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Palm Grove_HOABur ess, Sam To: Gheryl Blanton Subject: RE: Palm Grove Cheryl, T have read the updated covenants for Palm Grove and they look good. However, T did nat see any language crafted in the covenants addressing the fact that the private roads were for public use and that the HOA would be responsible for the roads despite the fact that the public could use them. If they are located in the covenants, please direct to the page or section number. Thanks, Sam -----Original Message----- From: Cheryl Blanton [mailto:cheryl@billclarkhomes.com] Sent: Tuesday, August 19, 2008 10:18 AM To: Burgess, Sam Cc: Robert P. Balland Subject: Palm Grove Sam- - At the TRC Meeting last week regarding Palm Grove Subdivision you requested additional language be added to our Covenants and Restrictions regarding the streets. Attached are the revised Covenants and Restrictions. The additional language is located in Article XIZI, SeCtlOn 7. Please let me Know if this is the same language you want included on the map of record. Thanks-Cheryl Cheryl Blanton Bill Clark Homes ----- Original Message ----_ From: <Kyoceracopier> To: <cheryl@billclarkhomes.com> sent: Tuesday, August 19, 2008 5:11 AM Subject: Kyocera Copier > KM-5050 > [00:c0:ee:18:58:f7] 1 t-~fW ~ De-r+..,.,s.rt~w,-" C.v,~waw ftlan,, ~eQ'E aim g~ pre... D~c-~ H®I~EOWNER C®NVEI~TAI~T CHECKLIST PROJECT ~y,4.~, G~.ovc DATE REVIEWED ~.t.~.a ~,~ ? a ~ 2 0 8 ~ .~.. HOMEOWNER'S ASSOCIATION IS REQUIRED FOR ALL: ~ PERFORMANCE RESIDENTIAL DEVELOPMENTS, HIGH DENSITY DEVELOPMENTS, OR ~/ SUBDIVISIONS WITH PRIVATE STREETS OR DRAINAGE (check as applicable). -- . ,~--- 1. Map or plat references Boolc #, Page # of Covenants, Conditions and Restrictions __ _ ~~ 2. Maintenance responsibilities specified (private streets, open space, recreation facilities, exterior ofattached dwellings) 3. Association authorized to rebuild damaged units if owner does not B. USE OF _ ,/ PRIVATE STREETS, _~ OPEN SPACE/RECREATIONAL SPACE: THESE REQUIRMENTS APPLY WHENEVER OPEN SPACE IS CREATED IN A PERFORMANCE RESIDENTIAL OR HIGH DENSITY DEVELOPMENT, AND IS NOT OFFERED TO AND ACCEPTED BY COUNTY. / 1. Each lot ar unit owner's undivided interest in use of open space is preserved through covenants running with the land ,/ 2. Each lot or unit owner has direct access {walkway/street/adjoining property) r/' 3. No economic restrictions (e.g., club membership fees) on use of open space (but Homeowner's Association dues or maintenance charges are acceptable) ,/ 4. Open to all the development (i.e., no Subgroups) C. MAINTENANCE OF OPEN SPACE: THESE REQUIREMENTS APPLY WHENEVER A HOMEOWNER'S ASSOCIATION IS ESTABLISHED TO GOVERN OPEN SPACE (OTHERWISE, DEVELOPER REMAINS RESPONSIBLE FOR INSURANCE/TAXES/MAINTENANCE) ~.. 1. Association established before sale of lots ~__.._ 2. Membership required far each lot buyer 3. Association responsible for insurance/taxes/maintenance ~_._..._. 4. Unpaid dues -lien on the property Page 1 of 1 xcc az~o~ (Tap poriinn far recording pnrpases} THIS DOCUMENT REGULATES OR PROHIBITS THIC DISPLAY OF POLITICAL SIGNS ~ THIS DOCUMENT REGULATES OR PROHIBITS THE DISPLAY OF THE FLAG ®~' THE UNITED SATES OF AMERICA OR STATE FLAG OF NORTH CAROLXNA. DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR THE PALM GROVE COMMiTNITY THIS DECLARATION is made on the date hereinafter set forth by Bill Clarlc Homes of Wilmington, L.L.C., a North Carolina limited liability (hereinafter collectively referred to as "Declarant"): WITNESS TO: WHEREAS, Declarant is the owner of certain. real property Iocated in New Hanover County, North Carolina, which is more particularly described orz Exhibit "A" attached hereto and zxzade a part hereof by reference (hereinafter sometimes referred to as the "Property"). WHEREAS, Declarant desires to create on such property an exclusive residential commuzzity of single-fanuly homes to be known as Palzn Grove (hereinafter sometizxzes referred to as "Subdivision"); WH>w,REAS, Declarant desires to pra~~ide for the maintenance and upkeep of the common area within the Subdivision, inciuding, but nat Iimited to the private roadways and streets, and to provide for enforcezxzent of covenants and reshictions applicable to the Subdivision, and, to that end, desires to create a planzaed community pursuant to the provisions of Chapter 47F of the General Statutes of North Carolina (the "Act"), and to subject all of the property within the Subdivision to the covenants, conditions, restrictions, easemezrts, charges and Bens hereinafter set Earth, each and alI of which is and are for the benef t of said property and each owner thereof; 8118108 WHEREAS, Declarant has deemed it advisable to create an organization to own, maintain and adrrzinistez• the Common Area (as hereinafter defined), to administer and enforce covenants and restrictions applicable to the Subdivision, and to collect and disburse the assessments and charges hereinafter created, and Declarant has therefore incorporated under North Carolina law as a non-profit eozpazatian, the PALM GROVE PROPERTY OWNERS ASSOCIATION, iNC., foz• the purpose of exercising the aforesaid functions; NOW, THEREFORE, Declarant declares that the Properties and such additions thereto as znay hereafter be made pursuant to Artiele II hereof, is and shall be owned, bald, transferred, sold, conveyed, used and occupied subject to the covenants, conditions, restrictions, easezxzents, charges and liens set forth in this Declaration, all of which shall run with the real property and be binding on all parties owning any right, title or interest in said real property or any part thereof, thelE' heirs, personal 1'epresentatives, successors and assigns, and shall inure to the benefit of each owner thereof: AI2TICL>C I DEFINITIONS Section 1. "Act slxall mean and refer to Chapter 47F of the General Statutes of Carolina, designated as the North Carolina Planned Community Act. 5ectian 2. "Association" shall 'mean azxd refer to fhe PALM GROVE PROPERTY OWNERS ASSOCIATION, INC. a North Catalina non-profit corporation, its successors and a581~115. Section 3, "Builder" shall mean and refer to any persons, firms or entities to whom or which Declarant conveys one or more Lots within the Properties fax the purpose of constructing a Dwelling thereon. Section 4. "Cornnron Area" shall mean and refer to any and all. real property, together with any improvements thereon, shown on any recorded subdivision plat of the Properties, with the exception of any Lots, as said term is defined in this Declaration. Common Are includes all private roadways and streets within the Subdivision. Except as athez•wise provided in this Declaration, the Corxrnaon Area shall be maintained by the Association or its successors in interest unless dedicated to public use as set forth hexein. Section S. "Declarant" shall mean and refer to Bill Clark Hornes of Wilrzzingtan, L.L.C., a North Carolina limited liability company. It shall also mean and refer to any person, company or entity to whom or which Declarant shall assign ar delegate the rights and obligations of Declarant by an assignment of Declarant's rights recorded in the applicable pziblie registry for New Hanover County, North Carolina. Section 6. "Lot" shall mean and refer to any plat of land, with delineated boundary lines, shown on any recorded subdivision plat of the Properties. In the event that any Lot is increased or decreased in size by recombination or resubdivision tluouglz recordation of new subdivision plats, any newly-platted Lnt shall thezeafter constitute a Lot. $/18108 Section 7. "Member" shall mean and refer to every person or entity who or which holds membership in the Association. Section 8. "Owzaet•" shall mean and refer to the record owner, whether one or snore persons or entities, of fee simple title to any Lot which is a part of the Properties, including contract sellers, but excluding those having an interest in a Lat solely as security for the performance of au obligation. Section 9. "Properties" shall mean and refer to the property described in Exhibit .~: to this Declare#ion and any additional pzoperty azulexed pursuant to Article II of this Declaration. Section 10. "Unit" or "Dwelling" shall mean and refer to any building or portion thereof within the Properties which is designated and itatended for use and occupancy as a residence by a single family, whether by the Owner of such Unit or by tenants or hessees of such Owner. ARTICLE Li PROPIt;RTY SUB~CT TO THIS DECLARATION AND WITHIN THiI JURISDICTION OF TIile1 PALM GROYE COMMUNITY Section 1. Existing Prc~pez~ty. The xeal property which is and shall he held, transferred, sold, coziveyed, used and occupied subject to dais Declaration as of the date ofzecordiug hereof, which is within the jurisdiction of the Association, and which is described on Exhibit A attached hereto. Section 2. Annexation of Additional Property. At any tinge prior to Decetaaber 31, 2028, additional land within the property described in Exhibit B attached laezeta and made a part hereof (the "Exhibit B Property") may be annexed by the Declarant without the consent of the Members and therefore become subject to dais Declaration by the recording by Declaratat of a plat showing such property to be atuaexed and of a suppletnentaty declaration extending the operation and effect of this Declaration to the property to be atuaexed. Fut•thertnare, at any time Declaratat owns any Lot within the Properties, additional land not within the Exhibit B Property may be atuaexed by the Declaratat without the consent of the Members and therefore becomc sttbject to this Declaration by the recording by Declarant of a plat showing such property to be atuaexed and of a supplementary declaration extending the operation and effect of dais Declaration to the property to be aaanexed. Any property anzaexed must be contiguous to property ah•eady subject to this Declaration. Any property annexed pursuatt to this subsection may be annexed and subjected to dais Declaration as one parcel or as several patcels at different titaaes. The addition. of such property pursuant to this Section znay increase the cumulative number of Lots within the Pxapet-ties and, Therefore, may alter the relative maximum voting strength of tlae varioats types of Members. A supplementary decIat•ation tnay contaua such complementary additions to and naodiftcations of the covenants and reshictions contained in dais Declaratiota, including, witlan~tt lizaaitation, different voting rights and different atuaual and special assessments far floe Lots or Units so atazaexed, as Declarant, in its sole discretion, may deem necessazy or appropriate to reflect tlxe different character or use of the property added. In no evetat, however, shall any 8/18J08 supplementary declaration revoke, modify or add to the covenants and restrictions establisl~ad by this Declaration so as to materially and adversely affect any portion of the Properties aheady subject to this Declaration. A supplementary declaration annexing additiotal property need only be executed by the Declarant and, if applicable, by the owner of the property being annexed, and shall not require the joinder or consent of the Association or airy of its Members. Nothing contained irz this Article shall be construed to obligate ot• require Declarant to make any additions to the Properties. Section 3. Conyey_~nce a~ Common Area in„An~iexed Property. Promptly upon request of Declarant, the owner of the annexed property shall convey any or all Common Area located within the newly annexed property io the Association ar, if requested by the Declarant, to the Declarant. Title fia such Common Area shall be conveyed in the same manner as set forth in Section 3 of Article 1V ofthis Declaration. Section 4 Merger. Additional propertty may also be made subject to this Declaration by merger or consolidation of the Association with another non ~3•afrt corporation formed for the sonic or sitnilar purposes in accoz•dance with the provisions of Sections 2-121 of the Act. The surviving or consolidated association shall administer the covenants and restrictions established by this Declaration within the Properties and the covenants and restrictions established upon property owned by the other association as one sche~rze. No such merger or consolidation slzall cause any revocation, change or addition to this Declaration. Section S. Effect of Addition of Property. Except by amendment of this Declaration as provided in Section 3 of Article XIII hexeof, no addition of property, whether by annexation, merger or consolidation, shall revoke ox modify any provision of this Declaration as to the Properties already subject hereto or diminish the rights of the Owners of Lots and Units witlrin the Properties, except for the dilution of voting strength that occurs as a result of inclusion of additional Members of the Association, Section 6. Withdrawal of ,Prope~•ty Declarant reserves the right to at~zetad this Declaration so long as it has a right to atuiex Additional Property pursuatrt to this Article for the purpose of removing any portion of the Pr•opet•ties then owned by Declarant oz• the Association fiom the coverage of this Declaration, to the extent originally included in error or as a result of airy changes whatsoever in the plans for the Subdivision, provided such withdrawal is not iuaequivocally contrary to the overall, uniform scheme of development for the Subdivision. Section 7 Good Faith Lender's Clause. Any violation of these covenants, conditions or restrictions slzall not affect any lien or deed of trust of record held in good faith, upon any Lot ox commercial Unit, which liens may be enforced in due course, subject to the terms of this Declaration. 8/18/08 ARTICLE III 1!H•;MBI+~RSHIP AND VOTING RIGHTS Section I. Membership. Every Owner of a Lot which is subject to assessment by the Association shall be a Member of the Association. Membership shall be appurtenant to and may not be separated from ownership of any Lot which is subject to assessn~ez~t. Section 2. Voting_Rz^,ghfs. The voting rights of the membership shall be apurtenait fie the ownership of the Lots and znay not be separated from ownership of any Lot. There shall be two classes of Lots with respect to voting tights: (a) Class A Lots, Class A Lots shall be all Lots except Class B Lots as the same are hereinafter defined. Ownership of a Class A Lot shall entitle the Owner of such Lot to one {1) vote. When more than one person ovens an interest (other than a leasehold or security interest) in any Lat, all such pezsons shall be Members and the voting rights appurtenant to their Lot sha11 be exercised as they, among themselves, detetztzine; but fractional voting shall not be allowed, and in no event shall more than one vote be cast with respect to any Class A Lot. (b) Class B Lots. Class B Lots shall be all Lots owned by Declarant which have not been converted to Class A Lots as set fozth below. Each Declarant shall each be entitled to nine {4) votes for each Class B Lot it awns. The Class B Lots shall cease to exist and shall be converted to Class A Lots upon the earlier of the following to occur: {i) when no Declarant owns any Lots oz• Units within the Properties; {ii) upon written waiver of Class B membership by the Declarant and/or; or {iii) December 31, 2028. When the Class B Lots cease to exist and are converted to Class A Lots, Declarant shall have the seine voting xights as other Owners of Class A Lots. (c) Declarant's Voting Rights. Until the Class B Lots cease to exist, as provided above, Declarant shall be vested with the sole voting rights of the Association on all matters (including election and removal of directors and officers of the Association), except such matters as to which the Declaration, the Articles of Incorporation, or the Bylaws of the Association specif ca11y requite a vote of the Class A Members. ARTICLIi; IV PROPERTY RIGHTS Section 1. Owners' Easements of En'o rnent and Access. Except as limited by the provisions of this Section I and by the zules and regulations adopted by the Board of Directors of the Association, every Owner shall have a right and easement of enjoyrrzent in, use of and access to, fiom, and over the Conunon Area, which right and easement shall be appurtenant to and shall pass with title to every Lot, subject to: (a) the riglrt of the Association to charge reasonable admission and other fees for the use of arty recreational facilities situated or constructed orz the Common Area and to lizxzit the use of 8/18108 such. facilities to Owners and to their families, tenants and guests, as provided in Section 2 of this Article IV. (b) the right of the Association to suspend the voting rights of an Owner subject to a heating or opportunity to present evidence in accordance with Section 47F-3-107.1 of the Act for any period during which any assessment against lris Lot remains unpaid, or for a period not to exceed sixty {60) days for any infraction of the published rules and regulations of the Association. (c) the right of the Association to dedicate, sell or traiisfei• all or any part of the Coznman Area to any public or quasi-public agency, authority or utility for such purposes and subject to such conditions as may be agreed upon by the Mezxzbez•s. After Class B Lofis cease to exist, ~~o such dedication or transfer shall be effective unless the Members entitled to at least 80% of the votes of the entire membership of the Association and at least tluee-fourths (3I4) of the votes appurtenant to each Class of Lots agree to such dedication, sale or transfer and signify their agreement by a signed document recorded in the applicable public registry for New Hanover County, North Carolina. Nothing herein shall be deemed to prohibit the Board of Directors of the Association, without consent of the Members, from granting easements over and acz•oss the Common Area to any public agency, authority or utility for the installation and maintenance of sewage, utility (including cable television} ar drainage facilities when, in tl~e opinion of the Board, such easements are necessary for the convenient use and enjoyment of propezties within the Subdivision. Notwithstanding anything herein to the contrary, the Common Area shall be preserved for the pezpetual benefit of the owners of Lots within the Subdivision and shall not be conveyed except to a governmental entity or another non-profit corporation organized for similar purposes. {d) the right of the Association, to barrow money and, after Class B Lots cease to exist, with the assent of Members' entitled to at least 80% of the votes of the entire znemberslup of the Association and at least two-thirds (213} of the votes appurtenant to each Class of Lots, mortgage, pledge, deed tlz trust, or hypothecate any or all of its real or personal property as secuzity foz• money boz7owed or debts incurred, provided that the rights of any such lender ar moz•tgagee shall be subordinate to the property rights of the Members and the Association as set forth herein. {e) the right of the Association to exchange all or pant of the Cazumon Area for other property and cozisideratioza of like value and utility, provided, however, that, after Class B Lots cease to exist, any such dedication shall require the assent of the Men~.bers as set forth in subparagraph (c) above, and further provided that, if the Board of Directors of the Association determines, in its sole discretion, that such exchange is necessary to cuz•e an encroachment or setback violation on azzy Lot, tl~e Board may effect such exchange without the consent of or approval by the Members. {f) the right of the Association to open the Cammox Area and, in pazticular, the recreational facilities constz•ucted thereon, for use by nan-mezxzbers of the Association. {g) the right of the Association to expand or add to the COZnrnan Area and to improve, maintain and operate the Conulion Az•ea. 811810& and invitees. No Owner or other permitted user shall use the Common Area or any portion thereof in violation of the rules and regulations contained in this Declaration ar subsequently adopted by the Association. Without limiting the generality of the foregoing, no Owner or tenant, guest or invitee of an Owner shall, without the specific prior written consent of the Association: {i) damage or waste the Coxmnon Area or improvezxaents thereon or remove any trees or vegetation therefronr; (ii) erect any gate, fence, structure or other improvement or thing on the Cannamon Azea; (iii) place any garbage receptacle, trash or debris on Coznn~an Area; {iv) fill or excavate any part of the Common Area; (v) landscape- or plant vegetation an Common Area; or {vi) use the Common Area or any part thereof in a matuier inconsistent with or in any way interferhig with the rights of other Owners. (b) Rights and Responsibilities of the Lot Owners as to Cornzr~~~i Area Easements. Eaclz Owner of a Lot upon which a Common Area easement lies shall pay all property taxes and other assessments levied against his Lot, including that portion of such tax or assessment as is attributable to such Common Area easement. (c) Ri hts and Res onsibilities of the Association as to Conunon Area. The Association shall have the right and obligation to ensure that the Common Area is preserved for the pezpetual benefit of the Owners, and, to that end, shall: (i) maintain the Common Area in its natural or improved state, as appropriate, and keep it flee of impediments to its use by the Owners, subject to the provisions of this Declaration; (ii) procure and maintain adequate liability insurance covering the Association and its Members, Directors and Officers, against any loss ar damage suffered 6y any person, including the Owner of the Lot upon which Cazxaxnou Area lies, resulting frarn use of the Common Area, and adequate hazard insurance covering the real and personal property awned in fee by the Association; and (iv) pay all property taxes and other assessments levied against all Common Area awned in fee by the Association. (d) Declarants and Association's Ri~nf Entry. The Declarant and the Association and the employees, agents, canhactors and subcontrantars of each, shall have anon-exchisive right and easement at all times to enter upon any portion of a Lot reserved or designated as a Common Area easement far the purposes of: (i) installing and maintaining subdivision entrance signs, features, fencing and landscaping; and {ii) making such improvements to the Common Area; and (iii) maintaining the Common Area easement in its natural or improved. state. ARTICLE V COVENANT FOR MAINTENANCE ASSESSMENTS Section 1. Creation of the Lien and Personal Obli anon of Assessments. Each Owner of a Lot, by acceptance of a deed therefore, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association annual assessments and special assessments, such assessments to be established and collected as hereinafter provided. All assessments which are unpaid when due, together with interest and late chaxges set Earth in Section 9 of this Article V and all costs of collection, including reasonable attorney's fees, shall be a charge against and, a continuing lien upon the Lot against which such assessment is made 8/1$/0 $ subject to ~ 47F-3-116 of the Act, as amended. Each such assessment or charge, together with interest and costs of collection, i.nelttding reasonable attorneys' fees, subject to notice provided in accordance with ~ 47C-3-i 16{el) of the Act, shall also be the personal or cazparate obligation of the persons}, f rm{s) or corporation{s) awning such Lot at the time when the assessment fell due, but such personal obligation shall not be imposed upon such Owner's successors in title unle55 expressly assumed by them.. Although unpaid assessments anal charges are not the personal obligation of such Owner's successors in title unless expressly assumed by them, the unpaid assessments acrd charges shall continue to be a lien upon the Lot against which the assessment or charge was made. It is the intent of the Declarant that aqy nroneta~y fines imposed against an Owner pw.•suant to tl~e Bylaws of the Association or Section 7 of Article XII of this Declaration and subject to §47F-3-1 Q7.1 of the Act slaall constit~zte a lien against the Lot of such Owa~er to the same extent as if such fuse were an assessment against such Lot. Section 2. Purposes of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety ar-d welfare of the residents of the Subdivision and, in particular, far: (ij acquisition, improvement and maintenance of properties, services and facilities related to the use and enjoyment of the Common Area; {ii) repair and reconstruction of improvements on, the Coznrnon Area, including, without limitation, the cost of repair, replacement and additions thereto and the cost of labor, equipznerrt, materials, management and supervision thereof; and specifically including maintenance and repair of all private streets and roadways within the subdivision; {iii) payment of taxes and public assessments levied against the Comzz~on Aaea owned by the Ass~ciationnx fee; (iv} procurement and maintenance of insurance in accordance with the Section 4{c) of Article IV of this Declaration; (v) employment of attorneys, accountants and other persons or firms to represent the Association when necessary; (vi} payment of principal and interest on funds borrowed far Association purposes; (viii) such other needs as znay arise; and (ix} payment for the maintenance and operation of street lights. The Declarant reserves the right to subject the real property in this subdivision to a contract with Progress Energy Carolinas, Inc. for the installation of street lighting, which requires a continuing monthly payment to Progress Energy Carolinas, Inc. by each residential customer. Said montlrly payment shall be included in the assessments charged to each Owner. Section 3. Annual Assessments. (a} Maximum Annual Assessment. Declarant shall establish the Maximum Annual Assessment and irutial annual assessment for Class A Lots; thereafter, the terms "Maxhnum Annual Assessment", am-rual assessment, and special assessment shall mean the Maxin~urn, annual and special assessments applicable to Class A Lots. Until the Maximum Annual Assessment shall be $ for each Class A Lot. For so long as a Class B Lot(s) exists, the Board of Directors, in its sole discretion, shall have the authority to adopt an annual budget without a vote of the mernberslup. Once Class B Lots cease to exist, the Maximum Annual Assessment may be increased by the Board of Directors effective Janrtar•y 1 of each year without a vote of the Members, belt subject to the limitation that the percentage of any such increase shall not exceed 10% of the Maxirn~uxr S!1$/08 Annual Assessment for the previous year unless such increase is approved as set forth in Section 3(b), below. (b) Azuiual Assessments: Ratification of Budgets. After Class B Lots cease to exist, the Board of Dneetars shall adopt a proposed budget (iz~zcluding the proposed annual assessment for each Class of Lots) at least annually. Within 30 days after adoption of the proposed budget, the Board of Directors shall send a copy of t11e proposed budget and shall give written notice to the Members of a nzeetuzg of the Members to consider ratification of the budget, such meeting to be held not sooner than 10 days nor more than 60 days after the mailing of such notice. Such meeting may, but nebd not be, combined with the azzziual meeting o~ the Members. Except as required by Section 7 below, there shall be no requirement that a quorum be present in order to vote nn ratification of the budget (although a quorum must be present to vote on other matters). The budget shall be deemed ratified unless at that meeting Members having a majority of the votes of the entire membership vote to reject the budget. Notwithstanding the foregoing, if the budget provides for amzual assessments not greater than 1Q% larger than the assessment in effect for the immediately preceding year, such budget shall be deemed ratified uziless Mezxzbers having at least 8Q% of the votes of the entire membership vote to reject the budget. if the proposed budget is rejected, die budget last ratified by the Members shall be continued until such time as the Members ratify a subsequent budget proposed by the Board. Any azulual assessment ratified by the Members shall continue thezeafter fiom year to year as the annual assessment until changed by the Board and ratif ed by the Members as set forth herein. Section 4. Special Assessments. In addition to the annual assessments authorized above, the Association znay levy, in any assessment year, special assessments far the purpose of defraying, in whole or in part, the cost of any construction, repair or replacement of a capital improvement on the Common Area, including fixtures and personal property related thereto, for repayment of indebtedness and interest thereon, or for any othez• purpose, provided that any such assesszxzent shall have the same assent of the Members as provided in Section 3(b) of this Article. Section 5. Assessment Rate: Collection Period. Except as provided in Section 6 of this Article V, the annual and special assessments shall be fzxed at a uniform rate for all Lots within each subclass of Lots and may be collected on a yearly, semi-azurually, quarterly oz• znontlily basis, as determuied by the Board of Directors. Section 6. Declarant's Assessments. Notwithstanding any other provision of this Declaration or t11e Bylaws of the Association, the Declarant shall not be obligated for, noz• subject to, any annual or special assessment for any Lot or other property that it owzrs within the Properties, provided, however, that the Declarant shall be responsible for paying the difference between: (i} the operating expenses of the Association; and (ii) the total operating revenues of the Association from all sources including, without limitation, aruiual and special assessnents, revenues generated frazxz fees charged by the Association for use of the Conunon Area, and investznezrt income (said difference being hereinafter r•efened to as the "Operating Deficit"). Foz• purposes of this Section, the term "operating expenses" shall not include eontribtitioz~s to any zesezves for replacement, operating resezves, depreciation resezves, capital expenditures, or special assessments. $/18/t)8 Declarant may, by written notice given by the Declarant to the Association on or before November 30 of any year, to be effective as of .lauuary 1, tezminate its obligation to pay the Operating Deficit and waive its right to exclusion from assessments. In such event, each Lot owned by the Declarant which contains a Dwelling for which a certif cafe of occupancy has been isstied shall be assessed at the rate of twenty-five percent (25°/©) of the annual assessment in effect for Class A Lots, as the same may change froze time to time. Upon sale of such Lot by Declarant to any other person or entity, such Lot shall be assessed at Class A rate, commencing on the day on which title to such Lot is transferred to such third party. Notwithstaudiig any other pz•ovision of this Declaration, a Lot owned by the Declarant whicb. contains a Dwelling occupied as a residence (but not as a model or sales center} shall be assessed at the rate applicable to Class A Lots. Section 7. Notice and ..Quorum for anv Action Authorized Under Sections, 3(a}. and 4. After Class B lots cease to exist, written notice of any meeting called for the purpose of taking any action authorized under Section 3(a) or 4 shall be sent to all Members not less than ten (10) days nor nzoz•e than sixty (60) days prior to the meeting. At such meeting, the presence of Members, in persozz or by proxy, entitled to cast sixty (60%) percent of the votes of the entire membership shall constitute a quorum. If the required quorum is not present, axiotlzei• meeting may be called subject to the same notice requirements, and if called for a date not later than sixty (60) days after the date of the first meeting, the required quorum at the subsequent meeting shall be one-half (%} of the required quorum at the preceding meeting. Section 8. Date of Comznenceznent of Azurual Assessments: Amount of Initial and Subsequent ,annual Assessments: Certificate, of„Payment. i3nless a different commencement date is set by the Board of Directors, the azuzual assessments provided for herein shall commence as to all Lots in any phase on tl~e first day of the month following the conveyance of a Lot or Unit within that phase to an Owner other than the Declarant or a Suildei•. Unless a lower amount is set by the Board of Directors and ratified by the Members, the first annual assessment shall be the "Maximum Annual Assessment" set forth in Section 3 of this Article and shall be prorated according to the number of days remaining in the calendar year. The Association shall, upon demand, aizd for such reasonable charge as the Board of Directors may determine, furnish a certif cafe signed by an officer of the Association setting forth whether the assessments on a specified Lot have been paid. If such certificate states that an assessment has been paid, such certificate shall be conclusive evidence of payment. Section 9. Effect of Non a meet of Assessments: Remedies. An assessmezrt not paid within ten (10) days after the due date shall incur such late charge as the Board of Directors may fiom tune to tune establish, and, if eat paid within thirty (30) days after the due date, shall also bear interest from the due date at the rate of eighteen percent (1$%) per amauin or the highest rate allowed by law, whichever is Tess. The Association may bring an action at law or in equity against the Owner personally obligated to pay the same and/or foreclose the lien against the Lot for which such assessment is dine subject to § 47F-3-116 of the Act, as amended. Interest, late paynterzt charges, reasonable attorneys' fees, and the costs of such action or foreclosure shall be added to the amount of such assessment. No Owner may waive or otherwise escape liability for 811$!08 the assessments provided far herein by non-use of the Cozrimon Area or by abandonment of his Lot. Section 10. Subardizaation of the Lien to, ortaa~es. The liens provided for herein shall be subordinate to the lien of any first mortgage or fist mortgage an a Lot. Sale or transfer of a Lot shall not affect any assessment lien; however, the sale or transfer of a Lot pursuant to foreclosure of a first mortgage, or any proceeding in lieu of foreclosure thereof, shall extinguish the lien of any assessment which became due prier to the date of such conveyance. No such sale or transfer shall relieve such Lot from liability for any assessmezit thereafter becoming due or fiozn the lien thereof; but the liens provided for herein shall eoiitiniie to be subordinate to the lien of any frsi mortgage. Section 11. Initial Capital Contribution. At the time of closing of each sate of a Dwelling, includu'zg the initial sale of same, a sum equal to one-fourth {1/4) of the annual assessment for Class A Lots in effect at the time of such sale shall be collected from the purchaser of such Dwelling and transferz'ed to the Association as part of its working capital. The purpose of such working capital contributions is to ensure that the Association will have adequate cash available to defray operating costs, meet unforeseen expenditures or to acquire additional equipment or services deemed by the Board of Directors to be necessary or desirable. Amounts paid pursuant to this Section slzall not be considered as an advance payment of any regular or special assessment. Section 12. Exem t Pro ert .All propez•Cy dedicated to and accepted by a public authority and all property owned by a charitable or non-profit organization exempt from taxation by the Iaws of the State ofNoz•th Carolina shall be exezxzpt from the assessments created herein. Notwithstanding the foregoing, z1o land or iznproven~erzts devoted to dwelling use shall be exempt from said assessments. ARTICLE VI RIGHTS OF LENDERS Section 1. Books and Records. Any owner or holder of a first mortgage on any Lot, or its agent, shall have the right, during normal business hours, to examine copies of this Declaration, the Articles of Incorporation, Bylaws, and the books and records of the Association and, upon written request to the Association, and payment of copying and mailing costs, to zeceive a copy of tl~e financial statement for the izxunediately preceding fiscal year. Section 2. Notice to Lenders. After Class B Lots cease to exist and upon written request to the Association, the owner or holder of a first mortgage on az~y Lot shall be entitled to timely `nnitl:ezz notice ofi {a) Any 60-day deliuciuency in the payment of assessments or charges owed by the Owner of the Lot securing its loan. 8118/48 (b) A lapse, cancellation, or material modification of any insurance policy or fidelity bond maintained by the Association. {c} Any proposed action that requires the consent of a specified percentage o£ owners or Holders of first mortgages an the Lots. Section 3. Approval of Owners and Holc~ers,,c~f First Mortgage. After Class B Lots cease to exist, unless at least seventy-five percent (75%} of the owners and holders of the first mortgages on Lots located within the Properties have given their prior written approval, the Association shall rant: {a) By act or omission seek to abandon, partition, subdivide, encurriber, sell or transfer any real estate or• improvements thereoia which are owned, directly or indirectly, lay the Association. The granting of easements for utilities or other puzposes shall not be deemed a transfer within the meaning of this subsection, Nothing herein shall be deemed to prohibit the Association frazn exchanging Common Azea far other real properly of like z.rtility and value as provided in Section 1(c) of Article IV of this Ieclaration, or to require the approval of such exchange by floe holders of first mortgages oia the Lots; {b) Claazage the method of deteriztining the obligations, assesszaaents, dues or other charges which may be levied against a Lot; (c) Fail to maintain hazard insurance oza insurable improvements on the Cozrzzaaoia Area on a curient replacement cost basis in an amount not less than one hundred percent (l OQ%} of the insurable value; or (d} Use the proceeds of any hazard insurance policy caveruig losses to any part of the Conanaon Area for other than the repair, replacement or reconstruction of the damaged improvements. Section 4. Pa ment of Taxes and Insurance Premiums. The owners or .holders of first mortgages on Lots, jointly or singly, may pay taxes or other charges which are in default and which have or may become a charge or lien against any of the Comraaon Area aiad may pay overdue prernirnaas ara hazard insurance policies or secure new hazard insurance coverage upon the Iapse of a policy covering property owned by the Association. Tlae persons, firms or corporations making such payments shall be owed inarrrediate reimbursement therefore lay the .Association. A>~T11C11~E vu )CASENLENTS Section 1. Access and Utility Easements. Easements for the installation and maintenance of roadways, driveways, walkways, water, gas, telephone, cable television grad electric power transnussion lines, sanitary sewer and storm water drainage facilities, and for other publicand private utility installations are reserved as shown on the recorded plats of the Properties. Tlae Association may reserve or grant easements over the Cozaararrora Area as provided in Article 1V, Section 1(c), of this Declaration. Within any such easement herein provided, no stzlichlre, planting or other material shall be placed or permitted to remain which may interfere with tlae 8/18108 installation ar maintenance of the utilities installed thereon, or which may change the direction of flaw or drainage of water through drainage pipes or channels constructed in such easements. For a period of thirty (34} years froze the date hereof, Declarant reserves, for itself and its employees, agents, successors and assigns, an easement upon and a right of ingress, egress and regress on, over and under the Properties for the purposes of canstrt.rcting ar~.d maintaining roadways, water, sewer, gas, storm water drainage and retention, telephone, cable television, and electric, and other utility facilities to the extent required by any applicable governmental entity or deemed by the Declarant to be necessary ar convenient for the development, use and enjoyzxrent of the Properties and the Comniozi Area and for the conduct of cozistruction, sales and zxzatlceting activities. Such right expressly includes the right to cut any trees, bushes or sluubbery, make any grading of the soil, relocate utility facilities within said easement and take any other similar action that it deems reasonably necessary or appropriate. After such action has been completed, Declarant sha11 grade and seed the affected property and otherwise restore the affected property to its original condition to the extent practicable, but shall not be required to replace any trees, bushes or slu•ubbery necessarily removed. Declarant shall give reasonable notice of its intont to take such action to each Owner whose Lot is affected. Section 2. Easements far Goverrtznental Access. An easement is hereby established over the Common Area and every Lot within the Properties for the benefit of applicable governmental agencies for installing, removing, and reading water meters, maintaining and replacing water and sewer facilities, and acting far other purposes consistent with public safety and welfare, including, without limitation, law enforcement, fire protection, garbage collection and the delivery of mail. Section 3. Owner's Easement and Ri ht of Entr for Re air Maintenance and Reconstruction. If any Dwelling is located closer than f ve (5) feet from its Lot line, the Owner thereof shall have a perpetual access easement over the adjoining Lot to the extent reasonably necessary to perform xepair, maintenance or reconstruction of such. Dwelling. Such work shall 6e done expeditiously and, upon completion of the work, the Owr~rer shall restore the adjoining Lot to as nearly the same condition as that which existed prior to the commencement of the warlc as is reasonably practicable. No fence shall be erected within such area adjoining a Iwelling. Section 4. Association's Easement„and, Right of Enlr•y. The Association, far itself and its employees, agents, contractors, subcontractors and invitees, shall have a perpetual access easement over the each Lot to the extent reasonably necessary to perform the maintenance to be performed by rho Association, including but not limited to landscaping maintenance. Section 5. Easement Over Common Area. A perpetual, non-exclusive easement over the Common Area is hereby granted to each Lot and its Owners, family members and tenants of such Owners, the occupants of such Lot, acrd guests and invitees of such Owners, tenants or occupants, for the purpose of providing access, ingress and egress to and from parking areas acid walkways serving the Properties and to and from adjacent public roads. 8118148 ARTICLE; VIII ARCHIThCTURAi. CONTROL Section 1. Architectural App~•oval. The Declarant shall have the sole and absolute right to determine the style and appearance of the Dwellings, including, but not limited to, flags, subject to Section 47F-3-121 of the Act, flag poles, flag staffs, fences, walls, buildings, outbuildings, garages, storage sheds, nnailboxes, lawn decorations, structures of any type ar color thereof, grading, landscaping, patio covers and trellises, plans for off street parking of vehicles and Litility layout, a~1d any other improvements to l1e built or constructed on atny Lot {hereinafter individually and collectively referred to as "Improvements"). After occupancy of a Dwelling as a residence pursuant to a certificate of occupancy or other similar certificate issued by the appropriate goverrlrnental authority, no Improvements (including, without limitation, replacement of any previously existing Improvements} shall 6e COI71111enced, erected or maintained upon t11e Properties, rlor s11a11 any extexiax addition to or change or alteration thereof be made {including, without limitation, changing rllaterials or color of any exterior portion of any such Impravenlerits), nor shall a building permit for such Improvements or change be applied for ox obtained, until plans and specifications showing the nature, kind, shape, heights, materials, color and location of same shall 11ave been submitted to and approved ir1 writing by the Association or by an Architectural Review Committee {"ARC") composed of three or more persons appointed by the Board of Directors of the Association. If the Association or its designee fails to approve or disapprove such proposed Improvements within b0 days after complete plans and specifications have been received by it, approval will not be requited, and this Article shall be deemed to have been complied with. The Association shall leave the right to charge a xeaso~lahle fee far receiving and processing eae11 application. The Declarant and, after t11e Declarant na longer awns any Lot or Unit within the Properties, the Association, shall have the right to promulgate and from tune to time amend written architectural standards and construction specifications (hereurafter the "Architectrral Guidelines"} which may establish, define and expressly 1zmit the standards and specifcations which will be approved, including, but not limited ta, architecturaI style, exterior color or finish, roofing material, siding material, driveway material, landscape design and construction technique. Neither the Association nor the ARC shall approve any Irllprovemcnts which it determines, in its sole discretion, not to be in harmony of external design, eorlstruction and/or location ir1 relation to the surrounding structures, topography or the general plan of development of the Subdivision. Neither the Declarant, the Association, t11e Board of Directors, the ARC, nor any member or employee of any of them, shall have any Iiability to any person or entity by reason of any acts taken or omitted by them, or any of them, in good faith pursuant to this Article. Section 2. Rules and Re ulations. The ARC may from time to ti11e recommend to the Board, and the Board may, in its sale discretion, adopt, promulgate, amend and repeal rules and regulations interpreting and implementing the provisions of this Article VIII, including adoption of detailed arcllitectrrr'a1 guidelines and the imposition of a fee or charge for review of proposed improvements ar modifications. 8118108 Section 3. Variances. The ARC may reconunend to the Board, and the Board zxzay, by the vote or written consent of a majority of the mezxzbers thereof, allow reasonable variances as to the covenants, conditions or restrictions contained in this Declaration, on such terms and conditions as it shall require; provided, however, that all such variances shall be in keeping with the general plan for the improvement and development of the Property. Variances contained in plans that are inadvertently approved by the ARC as part of the proposed improvements shall not be considered as having been approved unless specifically approved by the Board in accordance with the provisions of'this Section. ARTICLE IX PARTY WALLS Section 1. General Rules of„Law to A>~nly. Tine general rules of law regarding party walls, lateral support in below gzound construction and of liability for property damage due to negligence or willful acts or omissions shall apply to each wall which is built as part of the origizral construction of tlne Dwellings within the Properties and placed on the dividing Iine between the Lots, and all reconst~~uction or extensions of such walls, to the extent not inconsistent with the provisions of this Article. Section 2. Shaz•in of Re air and Maintenance. The cost of reasonable repair and maintenance of a patty wall shall be shared by the Owners who make use of the wall in proportion to suel- use. Section 3. Destruction by Fire or, Other Casualty. if a party wall is destroyed or damaged by fire or other casualty, any Owner who or which uses the wall may restore it, and if the other Owners thereafter make use of the wall, they shall contribute to the cost of restoration thereof in proportion to such use without prejudice, however, to the right of any such Owners to call for a larger contribution front the others under any rule of law regarding liability for negligent or willful acts or omissions. Section A-. Easement and_ Right of Entzy foz• Repair, Maintenance and Reconstructiozz. Every Owner shall have an easez~nezrt and right of entzy upon the Lot of any other Owner and the COlllzlloll Area to the extent reasonably necessary to perform repair, znaintenatice or reconstruction of a party wall and those improvements belonging to leis Lot which encroach on an adjoining Lot or Common Azea. Such repair, maintenance, or reconstruction shall be done expeditiously, and upon completion of the work, the Owner shall restore the adjoinhng Lot(s) and Conunon Area to as neatly the same condition as that which prevailed prior to cozxuxzerzcement of the work as is reasonably practicable. Section 5. Weather-proofing. Notwithstandizzg any other provision of this Article, an Owner wl~zo, by his negligence or willful act, causes the party wall to be exposed to the elements, shall bear the entire cost of furzuslung the necessary protection against such elements. Section 6. Right to Contribution, Runs With Land. The right of any Owner to contribution fiozn any other Owner under this Article shall be appurtenant to tlae land and shall pass to such Ownet's successors in title. 8118108 Section 7. Cetti~cation b Ad'oinin Pxo ert Owner That Na Contribution Is Due. If any Owner desizes to sell his Lot, such Owner, in order to assure a prospective purchaser that no Owner of an adjoining Lot has a tight of contribution as provided in this Article, play request the adjoining property Owner to malGe a certification that no right of contribution exists, whereupon it shall be the duty of each adjoining property Owner to make such certification ixzunediately upan xequest, and without charge; provided, however that where the adjoining property Owner claims a right of contribution, the certification shall contain a recital of the amount claimed. Section 8. Arbitration. In the event of a dispute concerting a patty wall or the provisions of this Article, such dispute shall be resolved pursuant to the provisions of Section 8 of Article XII hereof. ARTiCLli1 X RIGHTS AND RESPONSIBILITIES OF THE ASSOCIATION Section 1. Responsibilities, The Association, subject to the rights of the Owiter set forth lit this Ieclaration, shall be responsible for the exclusive management and control of the Contmon Area and shall keep the Common Area lit good, clean and proper condition, order and repair. The Association shall be responsible fox the payment of all costs, charges and expenses iztcuired in connection with the operation, admizzistration and management of the Coinmoi~ Area and the perfozmaxzce of its other obligations hereunder. The Association shall operate and maintain areas designated by the Declarant as Common Areas, whether or not title to such areas has been fozmally conveyed to the Association. The Association, shall also be responsible for enforcement of the covenants and restrictions contained in this Declaration. Section 2. Landsrapina. The Association shall be responsible for maintaining anal caring for the entire lawns of the Lots which includes, but is not limited to, mowing, edging, fertilizing, weeding, applying pine straw, pruning of trees and sluubs, azzd replacing of trees and shrubs as necessary. The Association shall also maintain the irrigation system on the Lots and shall have the right to go on said Lots at xeasonable times for the purpose of performing such maintenance and care; and each Owner hereby grants permission to the Association to enter his Lot for such purposes. In the event that the need for maintenance, repair or replacemext of the lawns or landscaping, or the irrigation systems servicing them, is caused by the willful or negligent act of the Lot owner, Iris family, az• his invitees, and specif cally inehtding failure to water the lawn and other landscaping, the cost of such maiitteitance, repair or replacement shall be added to and become a part of the assessment to which such Lot is subject. If any Lat Owner should fence his lawn then such Lot Owner shall be responsible for maintaining the area within the fence. The ground area within the fence must be grassed or covered with other vegetation. which has been approved by the Association. Na Owner shall be relieved of his obligation to pay Assessments nor shall an Owner be entitled to a seduction in the amount of the Assessment far maintaining iris own lawn, If an Owner fails to maintain the fenced area, then the Association after giving such Owner at least ten (10) days` written notice, shall be authorized to enter upan the fenced area and uitdertalce such maintenance. Section 3. Mazaaaer. The Association may employ and pay for the services of a person or entity, including tlae Declarant {the "Manager"), to assist the Association in managing its affairs Sf 1$108 and caltying out its resparrsibilities hereunder and such other persons az• entities, including attorneys and accountants, as the Association deems necessary or advisable, whether such persons or entities are engaged, furnished or employed by the Manager ar• directly by t11e Association. The Association may enter into a Management Agreement for such management services upon such terms as the Board of DII•ectors may deem appropriate. The payment of management fees due to the Declarant may, at Declal•ant's option, be deferred until. such later date as Declarant, 111 1tS Sole discPetion, deem appropriate. Furthermore, any Ianagement fees due to Declarant may, at Declarants option, be credited against any assessrrzents due or to be corning due ~roln the Declarant. - Section 4. Personal Pro ert for Conunon Use. 1'he Association Inay acgtlire and hold tangible and intangible personal pl•opel•ty and may dispose of the same by sale or otherwise, subject to such restrictions, if any, as may from time to time be provided by the Alticles of Incorporation or Bylaws of the Association. Sectinn 5. lnsurance: Bonds. The Association shall procure and maintain adequate liability instrrauce covering the Association. The Association shall also procure and maintain full replacement value hazard insurance on real and persolal property owned by the Association, and shall procure arld Inaintain officers', directors' and employees' liability insurance, and such other insurance as it deems necessary or advisable. The prelniums far such insnrarlce shall be a common expense paid fi•o~.n the aru-rual assessments provided in Article V of this Declaration. The Association may cause any or all persons responsible for collecting and disbursing monies of the Association to be banded, Section 6• Implied Rir?hts. The Association may exercise any other right ar privilege and take any action authorized by this Declaration, the Association's Articles or Bylaws, or the Act or the North Carolina Nonprofit Cozporation Act {Chapter 55A}, as from time to tizxre amended, and every other right or privilege reasonably necessary to effectuate the exercise of any right ar privilege or the taking of any action authorized herein or therein. Section 7. Declarant's Reserved Ri hts• Association's Obli atian of Cao eratiorl. The Assaciatioza shall accept conveyance of any Common Area conveyed to it, in fee ar by easement, by Declarant or, at the request of Declarant, by an owner of any property withui or to be ar~urrexed ir~Ito the Properties and, upon request of Declarant and without filrther consideration, sha11 execute any dacun~.ent necessary to evidence such acceptance. Until such time as Declarant and Builders have completed all of the contemplated improvements and have sold al] of the Lots within the Subdivision: {a} Declarant shall have the right to alter the bour•zdaries of the Common Area, whether or not it leas been previously deeded to the Association, subject to § 47F-3-112 of the Act, and provided that such alteration dons not substantially, materially and adversely affect the filrrction and use of the Common Area. The Association and each Owner hereby irrevocably appoints the Declarant as his attorlaey-irr-fact to execute andlor deliver any documents, plats, deeds, or other written matters necessary ar conveluent to accomplish the addition of Camznon Alea ar Properties, or bath, to create easements as deemed necessary by Declarant, and to adjure the boundary or boundaries of the Common Area. S/1 SIDS (b) Neither fhc Association nor its Members, nor the use of the Common Area by the Association and its Members, shall izrtexfere with or impede the coinpletian of the in~.provements or the marketing and sale by the Declarant and the Builder of Lats and homes. (c) Declarant and each Builder shall have the right to malce such use of Lots and the Canunan Area as may facilitate completion of development and sale of Lots and Units by the Declarant and the Builder. Without limiting the foregoing, Declarant shall have the right to maintain or permit the Builder or others to maintai~~ sales affces, model Dwellings and Units, administrative offices, and construction offzces (which. may be trailers or temporary or permanent buildings), or any or all of same, on Lots or the Common Area. Declarant and the Builder shall also have the right to erect and maintain signs on Lots andlor the Coniun.an Area, to bring prospective purchasers upon the Corrunon Area, to-use the Ca~nzxaon Area for sales and marketing activities for the Subdivision, to grant the right to use the Common Area to a prospective purchasers or any other individual or group, in Declaxant`s sole discretion, and to conduct any and all other marketing activities deemed appropriate by the Declaxant, and to perurit the Builder and others to exercise such rights in conjunction with or separate fioin the Declarant. (d) Subject to the provisions of Section I (d) of Article IV of this Declaration, Declarant shall have the right, but not the obligation, to loan money to the Association. i.n such amounts and upon such terms and conditions as to which the Declarant may agree. Payments due to the Declarant under any such loans may, at Declarant's option, be credited against any assessments coming due at any tune from the Declarant. (e} In addition to all other rights of the Declarant, na amendment shall be made to this Declaration, and no rule or regulation shall be adopted, interpreted or enforced by the Assoc~at~on, so as to modify the assessments or other charges applicable to the Declarant or a Builder or assessed against the Lats awned by either, or which shall restrict, impair, or, in Declaxant's sole judgrnent, materially adversely affect the activities of the Declarant or the Builder with regard to construction, use of Common Area and delegation of the right to use the Canunon Area, or the marketing and sale of Lots by the Declarant and Builder, whether or not such activities are enumerated in the preceding paragraphs, without the express prior written consent of Declarant. l;n exercising any of the rights provided or granted under tlris Article X, neithex Declarant, nor the Association shall revoke, modify or amend this Declaration in a manner that reduces the size of the Common Area to less than, the area required by the appropriate governmental authority as of the date of this Declaration. 8118/08 ARTICLE XI USE RESTRICTI4PIS Section 1. Business Use Prohibited. No trade, business, profession, garage sale, zrzoving sale, rummage sale or other type of commercial activity shall be cazxied on ~vithin any Unit, except that an Owner ar occupant residing in a Unit n~zay conduct business activities within the Unit so long as (a) the existence or operation of the business activity is not apparent or detectable by sight, sound, or szi2ell from. outside the Unit; (b) the business activity corifozins to all zoning requirements for the Properties; (c) the business activity does not involve regular visitation of the Unit by clients, customers, suppliers,'or other business invitees or door-to-door solicitation of residents of the properties; and, {d} the business activity is consistent with the residential character of the Properties and does not constitute a nuisance, or a hazardous or offensive use, ar tlzz•eaten the senurity ar safety of other residents of the Properties, as znay be determined in the sole discretion of the Board. The terms "business" and "trade", as used in this provision, shall be construed to have their ordinary, generally accepted meanings and shall include, without limitation, any occupation, work, or activity undertaken on an ongoing basis wluch involves the provision of goads or services to persons other than the provider's family and for which tl~e pzovider receives a tea, compensation, or other farm of consideration, regardless of whether: (aj such activity is engaged in full or part~time; (b) such activity is intended to or does generate a profit; or, {c} a license is required. Notwithstanding the foregoing, the Declarazrt and the agents and employees of Declarant shall have the right to: (i} use Lots and improvements eroded thereon far sales offices, field construction offices, storage facilities, and its own general business off ces; {ii) maintavi fluorescent-lighted or spot-lighted model homes whiclz may be open to the public for inspection 7 days per week far such hours as the Declarant or Builder deems appropriate or necessary; (iii) conduct any other activities on Lots to bezaefit sales efforts; and {iv) use the parking facilities on the Common Area for parking for its employees and invitees. Section 2. Use o_f Accessozy Stzuctures. No tent, shack, barn, car port, metal awnings, metal utility sheds az• other building, other than a Dwelling and its garage, shall be erected on a Lat, and used temporarily or permanently as a residence, nor shall any such struchzre be used for arty other purpose. Notwithstanding the foregoing, the Declarant and, with the approval of the Declarant, a Builder, nlay use temporazy buildings, offices or facilities in connection with the marketing, sale and construction of Units. Section 3. Maintenance of Im rovements. Each Owner shall maintain in good condition and repair all inlproveznents constructed upon such Owner's Lot, uicluding, without limitation, tl~ze Dwelling. No Owner shall change the landscaping, exterior design ar color of the Dwelling on such Owner`s Lot, including the roof thereof, except in coinpliance with Article VIII hereof Section 4. Storage: Clothes Hangui~. No Lot ar Gainzxion Area shall be used far the storage of rubbish. Outside clothes hanging devices skiall not be permitted. $/1810$ Section 5. Nuisaz2ces. No t2axious or offensive trade or activity shall be carried on upon any Lot at the Common Area, nor shall anything be done thereon which n2ay be or became an at2t2ayance or nuisance to the neighborhood. Na automobile nr other vel2icle n2echanical repairs oz• like activity s12a11 be conducted within the Properties otl2er than in a garage and concealed from public view. Section 6. Lawns. Each Lot shall be t22aintained in a neat condition by the Owner thereof az•, as appropriate, by tl2e Association. I12 this coz2text, tl2e word "Lot" shall u2elude tl2at partiot2 of the property fiam the outside of the structure an the applicable Lot to the adjacent paved road surface. All Lots upon which a Unit or Dwelling 12as been consttttcted {"Izz2proved Lots") must have gt•ass lawns; no gravel or si222ilat• typo Iawns are permitted. For Improved Lots, "Neat" shall require, at a tninirnum, that ti2e lawn be regularly cut and fertilized and that n2ulcl2ed areas be regularly re-mulched and kept weeded sa tl2at its appearance is in harmony with the neighborhood. No Ownez• shall allow the grass on at2 Lot to grow to a height in excess of six (G} incl2es, measured from the surface of the ground. For unin2proved Lots, "Neat" shall require that the Lat is maintained in a sigl2tly condition, fi•ee of debris, tttbbish, weeds and high glass and in a prudent and reasonable manner harmot2ious with that of other Lots witl2in the Subdivision. Section 7. Animals. No at2imals, livestock or paultzy of at2y ku2d shall be raised, bred, or kept on any Lot, except that a reasonable number of cats, dogs, and otl2et• 12ause12oId pets txtay be kepi provided they are kept within the residence artd are not kept, bred, or maintained for any commercial purposes or become a nuisance to the neighborhood. No person awning or havit2g custody of ate animal shall allow the animal to stray ar go upon another Owner's Lot without the consent of such other Owt2et•. No animals shall be permitted an or in tl2e Common Area at any time except as permitted by the rules and tegulations of the Association or by applicable law. All at2imals shall be on a leash when outside the Owner's Dwelli.z2g. The Owt2er shall be responsible for cleat2it2g all droppings from tl2eir at2imals. The Board of Directors of the Association shall have the right to expel at2imals from the community for the Owners continuiz2g violation(s) of the governing documents. The Board shall also have the right to expel dogs from the community for excessive barking which u2 the Board's opinion is a nuisance to other Owz2ers. Section 8. Sig 2s. No signs s12a11 be displayed on any Lot or on ar witl2in any improvement so as to be visible from the exterior of the improvement with tl2e exception of one sign with the trtaximun2 dimensiot2s of 24 inches by 24 inches expressing support afar opposition to political candidates or other issues wi2ich will appear ot2 the ballot of a primary, general ar special election2, provided that such political sigi2s shall not be placed on a Lot earliez• than forty-Five (45) days before such election and shall be removed within seven (7} days after suc12 election. The Association may develop uniform sign standards and specifications to which alI Owners must adl2ere. No sign of qtly kind shall be displayed in or on the Con2mon Area witl2out the prior wz•itten consent of the Association2. Notwithstanding t12e foregoing, Declarant and, with the caz2sent of and upon such conditions as Declaratrt, in its sole discretion, tnigl2t impose, a Builder shall have the z•igl2t to erect and n2ait2tain signs of any type and size on arty Lot which it owns and ail the Catnrnoz2 Atea, in connectior2 witl2 the development and sale of the Properties. Sectior2 9. Water Reter2tion Areas. The Association shall be responsible for maintaining tl2e portions of the storm watet• drainage system whicl2 are within the Cotntnon Area, tz2cludit2g the water quality and quantity standards of the approved plans, to tl2e ea•tent requited by law. A 8/18/(18 drainage easemezzt is hereby dedicated to the Association for the purpose of maintaizung the storm water system to meet water quality and quantity design standards of the approved plans and any filture governmental laws, rules or regulations. Each Owner of a Lnt which borders a water retention area shall maintain any portion of that Owner`s Lat lying within a retention area free of debris but shall not remove any wetlands species or do anything that would affect adversely water quality within the water retention a1•ea. Swimming and bathing in water retention az•eas are prohibited. Docks or other structures shall not be erected in water i•etentio~i areas without the prior written consent of the Association.. All other uses of water retention a1•eas shall be subject to the prior w1•itten approval of the Association and such I•ztles and regulations as the Association may adopt from time to time. Section 10. Vehicles Boats and Trailers. No vehicle of any kind shall be parked on any Lat except on a paved parking surface or driveway or within a garage. Na truck or vehicle used primarily for commercial purposes (other than. those temporarily present on business), no vehicle in inoperable condition, no unlicensed vehicle, no recreational vehicle, no camper, no boat and no trailer may be parked within the Properties, unless kept inside a garage and concealed fiam public view. No parked veluele shall be covered by a "car covel•" or other similar covering unless kept inside a garage and concealed fzom public view. For the purpose of the preceding sentence, the term "kept" shall mean present for either a period of more than ten (10} hours or overnight, whichever is less. The Association shall have the right to tow or remove any bast, trailer, or vehicle of any type which is parked within the Premises or kept on any Lot in violation of this section, at the owner's expense, and the owner of each Lot, by acceptance of their deed, does g1•ant to the Association such an easement on, across, and upon their Lot as may be necessary to enforce the provisions set out in this section. Section 11. Wally, Fences, and•Hedaes. AlI walls, fences, planters and hedges shall be controlled strictly for caznpliance with this Declaration and arclutcctural standards established by the Declarant or the ARC. The design, materials and placemelit of all walls, fences and hedges shall be approved by the ARC prior to construction pursuant to the approval requirements of Article VIII, Section 1, of thrs Declaration. Section 12. Anteruiae and Roof Structures. No radio or other electz•ical towers, aerials, antennae, , or other devices of any type for the reception or hansmission of radio broadcasts or other means of communication shall be erected, constzucted, placed or permitted to remain on any Lot or uparz any improvements tlael•eon, except that this p1•ahibition shall not apply to those antenrae specifically covered by 37 C•F.R. Fart 1, Subpart S, Section 1.4000 (or any successor provision} promulgated under the Telecommunications Act of 1996, as amended from time to time. The Association shall be empowered to adopt rules governing the types of antennae that are permissible hereunder and establishing reasonable, non-discriminatory restrictions relating to safety, location and maintenance of anteru~ae. An antelula permissible pursuant to I~.iles adopted by the Association may be installed only if it is approved 6y the Association pursuant to AI•ticle VIII hereof 8118108 Section 13. Visual Obstructions at the Intersections of Streets. No object or thing which obstructs sight lines at elevations between two {2) and six {6) feet above the roadways witlun floe triangular area formed by the junction of street curb lines and a line connecting them at points twenty-five {25) feet from the jutction of the street curb lines (ar extensions thereof) shall be placed, planted or permitted to remain oza any corner lots. Section 14. Leased Units. An Owner may lease or sublet his Unit; provided, however, that any ]ease ar sublease must be for at least six {6} months, in writizag and cantaut the fallowing provision: " "Tenant shall obey, adhere to and be bound by all provisions of the Declaration Of Covenatats, ConditiOlzS And Restrictions Far the Fahn Gzave Commiuaity, recorded iza the applicable public registry for New Hanover County, North Carolina. Tenant acknowledges that tae has received of a copy such Declaration-and the zules and regulations of the Association and is familiar with the provisions of same." if an Owner fails to include said provision in any lease or sublease, rt shall be conclusively deemed to be included and part of said lease or sublease. Owner shall fitrnish the Association a copy of any leases oz' subleases of his Uuit. Section 15. Minimum Size of Dwellings. All Dwellings constructed on any Lot shall have a minimum of square feet of enclosed dwelling area. The term "enclosed dwelling area" as used in the minimum requirements shall be the total enclosed area within a dwelling, provided, however, that such term does not include garages, terraces, decks, open porches, and like areas; provided, further, that shed type porches, even tlaaugh attached to the house az•e specifically excluded franc the defnaition of the aforesaid term "etclosed dwelling area". Sectiaza 16. Attached, Garages. All Single Family Units constructed witlun floe Properties shall contain an enclosed garage that is pezrzzataently attached to and part of the Unit and such garage shall be large enough to accamanodate at least one automobile. Garage doors shall remain closed at all times except when necessaz•y for ingress and egress. Multi Family Uzaits may or may not have garages. Section I7. Seasonal or Holiday Decorations. Holiday decorations {e.g., Christmas trees azzd lights, pumpkins, Eastex decorations) shall be removed from each Lot or residential dwelling within a reasonable period of time after such holiday passes. The .ARC has the sole discretion to determine what is a zeasazaable period of tune for seasonal or holiday decorations to exist after the holiday passes and its determination shall be final. Section 18. Deviations. Declarant at its sole discretion, is laez•eby permitted to appz'ove deviations to restrictions in Article XI in instances where in its judgment, such deviation wilE not adversely affect the development of the Property as a whole. Such approvals must be granted ua writing and when given will autanaatically amend these xestrictions for that certain Lot azaly. 8/18!08 Section 19. Window , Coyerin~s. All drapes, Cllrtaltls Or other similar materials hung at windows so as to be visible fian~ outside the home shall be of a wlute or neutral background material. Section 20. Exterior Lights. AlI light bulbs or other lights installed in any fixture located on the exterior of any building or any Sites shall be clear, white or non-fz•osted Lights or bulbs. Light wattage and placement shall be approved by the ARC. Section 21. Service Utilities fuel Tanks Wood Piles Trash. All service utilities, fuel tanks,-wood piles and trash and garbage containers are to be enclosed within a fence, wall or plant screen of a type and size approved by the Declarant or the ARC, so as to preclude the same fiom causing an unsightly view from any highway, street ar way witln the subdivision, or fi•ozn any other residence wi#hin the subdivision. Section 22• Curbside Maintenance. Each Owner shall have a duty and obligation to maintain the roadside curbing along the fzont of #hei~• Lot, and in the case of corner lots, along the side abutting roadways, in the same condition as originally installed by the Declarant, lli the event any Ownez• shall fail to do so, the Association after giving such Owner at least ten (10) days` written notice, shall be authorized to undertake such maintenance at the Owner's expense. Provided, however, that if the Declarant still owns property in the Subdivision, whether a developed lot or lots, or a tract or tracts of land for fizttire development, the Declarant shall have the option of repairing or replacing damaged curbing to its original condition, and the cost of such repairs or replacement shall constitute a lien in favor of the Declarant against the lot adjacen# to where the repairs or replacements wez•e effected. 1f such maintenance is undertaken by the Association or Declarant, the charge therefore and all costs of enforcement and collection shall be secured by a lien against the Lot as provided in Article V hereof. Section 24. Fla s. Subject to Section 47F-3-121., t:he design, materials and location of all flags, flag poles, flag staffs, shall be approved by the ARC prior to installation or display pursuant to the approval requirements of Article VIII, Section 1, of this Declaration. Section 25. Right of ways. if any Qwner places any improvement or structure in the right-of--way, then if requested by the North Caroli~aa Depaztment of Transportation or the Declarant or the Association or any governmental regulatory agency, the Declarant or the Association shall leave the right to remove such improvement or structure even if ARC had approved installation of such improvement or struchire. ARTICLE XII STORMWATER P)CRM~T TRANSFl1R RESPONSIBILITI)GS AND COVENANTS Section 1. Trazasfer to and Acce fiance b Association. Declarant shall, at its .sole cost and ex ease, initial! constz~tct all Stormwater Mana eznent Facilities re aired to be located u on the Pro e~ or u on an ro ert azuiexed into the Pz~o e b Declarant to the standards re aired b the North Carolina Storznwater Management Permit No. issued for the Properties, and anv additional North Carolina Stozinwatez• Manaueirrc~ni~ Pe~•,„i1s. ------- the "Permit" . U on cony letion of the initial construction of tl~e Storznwater Mana~en~ent 8!18108 Facilities re aired b the a licable Permit for the Pra ernes ursuant to this Declaration Prior to an such transfer of the Permit, the Storznwater Mana ement Facilities for the _._ Pro ezties iu~cludin an ro pert annexed b Declarant into the Pra e~ shall be certified to the Association and the State of North Carolina either b state ins ection orb a licensed e~~gineer, as bein~i~.i conapliaz~ce with the applicable Permit prior ~o such assi~tztnent or transfer. Section 2. Association Indeznnification._ The Association shall indemnify and bald Section 3. Administration of Perrot. From and after the ttansfer of Declarant's res onsibilities under the Pern~.it a licable to the ra ez annexed into the Pro ez•t and from and after transfer of the Permit from Declarant to the Association the aversi ht su envision tnana~enlen.t and administration of the Perzzut sllall• l~e•the_sale responsibility of the ~;issaciation. The Association`s duties with res ect to the Permit shall be caziied out in accordance with the terms and conditions of the Association Dacuznents and the Permit Section 4. Easement for U kee cad Enforcement, The Association hereb is *rarzted Section 5. Peznlit Covenants. To ensure on oin coin liance with the Permit as issued b the Division of Water uaIi zuzder NCAC 2H.1000 the followizt covenants and restrictions are hereb izn osed a an tl~e Pro ert 8118108 Permit sha[1 occur witlyn a reasonable eriod of tune after the date the Nozih Carolina De arttment of Envirann~ent and Natural Resources allows the transfer of the Permit to occur ar a later date if so elected b Declarant. into the Prope~~ty_from and after the date Declar~;nt•,tenders Transfer of its responsi;l~lities under the Permit. The Association shall indemni acid hold Declarant harmless from an loss, cast claim fee fine suit, dama e or ex ease inchzdin reasonable attazne s` fees incurred b certification of coamnliazice as set forth aboye.._..._.__.._ ~ - -,,, ~rtion for Further, Declarant may brni~ an ,...,,...•.,~, specif c perforn~auce of the obligations of the Association„pursuant to this Section .2., Permit and Declarant's res onsibilities under the Permit to the Association the Association slialI have and hereb is •artted and cozzve ed, an easement over uradet• and a on each annexed Lot for the ur ose of access to and U kee of aIl Stoinlwater Matra ement Facilities located a on such additional ro ert and to enforce all re uiren~ents of the Pezxmit. _ ... (a} The maximunr allowable built upon az•ea per Lot is ,_ , square feet The, allotted amount includes an built a on area constructed within the ra ert boundaries of a Lot and that az•tion of the ri ht of via between the front Lot line azzd the ed e of the avement of an street abuttin such Lot. Built Lz an area includes but is not limited to structures as halt, concrete avel brick stone slate. co Luna and azkizz areas, but does not include raised o en wood declcin or the water surface of swimrnin ools. Built u on area in excess of the ermined amount above stated will re uire a modification of the Permit. c Each lot will maintain a 30' wide ve etated buffer between all im erviaLts areas and surface waters. d All roof drains shall terminate at Ieast 34' from the mean lri h water marls. e No Person zna i E, fill in or alter an ve etated drama e swells constitutin a art oftlte Stormwatez• Mana ement Facilities constructed Lirsuant to the Permit. ma _ be subject to a z educt on 'm t e all viable bu It uo on1azi~ea~•d ~pcern as deli nag ted b.y...•C'AMA ze to such LAMA re ulations. (g} No alteration of the drama e for the Storznwater Mana emezrt Facilities designated in the Permit and shown on at~y,.accompan;yizig approved plans shall occur without the prior written consent of the Division of Water Quality. The covenants set forth in this Section S ertaizun to stormwater manaQen~ent run with the land are buidin on all ersons claimin undez• them. and zna not be altered rescinded or modzf ed without the ex ress written consent of the State of North Carolina. Division of Vi~ater uali .The State of North Carolina is made a benefzciar of the covenants above stated to the Section b. Each Uwner of a Lot which borders a water retention area, drainage easement or drainage Swale area shall be responsible to maintain any portion of that Owner's iot lying witlrin a retention area, drainage easement, or drainage Swale area free of debris but shall not zemove any wetlands species or do anything that would affect adversely water quality withal the water retention area. No structure of azly type shall be pezmitted within the water retention areas, drainage easements or drainage Swale areas. Swimming and bathing in water retention areas are prohibited. Docks ar other stz•LZCtzues shall not be erected in water retention areas without the prior written consent of the Association. All athez• uses of water retention areas shall be subject to the prior written approval of the Association and such rules and zegulations as the Association may adapt fi•ozn time to time. ART1lCL)G Xl(II flENERAL PRC)VISIflNS $/18/fl8 Section 1. Enforcement, Tlae Association or any Owner shall have the right to enforce, by proceeding at law or iaa equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration. Failure by the Association or an Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the r7ght to do so thereafter, Further, the Board of Directors shall have the right to record in the appropriate land records a notice of violation of this Declaration or the Bylaws of floe Association, or any rules, regulations, use restrictions, or design guidelines promulgated by the Association and fa assess the cost of recording and removing such notice against the Owner iaa. violation ofthe Declaration. • Section 2. Severability. Invalidation of anyone of these covenants or restrictions by judgment az• cotu.•t order shall in no way affect any other provision, which shall remain ita full force atad effect. Section 3. Amendment. For so long as Declarant owns any Lot or Unit within the Subdivision, this Declaration may be amended by the Declarant, without the consent or joinder of any other Owner or the Association. Any such amendzaaent shall be effective upon recording of same in the applicable public registry far New Hanover County, North Carolina. Na amendment shall be binding upon any Lot or Owner until fifteen (IS) days after a copy of such amendment has been provided to such Owner. The covenants and restrictions of this Declaration, and any amendments thereto, are apptu-tenant to and shall iun with and be binding upon tlae Pxoperties and the Owners thereof far a term of twenty-five (25) years from the date this Declaration is recorded, after which time they shall be automatically extended for successive periods of ten (lp) years unless tei-~ninated or amended by a vote of the Owners as set forth below. Subject to the provisions of Section 8(ej hereof and after Class B Lots cease to exist, this Declaration may be amended during the fzrst twenty-five year period by an instrument signed by the Owners of not less Phan seventy-five percent (?5%) of the Lats and terminated during the first twenty five year period only in strict compliance with § 47F-2-118 of the Act by an instrument signed by the Owners of .not less than eighty percent (80%} of the Lats, and thereafter amended by an instrument signed by the Owiaers of not less than sixty-seven percent (67%) of the Lots or terminated by an instrument signed by the Owlaers of not less than eighty percent {80%} of the Lats, provided, however, that so long as there is Class B zaaeznberslaip, no a~nendnaent adapted by the Owners shall be effective unless and until such amendment is approved in writing by the Declarant. Amendment or terminatin.n shall be by written instrument signed by the appropriate persons ar entities and recorded in the applicable public registry for New Hanover County, North Carolina, and upon recordation, shall be binding on all Lots and Units wit1aiza the Properties and the Qwza.ers thereof, without regard to wlaetlaer tlae Owner of such Lot voted far or against or signed or did not sign the amendment. Section 4. lnterpretation. Headings used herein are for indexing pu~pases only and shall not be used as a means of interpreting or construing any provision hereof Unless the context otherwise requires, the use herein of the singular shall include the plural and vice versa: the use of one gender shall include alI genders; and floe use of floe word "including" shall mean 5/18/08 "including, without limtation", This Declaration and the provisions thereof shall be construed and enforced in accordance with the laws of the State of North Carolina Section 5. Subdivision of Lots. No Lot within the Subdivision maybe subdivided by sale or otherwise so as to reduce the total Lot area shown on the xecoxded plat, except by or with the consent of the Declarant and, if required, by the appropriate govez7tmental authority. Section 6. Declarant's Ri lit To Chan e Develo rnent. With the approval of the appropriate governmental authority; and subject only to such terms and conditions as said authority may iittpo5e; Declarant sliall have the right; without coiiserit ar approval of the- Owiters, to create Lots and Units, add Common Area, and reallocal;e Lots or Units within the Properties. Declarant may convert any lot or lots or any other property subject to these restrictions to use as a roadway and/or road right-of way. Section 7, Right to Dedii,~Ee Streets. In khe event that the streets artd roadways providing access to the Palrrz Grove Sul~divisioz~ are accepted as public roads by the North Carolina Depaz-tment of Traa~spot•tation, then and in that event, the Declarant andlor the Association shall petitiozx the North Carolina Depaztment of Transportation to accept the streets and roadways witlzua tl~e Palm Grove Subdivision as public roads. Section 8. Rulos_and_Regulations: Enforcement. The Board of Director's shall have the authority to adopt additional rules and regulations governing the use of the Common Area and the Lots within the Subdivision and shall furnish a written copy of said rules and regulations to the Owners) of each Lot at least fifteen (15). days before such rules and regulations become effective. In addition to any other rights and remedies that the Association may have uzader tl~e Bylaws and this Declaration, the Association may impose sanctions for a violation of this Declaration, the Bylaws of the Association, the rules and regulations adapted Association, and any restrictive covenants applicable to the Properties, in accordance with procedures set forth in the Bylaws, and subject to the notice of hearing, evidence, and appeals procedures set forth in §47P-3-107.1 of the Act, which sanctions may include, without limitation, reasonable monetary fines not to exceed One Hundred Dollars ($100.00), provided that an additional fine of up to One 1-lundred Dollars ($100.00) per day niay be unposed for each day more than five (5) days after the decision that the violation occurs, which shall constitute a lien upon the Lot of the violator, and suspension of the right to vote and the right to use the Conunon Area any facilities thereon. Ln addition, as provided irz the Bylaws, the Association may exercise self help to cure violations (specifically including, but oat limited to, the towing of Owner and tenant vehicles that are in violation of parking rules) and Wray suspend the right of an Owner to use any Canimot~ Area azzd recreational facility within the Properties if the Ow;per is mare than 30 days deluiquent in paying any assessment oz• other charge due to the Association. The Association shall at all times have the right and easen~.ezzt to go upon any Lot for the purposes of exercising its rights hereunder, including, but not limited to, eziforcement of the arciutectural guidelines applicable to the Properties. Any entry onto any Lot for purposes of exercising this power of self-help shall not be deemed as trespass, All remedies set forth in this S/I 5/08 Declaration and the Bylaws shall be cumulative of any remedies available at law or in equity. In any action to enforce its rights and zemedies, if the Association prevails, it shall be entitled fie recover all costs, including, without limitation, attorneys' fees and couz-~ costs, incuzred in such action. The Association shall not be obligated to take action to enforce any covenant, restriction or Yule which the Board reasonably determines is, or is likely to be construed as, inconsistent with applicable law, oz• in any case in which the Board reasonably determines that the Association's position is not strong enough to justify taking enforcement actions, Any such etermznatzou shall not be construed as a waiver of the right to enforce suc$ p~•ovisions under otlrer circumstances or to estop the Association from enforcing any other covenant, restriction oz• rLlle. Section 9. Dis site Resolution. (a) Consensus for Association Action. (1} Except as provided in this Section, the Association may not commence a legal proceeding or an action under this Article without the approval of at least two-thirds of the Members. The foregoing shall not apply to: {i) actions brought by the Association to enforce the provisions of this Declaration, the Bylaws, or rules and regulations adopted by the Association (hereinafter collectively referred to as the ("Governing Documents"); (ii) the imposition and collection of assessments; {iii) proceedings involving challenges to ad valorem taxation: or (iv) counterclaims brought by the Association in proceedings against it. (2) Prior to the Association or any Member conazxzencing any proceeding to which Declarant is a party, including, without limitation, a proceeding based on an alleged defect iri any impz•overnent, Declarant shall have the right to be heard by the Members, or the particular Member, and to have access to inspect and con•ect the condition of or redesign any portion of any improvemezrt as to which a defect is alleged or to otherwise correct or resolve the dispute. (b) Alternative Method for Resolvul Dis sites. Declarant, its officers, directors, ezaaployees and agents, the Association, its officers, directors and committee members, all Qwners, Members, any Builder, its officers, directors, employees and agents, and any other person or entity not otherwise subject to this Declaration who agrees to submit to this Secfiion 8 (each such person or entity being herein referred to as a "Bound Party" or, in groups, as the "Bound Parties"} each agrees to encourage the amicable resolution of disputes, without the emotional and financial costs of litigation. Accordingly, each Bound Party covenants and agrees to SLlbznrt tllose claims, grievances and disputes described in Subsection {c) hereof (herein referred to as the "Claims") to the procedures set forth in Subsection (d) hereof. (c) Claims. Unless specifically exempted below, all Claims between any of the Bound Parties, regardless of how such Claims might have arisen or an what they might be based, including, but not limited to, Claims: (i} arising out of oz• relating to the interpretation, application or enforcement of the Governing Documents or the rights, obligations and duties of any Bound Party under the Governing Documents; (ii) relating to the design and constr-uctioir of improvements; or {'iii} based oi~ any statements, representation, promises, warranties, oi• other 8118108 conanaruaications alleged to have been made by or on behalf of any Bound Party, shall be subject to the provisions of Subsection (d) hereof. Notwithstanding the foregoing, unless all parties to any such dispute otherwise agree in writing, the following shall n©t be deemed to be Chinas covered by this Subsection (c) and shall not be subject to the provisions of Subsection (d): (1) any proceeding by tlae Association against any Bound Party to ezaforce the provisions of Article V of this Declaration: (2) any proceeding by the Association ar the Declarant to obtain a temporary restraining order or injunction (or equivalent equitable relief) aiid such other ancillary a•elief as the court may deem necessary in order to maintain floe status quo and presezve the Association's or the Declarant's ability to act under anal enforce the provisions of Articles VIII and XI of this Declaration; (3) any proceeding between or among Owzaers, which does not inchide the Declarant, a Builder, or the Association as a party, if such proceeding asserts a Claim which would consti~.~te a cause of action izadependeni of tlae Governing Documents; or {4} any proceeding in which iao Bound Party is an indispensable party. • with the consent of all parties thereto, any dispute involving any of the foregoing excepted actions may he submitted to the alternative dispute resolution procedures set forth in Subsection (d). {d} Mandatory Irocedures• {1) Native. Any Bound Party having a Claim {the "Claimant") against any other Bound Party (tlae "Respondent"} (the Claimant and the Respondent being herein individually referred to as a "Pasty" and collectively as the "Parties") shall notify each Respondent in writing (the "Notice"}, stating plaualy and concisely: (i) the nature of the Claun, includuag the persons or entities involved azad the Respondent's role ua the Claim: {ii} the legal basis of the Claim (i.e., the specific provisions of the Governing Documents or other authority out of which the Claim arises); (iii) the proposed remedy; and (iv) the fact that Claimant will meet with Respondent to discuss in good faith ways to resolve the Claim. (2) Ne otiation d Mediation. {i} The Parties shall make every reasonable effort to meet in person and confer for floe purpose of resolving the Claim by good faith negotiation. If requested in uniting, 8/18/08 accompanied by a copy of the Notice, the Board of Directors of the Association array appoint a representative to assist the Parties in their negotiations. { ii) If the Parties do not resolve the Claim within 30 days after the date of the Notice {or within such other time period as may be agreed upon by the Parties), Claaznant shall have an additional 30 days in which to submit the Claim to mediation under the auspices of the American Arbitration Association ("AAA"} in accordance with the AAA's Commercial or COnStz-uCtzall Industry Mediation Rules, as appropriate. {iii} If Claimant does aaot subziiit the Claim to iriediatiozi witl~iri such time; or does not appear for the mediation. Clauuant shall be deemed to have waived the Chian, and Respondent shall be released and discharged from any and all liability to Claimant on account of such Claizn; provided, nothing herein shall release or discharge the Respondent from any liability to any person or entity other than the Claimant. (iv) Any settlezxzent of the Clairn through negotiation or mediation shall be documented in writing and signed by rho Patties. If the Parties do not settle the Claim withizz 34 days after submission of the matter to AA.A mediation, or within such other time as array be deteaanined by the mediator or agreed to by the Parties, the mediator shall issue a written notice of tei~uination of the mediation process, which notice shall state that the Parties axe at an impasse and set Earth the date that mediation was terminated (hereinafter "Termination of Mediation"}. (v} Each Party shall bear its own costs of the mediation, including attoxzaeys' fees, and each Patty shall share equally all fees and expenses of the mediator and the administrative fees of mediation. If the Parfiies agree to a resolution of a Chun through negotiation or mediation as set forth in this Subsection (d}, and any Party thereafter fails to abide by the terms of fihe settlement agreement, any other Party may file suit or initiate arbitration proceedings to enforce the agreement without the need to again comply with the procedures set forth in this Subsection (d). Iu such event, the Party talcirzg action to enforce the agreement shall be entitled to recover from the non-complying Party {or, if snore than one Paz`ty is in noncompliance, from alI non- complying Parties pro rata) all Costs ancurred by such Party in enforcing the agreement, including, without limitation, attorneys' foes and court casts. {3) Bindin Arbitration. (i) After Tern-unation of Mediation, CIairnant shall be entitled to submit the Claim to fiaaal, binding arbitration under the auspices of the AAA in accordance with the AAA's Commercial ar Construction Industzy Arbitration Rules, as appropriate. No Claim subject to this Subsection (d), whether by the provisions thereof or by agreement of the Parties, shall be submitted to ar decided by or in a court of law. Any judgment upon the award entered by the arbitrator may be entered in and enforced by a court of eampeterzt jurisdiction. If the amount claimed by the Complainant or, by the Respondent in a counterclaim, exceeds $254,40x, the Claim shall be heard and determined by tluee arbitratoa•s. Otherwise, unless the Parties otherwise agree, the Claim shall be heard and determined by an arbitrator. An arbitrator shall leave 8/18/08 expez-tise in tl~e areas) of the Claim, which may include legal expez•tise if legal issues are involved. (ii) Each Parry shall bear its own costs of the arbitration, includurg attorneys' fees, and each Party shall share equally all fees and expenses of the arbitrator and the adrnu~istrative fees of arbitration. Notwithstanding the foregoing, if a Party unsuccessfully contests the validity or scope of arbitration iii a count of law, the non contesting Party shall be awarded reasonable attorneys' fees grid expenses izzcurl•ed in defending such contest: All decisions regarding the arbitrabiIity of any Claim shall ba decided by the arbitratax(s). (iii) The award of the azbitrators shall be accompanied by detailed written fzndings of fact and conclusions of law. Except as required by law or for confirmation of an award, neither a Party nor an arbitrator nay disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all Parties involved in the a.z'bitratiou. (e) Amendrrzent of Subsection. Notwithstanding any other provision of this Declaration, this Subsection 8 may not be amended prior to the expiration of 20 years froze the date of recording of this Declaration without the prior written consent of the Declarant. SIGNATURES ON FOLLOWING PAGE) [Rezxzainder of page intentionally left blank] 8/18lQ 8 DECLARANT: BiII Clark Homes of'GVilanin~;ton, L.L.C. a North Carolina Iimited liability coznpany By: _ Name: Title: Date Executed: STATE OF NORTH CAROLINA cauNTY or= I, a Notary Public in and for the State and County aforesaid, do certify that the following persons} personally appeared before me this day, each acknowledging to me that he or she voluntarily signed the foregoirxg instrument fnr the purposes stated therein and in the capacity indicated and that the identity of each was duly proven 1}y presentation of a driver's license. NAME: CAPACITX: MANAGER Off' BILL CLARK HOMES OF WILMINGTON, L,L.C. Witness my hand anal official seal, this the ,day of dune, 2008. {SEAL-STAMP ~ My Corrunission Expiz-es; Printed Name: Notary Public EXHIBIT A" Legal Description of Property EXHIBIT `B" Legal Description of Additional property