COVENANT FOR ASSESSMENTS

Section 1. Assessments.

(a) All Lots shall be subject to annual and special assessments as herein provided in order to fund the costs of fulfilling the purposes of the Association. In the event of a conveyance, the grantee is jointly and severally liable with the grantor for all assessments outstanding against the grantor and subject Lot, without prejudice to any right the grantee may have to recover from the grantor any amounts paid by the grantee. Each Lot Owner is deemed to covenant and agree by acceptance of a deed to a Lot to pay all assessments and no Lot Owner may waive or avoid responsibility for payment of any assessment by not using his Lot or the Common Areas or by disputing the purpose of the assessment or for any other reason; provided however, that no Lot while owned by the Declarant shall be subject to either annual or special assessments. The Developer hereby obligates itself to pay any current operating expenses that exceed assessments received from the members and other income sources of the Association. This obligation shall terminate when the Declarant no longer controls the Association. This payment of current operating expenses by the Declarant may be made in the form of a loan to the Association at a rate of 9% interest for which the Declarant may be reimbursed

(b) Both annual and special assessments must be fixed at a uniform rate per Lot subject to assessments and may be collected monthly, quarterly or annually as determined by the Board of Directors. As to any individual Lot or Lot Owner who has not paid an assessment when due or is in violation of these Covenants, Conditions and Restrictions, however, the amount of the assessment outstanding shall be increased by interest, late charges, costs, fines, damages and attorneys fees, as referenced throughout this Declaration.

Section 2. Annual Assessments.

The Association shall fix the amount and the due date of the annual assessment. Initially, annual assessments shall be payable in one annual installment, payable when the Homeowner takes title from the Builder and prorated from that date to the end of the fiscal year. The title company shall forward the proceeds of the prorated annual assessment, and the initiation fee of $200.00, to the Homeowners Association if not paid. The Association shall notify the Owners of each Lot of the amount, the date on which the assessments are payable, and the place of payment.

Section 3. Date of Commencement of Annual Assessments.

The annual assessments for each Lot shall only be payable upon conveyance of a Lot to a Class A Homeowner Member, and at the beginning of each fiscal year of the Association thereafter. Builders are not liable for assessments prior to conveyance of a Lot, or as may be provided by contract between Developer and the Builders. The Declarant or his successor shall not be assessed annual, special or initial fees at any time for ownership of Lots under his control.

Section 4. Special Assessments.

The Association may levy a special assessment to pay in whole or in part for the cost of any shortfall in the annual budgeted operating revenues, or for any repair or replacement of an existing capital improvement, or for the construction/acquisition of a new capital improvement, without concurrence of the Owners unless the cost of such repair/replacement/acquisition/construction is major. “Major” as referenced herein shall be defined to mean that the amount of the proposed special assessment per Owner, plus any other special assessments levied during that same fiscal year, exceeds 50% of the then current year’s annual assessment. Major capital improvements shall require the special assessment to be approved by a majority of a minimum of 50% of the membership. The Association may also levy special assessments without limitation or the concurrence of any Owner to pay for the cost of maintenance or enforcement of these covenants and restrictions with regard to specific lots; any such assessment shall be levied against the Owner of such Lot. Special assessments shall be payable at such time and place determined by the Association and stated in the assessment notice.

Section 5. Maximum Annual Assessment.

Until January 1, 2000, the annual assessment shall be $200.00 per Lot.

(a) From and after January 1, 2000, the annual assessment shall be set by the Association and may be increased each year by up to ten (10%) percent above the maximum allowable assessment for the previous year without a vote of membership. “Maximum allowable assessments” as referred to herein shall be calculated by assuming a cumulative 10% increase per year from and after the year 2000.

(b) From and after January 1, 2000, the maximum annual assessment may be increased by more than said ten (10%) percent only by a majority vote of those needed for a quorum of 50% of each class of members who are voting. The vote should be by certified written ballot mailed to each owner thirty (30) days after their receipt of written notification that a vote will be taken on the proposed increase in assessment.