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 any Assessment duly levied by the Association as provided in this Declaration. Such Assessments, together with interest, costs, late charges and reasonable attorneys' fees, shall also be a charge on the land and shall be a continuing lien upon the Lot against which each such Assessment is made. Each such Assessment, together with interest, costs, late charges, and attorneys' fees (including all such costs and fees incurred in connection with collection of the Assessment), shall also be the personal obligation of the person who was the Owner of such Lot at the time when the Assessment fell due. The personal obligation for delinquent Assessments shall not pass to an Owner's successor in title unless the lien for such delinquent Assessments had been Recorded prior to title transfer or unless expressly assumed by the successor in title. When Ownership of a Lot changes, Assessments which have been levied but are not yet due and payable in full shall be prorated between the transferor and the transferee based on a 365-day year.

 

4.2 Liability for Assessments. The Owner of each Lot shall be personally liable for all Assessments imposed on such Lot pursuant to this Declaration, on a joint and several basis. Declarant shall not be obligated to pay any Assessment levied against any Lots owned by it unless a Residence has been constructed on the Lot and such Residence is occupied. No Owner may exempt himself or herself from liability for his Assessments by abandoning any Lot owned by him or her.

 

(a) Association Budget. The Board shall prepare, or cause the preparation of, an operating budget (the "Budget") for the Association for each calendar year. The Declarant shall adopt the initial Budget of the Association. Every Budget shall set forth sums required by the Association, as estimated by the Board, to meet its annual Common Expenses. Within thirty (30) days after adoption by the Board of any proposed regular or special Budget of the Association, the Board shall set a date for a meeting of the Owners to consider ratification of the Budget not less than fourteen nor more than sixty days after mailing of the summary. Unless at that meeting the Owners of a majority of the votes in the Association are allocated or any larger percentage specified in the governing documents reject the Budget, in person or by proxy, the Budget is ratified, whether or not a quorum is present. In the event the proposed Budget is rejected or the required notice is not given, the periodic Budget last ratified by the Owners shall be continued until such time as the Owners ratify a subsequent Budget proposed by the Board. General Assessments on each Lot shall commence as follows: (i) for Lots on which Declarant has built a Residence, General Assessments on such Lots shall commence upon the earlier of the Close of Escrow for the initial transfer of such Lot with a completed Residence, or upon the occupancy of such Residence; (ii) for Lots sold by Declarant to a Participating Builder, General Assessments shall commence on the earlier of the date of the Close of Escrow for the Participating Builder's sale of the Lot with a completed Residence, or upon the occupancy of such Residence, but in no event later than one hundred twenty (120) days after the date that the Participating Builder has completed construction of such Residence and/or obtained a certificate of occupancy for the Residence; and (iii) for Lots sold by Declarant to anyone who is not a Participating Builder, General Assessments shall commence on the Close of Escrow. After the Turnover Date, the Members of the Association who are obligated to pay General Assessments based on a particular Budget may reject said Budget at a special meeting of the Association by a Majority Vote. After the Turnover Date, the Board shall not increase the amount of the General Assessments in any year by more than fifteen percent (15%) without a Majority Vote, in addition to the ordinary Budget ratification process. If during the year the Budget proves to be inadequate for any reason, including nonpayment of any Owner's Assessment, the Board may prepare a supplemental Budget for the remainder of the year. A supplemental Budget that results in an increase in an Owner's Assessments shall be ratified pursuant to this Section. Until General Assessments have commenced on all Lots, Declarant shall have the option for each calendar year of either paying an amount equal to the General Assessments which would have been due with respect to the unoccupied Lots owned by it had General Assessments commenced thereon or paying to the Association an amount equal to the excess, if any, of actual expenses of the Association over General Assessments levied.

 

(b) Levy of General Assessment. In order to meet the costs and expenses projected in its Budget, the Board shall determine and levy on every Owner a General Assessment. The Association's Budget shall be divided by the number of Lots to determine the amount of the General Assessment applicable to each Lot. Except as provided in Section 4.3 with respect to unoccupied Lots owned by the Declarant or a Participating Builder, each Owner's Prorata Share of General Assessments shall be calculated by multiplying the number of Lots owned by the Owner by the amount of the General Assessment for each Lot. General Assessments shall be payable in a lump sum annually on the date determined by the Board or may be billed on a quarterly or monthly basis if the Board so elects.

 

At the time of the first transfer of title to a Lot to a purchaser/Owner other than Declarant or a Participating Builder, the first purchaser shall pay to the Association at the Close of Escrow, an Initial General Assessment which is in addition to the initial working capital contribution. The Initial General Assessment is the pro-rata amount of the current General Assessment that the Board has assessed against the Lot for the year in which the Lot is purchased, which amount shall be prorated on a 365-day per year basis. The Declarant, its successor or assigns shall not be responsible for paying the balance of the General Assessment which is not paid as the first purchaser's Initial General Assessment, or any other fee or assessment which is assessed or due prior to the termination of the Development Period. The Initial General Assessment is the property of the Association.

 

(d) Amount of General Assessment. After ratification of the Budget by the Owners as set forth in Section 4.3 (a), the Board shall notify the Owners of the amount of the General Assessment payable by each Owner for an Assessment Period at least thirty (30) days in advance of beginning of such Assessment Period. Notice of the General Assessment shall thereupon be sent to each Owner; provided, however, that failure to notify an Owner of the amount of a General Assessment shall not render such General Assessment void or invalid and each Owner shall be obligated for such General Assessment even if no notice is given, and/or notice is given late. Any failure by the Board, before the expiration of any Assessment Period, to fix the amount of the General Assessment hereunder for the next Assessment Period, shall not be deemed a waiver or modification in any respect of the provisions hereof or a release of any Owner from the obligation to pay the General Assessment, or any installment thereof, for that or any subsequent Assessment Period.

 

(e) Assessment Period. The Assessment Period for General Assessments shall be a calendar year. The General Assessment for the preceding Assessment Period shall continue until a new Budget is approved. Upon any revision of the Budget by a supplemental Budget, the Board shall, if necessary, recalculate the General Assessment levied against the Owners and give notice of the same in the same manner as the initial levy of a General Assessment for the Assessment Period. The Assessment Period for any other Assessment shall be as determined by the Board.

 

(a) Capital Improvement Work. In addition to the General Assessments authorized by this Article, the Board may levy Capital Improvement Assessments at any time for the purpose of paying the cost of any installation, construction, reconstruction, repair or replacement of any capital improvements ("Capital Improvement Work") in or on a Common Area, or for such other purposes as the Board may consider appropriate. Capital Improvement Assessments shall require a Majority Vote (if there are two Classes, Capital Improvement Assessments shall require the Majority Vote of both Classes). The total cost of the Capital Improvement Work shall be divided by the number of Lots to determine the amount of the Capital Improvement Assessment applicable to each Lot. Each Owner's Prorata Share of the Capital Improvement Assessment shall be calculated by multiplying the number of Lots owned by the Owner by the amount of the Capital Improvement Assessment for each Lot. Capital Improvement Assessments shall be payable in one lump sum, or in installments, as determined by the Board (and as approved by a Majority Vote of each Class). The Association may charge interest on any Capital Improvement Assessment payable in installments, as determined by the Board (and as approved by a Majority Vote of each Class), and such interest shall become part of the installments due. Capital Improvement Assessments may be levied either before or after the Capital Improvement Work is done, in the discretion of the Board.

 

(b) Special Facilities. If the Association determines that costs incurred for Capital Improvement Work are in connection with facilities shared in common by one or more, but fewer than all, of the Lots, then the Capital Improvement Assessment for such Capital Improvement Work shall be assessed only against the Owners of the Lots served by such facilities. In such event, the total cost of the Capital Improvement Work shall be divided by the number of Lots served by such facilities to determine the amount of the Capital Improvement Assessment applicable to each Lot. Each Owner's Prorata Share of such Capital Improvement Assessment shall be calculated by multiplying the number of Lots owned by the Owner by the amount of the Capital Improvement Assessment for each Lot, and shall otherwise be on terms as permitted by this Section 4.4.

 

4.5 Special Assessments. The Association may levy Special Assessments against one or more Lots as provided in this Declaration. Special Assessments shall be as determined by the Board in accordance with this Declaration. Special Assessments shall be payable in one lump sum, or in installments, as determined by the Board. The Association may charge interest on any Special Assessment, as determined by the Board, and such interest shall become part of the installments due.

 

 

4.7 Accounts. Any Assessments collected by the Association shall be deposited in one or more Federally insured institutional depository accounts established by the Board. The Board shall have exclusive control of such accounts and shall maintain accurate records thereof No withdrawal shall be made from said accounts except to pay for charges and expenses authorized by this Declaration.

 

4.8 Waiver of Homestead or exemption Rights Under Law. Each Owner hereby waives, to the extent of any liens created pursuant to this Article, the benefit of any homestead or exemption law in effect at the time any Assessment or installment thereof becomes due and payable pursuant to the terms hereof

 

4.9 Records and Financial Statements. The Board shall prepare or cause to be prepared for any fiscal year in which the Association levies or collects any Assessments, a balance sheet and an operating (income/expense) statement for the Association which shall include a schedule of delinquent Assessments identified by the number of the Lot and the name of the Lot Owner; provided, however, such documents need not be prepared by a certified public accountant unless requested by the Board or the Owners by a Majority Vote. The annual financial statement of the Association need not be audited unless (i) the total of all Assessments for the year for all Lots is $50,000 or more, and (ii) the audit is not waived by at least 67% of Class A votes at a meeting of the Association at which a quorum is present. The Board shall cause detailed and accurate records of the receipts and expenditures of the Association to be kept specifying and itemizing the maintenance, operating, and any other expense incurred. Such records, copies of this Declaration, the Articles and the Bylaws, and any resolutions authorizing expenditures of Association funds shall be available after the Turnover Date for examination by any Owner at convenient weekday hours upon reasonable advance notice.

 

4.10 Certificate of Assessment. A certificate executed and acknowledged by the treasurer or the president of the Association (or an authorized agent thereof, if neither the president nor treasurer is available) stating the indebtedness for Assessments and charges, or lack thereof, upon any Lot shall be conclusive upon the Association as to the amount of such indebtedness on the date of the certificate, in favor of all persons who rely thereon in good faith. Such a certificate shall be furnished to any Owner or any Mortgagee of a Lot within a reasonable time after request, in Recordable form, at a reasonable fee. Unless otherwise prohibited by law, any Mortgagee holding a lien on a Lot may pay any unpaid Assessments or charges with respect to such Lot, and, upon such payment, shall have a lien on such Lot for the amounts paid of the same priority as the lien of its Mortgage.

 

4.11 Contribution to Working Capital Fund. In connection with the Close of Escrow for the closing of the sale of each Lot to an Owner other than Declarant, the initial Owner of such Lot (including a Participating Builder who acquires a Lot or Lots from Declarant) shall make a nonrefundable working capital contribution payment to the Association for an initial working capital fund (`Working Capital Fund"), which contribution shall be in an amount equal to Three Hundred Fifty Dollars ($350.00) per Lot (the "initial Working Capital Contribution") or such other amount as the Board determines from time to time is appropriate. The Initial Working Capital Contribution shall not be considered as an advance payment of any Assessments. The Working Capital Fund may be used as determined by the Board.