DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS CAPTAIN S POINT

Transcription

1 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS CAPTAIN S POINT DRAWN BY AND MAIL TO: Tim M. Kinsky, Esq. Parker, Pow, Adams & Bernstein L.L.P. (Box 10) 2500 Charlotte Plaza Charlotte, NC 28244

2 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS CAPTAIN S POINT ARTICLE 1 DEFINITIONS...2 Section 1.1 Additional Property...2 Section 1.2 Access Lots...2 Section 1.3 Approved Builder...2 Section 1.4 Articles of Incorporation...2 Section 1.5 Association...2 Section 1.6 Board of Directors...2 Section 1.7 Boatslips...3 Section 1.8 Bylaws...3 Section 1.9 Common Area or Common Areas...3 Section 1.10 Declarant...3 Section 1.11 Development...3 Section 1.12 Eligible Mortgagee...3 Section 1.13 Entrance Monuments...3 Section 1.14 Extra Boatslip...3 Section 1.15 Gazebo...3 Section 1.16 Lot or Lots...4 Section 1.17 Map...4 Section 1.18 Member...4 Section 1.19 Mortgage...4 Section 1.20 Mortgagee...4 Section 1.21 Multiple-Boatslip Lots...4 Section 1.22 Owner...4 Section 1.23 Pier or Piers...4 Section 1.24 Pond...4 Section 1.25 Property...4 Section 1.26 Public Roads...4 Section 1.27 Street Lights...5 Section 1.28 Subdivision...5 ARTICLE 2 PROPERTY SUBJECT TO THIS DECLARATION AND WITHIN THE JURISDICTION OF THE ASSOCIATION...5 Section 2.1 Property...5 Section 2.2 Additions to the Property...5 ARTICLE 3 PROPERTY RIGHTS...6 Section 3.1 Ownership of Common Areas...6 Section 3.2 Owners Rights to Use and Enjoy Common Areas...6 Section 3.3 Delegation of Use...7 i

3 Section 3.4 Declarant s Covenant to Convey Title to Common Area...7 ARTICLE 4 THE ASSOCIATION...7 Section 4.1 Membership...7 Section 4.2 Classes of Lots and Voting Rights...7 Section 4.3 Relinquishment of Control...8 Section 4.4 Availability of Documents...8 Section 4.5 Management Contracts...8 Section 4.6 Maintenance...8 Section 4.7 Reserve Fund...9 Section 4.8 Piers and Boatslips...9 Section 4.9 Pond...11 Section 4.10 Gazebos...11 Section 4.11 Architectural Control Committee...11 Section 4.12 Architectural Review Procedure...12 Section 4.13 Enforcement...13 Section 4.14 Effect of Failure to Act...14 Section 4.15 Right of Inspection...14 Section 4.16 Liability...14 Section 4.17 Compensation...14 Section 4.18 Ryland Homes Exemption...14 ARTICLE 5 COVENANT FOR ANNUAL AND SPECIAL ASSESSMENTS...14 Section 5.1 Creation of the Lien and Personal Obligation for Annual, Supplemental Annual, Special and Special Individual Assessments...14 Section 5.2 Purpose of Annual Assessments...15 Section 5.3 Payment of Annual Assessments Due Dates...15 Section 5.4 Maximum Annual Assessment...16 Section 5.5 Special Assessments for Capital Improvements...16 Section 5.6 Special Individual Assessments...17 Section 5.7 Assessment Rate...17 ARTICLE 6 COVENANT FOR BOATSLIP AND SPECIAL BOATSLIP ASSESSMENTS (FOR OWNERS OF EXTRA BOATSLIPS ONLY)...17 Section 6.1 Creation of the Lien and Personal Obligation for Boatslip, Supplemental Boatslip and Special Boatslip Assessments...17 Section 6.2 Purpose of Boatslip Assessments...18 Section 6.3 Payment of Boatslip Assessments: Due Dates...18 Section 6.4 Maximum Boatslip Assessment...19 Section 6.5 Special Assessments for Boatslip Improvements...19 Section 6.6 Assessment Rate...20 ARTICLE 7 GENERAL ASSESSMENT PROVISIONS...20 Section 7.1 Certificate Regarding Assessments...20 Section 7.2 Effect of Nonpayment of Assessments: Remedies of the Association...20 Section 7.3 Subordination of the Lien to Mortgage...20 ARTICLE 8 RESTRICTIONS...21 Section 8.1 Land Use, Building Type and Residential Restrictions ii

4 Section 8.2 Dwelling Size...21 Section 8.3 Building Construction and Quality...21 Section 8.4 Temporary Structures; Structure Materials...22 Section 8.5 Building Setback Lines...22 Section 8.6 Minor Setback Violations...23 Section 8.7 Combination or Subdivision of Lot...23 Section 8.8 Utility Easement...24 Section 8.9 Entrance Monuments Easement...24 Section 8.10 Fences, Walls and Mailboxes Section 8.11 Signs Section 8.12 Antennas; Satellite Dishes or Discs...25 Section 8.13 Lot Maintenance; Trash Disposal...25 Section 8.14 Offstreet Parking, Off-Water Boat Storage Section 8.15 Sewage Disposal...25 Section 8.16 Nuisances; Animals...26 Section 8.17 Diligent Construction...26 Section 8.18 [intentionally omitted...27 Section 8.19 Removal of Trees and Other Vegetation...27 Section 8.20 Marine Toilets...28 Section 8.21 Boat Ramp ARTICLE 9 INSURANCE...28 Section 9.1 Board of Directors Section 9.2 Premium Expense...29 Section 9.3 Special Endorsements...29 Section 9.4 General Guidelines...30 Section 9.5 Owner s Personal Property ARTICLE 10 RIGHTS RESERVED UNTO 1NSTITUTION LENDERS...30 Section 10.1 Obligation of Association to Eligible Mortgages Section 10.2 Requirements of Mortgagee...32 ARTICLE 11 CONDEMNATION...32 Section 11.1 Partial Taking Without Direct Effect on Lo...32 Section 11.2 Partial or Total Taking Directly Affecting Lots Section 11.3 Notice to Mortga...33 ARTICLE 12 GENERAL PROVISIONS...33 Section 12.1 Enforcement...33 Section 12.2 Severability...34 Section 12.3 Amendment...34 Section 12.4 Term iii

5 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS CAPTAIN S POINT THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS ( Declaration ) is made this day of January, 1996 by CHARTOWN, a North Carolina general partnership consisting of Town and Country Ford, Inc., and SMDA PROPERTIES LLC (Chartown is hereinafter referred to as Declarant ). All capitalized terms used herein shall have the meanings set forth in Article 1 or elsewhere in this Declaration. STATEMENT OF PURPOSE Declarant is the owner of certain property located in Mecklenburg County, North Carolina, which is more particularly described on that certain map recorded in Map Book 27, Page 102 in the Office of the Mecklenburg County Register of Deeds. Declarant desires to create on the property shown on that map an exclusive residential community of single-family residences to be named CAPTAIN S POINT (the Development ). Declarant desires to ensure the attractiveness of the Development, to prevent any future impairment thereof, to prevent nuisances and enhance the value and amenities of all properties within the Development, and to provide for the maintenance and upkeep of the Common Area within the Development. As part of such Common Area, Declarant desires to construct and provide for the maintenance and upkeep of lighted Entrance Monuments to be located at the entrance to the Development and the maintenance of the Pond, which Entrance Monuments and Pond will be for the common use and benefit of all Owners. In addition, as part of such Common Area, Declarant desires to construct one or more Piers, containing Boatslips, over the waters of Lake Norman adjacent to the Development. Furthermore, as part of such Common Area, Declarant reserves the right to construct one or more Gazebos on any Pier. The Access Lots, Piers, Boatslips and Gazebos will be for the common use and benefit of all Owners, each of whom are entitled to the use of at least one Boatslip as more particularly provided in this Declaration. Declarant desires to provide for a system whereby the Owners will pay for the maintenance and upkeep of the Common Areas; provided, however, any Owner entitled to the use of more than one Boatslip will pay an additional, proportionate share of the cost of maintenance and upkeep of the Access Lots, Piers, Boatslips and Gazebos. All Owners in the Development will pay for the costs associated with leasing the Street Lights from Duke Power Company and the cost of maintenance and upkeep of the Entrance Monuments and Public Roads (prior to their acceptance for public maintenance). To these ends, Declarant desires to subject the real property described herein to the covenants, conditions, restrictions, easement, charges and liens hereinafter set forth, each and all of which is and are for the benefit of said property and each owner thereof. Declarant further desires to create an organization to which will be delegated and assigned the powers of owning, maintaining and administering the Common Area, administering

6 and enforcing the covenants and restrictions contained herein, and collecting and disbursing the assessments and charges hereinafter created, in order to efficiently preserve, protect and enhance the values and amenities in the Development, to ensure the residents enjoyment of the specific rights, privileges and easement in the Common Area, to provide for the maintenance and upkeep of the Common Areas and amenities. To that end the Declarant has or will cause to be incorporated under North Carolina law, pursuant to the Articles of Incorporation attached hereto as Exhibit A and incorporated herein by reference, CAPTAIN S POINT OWNERS ASSOCIATION, INC., as a non-profit corporation for the purpose of exercising and performing the aforesaid functions, said corporation to be governed by the Bylaws attached hereto as Exhibit B and incorporated herein by reference. NOW, THEREFORE, Declarant, by this Declaration, does declare that all of the property described herein is and shall be held, transferred, sold, conveyed and occupied subject to the covenants, conditions, restrictions, easement, charges and liens set forth in this Declaration, which shall run with the real property described herein and be binding on all parties owning any right, title or interest in said real property or any part thereof, their heirs, successors and assigns, and shall inure to the benefit of each owner thereof. ARTICLE 1 DEFINITIONS Section 1.1 Additional Property shall mean and refer to additional real estate contiguous or adjacent to the Property, all or a portion of which may be made subject to the terms of this Declaration in accordance with the provisions of Section 2.2 of this Declaration. Section 1.2 Access Lots shall mean and refer to the ten (10) foot wide parcel between Lots 68 and 69 and labeled 10 Common Area or Access Lot on the Map, and any additional Access Lot(s) as may be shown on the Map and labeled similarly, for the common use and enjoyment of all Owners. Section 1.3 Approved Builder shall mean and refer to one or more persons or companies, in the business of building and selling homes to individuals, selected by Declarant to buy Lots and construct homes for sale in the Subdivision. Section 1.4 Articles of Incorporation shall mean and refer to the Articles of Incorporation for the Association attached as Exhibit A hereto and incorporated herein by reference. Section 1.5 Association shall mean and refer to CAPTAIN S POINT OWNERS ASSOCIATION, INC., a North Carolina non-profit corporation, its successors and assigns. Section 1.6 Board of Directors shall mean and refer to the Board of Directors of the Association, which shall be elected and shall serve pursuant to the Bylaws. 2

7 Section 1.7 Boatslips shall mean and refer to those certain fifty-eight (58) boatslips over the waters of Lake Norman, which Boatslips are designated as Boatslips 1 through 8, 11 through 16, 21 through 42, 45 through 54 and 59 through 70 on Exhibit C together with such additional Boatslips as Declarant may cause to be constructed in accordance with the terms of Section 2.2 of this Declaration (and which may be constructed at the end of the piers shown on Exhibit C ), and which Boatslips are more particularly addressed in Article 4 and Article 6 of this Declaration. Section 1.8 Bylaws shall mean and refer to the Bylaws for the Association attached as Exhibit B hereto and incorporated herein by reference. Section 1.9 Common Area or Common Areas shall mean and refer to the Access Lots, Piers, Gazebos, Boatslip, Entrance Monuments, Street Lights, Pond and Public Roads (prior to their acceptance for maintenance by the North Carolina Department of Transportation or other governmental entity), collectively, and any other property shown and designated on the Map as Common Area, Common Open Area, Common Open Space or COS. The Common Areas shall be owned by the Association for the common use, benefit and enjoyment of the Owners; subject to individual Lot Owners exclusive rights to use specified Boatslips. Section 1.10 Declarant shall mean and refer to CHARTOWN, a North Carolina general partnership consisting of Town and Country Ford, Inc. and SMDA PROPERTIES LLC Crescent Resources, Inc., its successors and assigns. Section 1.11 Development shall mean and refer to CAPTAIN S POINT, a singlefamily residential development proposed to be developed on the Property by Declarant. Section 1.12 Eligible Mortgagee shall mean and refer to an institutional lender holding a Mortgage that has notified the Association pursuant to Section 10.2 and requested all rights available under the Association s governing documents and this Declaration. Section 1.13 Entrance Monuments shall mean and refer to the easement areas reserved and granted by Declarant in Section 8.9 of this Declaration, over the parcels designated 15 L & SE or Landscape and Sign Easement (or similarly) on the Map over Lots 1 and 73 and/or over portions of the Common Area and the stone monuments and entrance signs located on such parcels, together with lighting, irrigation system, landscaping and other improvements to be constructed on such easements, to be used as an entryway for the Subdivision, and for the purposes set forth in Section 8.9. Section 1.14 Extra Boatslip shall mean and refer to any Boatslip greater than one (1) that is an appurtenance to a Lot, whether acquired by deed from Declarant or other conveyance as more particularly set forth in Section 4.8 of this Declaration. Section 1.15 Gazebo shall mean and refer to one or more gazebos that may be constructed on one or more Piers for the common use and enjoyment of all Owners, their families, guests and invitees as more particularly addressed in Section

8 Section 1.16 Lot or Lots shall mean and refer to the separately numbered parcels depicted on the Map, which Lots do not include the Common Area. Section 1.17 Map shall mean and refer to (i) the map of CAPTAIN S POINT Subdivision recorded in Map Book 27, Page 102 in the Office of the Register of Deeds for Mecklenburg County, North Carolina, and (ii) any revisions, supplements or amendments of such map or maps recorded in such Office. Section 1.18 Member shall mean and refer to every person or entity who holds membership in the Association. Section 1.19 Mortgage shall mean any mortgage or deed of trust constituting a first lien on a Lot. Section 1.20 Mortgagee shall mean the owner and holder of a Mortgage at the time such term is being applied. Section 1.21 Multiple-Boatslip Lots shall mean and refer those Lots in the Development which have, as an appurtenance to the Lot, the right to use an Extra Boatslip, whether acquired by deed from Declarant or other conveyance as more particularly set forth in Section 4.8 of this Declaration. Section 1.22 Owner shall mean and refer to the record owner, whether one or more persons or entities, of fee simple title to any Lot, including the Declarant if it owns any Lot, but excluding those having such interest merely as security for the performance of an obligation. Section 1.23 Pier or Piers shall mean and refer to that certain pier or piers, containing the Boatslips, which may be constructed over the waters of Lake Norman in the approximate location as shown on Exhibit C and elsewhere in the Subdivision in accordance with the terms of Section 2.2 of this Declaration and which Piers are more particularly addressed in Section 4.8 of this Declaration. Section 1.24 Pond shall mean and refer to that certain natural area consisting of a pond and surrounding land and labeled as Pond or Common Area on the Map, and shown as two (2) parcels containing approximately acres and acres, which shall be for the common use and benefit of the Owners, their families, guests and invitees as more particularly addressed in Section 4.9. Section 1.25 Property shall mean and refer to the property shown on the Map, including the Lots and Common Area, and Public Roads (prior to such roads being accepted for public maintenance by the North Carolina Department of Transportation or other governmental entity), together with any leasehold interest or easement which the Association has or may hereafter acquire in any property adjacent to the Development (including, but not limited to, any leases of any submerged land lying within the bed of Lake Norman). Section 1.26 Public Roads shall mean and refer to the road or roads and cul-de-sacs in the Subdivision dedicated to the public and shown on the Map, all to be maintained by 4

9 Declarant until accepted for public maintenance by the North Carolina Department of Transportation or other governmental entity. Section 1.27 Street Lights shall mean and refer to those certain streetlights which may be constructed upon and over the right of way of the Public Road which are to be maintained by Duke Power Company or other public utility company and which may be leased by the Association. Section 1.28 Subdivision shall mean and refer to CAPTAIN S POINT, as the same is shown on the Map. ARTICLE 2 PROPERTY SUBJECT TO THIS DECLARATION AND WITHIN THE JURISDICTION OF THE ASSOCIATION Section 2.1 Property. The real property which is and shall be held, transferred, sold, conveyed and occupied subject to this Declaration, and which is and shall be within the jurisdiction of the Association, is located in Mecklenburg County, North Carolina and is the Property, as defined above and as more particularly described and shown on the Map. Section 2.2 Additions to the Property. (a) Declarant may cause Additional Property to be annexed and made subject to the terms and scheme of this Declaration by filing a Supplemental Declaration in the Office of the Register of Deeds for Mecklenburg County, containing a description of the Additional Property and a statement by the Declarant of its intent to extend the operation and effect of this Declaration to the Additional Property. Declarant may also cause additional Piers and Boatslips adjacent to the Development or any Additional Property to be constructed and made subject to the terms and scheme of this Declaration by the filing of a Supplemental Declaration describing the location and number of Boatslips to be added and a statement by Declarant of its intent to extend the operation and effect of this Declaration to the additional Boatslips. Provided, however, that neither Declarant, Approved Builder nor the Association shall construct more docks than are approved, by Duke Power company (or its successors or assigns) pursuant to Declarant s original boatslip permit request for the Subdivision. Notwithstanding the foregoing, the covenants and restrictions established herein as applied to or imposed upon the Additional Property may be altered or modified by the Supplemental Declaration as provided in Subparagraph (b) below. (b) Any Supplemental Declaration may contain complementary additions to the covenants and restrictions contained herein as may be necessary in the judgment of the Declarant to reflect the different character of the Additional Property. In no event, however, shall any Supplemental Declaration revoke, modify or add to the covenants and restrictions contained herein with respect to the Property, nor revoke, modify, change or add to the covenants and restrictions established by previously filed Supplemental Declarations, without meeting the requirements for Amendment set forth in Section 12.3 of this Declaration. 5

10 (c) Notwithstanding anything in this Section 2.2 to the contrary, if and so long as there is at least one (1) Mortgage on a Lot insured by the U.S. Department of Veterans Affairs, any such annexation shall be in accordance with the general plans for the Subdivision previously approved by the U.S. Department of Veterans Affairs or shall have the vote or written consent of at least two-thirds (2/3) of all Class A Members. ARTICLE 3 PROPERTY RIGHTS Section 3.1 Ownership of Common Areas. Declarant shall convey to the Association the Common Areas to be owned by the Association. Notwithstanding the recordation of any Map or any other action by Declarant or the Association, all Common Areas (except for the Public Road upon its acceptance for public maintenance) shall remain private property and shall not be considered as dedicated to the use and enjoyment of the public. Section 3.2 Owners Rights to Use and Enjoy Common Areas. Each Owner shall have the non-exclusive easement and right to use and enjoy the Common Areas which shall be appurtenant to and shall pass with the title to his Lot, subject to the following: (a) the right of the Association to promulgate and enforce reasonable regulations governing the use of the Common Areas to insure the availability of the right to use the Common Areas to the Owners and the safety of all Owners on the Common Areas; (b) the right of the Association to suspend the voting rights of an Owner in the Association and the right of the Association to suspend the right to use certain or all of the Common Areas by an Owner for any period during which any assessment against his Lot remains unpaid, and for a period not to exceed sixty (60) days for any infraction of its published rules and regulations; (c) the right of the Declarant or the Association to grant utility, drainage and other easements across the Common Areas (by accepting a deed to a Lot, each Owner grants to the Association an irrevocable power of attorney for the purpose of granting such easements; provided however, as long as two (2) classes of Membership shall exist, prior approval by the U.S. Department of Veterans Affairs shall be obtained); (d) (e) the provisions of Section 4.8 below; the provisions of Article 8 of this Declaration; (f) the right of the Association to dedicate or transfer all or any part of the Common Area to any public agency, authority or utility for such purposes and subject to such conditions as may be agreed to by the Members. No such dedication or transfer shall be effective unless an instrument agreeing to such dedication or transfer is signed by two-thirds (2/3) of each class of Members and has been recorded. Also, so long as there is Class B Membership, dedication of any Common Area must also be approved by the U.S. Department of Veterans Affairs; 6

11 (g) the right of the Association, in accordance with the Articles of Incorporation and Bylaws (if permitted thereby), to borrow money secured by a mortgage against the Common Area for the purpose of improving the Common Area and facilities thereon. No mortgage of the Common Area shall be effective unless an instrument agreeing to such mortgage of Common Area is signed by two-thirds (2/3) of each class of Members. Also, so long as there is Class B Membership, mortgage of any Common Area must also be approved by the U.S. Department of Veterans Affairs; and (h) the right of the Association to exchange portions of Common Area with the Declarant for substantially equal areas of the properties for the purpose of eliminating unintentional encroachments of improvements onto portions of the Common Areas or any other purpose or reason. As long as there is Class B Membership, no such exchange of portions of Common Area with the Declarant shall be effective unless an instrument agreeing to such exchange has been approved by the U.S. Department of Veterans Affairs. Section 3.3 Delegation of Use. Any Owner may delegate, in accordance with the Bylaws, his right of enjoyment to the Common Areas and facilities located thereon to the members of his family, his guests, or tenants occupying the Owner s lot pursuant to a lease agreement. Section 3.4 Declarant s Covenant to Convey Title to Common Area. Declarant hereby covenants for itself, its successors and assigns, that it will convey fee simple title to its property designated herein as Common Area to the Association (save and except Common Area that forms a part of any Lot or the Public Roads) at such time as it conveys the first Lot to some person other than Declarant. The Common Area shall be free from any monetary liens but subject to easements of record including any easements established by this Declaration and expressly subject to an easement in favor of the Declarant to construct the Piers, Boatslips and Gazebos. Similarly, Declarant will convey to the Association such additional Common Area as is annexed in the future, immediately following its annexation pursuant to Article 2. The Association shall accept the conveyance of all such Common Area pursuant to this section. ARTICLE 4 THE ASSOCIATION Section 4.1 Membership. Every Owner of a Lot shall be a Member of the Association. Membership shall be appurtenant to and may not be separated from ownership of any Lot. Section 4.2 Classes of Lots and Voting Rights. The voting rights of the Membership shall be appurtenant to the ownership of Lots. There shall be two classes of Lots with respect to voting rights: (a) Class A Lots. Class A Lots shall be all Lots except Class B Lots as defined below. Each Class A Lot shall entitle the Owner(s) of said Lot to one (1) vote per Lot. When more than one person owns an interest (other than a leasehold or security 7

12 interest) in any Lot, all such persons shall be Members and the voting rights appurtenant to said Lot shall be exercised as they, among themselves, determine, but in no event shall more than one (1) vote be cast with respect to any Class A Lot. (b) Class B Lots. Class B Lots shall be all Lots owned by Declarant or Approved Builder which have not been conveyed to purchasers who are not affiliated with the Declarant or Approved Builder. Each Class B Lot shall entitle the Owner of said Lot to three (3) votes for each Class B Lot owned by it. Section 4.3 Relinquishment of Control. The Class B membership shall cease and be converted to Class A membership on the happening of either of the following events, whichever occurs earlier: (a) when the number of votes in the Class A membership held by Owners occupying full-time homes in the Subdivision equals the total number of votes outstanding in the Class B membership and no Additional Property remains which may be subject to the terms of this Declaration; or (b) upon the expiration of seven (7) full years after the recordation of this Declaration, unless Declarant, in its sole discretion, elects to convert the Class B Lots to Class A Lots at an earlier time. Section 4.4 Availability of Documents. The Association shall maintain current copies of the Declaration, the Bylaws and other rules concerning the Development as well as its own books, records, and financial statements available for inspection by all Owners, Mortgagees and insurers and guarantors of Mortgages that are secured by Lots. All such documents shall be available upon reasonable notice and during normal business hours. In addition, any Mortgagee may, at its own expense, have an audited statement prepared with respect to the finances of the Association. Section 4.5 Management Contracts. The Association is authorized and empowered to engage the services of any person, firm or corporation to act as managing agent of the Association at a compensation level to be established by the Board of Directors and to perform all of the powers and duties of the Association. Provided, however; that the term of any such agreement with a managing agent shall not exceed one (1) year and shall only be renewed by agreement of the parties for successive one (1) year terms. Any such contract shall be terminable by the Association with or without cause upon no more than ninety (90) days prior written notice to the manager without payment of a termination fee. Section 4.6 Maintenance. Prior to their acceptance for public maintenance, the Public Roads shall be maintained by Declarant until the Public Roads are accepted for maintenance by the Town of Cornelius, the North Carolina Department of Transportation or other governmental entity. Such maintenance shall include repair and reconstruction, when necessary. Maintenance of the Public Roads shall conform to the standard of maintenance (if one is ascertainable) which would be required by the North Carolina Department of Transportation or other governmental entity before it would accept such Public Roads for maintenance. 8

13 The Common Areas, together with all utilities, easement and amenities located within the Common Areas and not otherwise maintained by public entities or utilities, shall be maintained by the Association. (a) Maintenance of the Entrance Monuments shall include maintenance, repair and reconstruction, when necessary, of the stone monuments, signage, irrigation, planters and lighting located thereon and providing and paying for landscaping, utility charges for irrigation and lighting of the stone monuments and signage located thereon; (b) Maintenance of the Gazebos, Piers and Boatslips shall include the maintenance, repair and reconstruction, when necessary, of the Piers and Boatslips, including all structures, lighting, water lines and other fixtures, wire, railings and other facilities located thereon, providing and paying for utility charges therefore; (c) All Common Areas, including, but not limited to, the Access Lots, Pond, Entrance Monuments, Piers and Boatslips shall be clean, free from debris and maintained in an orderly condition, together with the landscaping thereon (if any) in accordance with the highest standards for private parks, including any removal and replacement of any landscaping, utilities, or improvements located therein; (d) The Association shall not be responsible for the maintenance of any Lot or any portion of any Lot or the improvements within the boundaries thereof. The Owners of such Lots shall be responsible for same. Section 4.7 Reserve Fund. The Association shall establish and maintain an adequate reserve fund for the periodic maintenance, repair and replacement of improvements located on all Common Areas which the Association is obligated to maintain and in order to fund unanticipated expenses of the Association or to acquire equipment or services deemed necessary or desirable by the Board of Directors. Such reserve fund shall be collected and maintained out of the Annual and Boatslip Assessments, as hereinafter defined, and as set forth in Section 5.2(f) and Section 6.2(g). Section 4.8 Piers and Boatslips. Declarant, Approved Builder and the Association shall have the exclusive right to construct the Piers and Boatslips, in the approximate location shown on Exhibit C, the Map or as otherwise shown in any Supplemental Declaration or other documents which may be filed pursuant to the provisions of this Declaration. Neither Declarant, Approved Builder nor the Association shall construct more Boatslips than are originally approved by Duke Power Company (or its successors or assigns) pursuant to Declarant s original boatslip permit request for the Subdivision. (a) Following the construction of the Piers and Boatslips as set forth above, Boatslips shall be designated for the exclusive use of the Owners of certain Lots and transferred among Owners as follows: (i) In a recorded deed or other recorded instrument, Declarant or Approved Builder shall designate one numbered Boatslip as an appurtenance to each individual Lot. Declarant or Approved Builder may also designate one or more Extra Boatslips as an appurtenance to any individual Lot and such Lot shall 9

14 thereafter be a Multiple-Boatslip Lot subject to the provisions of subparagraph (a)(ii) below. Such recorded deed or other recorded instrument shall operate to grant the Lot Owner the exclusive right and license to use the designated Boatslip and shall be conclusively deemed to establish a valid sublease of the designated Boatslip from the Association to the Lot Owner. Once designated in such deed or other recorded instrument, the exclusive right to use the designated Boatslip shall not be separated from ownership of the Lot to which it is appurtenant, but, rather, shall run with the title to such Lot unless the Boatslip is an Extra Boatslip and unless and until the right to use the designated Extra Boatslip is conveyed by recorded deed or other instrument as set forth in subparagraph (a)(ii) below; the Declarant s intent is that each Lot shall always have at least one Boatslip as an appurtenance to the Lot. Any deed, deed of trust, mortgage, transfer or other conveyance or encumbrance of a Lot shall also transfer, convey or encumber (as the case may be) the right to use the Boatslip appurtenant thereto, even if not expressly included therein. (ii) The exclusive right to use a particular Extra Boatsltp may be conveyed by recorded deed or other recorded instrument to another Owner. Upon such conveyance, the transferor s Lot shall cease to be a Multiple-Boatslip Lot (if no other Boatslip is appurtenant thereto) and the transferee s Lot shall thereafter be a Multiple-Boatslip Lot (if not already), and the right to use the transferred Boatslip shall then run with the title to such transferee s Lot as set forth in subparagraph (a)(i) above. A Boatslip shall not be conveyed, assigned or leased to anyone or any entity other than an Owner or the Association. (b) [intentionally omitted] (c) In the event that the Piers contain Boatslips which are not designated as an appurtenance to a Lot, Declarant and/or Approved Builder may convey such Boatslips to the Association. Such undesignated Boatslips shall be owned by the Association for the common use and enjoyment of all Owners, their families, guests and invitees, for the purpose of temporarily docking boats, and may not be leased or sold by the Association to (or used by) any other party or the public. No boat or other recreational vehicle shall be permitted to remain overnight in any undesignated Boatslip or Boatslip conveyed to the Association as set forth above. The use of the Piers and Boatslips is and shall be subject to each of the following: (i) rules and regulations for use promulgated by the Association; (ii) all laws, statutes, ordinances and regulations of all federal, state and local governmental bodies having jurisdiction thereon; (iii) rules and regulations for use established by Duke Power Company, its successors and assigns; and 10

15 (iv) the lease of the lake bed thereunder by Chartown (which has been subleased or assigned to the Association) from Duke Power Company, its successors or assigns, which lease currently is set to expire August 31, (d) The Board of Directors, pursuant to the Bylaws attached hereto as Exhibit B, shall adopt rules and regulations governing the use of the Piers and Boatslips and the personal conduct thereon of the Members and their families, guests, invitees and tenants. Should Members desire to amend such rules and regulations, then a meeting of the Members may be called and held, in accordance with Article 3 of the Bylaws, for the purpose of voting to amend such rules and regulations. If such a meeting is duly called and held, the Owners may direct the Board of Directors to make such amendments to the rules and regulations governing the use of the Piers and Boatslips, including additions to and deletions of portions of such rules and regulations, as are approved by a vote of the Members, in accordance with Article 3 of the Bylaws, and as are permitted under the Association s lease with Duke Power Company as to the lake bed over which the Piers and Boatslips are located. (e) The Piers may only be used by Owners, their families, guests, invitees or tenants occupying the Lot pursuant to a lease agreement. Each Boatslip may only be used by the Owner(s) of the Lot to which such Boatslip is appurtenant, their families, guests, invitees or tenants occupying the Lot pursuant to a lease agreement. Section 4.9 Pond. The Association shall maintain the Pond. The Pond shall be maintained for the common use and benefit of the Owners and may be used only by Declarant and its assigns and the Owners, their families, guests and invitees. Section 4.10 Gazebos. Declarant may construct and if constructed, the Association shall maintain one or more Gazebos on and over a portion of the Piers. The Gazebos shall be constructed and maintained for the common use and benefit of the Lot Owners and may be used only by Declarant and its assigns and the Owners, their families, guests and invitees in connection with their use of the Piers. Section 4.11 Architectural Control Committee. For so long as Declarant owns at least one (1) Lot in the Subdivision, Declarant shall annually appoint the members of the Architectural Control Committee ( ACC ), which will be composed of at least three (3) members, the exact number of members of the ACC being designated by Declarant from time to time for so long as Declarant has the right to appoint the members thereof, and thereafter by the Board. Each member shall be generally familiar with residential and community development design matters and knowledgeable about the Declarant s concern for a high level of taste and design standards within the Property. Members of the ACC appointed by Declarant need not be residents of the Subdivision and may be employees of Declarant. In the event of the death or resignation of any member of the ACC, Declarant, for so long as it has the authority to appoint the members of the ACC, and thereafter, the Board of Directors, shall have full authority to designate and appoint a successor. Members of the ACC may be removed and replaced at any time with or without cause, and without prior notice, by Declarant, for so long as Declarant has the right to appoint the members thereof, and thereafter by the Board of Directors. Subsequent to the conveyance of the last Lot in the Subdivision owned by Declarant (and earlier if Declarant specifically assigns this right to the Board of Directors), the Board of Directors shall designate 11

16 the number of and appoint the members of the ACC on an annual basis. At any time Declarant may elect not to designate the number of and/or appoint the members of the ACC and may assign this right to the Board of Directors. Section 4.12 Architectural Review Procedure. (a) Notwithstanding anything contained within this Declaration to the contrary, no Owner shall undertake on any Lot (i) the location of any completed Improvement(s) (as hereinafter defined) or any construction of any Improvement, which shall include, in addition to the actual erection of a dwelling and its appurtenances, any staking, clearing, excavation, grading or other site work, (ii) any landscaping, plantings or removal of plants, trees or shrubs other than general maintenance of landscaping located pursuant to previously approved landscaping plans, or (iii) any modification change or alteration of any Lot or dwelling thereon, whether functional or decorative, unless and until the type of size thereof, materials to be used in construction, exterior color scheme; exterior lighting plans, specifications and details thereof, and site plans, showing the proposed location of the dwelling, garage, and driveways upon the Lot, shall have been approved in writing by the ACC, and copies of said approved plans, specifications and details shall have been filed with the ACC. (b) The term Improvement(s) as used throughout this Declaration shall mean and include all buildings, storage sheds or areas, roofed structures, parking areas, loading areas, trackage, fences, walls, hedges, mass plantings, arbors, trellises, gazebos, poles, statuary, driveways, ponds, lakes, changes in grade or slope, site preparation, swimming pools and related structures, treehouses, children s playhouses, signs, exterior illumination, exterior antennae, solar panels or other similar receiving, transmission or energy generating equipment, dog houses, runs and pens, changes in any exterior color or shape and an new exterior constructed or exterior improvement exceeding one thousand dollars ($1,000) in cost which may not be included in any of the foregoing. The definition of Improvement does not include garden shrub or tree replacement which ordinarily would be expensed in an accounting practice which does not change exterior colors or exterior appearances. The definition of Improvement does include both original Improvements and all later changes and repairs to Improvements. (c) No subsequent alteration or modification of any existing Improvement, the construction, erection or installation of which was previously approved (or deemed approved) by the ACC hereunder shall occur prior to the ACC s prior written approval of all planned specifications therefor and a site plan therefor (notwithstanding the fact that the original Improvement was at one time approved or deemed approved by the ACC). The ACC shall consider the following criteria prior to issuing an approval or disapproval hereunder: (i) quality of workmanship and materials, adequacy of site dimensions; (ii) conformity and harmony of the external design, color, type and appearance of exterior surfaces; (iii) location with respect to topography and finished grade elevation and effect of location and use on neighboring Lots, Common Areas, easements, Public Roads and Improvements situated thereon; and 12

17 (iv) any other standards set forth within this Declaration (and any amendments hereto) or as may be set forth within bulletins promulgated by the ACC, or matters in which the ACC has been vested with the authority to render a final interpretation and decision. In all cases where ACC approval is required, final plans and specifications (including a site plan showing the location of the contemplated Improvements on the Site) for the proposed Improvements shall be submitted to the ACC for approval or disapproval. The ACC is authorized to request the submission of samples of proposed construction materials. Any modification or change to the ACC approved set of plans and specifications (specifically including, but without limitation, the above-described site plan) must again be submitted to the ACC for its inspection and approval. The ACC s approval or disapproval, as required herein, shall be in writing. Once the ACC has approved the plans and specifications for the proposed Improvements, the construction of such Improvements must be promptly commenced and diligently pursued to completion and if such construction is not commenced within the time set therefor by the ACC in the written approval (but in no event later than one (1) year after such approval), such approval shall be deemed rescinded and before construction of Improvements can thereafter be commenced on the site in question, the plans and specifications therefor must again be approved by the ACC pursuant to this Article. The ACC may from time to time publish and promulgate architectural standards bulletins which shall be fair, reasonable and shall carry forward the spirit and intention of this Declaration. Architectural standards bulletins or other guidelines issued by the ACC shall be used by the ACC as a guide to assist the ACC in reviewing any proposed plans, specifications and materials submitted to the ACC for approval. In any event, such architectural standards bulletins and/or guidelines may be revised and amended at any time by the ACC, in its sole discretion, and shall not constitute, in every event, the basis for approval or disapproval of plans, specifications or other materials submitted to the ACC for approval. Current copies of the architectural standards bulletins shall be available to interested persons at the principal office of the Association for a reasonable cost. Although the ACC shall not have unbridled discretion with respect to taste, design and any standards specified herein, the ACC shall be responsive to technological advances or general changes in architectural designs and materials and related conditions in future years and use its best efforts to balance the equities between matters of taste and design (on the one hand) and use of private property (on the other hand). Section 4.13 Enforcement. In addition to Declarant s and the Association s rights to enforce the provisions of this Declaration as set forth in Section 12.1 of this Declaration, the ACC shall have the specific, nonexclusive right to enforce the provisions contained in this Article and/or to prevent any violation of the provisions contained in this Article by a proceeding at law or in equity against the person or persons violating or attempting to violate any such provisions contained herein. In the event that the ACC, Declarant or the Association resorts to litigation to determine the propriety of any constructed Improvement, to remove any unapproved Improvement or otherwise to remedy a violation of this Article, the ACC, Declarant, or the Association, as applicable, shall be entitled to recover court costs, attorneys fees and expenses incurred in connection therewith, which costs, fees and expenses may be levied as a Special Individual Assessment against the offending Owner s Lot. 13

18 Section 4.14 Effect of Failure to Act. If the ACC fails to approve or disapprove the design of any proposed Improvements (for which approval is required pursuant to the terms of the Declaration) within forty-five (45) days after plans and specifications therefor, together with material samples and a site plan have been submitted and received, approval will not be required, and the requirements of this Article shall be deemed to have been fully satisfied, provided, that the plans and specifications required to be submitted shall not be deemed to have been received by the ACC if they contain erroneous data or present inadequate information upon which the ACC can arrive at a decision and the ACC requests additional materials or information in writing Notwithstanding the foregoing, the ACC shall have no right or power, either by action or failure to act, to waive or grant any variance relating to any mandatory restrictions specified in the Declaration. Section 4.15 Right of Inspection. The ACC shall have the right, at its election, to enter upon any of the Lots during (and after) preparation, construction, erection, or installation of any Improvements to determine that such work is being performed in conformity with the approved plans and specifications. Section 4.16 Liability. Neither the Association, the ACC, the officers, employees, agents, directors or members thereof, nor Declarant shall be liable for damages or otherwise to anyone submitting plans and specifications and other submittals for approval or to any Owner by reason of mistake of judgment, negligence or nonfeasance arising out of services performed pursuant to this Declaration. Section 4.17 Compensation. No member of the ACC shall be entitled to compensation arising out of services performed pursuant to this Article. The Association shall reimburse members of the ACC for reasonable out-of-pocket expenses incurred by such members in the performance of their duties as members of the ACC. Section 4.18 Ryland Homes Exemption. Declarant has selected The Ryland Group, Inc. (Ryland Homes) as an Approved Builder after reviewing its plans and specifications, and agreeing upon building standards and matters of taste and design. Consequently, the ACC shall have no authority nor jurisdiction over any Lot owned by The Ryland Group, Inc. (Ryland Homes) until such time as title to such Lot is conveyed to a subsequent Owner for occupancy. This Section 4.18 shall not be amended without the written consent of The Ryland Group, Inc. (Ryland Homes). ARTICLE 5 COVENANT FOR ANNUAL AND SPECIAL ASSESSMENTS Section 5.1 Creation of the Lien and Personal Obligation for Annual, Supplemental Annual, Special and Special Individual Assessments. The Declarant, for each Lot owned within the Property, hereby covenants, and each Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association Annual Assessments, Supplemental Annual Assessments, Special Assessments and Special Individual Assessments, as hereinafter defined, established and collected as hereinafter provided. Any such assessment charge, together with interest, costs, and 14

19 reasonable attorneys fees, shall be a charge and a continuing lien upon the Lot against which each such assessment or charge is made. Each such assessment or charge, together with interest, costs and reasonable attorneys fees, shall also be the personal obligation of the Owner of such Lot at the time when the assessment falls due. The personal obligation for delinquent assessments or charges shall not pass to an Owner s successors in title unless expressly assumed by them. Section 5.2 Purpose of Annual Assessments. The assessments to be levied annually by the Association against each Lot ( Annual Assessments ) shall be used as follows: (a) to repair, clean, maintain and reconstruct, when necessary, the Common Areas, including the Entrance Monuments, Pond, Access Lots, Gazebos, Piers and Boatslips, and all improvements thereon, such as paths, lighting and other fixtures, wires, railings, landscaping and irrigation, as more particularly set forth in Section 4.6 of this Declaration; (b) to provide and pay for all lighting of and water service to the Common Areas, to the extent deemed necessary for the safety and enjoyment of the Owners; (c) to pay all costs associated with the lease of the Street Lights from Duke Power Company including but not limited to, monthly lease payments and utility costs; (d) to pay all ad valorem taxes levied against the Common Areas and any other property owned by the Association; (e) to pay the premiums on all insurance carried by the Association pursuant hereto or pursuant to the Bylaws; (f) to pay all legal, accounting and other professional fees incurred by the Association in carrying out its duties as set forth herein or in the Bylaws; and (g) to maintain contingency reserves as to the amounts described in subsections (a), (b) and (c) above for the purposes set forth in Section 4.7 hereof in amounts as determined by the Board of Directors. Section 5.3 Payment of Annual Assessments Due Dates. The Annual Assessments provided for herein shall commence as to each Lot on the first day of the month following the month in which a Lot is conveyed to an Owner other than Approved Builder for occupancy. The Annual Assessments for the calendar year beginning January 1, 1996 shall be Three Hundred Eighty-Five Dollars ($385.00) per Lot, which amount shall be prorated from the annual amount and shall be due and payable in advance no later than July 31, The Annual Assessments for the calendar year beginning January 1, 1997 shall be Four Hundred Dollars ($400.00) per Lot and shall be due and payable in two (2) equal installments on January 31, 1997 and July 31, The Annual Assessments for each and every year beginning each January 1 thereafter shall be in an amount as set by the Board of Directors, in accordance with Section 4, and shall be due and payable in two (2) equal installments on January 31 and July 31 of each such calendar year. The Board of Directors shall fix the amount of the Annual Assessment as to each Lot for 15