DECLARATION OF COVENANTS AND RESTRICTIONS OF APPLE VALLEY FARM

Transcription

1 This copy of the Declaration incorporates the original Declaration and all Amendments. This copy is being supplied as a convenience. The recorded documents are available in the Rutherford County Registry, or by contacting Management. RUTHERFORD COUNTY NORTH CAROLINA DECLARATION OF COVENANTS AND RESTRICTIONS OF APPLE VALLEY FARM THIS DECLARATION OF COVENANTS AND RESTRICTIONS, MADE AS OF June 16, 1997 BY PAUL D. NEALON AND ADELE H. NEALON (his wife) owners, herein jointly called developer on behalf of themselves, their successors, grantees and assigns, hereby record this Declaration of Covenants and Restrictions, herein and in related documents referred to as Declaration : 1. SUBJECTION The fee simple title to the lands located in Rutherford County, North Carolina owned by Developer and shown in the attached Exhibit A, subject to permitted changes by the developer and final survey upon the transfer of common areas to the Apple Valley Farm Property Owners Association, Inc., as Apple Valley Farm Cluster Development (Plat prepared by Professional Surveying and Engineering, David Odom, PE, licensed surveyors dated May 25, 1997 and recorded in the Rutherford County Office of the Register of Deeds, Book 18 Page 20) are by this Declaration subjected to these Covenants and Restrictions. Except as may be provided herein, these Covenants and Restrictions shall run with the land and shall be and remain binding on the purchasers thereof, their heirs, executors, administrators, successors and assigns. a 2. PLAN OF DEVELOPMENT AND NAME The Developer constructed 46 residential/recreation vehicle units and associated improvements designated Apple Valley Farm, a Cluster Development, herein after called Development. b c 3. NAME The use of the Apple Valley Farm name is hereby governed: 3.1 APPLE VALLEY FARM The name Apple Valley Farm is the property of the Association and is registered as a ficticous name in the Public Record of Rutherford County, North Carolina. d 3.2 ASSOCIATION The name of the Association is Apple Valley Farm Property Owners Association, Inc. The Association is incorporated as a non-profit North Carolina corporation. Permission is hereby granted to use the Apple Valley Farm name as part of the name of the Association and as name of the Development, namely, Apple Valley Farm. 4. DEFINITIONS The terms used herein shall have the meanings stated in the Laws of the State of North Carolina and as follows, unless the context otherwise requires: a Amended in Deed Book 820, Page 759, recorded May 20, 2003 b Amended in Deed Book 820, Page 759, recorded May 20, 2003 c Amended in Deed Book 1104, Page 238, recorded April 28, 2015 d Amended in Deed Book 1104, Page 238, recorded April 28,

2 4.1 UNIT A parcel of the property which is subject to exclusive ownership. 4.2 UNIT NUMBER The number designated on the survey to identify a specific unit. 4.3 UNIT OWNER The owner (s) of record of a unit. 4.4 OWNERSHIP LIMITATION The number of persons or entities that may own a unit. 4.5 ASSESSMENT The share of funds required for the payment of common expenses which from time to time is assessed against the unit owner. Assessments made for capital improvements shall be designated and require a favorable vote of 66% of the eligible votes. 4.6 ASSOCIATION The corporation responsible for the operation of the common elements and management of the affairs of the Development, including the enforcement of the Rules and Regulations and the Covenants and Restrictions. 4.7 BOARD OF ADMINISTRATORS The Board of Directors responsible for the administration of the Association, sometimes herein referred to as the Board. 4.8 COMMON ELEMENTS The portions of the property not included and designated as residential/recreation vehicle units, including: Land. As designated Common Area in the Site Plan Exhibit A All parts of the improvements not included within the units Easements, streets and roadways Installations for the furnishing of services to more than one unit or to the common elements, such as electricity, water and sewer. 4.9 LIMITED COMMON ELEMENTS Those portions of the common elements which are reserved for the use of a certain unit or units to the exclusion of other units COMMON EXPENSES All expenses and assessments properly incurred by the Association COMMON SURPLUS The excess of revenues to the Association over expenses incurred by the Association PERSON The individual, corporation, trustee or other legal entity capable of holding title to a unit or membership in the Association SINGULAR, PLURAL, GENDER Whenever the context permits, the use of the plural shall include the singular, the singular shall include the plural and the use of any gender shall be deemed to include all genders DOCUMENTS The Declaration and its attached exhibits, which set forth the nature of the property rights in the Development and the covenants running with the land which govern these rights. All the documents shall be subject to the provisions of the Declaration RESIDENTIAL/RECREATION VEHICLE PARCEL The unit together with the undivided share in the common elements which is appurtenant to the unit ASSOCIATION PROPERTY The lands, buildings and personal property subject to Association ownership, whether or not contiguous and all improvements thereon and all easements and rights appurtenant thereto OPERATION The administration and management of the Association property and affairs MAINTENANCE PERIOD - A period of time, not to exceed 60 days, when facilities are closed for repair and maintenance of roads, utilities and buildings. Such period shall be at the discretion of the Board. e 4.19 PERMITTED RECREATION VEHICLE Shall define the type, size and condition of recreation vehicles allowed to park on the units. e Amended in Deed Book 820, Page 759, recorded May 20,

3 MOTORCOACH A Motorcoach shall be a motorized vehicle that combines transportation and living quarters. Motorcoaches, RVIA type A, shall be a complete living unit designed as full time living quarters which have been entirely constructed on a bare specially designed frame or chassis. It shall be fully equipped with kitchen, living, sleeping and bathroom facilities and be equipped with the ability to carry and store fresh water and sewage. Type A Motorcoaches shall not be less than 32 feet long and 8 feet wide. The motorcoach shall be manufactured as a complete living unit and shall be designed for access between the driving and living sections. f g 4.20 MEMBER IN GOOD STANDING A unit owner with no delinquent assessments or dues owing more than 30 days, or who has not been notified in writing, at his last known address in the Association records, of the delinquency DEVELOPER Paul D. Nealon and Adele H. Nealon were the original developers of Apple Valley Farm. The Developers have assigned all their rights in the Development and as defined in this Declaration to Apple Valley Farm Property Owners Association, Inc. h 5. UNITS SHALL BE CONSTITUTED AS FOLLOWS: 5.1 Each unit and all appurtenance thereto, for all purposes, constitute a separate parcel, which may be owned in fee simple and which may be conveyed, transferred and encumbered independent of all parts of the Development property, subject only to the provisions of the Declaration, Association documents and applicable laws. 5.2 BOUNDARIES Each unit shall be bound by the front, rear and side lines (parametric boundaries) as drawn on the survey and shall be subject to easements as shown on the Site Plan and survey. 5.3 EXCLUSIVE USE AND OWNERSHIP LIMITATION Each unit owner shall have exclusive use of his unit. Ownership shall be by no more than two (2) parties (a husband and wife constituting a single party), in which case unit shall be owned as tenants in common. Under no circumstance shall ownership be divided into time periods, such as found in timeshare arrangements. 5.4 APPURTENANCES The ownership of each unit shall include, and there shall pass as appurtenances thereto whether or not described separately, all of the right, title and interest of a unit owner in the property of the Association, which shall include, but not be limited to: COMMON ELEMENTS An undivided share in the common surplus and property, real and personal, held by the Association ASSOCIATION MEMBERSHIP and an undivided share in the common surplus and property, real and personal, held by the Association. 5.5 EASEMENTS The following non-exclusive easements from the Developer to (as applicable) the unit owner, to the Association and its employees, agents and hired contractors, to the utility companies, unit owner s families, guests, invitees and to governmental and emergency services BUT NOT TO THE GENERAL PUBLIC, are hereby created and granted: INGRESS AND EGRESS Easements over common areas for the ingress and egress to units and public ways. f Amended in Deed Book 820, Page 759, recorded May 20, 2003 g Amended in Deed Book 1043, Page 349, dated May 21, 2012 h Amended in Deed Book 1104, Page 238, recorded April 28,

4 5.5.2 MAINTENANCE, REPAIR, REPLACEMENT Easements through the units and common elements for operation, maintenance, repair and replacements. Such access is to be during normal daylight hours except in cases of emergency UTILITIES Easements through the units, common elements and limited common elements for conduits, ducts, plumbing, wiring, and other common facilities for furnishing services to other units and the common elements PUBLIC SERVICES Access to the property and to the units for emergency, regulatory, law enforcement and other public services in the lawful performance of their duties. 5.6 MAINTENANCE The responsibility for maintenance of a unit shall be as follows: BY THE ASSOCIATION Except as otherwise provided in this Declaration, the Association is responsible for causing the common elements to be maintained, repaired, and replaced when necessary and to assess the unit owners as necessary to recover the costs of such maintenance, repair, or replacement except that the costs of maintenance, repair, or replacement of a limited common element shall be assessed as provided in this Declaration. Each unit owner shall afford to the Association and when necessary to another unit owner access through the unit owner's lot reasonably necessary for any such maintenance, repair, or replacement activity. The Association shall maintain, repair, and replace at the Association s expense: i (a) Wiring, piping and other mechanical or electrical or other installations or equipment serving the common elements or more than one unit. In the case of the water and electric service, the Association s responsibility ends at, and includes, the meter servicing the unit. j (b) Provided that if the items in (a) are in need of repair or replacement due action or negligence by a unit owner, his family, invitee, lessee or guest, in that event the work shall be done under the direction of the Association at the expense of the unit owner, who shall be responsible for all damages, costs, liability and attorney fees, if any (c) All incidental damage to the unit caused by work done or ordered by the Association shall be promptly repaired by and paid for by the Association BY THE UNIT OWNER The responsibility of the unit owner shall be as follows: (a) To repair, replace and maintain, at his expense, all portions of his unit except the portions to be maintained, repaired and replaced by the Association. The unit owners responsibility specifically includes the unit driveway, wiring, piping, ramp, patio and landscaping, water and electric service to the unit, beginning at the connection where the service leaves the meter servicing the unit. k (b) Except for those portions of the Common Property which the Association is required to maintain and repair, each Unit Owner shall, at such Unit Owner s expense, maintain such Unit, and all components thereof, in good and tenantable condition and repair, and shall be responsible for the repair, maintenance and replacement, if necessary, of all improvements, fixtures, equipment, landscaping and personal property located within such Owner s Unit. i Amended in Deed Book 1043, Page 349, dated May 21, 2012 j Amended in Deed Book 1043, Page 349, dated May 21, 2012 k Amended in Deed Book 1043, Page 349, dated May 21,

5 5.6.2(c) If a unit owner is legally responsible for damage inflicted on any common element, the Association may direct such unit owner to repair such damage, or the Association may itself cause the repairs to be made and recover damages from the responsible unit owner (d) If damage is inflicted on any unit by an agent of the Association in the scope of the agent's activities as such agent, the Association is liable to repair such damage or to reimburse the unit owner for the cost of repairing such damages. The Association shall also be liable for any losses to the unit owner. l 5.7 ALTERATIONS AND IMPROVEMENTS No owner shall make any alterations in the portions of the improvements which are maintained by the Association or remove any portion thereof or make any additions thereto or impair any easement. 5.8 COMMON ELEMENTS The Common Elements shall be owned by the unit owner in such undivided shares as set forth in Exhibit B No action for partition of the common elements shall lie The maintenance and operation of the common elements shall be the responsibility of the Association, which shall not, however, prohibit management contracts Each unit owner and the Association shall be entitled to use the common elements in accordance with their intended purposes, but no such use shall hinder or encroach upon the rights of other owners to use the common elements Material alteration of or substantial additions to the common elements may be effectuated by a 66% affirmative vote of the voting interests at a meeting at which a quorum is present. Provided, however, that the Association is authorized to enter into an agreement, to acquire leaseholds, memberships and other possessory or use interests in lands or facilities such as country clubs, golf courses, marinas and other facilities whether contiguous or not to the lands of the Association if there are intended to provide enjoyment, recreation and other use or benefit to the unit owners. m n 6. FISCAL MANAGEMENT The fiscal management of the Association including budget, fiscal year, assessments, lien for and collection of assessments and accounts shall be set forth herein in the articles and in the By-Laws. 7. ASSOCIATION Administration of the Association shall be by and through the Board of Directors. The Association may: (1) Adopt and amend bylaws and rules and regulations; (2) Adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from lot owners; (3) Hire and discharge managing agents and other employees, agents, and independent contractors; (4) Institute, defend, or intervene in litigation or administrative proceedings on matters affecting the planned community; (5) Make contracts and incur liabilities; l Amended in Deed Book 1104, Page 238, recorded April 28, 2015 m Amended in Deed Book 1104, Page 238, recorded April 28, 2015 n Amended in Deed Book 1104, Page 238, recorded April 28,

6 (6) Regulate the use, maintenance, repair, replacement, and modification of common elements; (7) Cause additional improvements to be made as a part of the common elements; (8) Acquire, hold, encumber, and convey in its own name any right, title, or interest to real or personal property, provided that common elements may not be conveyed or subjected to a security interest; (9) Grant easements, leases, licenses, and concessions through or over the common elements; (10) Impose and receive any payments, fees, or charges for the use, rental, or operation of the common elements other than the limited common elements and for services provided to lot owners; (11) Impose reasonable charges for late payment of assessments, not to exceed the greater of twenty dollars ($20.00) per month or ten percent (10%) of any assessment installment unpaid and, after notice and an opportunity to be heard, suspend privileges or services provided by the association (except rights of access to lots) during any period that assessments or other amounts due and owing to the association remain unpaid for a period of 30 days or longer; (12) After notice and an opportunity to be heard, impose reasonable fines or suspend privileges or services provided by the association (except rights of access to lots) for reasonable periods for violations of the declaration, bylaws, and rules and regulations of the association; (13) Impose reasonable charges in connection with the preparation and recordation of documents, including, without limitation, amendments to the declaration or statements of unpaid assessments; (14) Provide for the indemnification of and maintain liability insurance for its officers, executive board, directors, employees, and agents; (15) Assign its right to future income, including the right to receive common expense assessments; (16) Exercise all other powers that may be exercised in this State by legal entities of the same type as the association; and (17) Exercise any other powers necessary and proper for the governance and operation of the association. o 8. INSURANCE The insurance which shall be carried on the property shall be governed by the following provisions: 8.1 ASSOCIATION TO PURCHASE All insurance policies except those insuring an individual unit owner separately shall be purchased by the Association. 8.2 UNIT OWNERS Each unit owner may obtain at his own expense, insurance coverage upon his personal property and for his personal liability. 8.3 COVERAGE CASUALTY The common buildings and all other insurable improvements upon the land and all personal property owned by the Association shall be insured in an amount equal to the current insurable replacement value thereof (exclusive of excavation and foundations) as determined from time to time to account for inflation, as follows: o Amended in Deed Book 1104, Page 238, recorded April 28,

7 8.3.1 LOSS OR DAMAGE BY FIRE, WINDSTORM AND OTHER HAZARDS covered by standard extended coverage endorsement SUCH OTHER RISKS as from time to time customarily shall be covered with respect to building similar in construction, location and use as the buildings, including but not limited to, floor insurance, vandalism and malicious mischief, if available PUBLIC LIABILITY AND PROPERTY DAMAGE in such amounts and forms necessary to protect the Association WORKERS COMPENSATION AND UNEMPLOYMENT COMPENSATION to meet the requirements of the law. 8.4 PREMIUMS To be paid by the Association and charged as operating expense. 8.5 BENEFIT AND PROCEEDS All insurance policies purchased by the Association shall be for the benefit of the Association, and the unit owners and their mortgages as to their respective interests and shall provide that all proceeds in excess of $10, payable as a casualty loss shall be paid to a North Carolina bank as may be approved by the Board of Directors. Such bank is to be referred to and serve as the Insurance Trustee. The Insurance Trustee shall not be liable for payment of premiums nor for the renewal of the policy, nor for the sufficiency of coverage, nor for the form and contents of the policies, nor for the failure to collect any proceeds. The duty of the Insurance Trustee shall be to receive such proceeds as are paid and to hold and be to receive such proceeds as are paid and to hold and disburse them as provided in Paragraph 9, next following. 9. RECONSTRUCTION OR REPAIR OF CASULATY DAMAGE If any part of the common elements or units shall be damaged or destroyed by casualty, the same shall be repaired or replaced unless 75% of the owners in the Association vote against such repair or replacement, in which event all proceeds shall be distributed to the unit owners or their mortgagees as their interests may appear. 9.1 REPLACEMENT AND REPAIR shall be substantially in accordance with the asbuilt plans and specifications. 9.2 CERTIFICATION The Insurance Trustee may rely on the certification by the Board, signed by the president and secretary, as to whether or not the damaged property is to be reconstructed or repaired. Upon the request of the Insurance Trustee this certification shall be delivered as soon as practical. 9.3 ESTIMATE OF COSTS Immediately after a casualty causing damage to property which the Association under Paragraph has the responsibility to insure, the Association shall obtain reliable and detailed estimates of the cost to repair or replace in a condition as much as possible to that prior to the casualty. Such costs may include professional fees and premiums as the Board desires. 9.4 CALLS FOR FUNDS If the proceeds for payment of costs will not be sufficient to defray the estimated costs of reconstruction and repair by the Association (including the aforementioned professional fees and premiums) the additional expense shall be paid by the unit owners in the Association directly affected by the damage in proportion to their interest in the damaged property. Such unit owners may be specially assessed to pay for repairs and reconstruction as may be necessary to meet said expenses. 9.5 CONSTRUCTION FUNDS The funds for payment of the cost to repair or replace damaged property shall consist of insurance proceeds and special assessments collected by the Association from unit owners. Such funds shall be placed in trust and the Insurance Trustee 7

8 shall disburse such funds in payment of costs upon the request of the Association, signed by an officer of the Association and by the architect or contractor, stating the sum to be paid, certification that the payment is due and just and describing the work and/or materials for which payment is due. 9.6 SURPLUS If after all expenses have been paid there is a surplus ins the trust fund the proceeds are to be paid first to those assessed in the proportion in which they were assessed and then any surplus remaining shall become part of the common surplus. 9.7 INSURANCE ADJUSTMENTS The Board shall have the exclusive right to adjust with the insurance company all losses under all policies purchased by the Association. 10. USE RESTRICTIONS The use of the property of the Association shall be in accordance with the Rules and Regulations attached as Exhibit C or as they may be amended as provided in Paragraph 10.2 herein and the following specific provisions: 10.1 LAWFUL USE All applicable valid laws, zoning ordinances and regulations of all governmental bodies having jurisdiction shall be observed. The responsibility for meeting the requirements of governmental bodies shall be the same as the responsibilities for the repair and maintenance of the property concerned as expressed earlier in this Declaration REGULATION Reasonable regulations concerning the use of the Association property may be made and amended from time to time by a 75% favorable vote of the voting interests as a meeting at which a quorum is present. Copies of the regulations shall be furnished by the Association to all unit owners. No new or amended regulation may be enforced until approved by 75% of the eligible unit owners. Changes in Exhibit C, Rules and Regulations, which do not affect this Declaration shall not constitute a change in this Declaration and need not be recorded in Public Record. No regulation may discriminate against any group or class of unit owner. p 10.3 USE OF THE UNITS is restricted to residential and recreational purposes. Nothing herein shall restrict a unit owner from engaging in a business that involves computers, telefax or other equipment commonly used in home offices to conduct business activities. There shall be no exterior signs indicating the business use. Activity shall not create client or patron traffic RECREATION VEHICLES PERMITTED Only vehicles that are classified as CLASS A as defined in Paragraph no less than 32 feet in length shall be allowed to park on the unit. All vehicles shall be approved by the Developer or Association as to type and condition and shall be annually inspected and approved. qr 10.5 UNIT RESTRICTIONS It is the intention of the Association that when unoccupied each unit shall blend into the woods and surroundings with no structure or feature except the vehicle pad, patio and hookup facility visible. Therefore, each unit shall be maintained in the following manner and shall comply as follows: s The Rules and Regulations shall establish the manner in which a unit must be maintained. Specifically, no item may be placed on the unit that may create hazardous or health threatening conditions, or prove unsightly or noisy. t p Amended in Deed Book 1104, Page 238, recorded April 28, 2015 q Amended in Deed Book 820, Page 759, recorded May 20, 2003 r Amended in Deed Book 1043, Page 349, dated May 21, 2012 s Amended in Deed Book 1104, Page 238, recorded April 28, 2015 t Amended in Deed Book 1104, Page 238, recorded April 28,

9 The Board shall govern all construction on the unit. Temporary structures shall be approved by the Board of Directors and shall be limited to portable screen rooms and patio enclosures. u v 10.6 NO PERMANENT RESIDENCE No unit shall be occupied in such a manner as to constitute a permanent residence or be construed as a mobile home. 11. DISPUTE RESOLUTION In accordance with North Carolina General Statute 7A-38.3F, Section1(j), this Association is notifying its members that they may initiate voluntary mediation under NCGS 7A-38.3F, in order to try and resolve a dispute with this Association. However the payment of Association assessments or any fines or fees associated with the collection of assessments is specifically exempt from this voluntary mediation statute. w x 12. COMPLIANCE AND DEFAULT The Association and each unit owner shall be governed by these Covenants and Restrictions and other Association Documents and shall comply with the terms and provisions thereof as they exist or shall be amended and/or adopted from time to time FAILURE TO COMPLY shall be grounds for relief, which relief may include but not be limited to an action to recover damages or injunctive relief or both. Actions may be maintained by the Association or any unit owner In any such proceeding, the prevailing party shall be entitled to recover the costs of the proceeding and such reasonable attorney fees as may be awarded by the court In the event of a grievance or any owner against the Association, the Board of Directors or a director, officer or member of the Association, a period of 20 days shall be allowed, prior to taking legal action, to resolve the grievance NO WAIVER OF RIGHTS The failure of the Association or any unit owner to enforce any covenant, restriction, rule or regulation or any other provision of the Association Documents shall not constitute a waiver of the right to do so thereafter as to subsequent or other infractions. 13. AMENDMENTS Amendments to this Declaration shall be made as follows: 13.1 An amendment may be proposed by the Board of Directors or by an ten (10) unit owners in good standing and may be considered at any meeting of the owners, special or regular, of which due notice has been given in accordance with the By-Laws, which due notice has been given in accordance with the By-Laws, which notice shall give the substance of the proposed amendment. Passage shall be evidenced by a certificate executed in recordable form signed by the president or vice-president and secretary of the Association that is has been enacted by the affirmative vote of the required percentage of the unit owner (which vote may be evidenced by written approval of owners not present, however not by proxy) and the separate written joinder of mortgagees where required shall include the recording and/or amended and which shall become effective upon recording in the Public Records CORRECTORY AMENDMENTS Whenever is shall appear that there is a defect, error or omission in any of the Association documents, a plurality of the voting unit owners in u Amended in Deed Book 820, Page 759, recorded May 20, 2003 v Amended in Deed Book 1104, Page 238, recorded April 28, 2015 w Amended in Deed Book 1104, Page 238, recorded April 28, 2015 x Amended in Deed Book 1104, Page 238, recorded April 28,

10 good standing in the Association at a meeting at which there is a quorum shall be the required percentage, or the procedure set forth in North Carolina Law may be used REGULAR AMENDMENTS An Amendment which does not change the configuration or the size of any unit in any material way, materially alter or modify the appurtenances to a unit, change the percentages of ownership of the common elements, sharing of the common expenses may be enacted by a 75% vote, of the voting interest in good standing in the Association EXTRAORDINARY AMENDMENTS An amendment which will have the effect of doing any of the things mentioned in 13.3 above shall require the affirmative vote of all of the y record units owners of the affected units and otherwise required by these documents. 14. TERMINATION The Association shall be terminated in the following manner: 14.1 By the agreement of 80% of the owners, which agreement shall be evidenced by an instrument or instruments executed in a manner required for the conveyance of land. Such termination shall become effective when recorded in the public record. Such termination of the Association shall not remove the covenants and restrictions on each unit as recorded nor shall it void the requirements which have been met to establish the cluster development as approved by the Rutherford County Planning Commission on May 28, OWNERSHIP OF COMMON ELEMENTS AFTER TERMINATION shall be by tenants in common in undivided shares to be owned by the unit owners, and the holders of mortgages and liens against the common elements formerly owned by the Association shall have mortgages and liens against the undivided shares of the unit owners. Such undivided shares shall be set forth in Exhibit B. All funds of and held by the Association except fore reasonably necessary expenses of winding up shall be disbursed to the unit owners and mortgagees as their interest may appear in the share set forth in Exhibit B. The costs incurred in connection with the termination the Association shall be common expense FOLLOWING TERMINATION The property may be partitioned and sold upon the application of any owner. Provided, however, that if the Board of Directors, serving as trustees for the assets of the Association and interests of the unit owners, mortgagees and/or lien holders, following termination determines to accept an offer for the sale of the Association property, each unit owner by acceptance of his deed to his unit, be deemed to have granted power of attorney to the Board of Directors to execute such deeds and other documents required to effect a sale. In such event, any action for partition shall be held in abeyance pending sale, and upon the consummation of the sale shall be discontinued by all parties thereto. z 15. RIGHTS OF MORTGAGEES Where an institutional mortgagee or the Association or his successor or assigns holds a first mortgage of record obtains title to a unit through deed in lieu of foreclosure or by foreclosure, such mortgagee and its successors and assigns shall not be liable for assessments against such unit or to share in the common expenses which became due prior to acquisition of title unless it is secured by a claim of lien recorded prior to the recordation of the mortgagee s title. aa y Amended in Deed Book 1104, Page 238, recorded April 28, 2015 z Amended in Deed Book 1104, Page 238, recorded April 28, 2015 aa Amended in Deed Book 1104, Page 238, recorded April 28,

11 16. ASSESSMENTS To provide the funds necessary for the proper operation and management of the Development, the Association has been granted the right to make, levy and collect assessments against the owners of all units. The following provisions shall govern the making, levying and collection of such assessments and the payment of the costs and expenses of operating and managing the Development and the Association DETERMINATION OF ASSESSMENTS Assessments by the Association against each unit and each owner of a unit shall be on a pro rata share of the total of the assessments to be made against all unit owners and their units as set forth in attached Exhibit B. Should the Association become owner of any unit(s), the assessment which would be due and payable by the unit(s) shall be levied ratably against all other unit owners after a deduction for any rent or other income that may be attributable to the unit(s), based upon their proportionate interests in the common elements exclusive of any interest therein appurtenant to any unit(s) owned by the Association TIME FOR PAYMENT The assessment levied against the owner of each unit for his unit shall be payable annually in advance on such dates as shall be fixed from time to time by the Board. The Board, at their sole discretion, may allow installment payments (quarter, semiannually) of the annual assessment. bb 16.3 ANNUAL BUDGET The Board shall in accordance with the By-Laws of the Association, establish an annual budget in advance of each fiscal year, which shall correspond to the calendar year required to properly operate, manage and maintain the Development and the Association including, when deemed necessary or advisable by the Board, a reasonable allowance to be collected during the year. Upon adoption of each annual budget by the Board, copies thereof shall be delivered to each unit owner and the assessment for the year shall be based upon such budget. Failure to deliver a copy of the budget to a unit owner shall, however, not affect the liability of such owner for such assessment. Should the Board at any time and from time to time, in its sole discretion, determine that the amount of money assessed for the year is or may be insufficient to meet the costs of operation, management and maintenance of the Development or in cases of emergencies, the Board shall have the authority to levy such additional assessment or assessments as it shall deem necessary RESERVE FUND The Board in establishing each annual budget, shall, when deemed necessary or desirable, include therein a sum to be collected and maintained as reserve fund for replacement of the common elements and personal property held for the joint use and benefit of the owners of all units. The Board shall also establish and include reserves for items as required by law GENERAL OPERATING RESERVE The Board, when establishing each annual budget may, when deemed necessary or desirable, include therein a sum to be collected and maintained as a general operating reserve to provide a measure of stability during the periods of financial stress when such sums may be used to meet deficiencies existing from time to time as a result of delinquent payment of assessments by owners of units, as a result of emergencies or for other reasons placing financial stress on the Association. The annual amount allocated for such operating reserve and collected therefore shall not exceed fifty percent (50%) of the current annual assessment. cc 16.6 USE OF ASSOCIATION FUNDS All monies collected by the Association shall be treated as the separate property of the Association, and such monies may be applied by the bb Amended in Deed Book 1104, Page 238, recorded April 28, 2015 cc Amended in Deed Book 1043, Page 349, dated May 21,

12 Association to payment of any expenses of operating and managing the Development and Association, or to the proper undertaking of all acts and duties imposed upon it by this Declaration, the Articles and By-Laws, as the monies are paid to the Association by unit owners, the same monies ma be co-mingles with the monies paid to the Association by other owners of other units. However, all funds and other assessments of the Association and any increments thereto, or profits derived there from or from the leasing or use of the common elements, including without limitation, common surplus, shall be held for the benefit of the members of the Association. No member of the Association shall have the right to assign, hypothecate, pledge or in any manner transfer his membership interest therein, except as an appurtenant to his unit DELIQUENCY OR DEFAULT The payment of any assessment or installment thereof due to the Association shall be in default if not paid to the Association on or before the due date (as defined in the By-Laws of the Association thereof). The in default, the delinquent assessments or installments thereof shall bear interest at the highest rate allowed by the laws of the State of North Carolina from the date when due until paid. All payments shall be applied first to the interest accrued and then to the assessment payment first due PERSONAL LIABILITY OF UNIT OWNER FOR ASSESSMENT The owner(s) of a unit shall be personally liable, jointly and severally, as the case may be, to the Association for the payment of all assessments, regular or special, interest thereon, if delinquent, as above provided, and for all costs of collecting the assessment, including reasonable attorney s fees, whether or not suit is brought, levied or otherwise coming due while the owner(s) of the unit LIABILITY NOT SUBJECT TO WAIVER No owner of a unit may avoid or abate liability, not exempt himself from liability for assessment levied against such unit owner and his unit by waiver, either voluntary or involuntary, of the use or enjoyment or any of the common elements, or by abandonment of the unit, by interruption in the availability of the common elements, or by any other manner LEIN FOR ASSESSMENT Any assessment levied against a lot remaining unpaid for a period of 30 days or longer shall constitute a lien on that lot when a claim of lien is filed of record in the office of the clerk of superior court of the county in which the lot is located in the manner provided herein. Prior to filing a claim of lien, the association must make reasonable and diligent efforts to ensure that its records contain the lot owner's current mailing address. No fewer than 15 days prior to filing the lien, the association shall mail a statement of the assessment amount due by first-class mail to the physical address of the lot and the lot owner's address of record with the association, and, if different, to the address for the lot owner shown on the county tax records and the county real property records for the lot. If the lot owner is a corporation, the statement shall also be sent by first-class mail to the mailing address of the registered agent for the corporation. Unless the declaration otherwise provides, fees, charges, late charges, and other charges imposed pursuant to G.S. 47F-3-102, 47F-3-107, 47F , and 47F are enforceable as assessments under this section. Except as provided in subsections (a1) and (a2) of this section, the association may foreclose the claim of lien in like manner as a mortgage on real estate under power of sale under Article 2A of Chapter 45 of the General Statutes (a) An association may not foreclose an association assessment lien under Article 2A of Chapter 45 of the General Statutes if the debt securing the lien consists solely of fines imposed by the association, interest on unpaid fines, or attorneys' fees incurred by the association solely associated with fines imposed by the association. The association, however, may enforce the lien by judicial foreclosure as provided in Article 29A of Chapter 1 of the General Statutes. 12

13 16.10(b) An association shall not levy, charge, or attempt to collect a service, collection, consulting, or administration fee from any lot owner unless the fee is expressly allowed in the declaration. Any lien securing a debt consisting solely of these fees may only be enforced by judicial foreclosure as provided in Article 29A of Chapter 1 of the General Statutes (c) The lien under this section is prior to all liens and encumbrances on a lot except (i) liens and encumbrances (specifically including, but not limited to, a mortgage or deed of trust on the lot) recorded before the docketing of the claim of lien in the office of the clerk of superior court, and (ii) liens for real estate taxes and other governmental assessments and charges against the lot. This subsection does not affect the priority of mechanics' or materialmen's liens (d) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three years after the docketing of the claim of lien in the office of the clerk of superior court (e) This section does not prohibit other actions to recover the sums for which subsection (a) of this section creates a lien or prohibit an association taking a deed in lieu of foreclosure (f) A judgment, decree, or order in any action brought under this section shall include costs and reasonable attorneys' fees for the prevailing party. If the lot owner does not contest the collection of debt and enforcement of a lien after the expiration of the 15-day period following notice as required in subsection (e1) of this section, then reasonable attorneys' fees shall not exceed one thousand two hundred dollars ($1,200), not including costs or expenses incurred. The collection of debt and enforcement of a lien remain uncontested as long as the lot owner does not dispute, contest, or raise any objection, defense, offset, or counterclaim as to the amount or validity of the debt and lien asserted or the association's right to collect the debt and enforce the lien as provided in this section. The attorneys' fee limitation in this subsection shall not apply to judicial foreclosures or to proceedings authorized under subsection (d) of this section or G.S. 47F (g) A lot owner may not be required to pay attorneys' fees and court costs until the lot owner is notified in writing of the association's intent to seek payment of attorneys' fees and court costs. The notice must be sent by first-class mail to the property address and, if different, to the mailing address for the lot owner in the association's records. The association must make reasonable and diligent efforts to ensure that its records contain the lot owner's current mailing address. The notice shall set out the outstanding balance due as of the date of the notice and state that the lot owner has 15 days from the mailing of the notice by first-class mail to pay the outstanding balance without the attorneys' fees and court costs. If the lot owner pays the outstanding balance within this period, then the lot owner shall have no obligation to pay attorneys' fees and court costs. The notice shall also inform the lot owner of the opportunity to contact a representative of the association to discuss a payment schedule for the outstanding balance as provided in subsection (e2) of this section and shall provide the name and telephone number of the representative (h) The association, acting through its executive board and in the board's sole discretion, may agree to allow payment of an outstanding balance in installments. Neither the association nor the lot owner is obligated to offer or accept any proposed installment schedule. Reasonable administrative fees and costs for accepting and processing installments may be added to the outstanding balance and included in an installment payment schedule. Reasonable attorneys' fees may be added to the outstanding balance and included in an installment schedule only after the lot owner has been given notice as required in subsection (e1) of this section. 13

14 16.10(i) Where the holder of a first mortgage or first deed of trust of record, or other purchaser of a lot obtains title to the lot as a result of foreclosure of a first mortgage or first deed of trust, such purchaser and its heirs, successors, and assigns, shall not be liable for the assessments against such lot which became due prior to the acquisition of title to such lot by such purchaser. Such unpaid assessments shall be deemed to be common expenses collectible from all the lot owners including such purchaser, its heirs, successors, and assigns (j) A claim of lien shall set forth the name and address of the association, the name of the record owner of the lot at the time the claim of lien is filed, a description of the lot, and the amount of the lien claimed. The first page of the claim of lien shall contain the following statement in print that is in boldface, capital letters and no smaller than the largest print used elsewhere in the document: "THIS DOCUMENT CONSTITUTES A LIEN AGAINST YOUR PROPERTY, AND IF THE LIEN IS NOT PAID, THE HOMEOWNERS ASSOCIATION MAY PROCEED WITH FORECLOSURE AGAINST YOUR PROPERTY IN LIKE MANNER AS A MORTGAGE UNDER NORTH CAROLINA LAW." The person signing the claim of lien on behalf of the association shall attach to and file with the claim of lien a certificate of service attesting to the attempt of service on the record owner, which service shall be attempted in accordance with G.S. 1A-1, Rule 4(j) for service of a copy of a summons and a complaint. If the actual service is not achieved, the person signing the claim of lien on behalf of the association shall be deemed to have met the requirements of this subsection if service has been attempted pursuant to both of the following: (i) G.S. 1A-1, Rule 4(j)(1) c., d., or e.; and (ii) by mailing a copy of the lien by regular, first-class mail, postage prepaid to the physical address of the lot and the lot owner's address of record with the association, and, if different, to the address for the lot owner shown on the county tax records and the county real property records for the lot. In the event that the owner of record is not a natural person, and actual service is not achieved, the person signing the claim of lien on behalf of the association shall be deemed to have met the requirements of this subsection if service has been attempted once pursuant to the applicable provisions of G.S. 1A-1, Rule 4(j)(3) through G.S. 1A-1, Rule 4(j)(9). dd COLLECTION AND FORECLOSURE The Board of Directors of the Association may take such action as they deem necessary to collect assessments of the Association by personal action against the affected unit owner(s) or by enforcing and foreclosing said lien, and may settle and compromise same, if in the best interest of the Association by personal action against the affected unit owner(s) or by enforcing and foreclosing said lien, may settle and compromise same, if in the best interest of the Association. The Association shall be entitled to bid at any sale pursuant to a suit to foreclosure an assessment lien, and to apply as a cash credit against its bid all sums due the Association covered by the lien so enforced. In the case of foreclosure, the affected unit owner(s) shall be required to pay a reasonable rent for the unit and the Association, as plaintiff in such foreclosure shall be entitled to the appointment of a receiver to collect same from the unit owner and/or occupant. Institution of personal action against the affected owner(s) in an attempt to effect collection of payment of any delinquent assessment shall not be deemed to be an election by the Association which shall prevent its thereafter seeking enforcement of the collection of any sums remaining owing to it by a foreclosure action, nor shall proceeding by foreclosure to attempt to effect such collection be deemed to be an election precluding the institution of a personal action against the affected unit owner to attempt collection of any sum then remaining owing the Association. dd Amended in Deed Book 1104, Page 238, recorded April 28,

15 16.12 EFFECT OF FORECLOSURE OR JUDICIAL SALE In the event that any person, firm or corporation shall acquire title to any unit and its appurtenant undivided interest in the common elements by virtue of any foreclosure, deed in lieu of foreclosure, or judicial sale, such person, firm or corporation shall only be liable and obligated for assessments as shall accrue and become payable for the unit and its appurtenant undivided interests subsequent to the acquisition of title, and shall not be liable for any sums due to the Association representing an apportionment of taxes or special assessment levied by taxing authorities against the Association representing an apportionment of taxes or special assessment levied by taxing authorities against the Association in its entirety. Nothing herein shall release the delinquent or otherwise in default unit owner upon whom the foreclosure action is taken from liability for unpaid assessments, costs of collection or other charges for which any other legal action may be taken in order to effect collection thereof. In the event such collection can t be made, the uncollected assessment shall be absorbed and paid by all unit owners as part of the common expense. The party, except the Association under circumstance stated above, acquiring the unit by foreclosure or judicial sale shall not be excuse from payment of normal and special assessments which may be levied by the Association against the unit owners during the period of such ownership. ee EFFECT OF VOLUNTARY TRANSFER When a unit owner proposes to sell his unit in compliance with other provisions of this Declaration, the Association, upon written request of the selling owner or agent of such unit, shall furnish to the proposed purchaser a statement verifying the status of payment of any and all assessments which may be due and payable to the Association by the owner of such unit. Such statement shall be signed by an authorized officer or agent of the Association and any purchaser may rely on such statement in concluding the proposed transaction, and the Association shall be bound by such statement. In the event that there exists a default or deficiency in the payment of an assessment (whether or not a claim of lien has been recorded by the Association), then the proceeds of the sale shall be applied by the purchaser first to payment of any then delinquent payment or assessment or installment thereof due to the Association before payment of the balance of such proceeds to the owner of the unit responsible for such delinquent payment. In any voluntary conveyance of a unit, the grantee shall be jointly and severally liable with the grantor for all unpaid assessments against the grantor made prior to the time of such voluntary conveyance, without prejudice to the rights of the grantee to recover from the grantor the amounts paid by the grantee therefore. ff 17. MEMBERS The qualification of member and the manner of their admission to the Association shall be as follows: 17.1 ALL OWNERS OF UNITS in the Development and in proposed additional Apple Valley Farm Cluster Development sections, if any, shall be members of the Association, and no other person or entity shall be entitled to membership. gg 17.2 MEMBERSHIP IN THE ASSOCIATION shall be established by the recording of the deed to the unit or other instrument establishing a change of ownership in the Public Records of Rutherford County, North Carolina the unit owner thereby becoming a member of the Association. The membership of the prior owner shall thereby be terminated. Provided, however, that the change of ownership and occupancy shall have been in full compliance with ee Amended in Deed Book 1104, Page 238, recorded April 28, 2015 ff Amended in Deed Book 1104, Page 238, recorded April 28, 2015 gg Amended in Deed Book 1104, Page 238, recorded April 28,