediator believes is most appropriate for
reaching a settlement of the Dispute. The mediator is authorized to conduct joint and separate
meetings with the parties to the Dispute and to make oral and written recommendations for
settlement. Whenever necessary, the mediator may also obtain expert advice concerning
technical aspects of the dispute, provided the parties to the Dispute agree to obtain and assume
the expenses of obtaining such advice as provided in Subsection 13.4.2.5 below. The mediator
does not have the authority to impose a settlement on any party to the Dispute.
Section 13.4.2.3. Exclusion Agreement. Any admissions, offers of
compromise or settlement negotiations or communications at the mediation shall be excluded in
any subsequent dispute resolution forum.
Section 13.4.2.4. Parties Permitted at Sessions. Persons other than the
parties to the Dispute may attend mediation sessions only with the permission of all parties to the
Dispute and the consent of the mediator. Confidential information disclosed to a mediator by the
parties to the Dispute or by witnesses in the course of the mediation shall be kept confidential.
There shall be no stenographic record of the mediation process.
Section 13.4.2.5. Expenses of Mediation. The expenses of witnesses for
either side shall be paid by the party producing such witnesses. All other expenses of the
mediation, including, but not limited to, the fees and costs charged by the mediator and the
expenses of any witnesses or the cost of any proof of expert advice produced at the direct request
of the mediator, shall be borne equally by the parties to the Dispute unless agreed to otherwise.
Each party to the Dispute shall bear their own attorneys' fees and costs in connection with such
mediation.
Section 13.4.3. Final and Binding Arbitration. If the parties cannot resolve
their Dispute pursuant to the procedures described in Subsection 13.4.2 above, the Disputing
Party shall have thirty (30) days following termination of mediation proceedings (as determined
by the mediator) to submit the Dispute to final and binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, as modified or as
otherwise provided in this Section 13.4. If the Disputing Party does not submit the Dispute to
arbitration within thirty days after termination of mediation proceedings, the Disputing Party
shall be deemed to have waived any claims related to the Dispute and all other parties to the
Dispute shall be released and discharged from any and all liability to the Disputing Party on
account of such Dispute; provided, nothing herein shall release or discharge such party or parties
from any liability to a person or entity not a party to the foregoing proceedings.
The existing parties to the Dispute shall cooperate in good faith to ensure that all
necessary and appropriate parties are included in the arbitration proceeding. No Developer shall
be required to participate in the arbitration proceeding if all parties against whom a Developer
WE

would have necessary or permissive cross -claims or counterclaims are not or cannot be joined in
the arbitration proceedings. Subject to the limitations imposed in this Section 13.4, the arbitrator
shall have the authority to try all issues, whether of fact or law.
Section 13.4.3.1. Place. The arbitration proceedings shall be heard in the
County where the Property is located.
Section 13.4.3.2. Arbitration. A single arbitrator shall be selected in
accordance with the rules of the American Arbitration Association from panels maintained by
the American Arbitration Association with experience in relevant matters which are the subject
of the Dispute. The arbitrator shall not have any relationship to the parties or interest in the
Project. The parties to the Dispute shall meet to select the arbitrator within ten (10) days after
service of the initial complaint on all defendants named therein.
Section 13.4.3.3. Commencement and Timiny, of Proceeding. The
arbitrator shall promptly commence the arbitration proceeding at the earliest convenient date in
light of all of the facts and circumstances and shall conduct the proceeding without undue delay.
Section 13.4.3.4. Pre -hearing Conferences. The arbitrator may require
one or more pre -hearing conferences.
Section 13.4.3.5. Discovery. The parties to the Dispute shall be entitled
to limited discovery only, consisting of the exchange between the parties of the following
matters: (i) witness lists; (ii) expert witness designations; (iii) expert witness reports; (iv)
exhibits; (v) reports of testing or inspections of the property subject to the Dispute, including but
not limited to, destructive or invasive testing; and (vi) trial briefs. The Developer shall also be
entitled to conduct further tests and inspections as provided in Section 13.1 above. Any other
discovery shall be permitted by the arbitrator upon a showing of good cause or based on the
mutual agreement of the parties to the Dispute. The arbitrator shall oversee discovery and may
enforce all discovery orders in the same manner as any trial court judge.
Section 13.4.3.6. Limitation on Remedies/Prohibition on the Award of
Punitive Damages. Notwithstanding contrary provisions of the Commercial Arbitration Rules,
the arbitrator in any proceeding shall not have the power to award punitive or consequential
damages; however, the arbitrator shall have the power to grant all other legal and equitable
remedies and award compensatory damages. The arbitrator's award may be enforced as
provided for in the Uniform Arbitration Act, NCGS §1-569, et seq., or such similar law
governing enforcement of awards in a trial court as is applicable in the jurisdiction in which the
arbitration is held.
Section 13.4.3.7. Motions. The arbitrator shall have the power to hear
and dispose or motions, including motions to dismiss, motions for judgment on the pleadings,
and summary judgment motions, in the same manner as a trial court judge, except the arbitrator
shall also have the power to adjudicate summary issues of fact or law including the availability
of remedies, whether or not the issue adjudicated could dispose of an entire cause of action or
defense.
N

Section 13.4.3.8. Expenses of Arbitration. Each party to the Dispute
shall bear all of its own costs incurred prior to and during the arbitration proceedings, including
the fees and costs of its attorneys or other representatives, discovery costs, and expenses of
witnesses produced by such party. Each party to the Dispute shall share equally all charges
rendered by the arbitrator unless otherwise agreed to by the parties.
Section 13.5. Statute of Limitations. Nothing in this Article shall be
considered to toll, stay, or extend any applicable statute of limitations.
Section 13.6. Enforcement of Resolution. If the parties to a Dispute resolve
such Dispute through negotiation or mediation in accordance with Subsection 13.4.1 or
Subsection 13.4.2 above, and any party thereafter fails to abide by the terms of such negotiation
or mediation, or if an arbitration award is made in accordance with Subsection 13.4.3 and any
party to the Dispute thereafter fails to comply with such resolution or award, then the other party
to the Dispute may file suit or initiate administrative proceedings to enforce the terms of such
negotiation, mediation, or award without the need to again comply with the procedures set forth
in this Article. In such event, the party taking action to enforce the terms of the negotiation,
mediation, or the award shall be entitled to recover from the non -complying party (or if more
than one non -complying party, from all such parties pro rata), all costs incurred to enforce the
terms of the negotiation, mediation or award including, without limitation, attorneys fees and
court costs.
ARTICLE XIV
INTENTIONALLY OMITTED
ARTICLE XV
GENERAL PROVISIONS
Section 15.1. Severability. Invalidation of any terms, conditions, covenants,
conditions, restrictions or other provisions of the Declaration (or portions thereof) shall not affect
the validity of the any other terms, conditions, covenants, conditions, restrictions or other
provisions of the Declaration (or portions thereof), all of which shall remain in full force and
effect.
Section 15.2. Construction. The Article and section headings have been
inserted for convenience only and shall not be considered in resolving questions of interpretation
or construction. All terms and words used in this Declaration regardless of the number and
gender in which they are used shall be deemed and construed to include any other number, and
any other gender, as the context or sense requires. In the event of any conflict or inconsistency
between this Declaration, the Articles, and/or the Bylaws, the provisions of this Declaration shall
control over the provision of the Articles and the Bylaws and the provisions of the Articles shall
prevail over the provisions of the Bylaws.
Section 15.3. Notices. Any notice permitted or required to be delivered as
provided herein may be delivered either personally or by mail, postage prepaid; if to an Owner,
addressed to that Owner at the address of the Owner's lot or if to the Architectural Committee,
addressed to that Committee at the normal business address. If notice is sent by mail, it shall be
41

deemed to have been delivered twenty-four (24) hours after a copy of the same has been
deposited in the United States mail, postage pre -paid. If personally delivered, notice shall be
effective on receipt. Notwithstanding the foregoing, if application for approval, plans,
specifications and any other communication or documents shall not be deemed to have been
submitted to the Architectural Committee, unless actually received by said Committee. Any
vote, election, consent or approval of any nature by the Owners or the Board of Directors,
whether hereunder or for any other purpose, may, in the discretion of the Board of Directors and
in lieu of a meeting of members, be held by a mail -in ballot process pursuant to such reasonable
rules as the Board may specify.
Section 15.4. Intentionally Omitted.
Section 15.1. Intentionally Omitted.
Section 15.2. Restriction of Traffic. Declarant reserves the right, until the
conveyance of title to Purchaser of the last Residential Unit in the Property, to unilaterally
restrict and/or re-route all pedestrian and vehicular traffic within the Property, in Declarant's sole
discretion, to accommodate Declarant's construction activities, and sales and marketing
activities; provided that no Residential Unit shall be deprived of access to a dedicated street
adjacent to the Property.
Section 15.3. Other Rights. Declarant reserves all other rights, powers, and
authority of Declarant set forth in this Declaration, and, to the extent not expressly prohibited by
applicable North Carolina law, further reserves all other rights, powers, and authority, in
Declarant's sole discretion, of a declarant under applicable North Carolina law, including,
without limitation, all special declarant rights under the Act.
Section 15.4. Disclaimers and Releases. By acceptance of a deed to a
Residential Unit, each purchaser or Owner, for itself and all persons claiming under such
purchaser or Owner, shall conclusively be deemed to have acknowledged and agreed: (a) that
Declarant specifically disclaims any and all representations and warranties, express and implied,
with regard to any of the disclosed or described matters (other than to the extent expressly set
forth in the foregoing disclosures); and (b) to fully and unconditionally release Declarant and the
Association, and their respective officers, managers, agents, employees, suppliers and
contractors, and their successors and assigns, from any and all loss, damage or liability
(including, but not limited to, any claim for nuisance or health hazards) related to or arising in
connection with any disturbance, inconvenience, injury, or damage resulting from or pertaining
to all and/or any one or more of the conditions, activities, occurrences described herein.
ARTICLE XVI
SPECIAL PROVISIONS
Section 1 b.1. Future Development. Declarant presently plans to develop only
those Lots which have already been released for construction and sale, and Declarant has no
obligation with respect to future phases, plans, zoning, or development of other real property
contiguous to or nearby the Lots presently planned for development. The Owner of a Residential
Unit may have seen proposed or contemplated residential and other developments which may
42

have been illustrated in the plot plan or other sales literature in or from Declarant's sales office,
and/or may have been advised of the same in discussions with sales personnel; however,
notwithstanding such plot plans, sales literature, or discussions or representations by sales
personnel or otherwise, Declarant is under no obligation to construct such future or planned
developments, amenities or units, and the same may not be built in the event that Declarant, for
any reason whatsoever, decides not to build same. An Owner is not entitled to rely upon, and in
fact has not relied upon, the presumption or belief that the same will be built; and no sales
personnel or any other person in any way associated with Declarant has any authority to make
any statement contrary to the foregoing provisions.
Section 16.2. Construction Nuisances. Residential subdivision and new home
construction are subject to and accompanied by substantial levels of noise, dust, traffic, and other
construction -related "nuisances." Each Owner acknowledges and agrees that it is purchasing a
Residential Unit which is within a residential subdivision currently being developed, and that the
Owner will experience and accepts substantial level of construction -related "nuisances" until the
subdivision (and other neighboring portions of land being developed) have been completed and
sold out.
Section 16.3. Model Homes. Model homes are displayed for illustrative
purposes only, and such display shall not constitute an agreement or commitment on the part of
Declarant to deliver the Residential Unit in conformity with any model home, and any
representation or inference to the contrary is hereby expressly disclaimed. None of the decorator
items and other items or furnishings (including, but not limited to, decorator paint colors,
wallpaper, window treatments, mirrors, upgraded carpet, decorator built-ins, model home
furniture, model home landscaping, and the like) shown installed or on display in any model
home are included for sale to a purchaser unless an authorized officer of Declarant has
specifically agreed in a written addendum to the purchase agreement to make specific items a
part of the purchase agreement.
Section 16.4. Stormwater Facilities.
(A) Stormwater Facilities. In accordance with the requirements of the
governing authorities one or more Stormwater Facilities may be located on a portion of the
Common Area. The operation and maintenance of the Stormwater Facilities are subject to the
terms of the Stormwater Facility Agreements. Upon conveyance of the Common Area to the
Association, the Association shall operate and maintain the Stormwater Facilities.
(B) Expenditure Priority. To the extent not inconsistent with other applicable
legal requirements, the Association's obligations under the Stormwater Facility Agreements shall
receive the highest priority for expenditures with the exception of expenditures for (i)
assessments levied by the local governmental authorities (ii) ad valorem property taxes (iii)
liability and hazard insurance required to be maintained by the Association (iv) any other
expenditures which are required by law to have a higher priority.
(C) Reconstruction and Repair Fund. The Association shall maintain a Major
Reconstruction Fund for the reconstruction and repair of the Stormwater Facilities, which shall
be separate from the fund for the routine maintenance of the Stormwater Facilities. The
43

reconstruction and repair fund shall be listed as a separate line in the Association's budget and
shall be kept in an account insured by the Federal Deposit Insurance Corporation or by another
entity acceptable to the Board. The funds in the reconstruction and repair account shall not be
commingled with any of the Association's other funds.
(D) Dissolution and Transfer. Notwithstanding any provision to the contrary
contained in the Declaration and to the extent permitted by applicable law, the Association shall
not enter into voluntary dissolution unless the Stormwater Facilities located on Common Area
are transferred to a person or entity who assumes the maintenance obligation of the Stormwater
Facilities as set forth in the Stormwater Facility Agreements, and, to the extent permitted by
applicable law, the Association shall not sell, convey or otherwise transfer any interest in the
Common Area on which the Stormwater Facilities are located to any party unless the transferee
assumes the maintenance obligation of the Stormwater Facilities as set forth in the Stormwater
Facility Agreements.
(E) Easement to the Governing Authorities. Declarant hereby grants to the
applicable governing authorities an easement for ingress, egress and regress over and across the
Common Area on which the Stormwater Facilities exist for the purpose of inspecting the
Stormwater Facilities as necessary and for the purpose of correcting, repairing, replacing, and
maintaining the Stormwater Facilities and exercising the other rights of the such governing
authorities that are provided for by the Stormwater Facility Agreements.
[REMAINDER OF PAGE INTENTIONALLY BLANKI

IN WITNESS WHEREOF, Declarant has executed this Declaration as of the day and
year below indicated.
DECLARANT:
CALATLANTIC GROUP, INC., a Delaware
Name: 7A,
ennett
As:c".lid
Date: A) o1 !
UNION COUNTY
NORTH CAROLINA
I certify that the following person personally appeared before me this day and
acknowledged to me that he or she voluntarily signed the foregoing document for the purpose
stated therein and in the capacity indicated: Bob Bennett
Date: � dL 1 �� ! f
My Commission Expires:
1 �r
[Affix N 13r 1RRSQ yySeal below]
s aOVARY
►Es
AVal Is U
N Coto
'14
45

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'�r''� �isfii%ktk�''1�1

IN WITNESS WHEREOF, Consenting Party has executed this Declaration as of the day
and year below indicated, for purposes of subjecting the portion of the Property owned by
Consenting Party to the lien and encumbrance of this Declaration.
TRATON HOMES, LLC, a Georgia limited
liability company
.4
By:
NAm
As: DLt)l St 6W
Date: I
1&2.4'IW+ 4id- COUNTY
,A a R-rH 1 R0tz 4vA
I certify that the following person personally appeared before me this day and
acknowledged to me that he or she voluntarily signed the foregoing document for the purpose
stated therein and in the capacity indicated: 00 V ' 'o ' e-
Insert name of person signing
Date: k4 v m
My Commission Expires:
[Affix Notary Stamp or Seal below]
Notary Public
Print Name: �.cr�S�e�Y, S,►.
SOJ%J111111"J.
SI EVEN ,S2j�.,.
01 AR y
� � COMM.
� ices
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0. f' U 130 Jam'
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
111;w ."10111[�1�I�I.�
ALL OF THAT CERTAIN REAL PROPERTY CONVEYED TO THE RYLAND GROUP,
INC., BY DEVELOPMENT DOLUTIONS GROLe LLC, IN THOSE TWO DEEDS
RECORDED AT BOOK 4VS3 , PAGES V-I I AND r M , OFFICE OF THE REGISTER
OF DEEDS OF UNION COUNTY, NORTH CAROLINA.
CONSENTING PARTY OWNS.
BEING ALL REAL PROPERTY OF ANY KIND SHOWN ON THE PLAT RECORDED IN
PLAT CABINET N, FILE 49, LESS AND EXCEPT, THE PROPERTY DESCRIBED ABOVE
IN THIS EXHIBIT A AS OWNED BY DECLARANT.
47

EXHIBIT B
LEGAL DESCRIPTION OF ADDITIONAL PROPERTY
Any real property having a property line that is not greater than 500 feet from any boundary line
of the Property described on Exhibit A above.
4882-1587A367, v. 1
48