PUBLIC OFFERING STATEMENT The Landings at Sugar Creek Condominium Pursuant to N.C.Gen. Stat. 47C et seq.

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2 PUBLIC OFFERING STATEMENT The Landings at Sugar Creek Condominium Pursuant to N.C.Gen. Stat. 47C et seq. 1. Name and address of the Declarant and the Condominium. a. Name of Declarant: Gray Eagle Partners, LLC b. Address of Declarant: P. O. Box 190, Nags Head, NC c. Name of Condominium: The Landings at Sugar Creek Condominium d. Address of Condominium: 110 W. Gray Eagle Street, Unit 102 Nags Head, NC General Description of the Condominium. Phase One of the Condominium consists of one building containing seven (7) Units, three (3) Units designated for non-residential use and four (4) Units designated for residential use. Phase One has been completed. Phase Two consists of one three-story wood framed building containing forty-one (41) Units, all of which are designated for residential use. Amenities, including an outdoor pool, and a community room have been constructed as part of Phase Two. Phase Two has been completed. 3. Number of Condominium Units. There are currently forty-eight completed and declared Units in the Condominium. 4. Copies of Declaration, Bylaws, and other Documents. a. Declaration: A copy of the recorded Declaration for the Condominium, along with a copy of the recorded First, Second and Third Amendments to the Declaration, accompany this Public Offering Statement. b. Bylaws. A copy of the Bylaws for The Landings at Sugar Creek Owners Association, Inc. c. Association Rules and Regulations: A copy of the Association Rules and Regulations accompanies this Public Offering Statement. d. Contracts: There are no contracts or leases to be signed by the purchaser at closing. 1

3 e. Contracts and Leases Subject to Cancellation by the Association: (1) Declarant will enter into contracts to provide landscaping services and maintenance, which contracts may be assigned to the Association. (2) Declarant will enter into contracts to provide services and maintenance on the sprinkler systems, fire alarm systems, and monitoring, which contracts may be assigned to the Association. (3) Declarant may enter into contracts to provide pest control services and maintenance, which contracts may be assigned to the Association. (4) Declarant will enter into contracts to provide elevator maintenance and repair services, which contracts may be assigned to the Association. 5. Current Balance Sheet and Projected Budget for the Association. Attached as Exhibit A is the Association s most recent balance sheet. Attached as Exhibit B is the Association s projected 2010 projected budget. As required by Section 47C-4-103(5) of the North Carolina General Statutes, the budget includes (a) a statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement; (b) a statement of any other reserves; (c) the projected common expense assessment by category of expenditures for the association; and (d) the projected monthly common expense assessment for each type of unit. The budget for the Association was prepared by the Declarant and does not incorporate any assumptions other than one hundred percent (100%) ownership of the Units within the first year following the first conveyance of a Unit to a purchaser. 6. Declarant-Provided Services. Declarant at the present time does not provide any services and does not pay for any expenses which are not shown in the Association s budget and which it expects may become a subsequent common expense of the Association. 7. Fees Due From Purchaser at Closing. Buyers of Units pay at closing an Initial Assessment/Contribution of $ to the Association, as provided by Section of the Declaration. 8. Existing Liens or Encumbrances on the Condominiuim. a. Declaration of Condominium and various recorded amendments thereto, copies of which are attached to this Public Offering Statement. 2

4 b. Matters shown on the recorded plats and plans of the Condominium. c. Easement to Virginia Electric and Power Company filed in Book 519, Page 429, Dare County Registry. d. Easement to Virginia Electric and Power Company filed in Book 1783, Page 130, Dare County Registry. e. The lien of Dare County and Town of Nags Head property taxes. f. Riparian rights to and title to that portion of the land lying below the mean high water mark of the Roanoke Sound. g. All general service and utility easements affecting the subject property. h. Tri-Party Agreement regarding septic maintenance to Dare County recorded in Book 1789, Page 324, Dare County Registry. 9. Declarant s Warranties. a. Each Unit is being sold AS IS and WITH ALL FAULTS and there are no express or implied warranties except as stated in this paragraph 9 and the contract of purchase. b. PURSUANT TO G.S. 47C-4-115(b), THE FOLLOWING WARRANTIES DESCRIBED ABOVE ARE EXCLUDED: (i) NO IMPLIED WARRANTY OF QUALITY THAT THE PREMISES ARE: (1) FREE FROM DEFECTIVE MATERIALS, (2) CONSTRUCTED IN A WORKMANLIKE MANNER, (3) CONSTRUCTED ACCORDING TO SOUND ENGINEERING AND CONSTRUCTION STANDARDS OR (4) MAY BE USED FOR A PARTICULAR PURPOSE, ARE MADE. (1) NO WARRANTIES ARE MADE AS TO THE CONDITION OF ANY HOT WATER HEATER, AIR CONDITIONER, KITCHEN EQUIPMENT OR APPLIANCE OR OTHER ITEMS CONSIDERED CONSUMER PRODUCTS UNDER THE MAGNUSEN-MOSS FEDERAL TRADE COMMISSION IMPROVEMENT ACT. DECLARANT WARRANTS, HOWEVER, THAT ALL SUCH EQUIPMENT WILL BE INSTALLED NEW AND THAT THE DECLARANT WILL DELIVER TO BUYER ANY MANUFACTURER S WARRANTIES THAT ARE BOTH APPLICABLE TO SUCH EQUIPMENT OR APPLIANCES AND FOR THE SOLE BENEFIT OF THE CONSUMER PURCHASER. (2) IMPROVEMENTS AND APPLIANCES INSTALLED BY DECLARANT AT THE BUYER S REQUEST AND EXPENSE, IF ANY, SHALL BE COVERED BY THE MANUFACTURER S OR CONTRACTOR S WARRANTY IF ANY. 3

5 (3) THE DECLARANT MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE CONDITION OR HEALTH OF ANY SHRUBS, TREES OR PLANTINGS LOCATED ON THE AREAS SURROUNDING THE BUILDINGS. THE DECLARANT WILL DELIVER TO THE ASSOCIATION ANY NURSERY S WARRANTIES THAT ARE BOTH APPLICABLE TO SUCH VEGETATION AND FOR THE SOLE BENEFIT OF THE UNIT OWNER S ASSOCIATION. c. NO ADDITIONAL EXPRESS OR LIMITED WARRANTIES, UNLESS REQUIRED BY LAW, ARE MADE BY THE DECLARANT. d. THE EXCLUSION OF WARRANTIES IS A PART OF THE BASIS OF THE BARGAIN AND CONSIDERATION FOR THE SALES CONTRACT BETWEEN THE DECLARANT AND THE PURCHASER. 10. Purchaser s Right to Cancel. The purchaser must receive this Public Offering Statement before signing a contract for purchase. No conveyance of title by deed can occur until seven (7) calendar days following the signing of a contract for purchase. The purchaser has the absolute right to cancel the contract to purchase during said seven (7) calendar day period without penalty. Pursuant to N.C.Gen. Stat. 47C-4-108)b), a purchaser electing to cancel a contract may do so by hand-delivering notice thereof to the Declarant or by mailing notice thereof by prepaid United States mail to Declarant or his agent for service of process 11. Judgments and Pending Suits. There are no known or recorded unsatisfied judgments or pending suits against the Association. 12. Escrow Deposit. Any escrow deposit or down payment made by a purchaser in connection with the purchase of a unit will be held in an escrow account pursuant to N.C.Gen.Stat. 47C The name of the escrow agent is Gray Eagle Partners, LLC, whose address is P. O. Box 190, Nags Head, NC 27959, telephone The earnest money held in the escrow account will bear interest and interest will accrue to the benefit of the Declarant. Pursuant to N.C.Gen.Stat. 47C-4-110, payments held in such escrow account shall be deemed to belong to the purchaser and not the Declarant for such period of time as the purchaser is entitled to cancel pursuant to N.C.Gen.Stat. 47C-4-108, or cancellation by the purchaser thereunder, whichever occurs first. All earnest money shall be held in escrow until the sale is closed, at which time it will be credited to Buyer, or until this Contract is otherwise terminated and it is disbursed in accordance with the provisions of the contract. 4

6 13. Restraints on Alienation. The Declaration provides that no Unit or any portion thereof may be transferred or conveyed as a time share, as same is defined in Chapter 93A, Article 4 of the North Carolina General Statutes, except as allowed in the Declaration of the Condominium. Leasing of Units is permitted subject to the specific requirements and conditions described in the Declaration. 14. Insurance Coverage. A description of the Association s insurance coverage for Phase One is set forth below: Insurance Limits Deductible Underwriter Property TIV $1,437, $2, QBE Insurance Co. Wind & Hail TIV $1,337, $25, (90% coinsurance) North Carolina Joint Underwriting Association General $1,000,000 each occurrence, QBE Ins. Co. Liability $2,000,000 aggregate (other limits provided on request Flood $1,300, $5, Selective Insurance Co. The insurance agent for Phase One insurance is J. Fletcher Willey Agency, Inc., P. O. Box 848, Nags Head, NC A description of the Association s insurance coverage for Phase Two is set forth below: Insurance Limits Deductible Underwriter Property TIV $5,483, $2, QBE Insurance. Corp. Wind & Hail TIV $5,483, $25, North Carolina Joint Underwriting Association General Liability $1,000,000 each occurrence, $2,000,000 aggregate (other limits provided on request QBE Insurance Corp. Flood TIV $5,483,900.0 $ Selective Insurance Co. The insurance agent for Phase Two insurance is J. Fletcher Willey Agency, Inc., P. O. Box 848, Nags Head, NC Each Buyer will be responsible for purchasing such Buyer s own insurance coverage for any portion of the Unit and its contents that are not covered by the insurance carried by the Association. Each Buyer is responsible for reviewing with his or her insurance agent the definition and boundaries of such Buyer s Unit as described in the Declaration of the Condominium. Such review is necessary so that each Buyer will procure sufficient insurance coverage to protect the Buyer from casualty losses to the Buyer s unit and its contents. 5

7 15. Fees for Use of Common Elements. Other than the annual and special maintenance assessments provided by the Condominium Declaration, there are no present and no known or anticipated future fees or charges to be paid by unit owners for the use of the Common Elements and other Condominium facilities. 16. Completion of Improvements. There are no additional improvements labeled MUST BE BUILT on the plans and plats of the Condominium. 17. Zoning and Land Use Requirements. The condominium is zoned C-2 by the Town of Nags Head, North Carolina. Portions of the Property are subject to compliance with the Coastal Area Management Act and the Coastal Area Management Act Regulations, as they may be amended from time to time. A Coastal Area Management Act permit may be necessary for any land disturbing activity. The Condominium is subject to all use restrictions as set forth in the Declaration for the Condominium as amended. 18. Alienation of Common Elements. Pursuant to N.C. Gen. Stat. Sec. 47C-3-112(a), portion of the common elements of the Condominium may be conveyed by the Association or subjected to a security interest if persons entitled to cast at least eighty percent (80%) of the votes allocated to units, not owned by the Declarant agree to the action. 19. Maximum Number of Units Which Declarant May Create. The maximum number of Units which the Declarant reserves the right to create is fiftysix (56) Units. The maximum number of Units per acre is Restrictions on Future Units. All Units which may be created under Development Right retained by the Declarant will be restricted to residential use. 21. Declarant s Development Rights. The Declarant has reserved Development Rights as more particularly set forth in Section 29.2 of the Declaration. In summary, the Development Rights include the right to create additional units, not to exceed a total of fifty-six (56) units, from Development Property described on Exhibit E to the Declaration. The Development Rights are subject to the 6

8 limitations and conditions set forth in the Declaration. The Declarant s Development Rights expire twenty (20) years after the date the Declaration was recorded in the Dare County Registry. 22. Change in Allocated Interest of Units. As set forth in the Declaration, the allocated interests of each Unit will be equal, and the maximum extent to which each Unit s allocated interests may be changed shall be to reduce such allocated interests to 1.786%. 23. Compatibility of Future Buildings with Existing Buildings. Both existing buildings are reasonably compatible with each other in terms of quality of construction and architectural style, but no other assurances are made. Specifically, the Declarant makes no assurances as to the final design or size of the building or the style and size of Units which may be created pursuant to a Development Right. 24. Other Future Improvements. No other future improvements are contemplated to be constructed. 25. Locations of Future Buildings. No assurances are made as to the location of any future building or other future improvements to be construction in the Condominium. 26. Types and Sizes of Future Limited Common Elements. No assurances are made regarding whether any Limited Common Elements created in connection with the exercise of a Development Right will be the same general types or sizes as Limited Common Elements created in other parts of the Condominium. 27. Proportion of Future Limited Common Elements to Existing Limited Common Elements. No assurances are made regarding whether the proportion of any Limited Common Elements created in connection with the exercise of a Development Right will be approximately equal to the proportion created in other parts of the Condominium. 28. Application of Existing Restrictions to Future Units. All restrictions in the Declaration, as amended from time to time, affecting use, occupancy, and alienation of units will apply to any future Units created by Declarant under a Development Right. 7

9 29. Effect of Non-Exercise of Development Rights. Declarant makes no assurances, other than those specifically set forth above, relating to any Development Right which are exercised or not exercised by the Declarant. THE STATEMENTS SET FORTH ABOVE ARE ONLY SUMMARY IN NATURE. A PROSPECTIVE PURCHASER SHOULD REFER TO THE ENTIRE SET OF DISCLOSURE MATERIALS AND HIS OR HER SALES CONTRACT. ALL DISCLOSURE MATERIALS AND CONTRACTS ARE IMPORTANT DOCUMENTS AND IF NOT UNDERSTOOD, THE PROSPECTIVE PURCHASER SHOULD SEEK COMPETENT LEGAL ADVICE. 8

10 Exhibit A Sugar Creek Owners Association, Inc Balance Sheet As of December 31, 2009 Assets Current Assets Cash in Bank ECB $ Accounts Receivable $2, Total Current Assets $2, Fixed Assets Total Assets $2, Liabilities and Equity Current Liabilities Trade Accounts Payable $ Total Current Liabilities $ Net Assets $2, Total Liabilities and Net Assets $2,638.60

11 Exhibit B Sugar Creek Owners Association, Inc Projected Operating Budget for Income: Member assessment 48 $4,300/unit 12 months $206, Total Income $206, Expenses: General and Administrative: Management 10% $20, Property and liability insurance $12, Wind insurance $63, Flood insurance $5, Umbrella Insurance $1, Depreciation, administrative and other $1, Total expenses $104, Common area maintenance: Lawn repair and maintenance $5, Lighting repair / maintenance $ Irrigation repair and maintenance $ Electricity & Elev. Phones $9, Water $6, Miscellaneous repairs and maintenance $9, Elevators $10, Pool/Community Room $9, Septic Tank Maintenance $9, Total expenses $60, Total Expenses $164, Reserve for Repairs $41, Income over Expenses $0.00

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95 Exhibit A Sugar Creek Owners Association, Inc Balance Sheet As of December 31, 2009 Assets Current Assets Cash in Bank ECB $ Accounts Receivable $2, Total Current Assets $2, Fixed Assets Total Assets $2, Liabilities and Equity Current Liabilities Trade Accounts Payable $ Total Current Liabilities $ Net Assets $2, Total Liabilities and Net Assets $2,638.60

96 Exhibit B Sugar Creek Owners Association, Inc Projected Operating Budget for Income: Member assessment 48 $4,300/unit 12 months $206, Total Income $206, Expenses: General and Administrative: Management 10% $20, Property and liability insurance $12, Wind insurance $63, Flood insurance $5, Umbrella Insurance $1, Depreciation, administrative and other $1, Total expenses $104, Common area maintenance: Lawn repair and maintenance $5, Lighting repair / maintenance $ Irrigation repair and maintenance $ Electricity & Elev. Phones $9, Water $6, Miscellaneous repairs and maintenance $9, Elevators $10, Pool/Community Room $9, Septic Tank Maintenance $9, Total expenses $60, Total Expenses $164, Reserve for Repairs $41, Income over Expenses $0.00