MYSTIC MOUNTAIN ESTATES COMMUNITY MEETING

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1 MYSTIC MOUNTAIN ESTATES COMMUNITY MEETING APRIL 21, 2012 OUTLINE ON THE POTENTIAL FORMATION 1 OF A HOMEOWNERS ASSOCIATION AND THE TRANSFER OF CONTROL I. BACKGROUND Mystic Mountain Estates was approved for subdivision in the early 1970s. The Pennsylvania Uniform Planned Community Act first became stat law in December of The first units in Mystic Mountain were sold in To date, The Southern Columbia Corporation (the TSCC ) is the legal owner of all portions of Mystic Mountain that have not been conveyed to third-party purchasers. As planned, there are 423 lots within Mystic Mountain and 225 have been sold by TSSC. Many of the remaining, unsold lots are burdened with environmental and municipal restrictions that prevent their future sale and development. To date, TSCC has been responsible for maintaining all the open area and common area of Mystic Mountain. Recently, certain lot owners stated that it was their belief that it was in the best interests of the lot owners in Mystic Mountain Estates to form a unit owners association. Each lot within Mystic Mountain Estates sold to a third-party purchaser was transferred subject to a common set of Restrictive Covenants. A copy of the Restrictive Covenants is attached hereto as Appendix A. There is no recorded covenant or deed restriction anticipating the formation of a homeowners association that would own common elements and collect assessments for the Mystic Mountain Estates. TSCC is open to the idea of forming a mandatory unit owners association that could assume ownership and the common areas. 1 This Outline is for informational purposes only, and should not be construed as a contract or an offer to contract. Nothing stated herein shall bind any party.

2 II. PROPOSED ULTIMATE GOALS Transition of the Mystic Mountain Estates from a private community organized and operated by TSCC to a planned community organized and operated pursuant to Pennsylvania Uniform Planned Community Ac ( UPCA ), as amended, 68 Pa. C.S.A. 5101, et seq. After a transition, all common areas of Mystic Mountain Estates, including its undeveloped areas and roadways, will be owned by a mandatory unit owners association (a HOA ). After a transition, the HOA would govern Mystic Mountain Estates subject to all provisions of the UPCA. III. WHAT WILL ULTIMATELY CHANGE AFTER A TRANSITION? After the transition, TSCC will no longer own the roadways and the areas that will not be developed. A Unit Owners Association will own and control the common areas. The Unit Owners Association will be operated as a corporation i.e., elected officers will manage the affairs of Mystic Mountain pursuant to authority defined in the Declaration and the By-laws. TSCC will retain ownership of all lots that are still intended for sale to a third party, as well as some other areas. IV. WHAT ARE SOME OF THE BENEFITS? After a transition, the Unit Owners will control the Mountain. Succession from the TSCC to the HOA is made pursuant to a known statutory scheme, which will ensure continuity and control by individuals with a long term interest in the community. Ensures the participation of all current lot owners in the transition and future ownership and operation of Mystic Mountain. TSCC cannot effectively transfer control to a HOA until 80% of the lot owners vote to opt-in to the statutory scheme of the Pennsylvania Uniform Planned Community Act. V. FUTURE AUTHORITY OF A HOMEOWNERS ASSOCIATION Once adopted by 80% of the lot owners, the new HOA will have the statutory authority to, among other things: Adopt and amend bylaws and rules and regulations.

3 Adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners. Hire and terminate managing agents and other employees, agents and independent contractors. Institute, defend or intervene in litigation or administrative proceedings, or engage in arbitrations or mediations, in its own name on behalf of itself or two or more unit owners on matters affecting the planned community. Make contracts and incur liabilities. Regulate the use, maintenance, repair, replacement and modification of common elements. Impose and receive payments, fees or charges for the use, rental or operation of the common elements. Exercise any other powers necessary and proper for the governance and operation of the association. 68 Pa.C.S.A VI. WHAT WILL BE THE NEW GOVERNING DOCUMENTS A. Declaration. The declaration for a planned community will contain, among other provisions: The name of the planned community A legally sufficient description of the real estate included in the planned community. Description or delineation of the boundaries of each unit, including the unit's identifying number. A description of any controlled facilities and the obligations of the association for the maintenance, improvement, repair, replacement, regulation, management, insurance or control of the controlled facilities. A description of any limited common facilities and any limited controlled facilities and limited common expenses, if any, and how they are assessed. An allocation to each unit of a portion of the votes in the association and a percentage or fraction of the common expenses of the association. 68 Pa.C.S.A B. By-Laws. The bylaws of the association will provide for all of the following:

4 The number of members of the executive board and the titles of the officers of the association. Election by the executive board of a president, treasurer, secretary and any other officers of the association the bylaws specify. The qualifications, powers and duties, terms of office and manner of electing and removing executive board members and officers and filling vacancies. Which, if any, of its powers the executive board or officers may delegate to other persons or to a managing agent. Which of its officers may prepare, execute, certify and record amendments to the declaration on behalf of the association. The method of amending the bylaws. 68 Pa.C.S.A C. HOA Plans. The new HOA plans will show all of the following: The name, location and dimensions of the planned community. The location and dimensions of all existing improvements. The intended location and dimensions of any contemplated improvement to be constructed anywhere within the planned community labeled with MUST BE BUILT or NEED NOT BE BUILT. The location and dimensions of any convertible real estate, labeled as such. The location and dimensions of any withdrawable real estate, labeled as such. The location and dimensions of any additional real estate, labeled as such. To the extent feasible, the location and dimensions of all easements serving or burdening any portion of the planned community. The location and dimensions of any vertical unit boundaries not shown or projected on plans recorded under subsection (c) and that unit's identifying number. All other matters customarily shown on land surveys. 68 Pa.C.S.A VII. SUMMARY PROPOSAL FOR FORMING THE HOA, OPTING-IN TO THE UPCA, AND MAKING THE TRANSITION 1. File appropriate paperwork with the Pennsylvania Department of State to form a Non-Profit Corporation that will act as the mandatory unit owners association for Mystic Mountain.

5 2. Draft HOA Plans for Mystic Mountain that will comply with the UPCA. 3. Draft the governing documents for the planned community i.e., the Declaration and the By-Laws. 4. Secure municipal approval of the HOA. 5. Secure approval of 80% of the lot owners of a Transition and Adoption Agreement that adopts the HOA Plans and the Governing Documents. 6. Record a Transition and Adoption Agreement with the Columbia County Recorder of Deeds. VIII. WHAT S NEXT Indicate your general interest in proceeding forward by completing the Non-Binding Statement of General Interest form at the end of this packet and returning it to TSCC If sufficient interest in expressed, TSCC has authorized the Law Offices of Vincent B. Mancini & Associates to produce a draft copy of: (1) Declaration; (2) By-Laws; and, (3) HOA Plans. Once the aforementioned documents are completed, a second meeting will be called to present those documents to the community for review and comment. A formal transition will not take place until 80% of the lot owners sign and notarize the Transition and Adoption Agreement If sufficient interest is not expressed, Mystic Mountain will continue to be maintained pursuant to the Deed Covenants.

6 Appendix A Sample Deed Covenants

7 MYSTIC MOUNTAIN ESTATES COMMUNITY MEETING Non-Binding Statement On General Interest I, owner of within Mystic Mountain Estates: [ ] do have a general interest in seeing the formation of a homeowners association and the subsequent transition of control to that homeowners association; or [ ] do not have a general interest in seeing the formation of a homeowners association and the subsequent transition of control to that homeowners association; Please provide me with future information and/or contact me at Mailing Address: Address: Phone Number:

DECLARATION OF COVENANTS, RESTRICTIONS, EASEMENTS, CHARGES AND LIENS FOR MYSTIC MOUNTAIN ESTATES, A FLEXIBLE PLANNED COMMUNITY

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WHEREAS, to date, TSCC has been responsible for maintaining all the open area and common area of Mystic Mountain Estates;

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