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Kedron HillsUpon recording, please return to: FILED & RECORDED FRYETTE ¢OU~IT¥. O,A. M. Maxine Hicks 99 West Paces Ferry Road, N.W. sUite2~ W.~. BALL,RD, CLERK Atlanta, Georgia 30305 DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR KEDRON HILLS COMMUNITY ASSOCIATION, INC. - TABLE OF CONTENTS - Article 1. DEFINITIONS ................................................ 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. 1.9. 1.10. 1.11. 1.12. 1.13. 1.14. 1.15. 1.16. 1.17. 1.18. 1.19. 1.20. 1.21. 1.22. 1.23. 1.24. 1.25. 1.26. 1.27. 1.28. 1.29. 1.30. 1 ARB ................................................... 1 Area of Common Responsibility ................................. 1 Articles of Incorporation or Articles ............................... 1 Association ............................................... 2 Board of Directors or Board .................................... 2 Builder .................................................. 2 By-Laws ................................................. 2 City .................................................... 2 Class B Control Period ....................................... 2 Common Area ............................................. 2 Common Expenses .......................................... 2 Community-Wide Standard ..................................... 2 Covenant to Share Costs ...................................... 2 Declarant ................................................ 2 Design Guidelines ........................................... 2 General Assessment ......................................... 3 Majority ................................................. 3 Master Plan ............................................... 3 Member ................................................. 3 Mortgage ................................................ 3 Mortgagee ............................................... 3 Owner .................................................. 3 Person .................................................. 3 Properties ................................................ 3 Public Records ............................................. 3 Special Assessment .......................................... 3 Specific Assessment ......................................... 3 Supplemental Declaration ...................................... 3 Unit .................................................... 3 Water Quality Facility ........................................ 4 Article 2. PROPERTY RIGHTS 2.1. 2.2. 2.3. 2.4. 2.5. Common Area ............................................. 4 Erosion Control, Water Quality Facilities and Buffer Zones ............... 5 No Partition .............................................. 5 Condemnation ............................................. 5 Actions Requiring Owner Approval ............................... 5 Article 3. MEMBERSHIP AND VOTING RIGHTS .............................. 5 3.1. Membership ............................................... 5 3.2. Voting ................................................... 6 Article 4. RIGHTS AND OBLIGATIONS OF THE ASSOCIATION ................... 7 4.1. Function of Association ....................................... 7 4.2. Common Area ............................................. 7 800K ]. ] izJPASE 6(i7 ARTICLE SECTION PAGE 4.3. Personal Property and Real Property for Common Use .................. 7 4.4. Enforcement .............................................. 7 4.5. Implied Rights; Board Authority ................................. 8 4.6. Governmental Interests ....................................... 8 4.7. Indemnification ............................................ 9 4.8. Dedication of or Grant of Easement on Common Area ................... 9 4.9. Utility Lines .............................................. 9 Article 5. MAINTENANCE .............................................. 9 5.1. Association's Responsibility .................................... 9 5.2. Owner's Responsibility ...................................... 10 5.3. Standard of Performance ..................................... 11 5.4. Covenant to Share Costs ..................................... 11 Article 6. INSURANCE AND CASUALTY LOSSES ............................ 11 6.1. Association Insurance ....................................... 11 6.2. Owners' Insurance ......................................... 14 Article 7. ANNEXATION AND WITHDRAWAL OF PROPERTY ................... 14 7.1. Annexation Without Approval of Membership ........................ 14 7.2. Annexation With Approval of Membership ......................... 14 7.3. Withdrawal of Property ...................................... 15 7.4. Amendment .............................................. 15 Article 8. ASSESSMENTS .............................................. 15 8. I. Creation of and Obligation for Assessments ......................... 15 8.2. Declarant's Obligation for Assessments ............................ 16 8.3. Computation of General Assessments ............................. 16 8.4. Reserve Budget and Capital Contribution ........................... 16 8.5. Special Assessments ........................................ 16 8.6. Specific Assessments ........................................ 17 8.7. Lien for Assessments ........................................ 17 8.8. Date of Commencement of Assessments ........................... 18 8.9. Failure to Assess ........................................... 18 8.10. Exempt Property .......................................... 18 8.11. Capitalization of Association ................................... 18 8.12. Declarant's Obligation ....................................... 18 Article 9. ARCHITECTURAL STANDARDS ................................. 19 9.1. General ................................................ 19 9.2. Architectural Review ....................................... 19 9.3. Guidelines and Procedures .................................... 19 9.4. Specific Guidelines and Restrictions .............................. 20 9.5. Construction Period ........................................ 21 9.6. No Waiver of Future Approvals ................................ 2 l 9.7. Variance ................................................ 22 ARTICLE SECTION PAGE Article Article Article Article 9.8. Limitation of Liability ....................................... 22 9.9. Enforcement ............................................. 22 10. 10.1. 10.2. 10.3. 10.4. 10.5. 10.6. 10.7. 10.8. 10.9. 10.10. 10.11. 10.12. 10.13. 10.14. 10.15. 10.16. 10.17. 10.18. USE RESTRICTIONS ......................................... 23 General Use Restrictions ..................................... 23 Residential Use ........................................... 23 Leasing ............................................ ' .... 23 Rules and Regulations ....................................... 23 Vehicles ................................................ 24 Nuisance ............................................... 24 Storage of Materials, Trash, Garbage, Dumping, Etc ................... 24 Animals and Pets .......................................... 25 General Prohibitions ........................................ 25 Streams ................................................ 25 Wetlands ............................................... 25 Drainage and Grading ....................................... 25 Water Quality Facilities ...................................... 26 Greenbelts, Buffer Zones, and Nondisturbance Areas .................. 26 Sight Distance at Intersections .................................. 26 Subdivision of Unit ......................................... 26 Occupancy of Unfinished Units ................................. 26 Occupants Bound .......................................... 27 Il. Il.1. 11.2. 11.3. 11.4. 11.5. 11.6. 11.7. 11.8. 11.9. 11.10. 11.I1. 11.12. EASEMENTS .............................................. 27 Easements of Encroachment ................................... 27 Easements for Utilities, Etc ................................... 27 Easement for SloPe Control and Drainage Maintenance .................. 28 Easements for Water Quality Facility, Drainage Easement Area Maintenance . . . 28 Easement for Greenbelt Maintenance ............................. 29 Easements to Serve Additional Property ........................... 29 Easement for Right of Entry ................................... 30 Easement for Latera[ Support .................................. 30 Easement for Special Events ................................... 30 Liability for Use of Easements ................................. 30 Non-Merger ............................................. 30 Grants ................................................. 31 12. 12.1. 12.2. 12.3. 12.4. 12.5. 12.6. MORTGAGEE PROVISIONS .................................... 31 Notices of Action .......................................... 31 Special FHLMC Provision .................................... 31 No Priority .............................................. 32 Notice to Association ....................................... 32 Construction of Article 12 .................................... 32 Failure of Mortgagee to Respond ................................ 32 13. DECLARANT'S RIGHTS ...................................... 32 iii Article 13.1. 13.2. 13.3. 13.4. 13.5. Transfer to Association ...................................... 32 Development ............................................. 32 Improvements to Common Area ................................ 33 Additional Declarations ................................. ~ .... 33 Amendments ............................................. 33 14. GENERAL PROVISIONS 14.1. 14.2. 14.3. 14.4. 14.5. 14.6. 14.7. 14.8. 14.9. 14.10. Duration ................................................ 33 Amendment .............................................. 34 Severability .............................................. 35 Alternative Dispute Resolution .................................. 35 Litigation ............................................... 35 Cumulative Effect; Conflict ................................... 35 Use of the Words "Kedron Hills" . ............................... 35 Compliance .............................................. 35 Notice of Sale or Transfer of Title ............................... 35 Exhibits ................................................ 36 Exhibit A - TABLE OF EXHIBITS - Subject MaCtcr Land Initially Submitted Land Subject to Annexation By-Laws of Kedron Hills Community Association, Inc. Page First Appearing DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR KEDRON HILLS COMMUNITY ASSOCIATION, INC. THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS is made as of the date set forth on the signature page hereof by Peachtree City Holdings, L.L.C., a Georgia limited liability company (the "Declarant"). Declarant is the owner of the real property described on ~, which is attached and incorporated by reference. This Declaration imposes upon the Properties (as defined in Article 1 below) mutually beneficial restrictions under a general plan of improvement for the benefit of the owners of each portion of the Properties and establishes a flexible and reasonable procedure for the overall development, administration, maintenance and preservation of the Properties. In furtherance of such plan, Declarant has caused or intends to cause the Kedron Hills Community Association, Inc., to be formed as a non-profit corporation to own, operate and maintain the Common Area (as defined below) and to administer and enforce the provisions of this Declaration, the By-Laws, and the Design Guidelines (as these terms are defined below). Declarant hereby declares that all of the property described on Exhibit A and any additional property subjected to this Declaration shall be held, sold, used and conveyed subject to the following easements, restrictions, covenants, and conditions, which shall run with the title to the real property subjected to this Declaration. This Declaration shall be binding upon all parties having any right, title, or interest in any portion of the Properties, their heirs, successors, successors-in-title, and assigns, and shall inure to the benefit of each owner of any portion of the Properties. This document does not and is not intended, to create a condominium within the meaning of O.C.G.A. §44-3-70, et seq. nor a property owners' development within the meaning of O.C.G.A. §44-3-220, et sea.. Article 1. DEFINITIONS The terms in this Declaration and the attached exhibits shall generally be given their natural, commonly accepted definitions except as otherwise specified. Capitalized terms shall be defined as set forth below. I. 1. "ARB": The Architectural Review Board, as described in Article 9. 1.2. "Area of Common Responsibility": The Common Area, together with those areas including without limitation any rights-of-way, if any, for which the Association has or assumes responsibility pursuant to the terms of this Declaration, any Supplemental Declaration or other applicable covenant, contract or agreement. 1.3. "Articles of Incorporation" or "Articl~I/": The Articles of Incorporation of Kedron Hills Community Association, Inc., as filed with the Secretary of State of the State of Georgia. 1.4. "Associatioll": Kedron Hills Community Association, Inc., a Georgia non-profit corporation, its successors or assigns. 1.5. "Board of Directors" or "Board": The body responsible for administration of the Association, selected as provided in the By-Laws and generally serving the same role as the board of directors under Georgia corporate law. 1.6. "Builder": Any Person who purchases one or more Units for the purpose of constructing improvements for later sale to consumers in the ordinary course of such Person's business. Any Person occupying or leasing a Unit for residential purposes shall cease to be considered a Builder immediately upon occupation of the Unit for residential purposes, notwithstanding that such Person originally purchased the Unit for the purpose of constructing improvements for later sale to consumers. 1.7. "By-Laws": The By-Laws of Kedron Hills Community Association, Inc., attached as Exhibit C, as they may be amended. 1.8. "City": The City of Peachtree City, Georgia. 1.9. "Class "B" Control Peri9~l": The period of time during which the Class "B" Member is entitled to appoint a Majority of the members of the Board of Directors as provided in Section 3.2 of this Declaration and Section 3.3 of the By-Laws. 1.10. "Common Area": All real and personal property, including easements, which the Association owns, leases or otherwise holds possessory or use rights in for the common use and enjoyment of the Owners. 1.1 i. "Common Expenses": The actual and estimated expenses incurred, or anticipated to be incurred, by the Association for the general benefit of all Owners, including any reasonable reserve, as the Board may find necessary and appropriate pursuant to this Declaration, the By-Laws, and the Articles. 1.12. "Community-Wide Standard": The standard of conduct, maintenance, or other activity generally prevailing throughout the Properties. Such standard shall initially be established by the Declarant and may be more specifically determined by the Board of Directors and the Architectural Review Board. 1.13. "Covenant to Share Cost~;": Any agreement or contract between the Association and an owner or operator of property adjacent to the Properties for the allocation of expenses that benefit both the Association and the owner or operator of such property. I. 14. "Declaranf': Peachtree City Holdings, L.L.C., a Georgia limited liability company, or any successor, successor-in-title, or assign who takes title to any portion of the property described on Exhibit A or Exhibit B for the purpose of development and/or sale and who is designated as the Declarant in a recorded instrument executed by the immediately preceding Declarant; provided, however, that there shall be only one Person entitled to exercise the rights and powers of the "Declarant" hereunder at any one time. 1.15. "Design Guidelines": The design and construction guidelines and application and review procedures applicable to the Properties promulgated and administered pursuant to Article 9. 1.16. "General Assessment": Assessments levied on all units subject to assessment under Article 8 to fund Common Expenses for the general benefit of all Units, as more particularly described in Sections 8.1 and 8.3. 1.17. "Ma_iority": Those votes, Owners, Members, or other group, as the context may indicate, totaling more than fifty percent (505) of the total eligible number. 1.18. "Master Plan": The land use plan or development plan for "Kedron Hills" as such plan may be amended from time to time, which includes the property described on Exhibit A and all or a portion of the property described on ~ that Declarant may from time to time anticipate subjecting to this Declaration. Inclusion of property on the Master Plan shall not, under any circumstances, obligate Declarant to subject such property to this Declaration, nor shall the exclusion of property described on Exhibit l~ from the Master Plan bar its later annexation in accordance with Article 7. 1.19. "Member": A Person subject to membership in the Association pursuant to Article 3. 1.20. "MortgagC': A mortgage, a deed of trust, a deed to secure debt, or any other form of security instrument affecting title to any Unit. 1.21. "Mortgagee": A beneficiary or holder of a Mortgage. 1.22. "Qwn~r": One or more Persons who hold the record title to any Unit, but excluding in all cases any party holding an interest merely as security for the performance of an obligation. If a Unit is sold under a recorded contract of sale, and the contract specifically so provides, the purchaser (rather than the fee owner) will be considered the Owner. 1.23. "Person": A natural person, a corporation, a partnership, a limited liability company, a fiduciary acting on behalf of another Person, or any other legal entity. 1.24. "Properties": Tile real property described on Exhibit ~,, together with such additional property as is subjected to this Declaration in accordance with Article 7. 1.25. "Public Records": The Official Records of the Clerk of the Superior Court of Fayette County, Georgia, or such other place which is designated as the official location for recording of deeds and similar documents affecting title to real estate. 1.26. "Special Assessglent": Assessments levied in accordance with Section 8.5. 1.27. "Specific Assessment": Assessments levied in accordance with Section 8.6. 1.28. "Supplemental Declaration": An instrument filed in the Public Records pursuant to Article 7 which subjects additional property to this Declaration and/or imposes, expressly or by reference, additional restrictions and obligations on the land described in such instrument. 1.29. "Unit": A portion of the Properties, whether improved or unimproved, which may be independently owned and conveyed and which is intended for development, use, and occupancy as a residence for a single family. The term shall refer to the land, if any, which is part of the Unit as well as any improvements thereon. The term shall include vacant land intended for development, but shall not include Contmon Area, or property dedicated to the public. In the case of a parcel of vacant land or land -3- on which improvements are under construction, the parcel shall be deemed to be a single Unit until such time as a subdivision plat is filed of record on all or a portion of the parcel. Thereafter, the portion encompassed by such plat shall contain the number of Units determined as set forth in the preceding paragraph and any portion not encompassed by such plat shall continue to be treated in accordance with this paragraph. 1.30. "Water Ouality Facility": Areas designated by easement or appearing on a recorded plat and intended to control runoff and water quality for adjacent or nearby bodies of water. Article 2. PROPERTY RIGHTS 2.1. Common Area. Every Owner shall have a right and nonexclusive easement of use, access, and enjoyment in and to the Common Area which is appurtenant to and passes with title to each Unit, subject to: (a) this Declaration and any other applicable covenants; (b) any restrictions or limitations contained in any deed conveying such property to the Association; (c) the right of the Board to adopt, amend, and repeal rules regulating the use and enjoyment of the Common Area, including rules limiting the number of guests who may use the Common Area; (d) the right of the Board to allow persons other than Owners, their families, lessees and guests to use any recreational or social facilities situated upon the Common Area upon payment of use fees established by the Board; (e) the right of the Board to impose reasonable membership requirements and charge reasonable admission or other use fees for the use of any recreational facility situated on the Common Area; (f) the right of the Board to suspend the right of an Owner to use recreational and social facilities within the Conm~on Area pursuant to Section 4.4; (g) the right of the Association, acting through the Board, to dedicate or transfer all or any part of the Common Area subject to such approval requirements as may be set forth in this Declaration; (h) the right of the Association, acting through the Board, to mortgage, pledge, or hypothecate any or all of its real or personal property as security for money borrowed or debts incurred, subject to the approval requirements set forth in Section 2.5; and (i) the right of the Declarant to conduct activities within the Common Area, such as tournaments, charitable events, and promotional events and to restrict Members from using the Common Area during such activities, provided such activities shall be conducted in a manner to minimize (to the extent reasonably possible) any substantial interference with the Members' use and enjoyment of the Common Area and shall not exceed seven (7) consecutive days. Any Owner may extend his or her right of use and enjoyment to the members of his or her family, lessees, and social invitees, as applicable, subject to reasonable regulation by the Board. An Owner who leases his or her Unit shall be deemed to have assigned all such rights to the lessee of such Unit. 2.2. Erosion Control. Water Ouality Facilities and Buffer Zones. The Properties are subject to the provisions of: (i) the Peachtree City Erosion Control Ordinance which requires non-disturbance buffers between the Properties and adjoining subdivisions, and restrictions on construction in impervious surface in the vicinity of lakes and other bodies of water, and (ii) if shown on a subdivision plat or under a separate declaration of easements affecting certain lots within the Properties, Water Quality Facilities and Drainage Easement Areas. Use of the Properties by the Owners shall be governed by the Peachtree City Erosion Control Ordinance and any easements govern water quality and erosion control recorded in the Public Records. 2.3. No Partition. Except as permitted in this Declaration, there shall be no judicial partition of the Common Area. No Person shall seek any judicial partition unless the portion of the Common Area which is the subject of such partition action has been removed from the provisions of this Declaration. This Article shall not prohibit the Board from acquiring and disposing of tangible personal property nor from acquiring and disposing of real property which may or may not be subject to this Declaration. 2.4. Condemnation. If any part of the Common Area shall be taken by any authority having the power of condemnation or eminent domain, or conveyed in lieu of and under threat of condemnation, each Owner shall be entitled to written notice of such taking or conveyance prior to disbursement of the condenmation award or proceeds of conveyance. Any resulting award or proceeds shall be payable to the Association to be disbursed according to this Section. If the taking or conveyance involves a portion of the Common Area on which improvements have been constructed, the Association shall restore or replace such improvements on the remaining land included in the Common Area to the extent available, unless within sixty (60) days after such taking the Declarant, so long as the Declarant owns any property which is subject to this Declaration or which may be unilaterally subjected to this Declaration by the Declarant, and Voting Delegates representing at least sixty-seven percent (67%) of the total Class "A" vote of the Association shall otherwise agree. Any such construction shall be in accordance with plans approved by the Board. The provisions of Section 6. l(c) regarding funds for the repair of damage or destruction shall apply. If the taking or conveyance does not involve any improvements on the Common Area, or if a decision is made not to repair or restore, or if net funds remain after any such restoration or replacement is complete, then such award or net funds shall be disbursed to the Association and used for such purposes as the Board shall determine. 2.5. Actions Requiring Owner Approval. As long as there is a Class "B" membership, the conveyance or mortgaging of Conunon Area, except in accordance with Section 4.3, shall require the prior approval of Members representing at least two-thirds (2/3) of the total Class "A" votes in the Association. Notwithstanding anything to the contrary in this Article, the Association, acting through the Board, may grant easements over the Common Area for installation and maintenance of utilities, and drainage and water quality facilities and for other purposes not inconsistent with the intended use of the Common Area, without the approval of the membership. Article 3. MEMBERSHIP AND VOTING RIGHTS 3. I. Membership. Every Owner shall be a Member of the Association. There shall be only one (1) membership per Unit. Ifa Unit is owned by more than one (1) Person, all co-Owners shall share -5- BO0 :1. 1 i 6 :k 5 the privileges of such membership, subject to reasonable Board regulation and the restrictions on voting set forth in Section 3.2(c) and in the By-Laws, and all such co-Owners shall be jointly and severally obligated to perform the responsibilities of Owners. The membership rights of an Owner which is not a natural person may be exercised by any officer, director, partner, member, authorized manager fiduciary acting on behalf of the Owner, or by any individual designated from time to time by the Owner in a written instrument delivered to the secretary of the Association. 3.2. Voting. The Association shall have two (2) classes of membership described in this Section as Class "A" and Class "B." (a) Class "A". Class "A" Members shall be all Owners except the Class "B" Member, if any. Class "A" Members shall have one (1) equal vote for each Unit in which they hold the interest required for membership under Section 3.1; provided however, there shall be only one (1) vote per Unit and no vote shall be exercised for any property which is exempt from assessment under Section 8.10. (b) Class "B". The sole Class "B" Member shall be the Declarant. The rights of the Class "B" Member, including the right to approve, or withhold approval of, actions proposed under this Declaration, the By-Laws and the Articles, are specified in the relevant sections of this Declaration, the By-Laws and the Articles. The Class "B" Member may appoint a Majority of the members of the Board of Directors during the Class "B" Control Period which shall continue until the first to occur of the following: (i) when eighty percent (80%) of the total number of Units permitted by the Master Plan for the property described on Exhibit A and Exhibit B have certificates of occupancy issued thereon and have been conveyed to Persons other than Builders; (ii) December 31, 2002; or (iii) when, in its discretion, the Class "B" Member so determines. After termination of the Class "B" Control Period, the Class "B" Member shall have a right to disapprove actions of the Board and committees as provided in the By-Laws. The Class "B" membership shall terminate upon the earlier of: (i) two (2) years after expiration of the Class "B" Control Period; or (ii) recorded instrument. when, in its discretion, the Declarant so determines and declares in a Upon termination of the Class "B" membership, the Declarant shall be a Class "A" Member entitled to Class "A" votes for each Unit which it owns. (c) Exercise of Voting Rights. In any situation where a Member is entitled to exercise the vote for his or her Unit and there is more than one (i) Owner of such Unit, the vote for such Unit shall be exercised as the co-Owners determine among themselves and notify the secretary of the Association in writing prior to the vote being taken. Absent notice to the secretary, the Unit's vote shall be suspended if more than one (1) Person seeks to exercise it. Article 4. RIGHTS AND OBLIGATIONS OF THE ASSOCIATION 4.1. Function of Association. The Association shall be the entity responsible for management, maintenance, operation and control of the Area of Common Responsibility and all improvements thereon. The Association shall be the primary entity responsible for enforcement of this Declaration and such reasonable rules regulating use of the Properties as the Board may adopt pursuant to Article 10. The Association shall also be responsible for administering and enforcing the architectural standards and controls set forth in this Declaration and in the Design Guidelines. The Association shall perform its functions in accordance with the Governing Documents and the laws of the State of Georgia. 4.2. Common Area. The Association, subject to the rights of the Owners set forth in this Declaration, shall manage and control the Common Area and all improvements thereon (including, without limitation, landscaping, recreational facilities, furnishings, equipment, and other personal property of the Association), and shall keep it in attractive condition and good repair, consistent with the Community-Wide Standard. The Board is specifically authorized, but not obligated, to retain or employ professional management to assist in carrying out the Association's responsibilities under this Declaration, the cost of which shall be a Common Expense. 4.3. Personal Property and Real Property for Common I.I$¢. The Association through the action of its Board, may acquire, hold, and dispose of tangible and intangible personal property and real property, subject to the provisions of Section 2.5. The Declarant and its designees may convey to the Association improved or unimproved real estate, or interests in real estate, located within the properties described in Exhibit A or Exhibit B, personal property and leasehold and other property interests. Such property shall be accepted by the Association and thereafter shall be maintained by the Association at its expense for the benefit of its Members, subject to any restrictions set forth in the deed or other instrument transferring such property to the Association. Upon written request of Declarant, the Association shall reconvey to Declarant any unimproved portions of the Properties originally conveyed by Declarant to the Association for no consideration, to the extent conveyed by Declarant in error or needed by Declarant to make adjustments in property lines. 4.4. Enforcement. The Board, or the covenants committee if established, may impose sanctions for violation of this Declaration, the By-Laws, any Supplemental Declaration, or any rule or regulation, after compliance with the notice and hearing procedures set forth in Section 3.25 of the By-Laws. Such sanctions may include, without limitation: (a) imposing reasonable monetary fines which shall constitute a lien upon the Unit of the violator (In the event that any occupant, guest or invitee of a Unit violates the Declaration, the By- Laws, the Supplemental Declaration, or any rule or regulation and a fine is imposed, the fine shall first be assessed against the occupant; provided however, if the fine is not paid by the occupant within the time period set by the Board, the Owner shall pay the fine upon notice from the Board.); (b) suspending an Owner's right to vote; -7- BOOK PASE 6 (c) suspending any Person's right to use any recreational facilities within the Common Area; provided however, nothing herein shall authorize the Board to limit ingress or egress to or from a Unit; (d) suspending any services provided by the Association to an Owner or the Owner's Unit if the Owner is more than thirty (30) days delinquent in paying any assessment or other charge owed to the Association; and (e) levying Specific Assessments to cover costs incurred in bringing a Unit into compliance in accordance with Section 8.6(b) and 9.9. In addition, the Board, or the covenants committee if established, may elect to enforce any provision of this Declaration, the By-Laws, any Supplemental Declaration, or the rules and regulations of the Association by self-help (specifically including, but not limited to, the towing of vehicles that are in violation of parking rules and the removal of pets that are in violation of pet rules) or by suit at law or in equity to enjoin any violation and/or to recover monetary damages. All remedies set forth in this Declaration and the By-Laws shall be cumulative of any remedies available at law or in equity. In any action to enforce the provisions of this Declaration, the By- Laws, any Supplemental Declaration, or any rule or regulation, if the Association prevails, it shall be entitled to recover all costs, including, without limitation, attorneys fees and court costs, reasonably incurred in such action. The Association shall not be obligated to take action to enforce any covenant, restriction, or rule which the Board in the exercise of its business judgment determines is, or is likely to be construed as, inconsistent with applicable law, or in any case in which the Board reasonably determines that the Association's position is not strong enough to justify taking enforcement action. Any such determination shall not be construed a waiver of the right of the Association to enforce such provision under any circumstances or estop the Association from enforcing any other covenant, restriction or rule. The Association, by contract or other agreement, may enforce county and city ordinances, if applicable, and permit local governments to enforce ordinances on the Properties for the benefit of the Association and its Members. 4.5. Implied Rights: Board Authority. The Association may exercise any right or privilege given to it expressly by this Declaration or the By-Laws, or reasonably implied from or reasonably necessary to effectuate any such right or privilege. Except as otherwise specifically provided in this Declaration, the By-Laws, the Articles, or by law, all rights and powers of the Association may be exercised by the Board without a vote of the membership. 4.6. Governmental Interests. For so long as the Declarant owns any property which is subject to this Declaration, or which the Declarant may unilaterally subject to this Declaration, the Declarant may designate sites within the Properties for fire, police, utility facilities, public schools, parks, streets, or other public or quasi-public facilities. The sites may include Common Area, in which case the Association shall take whatever action is required with respect to such site to permit such use, including conveyance of the site, if so directed by Declarant. The sites may include other property not owned by Declarant provided the owner consents. 4.7. Indemnification. The Association shall indemnify every officer, director, and committee member, against all damages and expenses, including attorneys' fees, reasonably incurred in connection with any action, suit, or other proceeding (including settlement of any suit or proceeding, if approved by the then Board of Directors) to which he or she may be a party by reason of being or having been an officer, director, or committee member, except that such obligation to indemnify shall be limited to those actions for which liability is limited under this Section, the Articles of Incorporation and Georgia law. The officers, directors, and ARB or committee members shall not be liable for any mistake of judgment, negligent or otherwise, except for their own individual willful misfeasance, malfeasance, misconduct, or bad faith. The officers and directors shall have no personal liability with respect to any contract or other commitment made or action taken in good faith on behalf of the Association (except to the extent that such officers or directors may also be Members of the Association). The Association shall indemnify and forever hold each such officer, director and ARB or committee member harmless from any and all liability to others on account of any such contract, commitment or action. This right to indemnification shall not be exclusive of any other rights to which any present or former officer, director, or committee member may be entitled. The Association shall, as a Common Expense, maintain adequate general liability and officers' and directors' liability insurance to fund this obligation, if such insurance is reasonably available. 4.8. Dedication of or Grant of Easement on Common Are;~. The Association may dedicate or grant easements across portions of the Common Area to the City, to Fayette County, or to any other local, state, or federal governmental or quasi-governmental entity. 4.9. Utility Lil~e~;. Each Owner, occupant, guest, and invitee acknowledges that neither the Association, the Board nor Declarant shall in any way be considered insurers or guarantors of health within the Properties and neither the Association, the Board, nor Declarant shall be held liable for any personal injury, illness or any other loss or damage caused by the presence or malfunction of utility lines or utility sub-stations adjacent to, near, over, or on the Properties. Each Owner, occupant, guest, and invitee assumes all risk of personal injury, illness, or other loss or damage arising from the presence of utility lines or utility sub-stations and further acknowledges that neither Declarant nor the Association have made any representations or warranties, nor has any Owner, occupant, guest, or invitee relied upon any representations or warranties, expressed or implied, relative to the condition or impact of utility lines or utility sub-stations. Article 5. MAINTENANCE 5.1. Association's Responsil~ility. (a) The Association shall maintain and keep in good condition, order and repair the Area of Common Responsibility, which may include, but need not be limited to: (i) Common Area and the facilities located therein; (ii) all landscaping and other flora, parks, ponds, structures, and improvements, including any entry features, bike and pedestrian pathways/trails, situated upon the Common Area; (iii) all furnishings, equipment and other personal property of the Association; -9- (iv) any landscaping and other flora, parks, pedestrian pathways/trails, cart paths, sidewalks, greenbelts, Water Quality Facilities structures and improvements within public rights-of-way within or abutting the Properties or upon such other public land adjacent to the Properties as deemed necessary in the discretion of the Board; (v) such portions of any additional property included within the Area of Common Responsibility as may be dictated by this Declaration, any Supplemental Declaration, any Covenant to Share Costs, any declaration of easements by Declarant, or any contract or agreement for maintenance thereof entered into by the Association; (vi) all ponds, streams, wetlands and/or Water Quality Facilities located within the Properties which serve as part of the drainage and storm water retention system for the Properties, including any retaining walls, bulkheads or dams (earthen or otherwise) retaining water therein, and any fountains, lighting, pumps, conduits, and similar equipment installed therein or used in connection therewith, except as pre-empted by the Declaration of Easements; and (vii) any property and facilities owned by the Declarant and made available, on a temporary or permanent basis, for the primary use and enjoyment of the Association and its Members, such property and facilities to be identified by written notice from the Declarant to the Association and to remain a part of the Area of Common Responsibility and be maintained by the Association until such time as Declarant revokes such privilege of use and enjoyment by written notice to the Association. The Association may, as a Common Expense, maintain other property which it does not own, including, without limitation, property dedicated to the public such as greenbelts, buffer zones and cart paths, or provide maintenance or services related to such property over and above the level being provided by the property owner, if the Board of Directors determines that such maintenance is necessary or desirable to maintain the Community-Wide Standard. (b) The Association shall maintain the facilities and equipment within the Area of Common Responsibility in continuous operation, except for any periods necessary, as determined in the sole discretion of the Board, to perform required maintenance or repairs, unless Members holding sixty- seven percent (67%) of the Class "A" votes in the Association and the Class "B" Member, if any, agree in writing to discontinue such operation. Except as otherwise specifically provided herein, all costs associated with maintenance, repair and replacement of the Area of Common Responsibility shall be a Common Expense to be allocated among all Units as part of the General Assessment, without prejudice to the right of the Association to seek reimbursement from the owner(s) of, or other Persons responsible for, certain portions of the Area of Common Responsibility pursuant to this Declaration, the Covenant to Share Costs, the Declaration of Easements, other recorded covenants, or agreements with the owner(s) thereof. 5.2. Owner's Responsibility. Each Owner shall maintain his or her Unit and all structures, parking areas, landscaping and other improvements comprising the Unit in a manner consistent with the Community-Wide Standard and all applicable covenants, unless such maintenance responsibility is otherwise assumed by or assigned to the Association. In addition to any other enforcement rights, if an Owner fails to perform properly his or her maintenance responsibility, the Association may perform such maintenance responsibilities and assess all costs incurred by the Association against the Unit and the Owner in accordance with Section 8.6. The Association shall afford the Owner reasonable notice and an F:'~WP.51'~DATAIRED~,PCD~IC-HILLS\CCR.V2 - 10- opportunity to cure the problem prior to entry, except when entry is required due to an emergency situation. 5.3. Standard of Performance. All maintenance shall be performed in a manner consistent with the Cormnunity-Wide Standard and all applicable covenants. Maintenance shall include the responsibility for repair and replacement as necessary. The Association and/or an Owner shall not be liable for any damage or injury occurring on, or arising out of the condition of, property which it does not own except to the extent that it has been negligent in the performance of its maintenance responsibilities. 5.4. Covenant to Share Co~;t~;. Adjacent to or in the vicinity of the Properties, there may be certain residential or nonresidential areas, including without limitation single family residential developments and retail, commercial, or business areas, which are not subject to this Declaration and which are neither Units nor Common Area as defined in this Declaration (hereinafter "adjacent properties"). The owners of such adjacent properties shall not be Members of the Association and shall not be entitled to vote, nor shall they be subject to assessment under Article 8 of this Declaration. The Association may enter into agreements with the owners of portions of the adjacent properties which obligate the owners of such adjacent properties to share in certain costs associated with the maintenance, repair, replacement and insuring of portions of the Area of Common Responsibility, if any, which are used by or benefit jointly the owners of such adjacent properties and the owners within the Properties or which obligate the Association to share in certain costs associated with the maintenance, repair, replacement and insuring of portions of such adjacent properties, if any, which are used by or benefit jointly the owners of such adjacent properties and the owners within tile Properties. The owners of such adjacent properties shall be subject to assessment by the Association in accordance with the provisions of such agreement(s). The owners of the adjacent properties shall not be subject to the restrictions contained in this Declaration except as otherwise specifically provided herein. Article 6. INSURANCE AND CASUALTY LOSSES 6.1. Association Insurance. (a) Required Coverages and Payment of Premiums. The Association, acting through its Board or its duly authorized agent, shall obtain and continue in effect the following types of insurance, if reasonably available, or if not reasonably available, the most nearly equivalent coverages as are reasonably available: (i) Blanket property insurance covering "risks of direct physical loss" on a "special form" basis (or comparable coverage by whatever name denominated) for all insurable improvements on tile Common Area, if any, and on other portions of the Area of Common Responsibility to the extent that it has assumed responsibility for maintenance, repair and/or replacement in tile event of a casualty. If such coverage is not generally available at reasonable cost, then "broad form" coverage may be substituted. The Association shall have the authority to and interest in insuring any property for which it has maintenance or repair responsibility, regardless of ownership. All property insurance policies obtained by the Association shall have policy limits sufficient to cover the full replacement cost of the insured improvements; (ii) Commercial general liability insurance on the Area of Common Responsibility, insuring the Association and its Members for damage or injury caused by the negligence of the Association or any of its Members, employees, agents, or contractors while acting on its behalf. -11- If generally aYailable at reasonable cost, thc commercial general liability coverage (including primary and any umbrella coverage) shall have a limit of at least one million dollars ($],000,000) pot occurrence with respect to bodily injury, personal injury, and property damage, provided should additional coverage and higher limits be available at reasonable cost which a reasonably prudent person would obtain, the Association shall obtain such additional coverages or limits; (iii) Workers compensation insurance and employers liability insurance, if and to the extent required by law; (iv) Directors and officers liability coverage; (v) Fidelity insurance covering all Persons responsible for handling Association funds in an amount determined in the Board's best business judgment but not less than an amount equal to one-sixth (1/6) of the annual General Assessments on all Units plus reserves on hand. Fidelity insurance policies shall contain a waiver of all defenses based upon the exclusion of Persons serving without compensation; and (vi) Such additional insurance as the Board, in its best business judgment, determines advisable, which may include, without limitation, flood insurance, fidelity insurance covering Persons responsible for the Association funds, and property insurance on insurable improvements. Premiums for all insurance on the Area of Common Responsibility shall be Common Expenses and shall be included in the General Assessment. In the event of an insured loss, the deductible shall be treated as a Common Expense in the same manner as the premiums for the applicable insurance coverage. However, if the Board reasonably determines, after notice and an opportunity to be heard in accordance with the By-Laws, that the loss is the result of the negligence or willful misconduct of one or more Owners, their guests, invitees, or lessees, then the Board may specifically assess the full amount of such deductible against such Owner(s) and their Units pursuant to Section 8.6. (b) Policy Requirements. The Association shall arrange for an annual review of the sufficiency of insurance coverage by one or more qualified Persons, at least one of whom must be familiar with insurable replacement costs in the metropolitan Atlanta area. Ail Association policies shall provide for a certificate of insurance to be furnished to the Association and to each Member insured upon such Member's written request. The policies may contain a reasonable deductible and the amount thereof shall not be subtracted from the face amount of the policy in determining whether the policy limits satisfy the requirements of Section 6.1(a). In the event of an insured loss, the deductible shall be treated as a Common Expense in the same manner as the premiums for the applicable insurance coverage. However, if the Board reasonably determines, after notice and an opportunity to be heard in accordance with the By-Laws, that the loss is the result of the negligence or willful misconduct of one or more Owners, their guests, invitees, or lessees, then the Board may specifically assess the full amount of such deductible against such Owner(s) and their Units pursuant to Section 8.6. All insurance coverage obtained by the Board shall: (i) be written with a company authorized to do business in the State of Georgia which satisfies the requirements of the Federal National Mortgage Association, or such other secondary mortgage market agencies or federal agencies as the Board deems appropriate; (ii) be written in the name of the Association as trustee for the benefitted parties. Policies on the Common Areas shall be for the benefit of the Association and its Members; (iii) not be brought into contribution with insurance purchased by Owners, occupants, or their Mortgagees individually; (iv) contain an inflation guard endorsement; and (v) include an agreed amount endorsement, if the policy contains a co-insurance clause. In addition, the Board shall use reasonable efforts to secure insurance policies which list the Owners as additional insureds and provide: (i) a waiver of subrogation as to any claims against the Association's Board, officers, employees, and its manager, the Owners and their tenants, servants, agents, and guests; cash; (ii) a waiver of the insurer's rights to repair and reconstruct instead of paying (iii) an endorsement precluding cancellation, invalidation, suspension, or non-renewal by the insurer on account of any one or more individual Owners, or on account of any curable defect or violation without prior written demand to the Association to cure the defect or violation and allowance of a reasonable time to cure; (iv) an endorsement excluding Owners' individual policies from consideration under any "other insurance" clause; (v) an endorsement requiring at least thirty (30) days' prior written notice to the Association of any cancellation, subs!antial modification, or non-renewal; (vi) a cross-liability provision; and (vii) a provision vesting in the Board exclusive authority to adjust losses; provided however, no Mortgagee having an interest in such losses may be prohibited from participating in the settlement negotiations, if any, related to the loss. (c) Damage and Destruction. Immediately after damage or destruction to all or any part of the Properties covered by insurance written in the name of the Association, the Board or its duly authorized agent shall file and adjust all insurance claims and obtain reliable and detailed estimates of the cost of repair or reconstruction. Repair or reconstruction, as used in this paragraph, means repairing or restoring the property to substantially the condition in which it existed prior to the damage, allowing for changes or improvements necessitated by changes in applicable building codes. Any damage to or destruction of the Common Area shall be repaired or reconstructed unless the Voting Delegates representing at least sixty-seven percent (67%) of the total Class "A" votes in the Association, and the Class "B" Member, if any, decide within sixty (60) days after the loss not to repair or reconstruct. If either the insurance proceeds or reliable and detailed estimates of the cost of repair or reconstruction, or both, are not available to the Association within such sixty (60) day period, then the period shall be extended until such funds or information are available. However, such extension shall not exceed sixty (60) F:'~Wp$ I ~DATA'~R ED'~PCD~,K. HI L LS~.CCR. V2 - 13- additional days. No Mortgagee shall have the right to participate in thc determination of whether the damage or destruction to the Common Area shall be repaired or reconstructed. If determined in the manner described above that the damage or destruction to the Common Area shall not be repaired or reconstructed and no alternative improvements are authorized, the affected property shall be cleared of all debris and ruins and thereafter shall be maintained by the Association in a neat and attractive, landscaped condition consistent with the Community-Wide Standard. Any insurance proceeds remaining after paying the costs of repair or reconstruction, or after such settlement as is necessary and appropriate, shall be retained by and for the benefit of the Association and placed in a capital improvement~ account. This is a covenant for the benefit of Mortgagees and may be enforced by the Mortgagee of any affected Unit. If insurance proceeds are insufficient to cover the costs of repair or reconstruction, the Board of Directors may levy Special Assessments without a vote of the Members to cover the shortfall against those Owners responsible for the premiums for the applicable insurance coverage under Section 6. l(a). 6.2. Owners' Insurance. By virtue of taking title to a Unit, each Owner covenants and agrees with all other Owners and with the Association to carry property insurance for the full replacement cost of all insurable improvements on his or her Unit, less a reasonable deductible. Each Owner further covenants and agrees that in the event of damage to or destruction of structures on his Unit, the Owner shall proceed promptly to repair or to reconstruct in a manner consistent with the original construction or such other plans and specifications as are approved in accordance with Article 9. Alternatively, the Owner shall clear the Unit of ali debris and ruins and maintain the Unit in a neat and attractive, landscaped condition consistent with the Community-Wide Standard. The Owner shall pay any costs which are not covered by insurance proceeds. Article 7, ANNEXATION AND WITHDRAWAL OF PROPERTY 7.1. Annexation Without Approval of Membership. Until twenty (20) years after the recording of this Declaration in the Public Records, Declarant may from time to time unilaterally subject to the provisions of this Declaration all or any portion of the real property described in Exhibit B. The Declarant may transfer or assign this right to annex property, provided that the transferee or assignee is the developer of at least a portion of the real property described in Exhibit A or Exhibit B and that such transfer is memorialized in a written, recorded instrument executed by Declarant. Such annexation shall be accomplished by filing a Supplemental Declaration in the Public Records describing the property being annexed. Such Supplemental Declaration shall not require the consent of Members, but shall require the consent of the owner of such property, if other than Declarant. Any such annexation shall be effective upon the filing for record of such Supplemental Declaration unless otherwise provided therein. Nothing in this Declaration shall be construed to require the Declarant or any successor to annex or develop any of the property set forth in Exhibit B in any manner whatsoever. 7.2. Annexation With Approval of Membership. The Association may annex any other real property to the provisions of this Declaration with the consent of the owner of such property, the affirmative vote of Members representing a Majority of the Class "A" votes of the Association represented at a meeting duly called for such purpose, and the written consent of the Declarant so long as Declarant owns property subject to this Declaration or which the Declarant may unilaterally subject to this Declaration. Such annexation shall be accomplished by filing a Supplemental Declaration describing the property being annexed in the Public Records. Any such Supplemental Declaration shall be signed by the President and the Secretary of the Association, and by the owner of the annexed property, and by the Declarant, if the Declarant's consent is required. Any such annexation shall be effective upon filing unless otherwise provided therein. 7.3. Withdrawal of Property. The Declarant reserves the right to amend this Declaration so long as it has a right to annex additional property pursuant to Section 7.1, for the purpose of removing any portion of the Properties from the coverage of this Declaration, provided such withdrawal is not contrary to the overall, uniform scheme of development for the Properties. Such amendment shall not require the consent of any Person other than the Owner of the property to be withdrawn, if not the Declarant. 7.4. Amendment. TI'tis Article shall not be amended without the prior written consent of Declarant so long as the Declarant owns any property which is subject to this Declaration or which Declarant may unilaterally subject to this Declaration. Article 8. ASSESSMENTS 8.1. Creation of and Obligation for Assessm¢l~I,S. (a) Purposes and Typ¢~;. There are hereby created assessments for the Common Expenses of the Association as the Board may authorize from time to time. There shall be three types of assessments: (a) General Assessments as described in Section 8.3; (b) Special Assessments as described in Section 8.5; and (c) Specific Assessments as described in Section 8.6. Each Owner, by accepting a deed or entering into a recorded contract of sale for any portion of the Properties, is deemed to have notice of liability for these assessments and to covenant and agree to pay these assessments. (b) Personal Obligation and I, ierl. All assessments, together with interest not to exceed the maximum rate allowable by law, late charges, costs of collection, and reasonable attorneys' fees, shall be a charge and continuing lien upon each Unit against which the assessment is made until paid, as more particularly provided in Section 8.7. Each assessment, together with interest, late charges, costs of collection, and reasonable attorneys' fees, also shall be the personal obligation of the Person who was the Owner of such Unit at the time the assessment arose. Upon a transfer of title to a Unit, the grantee shall be jointly and severally liable for any assessments and other charges due at the time of conveyance. However, no first Mortgagee who obtains title to a Unit by exercising the remedies provided in its Mortgage shall be liable for unpaid assessments which accrued prior to such acquisition of title. The Association shall, upon request, furnish to any Owner liable for any type of assessment a written statement signed by an Association officer setting forth whether such assessment has been paid. Such statement shall be conclusive evidence of payment. The Association may require the advance payment of a reasonable processing fee for the issuance of a state~nent. Assessments shall be paid in such manner and on such dates as the Board may establish. Unless the Board otherwise provides, the General Assessment shall be due and payable in advance on the first (lst) day of each fiscal year. The Board may require advance payment of assessments at closing of the transfer of title to a Unit and impose special requirements for Owners with a history of delinquent payment. If the Board so elects, assessments may be paid in two (2) or more installments. If any Owner is delinquent in paying any assessments or other charges levied on his Unit, the Board may require any unpaid installments or all outstanding assessments to be paid in full immediately. Any assessment or installment shall be considered delinquent on the fifteenth (15th) day following the due date unless otherwise specified by Board Resolution. No Owner may exempt himself from liability for assessments by non-use of Common Area, abandonment of his Unit, or any other means. The obligation to pay assessments is a separate and independent covenant on the part of each Owner. No diminution or abatement of assessments or set-off shall be claimed or allowed for any alleged failure of the Association or Board to take some action or perform some function required of it, or for inconvenience or discomfort arising from the making of repairs or improvements, or from any other action it takes. The Association is specifically authorized to enter into subsidy contracts or contracts for "in kind" contribution - 15- BOOK ]. PA,BE of sen, ices, materials, or a combination of services and materials with thc Declarant or other entities for payment of Common Expenses. 8.2. Declarant's Obligation for Assessments. So long as the Declarant owns any property which is subject to this Declaration or which Declarant may unilaterally subject to this Declaration, Declarant may elect annually either to pay an amount equal to regular assessments on its unsold Units, or to pay the difference between the amount of assessments levied on all other Units subject to assessment and the amount of actual expenditures by the Association during the fiscal year. Unless the Declarant otherwise notifies the Board in writing at least sixty (60) days before the beginning of each fiscal year, the Declarant shall be deemed to have elected to continue paying on the same basis as during the immediately preceding fiscal year. The Declarant's obligations hereunder may be satisfied in the form of cash or by "in kind" contributions of services or materials, or by a combination of these. 8.3. Computation of General Assessments.. The Board shall prepare a budget covering the estimated Common Expenses during the coming year including a capital contribution to establish a reserve fund in accordance with a budget separately prepared as provided in Section 8.4. General Assessments shall be levied equally on all Units subject to assessment pursuant to Section 8.7. The Board shall send a copy of the budget and notice of the amount of the General Assessment for the upcoming year to each Owner at least thirty (30) days prior to the effective date of such budget. Such budget and assessment shall become effective unless disapproved at a meeting by Members representing at least sixty-seven percent (67%) of the total Class "A" votes in the Association and by the Class "B" Member, if any. If a budget is not adopted for any year, or if the Association fails to deliver an assessment notice, then until such time as a budget is adopted, the budget in effect for the immediately preceding year shall continue for the current year and each Owner shall continue to pay General Assessments on the same basis as during the last year. Once a new budget is adopted and assessments levied, the Association may retroactively assess any shortfalls in collections. If the budget proves inadequate for any reason, the Board may prepare a revised budget for the remainder of the fiscal year, which revised budget shall become effective unless disapproved at a meeting by Members in the same manner as prescribed for the initial budget. There shall be no obligation to call a meeting for the purpose of considering the budget or any revised budget except on petition of the Members as required for special meetings in the By-Laws, which petition must be presented to the Board within ten (10) days after delivery of tile notice of assessments. So long as the Declarant has tile right unilaterally to annex additional property pursuant to Section 7. l, the Declarant may, but shall not be obligated to, reduce tile General Assessment for any fiscal year by payment of a subsidy (in addition to any amounts paid by Declarant under Section 8.2), which may be treated as either a contribution or an advance against future assessments due from the Declarant, or a loan, in the Declarant's discretion. Any such subsidy shall be conspicuously disclosed as a line item in the Common Expense budget and the treatment of such subsidy shall be made known to the membership. The payment of such subsidy in any year shall under no circumstances obligate the Declarant to continue payment of such subsidy in future years, unless otherwise provided in a written agreement between the Association and the Declarant. 8.4. Reserve Budget and Capital Contribution. The Board shall annually prepare reserve budgets which take into account the number and nature of replaceable assets within the Area of Common Responsibility, the expected life of each asset, and the expected repair or replacement cost. The Board shall set the required capital contribution in an amount sufficient to permit meeting the projected needs of the Association, as shown on the budget over the budget period. 8.5. Special Assessments. In addition to other authorized assessments, the Association may levy Special Assessments from time to time to cover unbudgeted expenses or expenses in excess of those budgeted. So long as the total amount of Special Assessments allocable to a Unit does not exceed $250.00 in any one (1) fiscal year, the Board may impose the Special Assessment. Except as provided in Section 6. l(c) hereof, any Special Assessment which would cause the amount of Special Assessments allocable to any Unit to exceed this limitation shall require the affirmative vote or written consent of Members representing at least sixty-seven percent (67%) of the total Class "A" votes in the Association, and the written consent of the Declarant so long as the Declarant owns any property which is subject to this declaration or which Declarant may unilaterally subject to this Declaration. Special Assessments shall be payable in such manner and at such times as determined by the Board, and may be payable in installments extending beyond the fiscal year in which the Special Assessment is approved. Special Assessments shall be levied equally on all Units. 8.6. Specific Assessments. The Association shall have the power to levy Specific Assessments against a particular Unit or Units as follows: (a) to cover the costs, including overhead and administrative costs, of providing benefits, items, or services to the Unit(s) or occupants thereof upon request of the Owner pursuant to a menu of special services which the Board may from time to time authorize to be offered to Owners and occupants (which might include, without limitation, garbage collection, landscape maintenance, janitorial service, pest control, etc.), which assessments may be levied in advance of the provision of the requested benefit, item or service as a deposit against charges to be incurred by the Owner; and (b) to cover costs incurred in bringing the Unit(s) into compliance with the terms of this Declaration, any applicable Supplemental Declaration, the By-Laws or rules, or costs incurred as a consequence of the conduct of the Owner or occupants of the Unit, their agents, contractors, employees, licensees, invitees, or guests; provided, however, the Board shall give the Unit Owner prior written notice and an opportunity for a hearing, in accordance with the By-Laws before levying any Specific Assessment. 8.7. Lien for Assessments. The Association shall have a lien against each Unit to secure payment of delinquent assessments, as well as interest at a rate set by the Board (subject to the maximum interest rate limitations under Georgia law), late charges and costs of collection (including attorneys' fees). Such lien shall be superior to all other liens, except (a) the liens of all taxes, bonds, assessments, and other levies which by law would be superior, and (b) the lien or charge of any first Mortgage of record (meaning any recorded Mortgage with first priority over other Mortgages) made in good faith and for value. Such lien, when delinquent, may be enforced by suit, judgment, and foreclosure under Georgia law. The Association may bid for the Unit at the foreclosure sale and acquire, hold, lease, mortgage, and convey the Unit. While a Unit is owned by the Association following foreclosure: (a) no right to vote shall be exercised on its behalf; (b) no assessment shall be levied on it; and (c) each other Unit shall be charged, in addition to its usual assessment, its pro rata share of the assessment that would have been charged such Unit had it not been acquired by the Association. The Association may sue for unpaid assessments and other charges authorized hereunder without foreclosing or waiving the lien securing the same. The sale or transfer of any Unit shall not affect the assessment lien or relieve such Unit from the lien for any subsequent assessments. However, the sale or transfer of any Unit pursuant to foreclosure of the first Mortgage shall extinguish the lien as to any installments of such assessments due prior to such sale or transfer. A Mortgagee or other purchaser of a Unit who obtains title pursuant to foreclosure of the Mortgage shall not be personally liable for assessments on such Unit due prior to such acquisition of title. Such unpaid assessments shall be deemed to be Common Expenses collectible from Owners of all Units subject to assessment, including such acquirer, its successors and assigns. F:~WP$1 ~DATA~R ED~PCDtK-HILLS~CCR. V2 -17- 8.8. Date of Commencement of Assessments. Thc obligation to pay assessments shall cornmcncc as to each Unit on the date which the Unit is conveyed to or occupied for residential purposes by a Person other than a Builder or Declarant. The first annual General Assessment levied on each Unit shall be paid at the closing of the sale to a Person other than a Builder or Declarant. In the event the obligation to pay assessments accrues by virtue of occupation of a Unit for residential purposes, the first annual General Assessment levied shall be paid immediately upon demand by the Association, and shall be based on the date of occupancy of the Unit for residential purposes. Notwithstanding the foregoing, a Builder holding any lot for one (1) year after purchase shall be obligated to pay the full annual assessment and capital contribution under Section 8.11 for such lot, commencing with the first day of the month after the first anniversary of the Builder's purchase of the lot. The first annual General Assessment shall be adjusted according to the number of months remaining in the fiscal year at the time assessments commence on the Unit. 8.9. Failure to Assess. Failure of the Board to fix assessment amounts or rates or to deliver or mail each Owner an assessment notice shall not be deemed a waiver, modification, or a release of any Owner from the obligation to pay assessments. In such event, each Owner shall continue to pay General Assessments on the same basis as during the last year for which an assessment was made, if any, until a new assessment is levied, at which time the Association may retroactively assess any shortfalls in collection. 8.10. Exempt Property. The following property shall be exempt from payment of assessments: (a) All Common Area and such portions of the property owned by the Declarant as are included in the Area of Common Responsibility pursuant to Section 5.1; and (b) Any property dedicated to and accepted by any governmental authority or public utility. 8.11. Capitalization of Association. Upon acquisition of record title to a Unit by the first Owner thereof other than the Declarant or a Builder, or upon occupation of a Unit by a Person other than a Builder or Declarant, a contribution shall be made by or on behalf of the purchaser or Person occupying the Unit to the working capital of the Association in an amount equal to one-sixth (1/6) of the annual General Assessment per Unit for that year. This amount shall be in addition to, not in lieu of, the annual General Assessment and shall not be considered an advance payment of such assessment. This amount shall be collected and disbursed to the Association at closing of the purchase and sale of the Unit, or, in the event the obligation to make the capital contribution accrues by virtue of occupation of a Unit for residential purposes, the capital contribution shall be paid immediately upon demand by the Association, and shall be based on the date of occupancy of the Unit for residential purposes. The capital contributions shall be used in covering operating expenses and other expenses incurred by the Association pursuant to this Declaration and the By-Laws. 8.12~ Declarant's Obligation. During the Class "B" Control Period, Declarant shall fund any deficit during any fiscal year. The "deficit" shall be the difference between: (a) the amount of all income and revenue of any kind received by the Association, including but not limited to, assessments collected on all Units, use fees, advances made by Declarant, and income from all other sources, and F:~,WP~BD^T&~RED~,PCD'~.HiLLS~CCR.V2 - 18- (b) the amount of all actual expenditures incurred by the Association during the fiscal year, including any reserve contributions for such year, but excluding all non-cash expenses, such as depreciation or amortization, and all expenditures made from reserve funds. Calculation of the deficit shall be performed on a cash basis of accounting. The Declarant may satisfy such obligation through "in kind" contribution of services, materials, or a combination of services and materials. Article 9, ARCHITECTURAL STANDARDS 9.1. General. No structure shall be placed, erected, or installed upon any Unit, and no improvements (including staking, clearing, excavation, grading and other site wOrk, exterior alteration of existing improvements, and planting or removal of landscaping materials) shall take place except in compliance with this Article, and approval of the ARB under this Article unless exempted from the application and approval requirements pursuant to Section 9.3. Any Owner may remodel, paint or redecorate the interior of structures on his Unit without approval; however, modifications to the interior of screened porches, patios, and similar portions of a Unit visible from outside the structures on the Unit shall be subject to approval. No approval shall be required to repaint the exterior of a structure in accordance with the originally approved color scheme or to rebuild in accordance with originally approved plans and specifications. All dwellings constructed on any portion o~' the Properties shall be designed by and built in accordance with the plans and specifications of a licensed architect or other qualified building designer. This Article shall not apply to the activities of the Declarant. This Article may not be amended without the Declarant's written consent so long as the Declarant owns any land subject to this Declaration or which Declarant may unilaterally subject to this Declaration.. 9.2. Architectural Review. Responsibility for administration of the Design Guidelines and review of all applications for construction and modifications under this Article shall be handled by the ARB, the members of which need not be Members of the Association or representatives of Members, and may, but need not, include architects, landscape architects, engineers or similar professionals, whose compensation, if any, shall be established from time to time by the ARB. The ARB may establish and charge reasonable fees for review of applications hereunder and may require such fees to be paid in full prior to review of any application. Such fees may include the reasonable costs incurred by the ARB in having any application reviewed by architects, engineers or other professionals. The ARB shall consist of at least three (3), but not more than five (5), persons and shall have exclusive jurisdiction over all construction on any portion of the Properties. The Declarant shall have the right to appoint all members of the ARB who shall serve at the Declarant's discretion. There shall be no surrender of this right except in a written instrument in recordable form executed by Declarant. Upon the surrender of such right as set forth herein, the Board shall appoint the members of the ARB, who shall thereafter serve and may be removed in the Board's discretion. 9.3. Guidelines and Procedures. (a) Design Guidelines. The Declarant shall prepare Design Guidelines for the Properties. The Design Guidelines may contain general provisions applicable to all of the Properties, as well as other specific provisions which vary from one Portion of the Properties to another depending upon the location and unique characteristics. The Design Guidelines are intended to provide guidance to Owners and Builders regarding matters of particular concern to the ARB in considering applications hereunder. The Design Guidelines are not the exclusive basis for decisions of the ARB, and compliance with the Design F:~WP~ [~DATA~,RED~PCD~K.HI LLS~CCR. V2 - 19- Guidelines does not guarantee approval of any application. The ARB shall adopt such Design Guidelines at its initial organizational meeting and thereafter shall have sole and full authority to amend them. Any amendments to the Design Guidelines shall be prospective only and shall not apply to require modifications to or removal of structures previously approved once the approved construction or modification has commenced. There shall be no limitation on the scope of amendments to the Design Guidelines; the ARB is expressly authorized to amend the Design Guidelines to remove requirements previously imposed or otherwise to make the Design Guidelines less restrictive. The ARB shall make the Design Guidelines available to Owners and Builders who seek to engage in development or construction within the Properties. In the Declarant's discretion, such Design Guidelines may be recorded in the Public Records, in which event the recorded version, as it may unilaterally be amended from time to time, shall control in the event of any dispute as to which version of the Design Guidelines was in effect at any particular time. (b) Procedures. Plans and specifications showing the nature, kind, shape, color, size, materials, and location of all proposed structures and improvements shall be submitted to the ARB for review and a decision on approval. In addition, information concerning irrigation systems, drainage, lighting, landscaping and other features of proposed construction shall be submitted as applicable and as required by the Design Guidelines. In reviewing each submission, the ARB may consider the quality of workmanship and design, harmony of external design with existing structures, and location in relation to surrounding structures, topography, and finish grade elevation, among other considerations. Decisions of the ARB may be based on purely aesthetic considerations. Each Owner acknowledges that opinions on aesthetic matters are subjective and may vary as ARB members change over time. In the event that the ARB fails to approve or to disapprove any application within ten (10) business days after submission of all information and materials reasonably requested, the application shall be deemed approved. However, no approval, whether expressly granted or deemed granted pursuant to the foregoing, shall be inconsistent with the Design Guidelines unless a variance has been granted in writing by the ARB pursuant to this Article. Notwithstanding the above, the ARB by resolution may exempt certain activities from the application and approval requirements of this Article, provided such activities are undertaken in strict compliance with the requirements of such resolution. 9.4. Specific Guidelines and Restrictions. The following items are strictly regulated by the ARB, and the ARB shall have the right, in its sole discretion, to prohibit or restrict these items within the Properties. Each Owner must strictly comply with the terms of this Section unless approval or waiver in writing is obtained from the ARB. The ARB may, but is not required to, adopt specific guidelines as part of the Design Guidelines, or rules and regulations which address these items. (a) Tree Removal. Removal of trees and other natural resources without the prior written consent of the ARB is prohibited except as permitted by the Design Guidelines. (b) Lighting. Exterior lighting visible from the street shall not be permitted unless approved by the ARB under this Article. Seasonal decorative lights may be used only pursuant to rules and regulations established by the Board from time to time. (c) Exterior Structures. No exterior structure of any kind nor any artificial vegetation or sculpture shall be constructed, erected or placed on the outside portion of the Unit, whether such portion is improved or unimproved, except in strict compliance with this Article. This shall include without limitation, mailboxes; basketball hoops; swing sets and similar sports and play equipment; clotheslines; garbage cans; wood piles; swimming pools; docks, piers, boathouses, boatslips or wharfs; hot tubs; gazebos; playhouses; window air conditioning units or fans; solar panels; antennas; satellite dishes, or any other apparatus for the transmission or reception of television, radio, satellite, or other signals of any kind; and hedges, walls, dog runs, animal pens, or fences of any kind. Notwithstanding the foregoing, the Association shall regulate antennas, satellite dishes, or any other apparatus for the transmission or reception of television, radio, satellite or other signals of any kind only in strict compliance with all federal laws and regulations. (d) Temporary or Detached Structures. Except as may be permitted by the Declarant during initial construction, or the ARB thereafter, no temporary or detached house, dwelling, garage or out building shall be placed or erected on any Unit. No mobile home, trailer home, travel trailer, camper or vehicle conunonly known as a "recreational vehicle" shall be stored, parked or otherwise allowed to be placed on a Unit as a temporary or permanent dwelling. (e) Utility Line~;. Overhead utility lines are not permitted, including lines for cable television, except for temporary lines as required during construction and lines installed by or at the request of Declarant. (f) Signs. No sign of any kind shall be erected by an Owner or occupant without the prior written consent of the ARB except as provided in the Design Guidelines. Unless in compliance with this Article, no signs shall be posted or erected by any Owner or occupant within any portion of the Properties, including the Common Area, any Unit, or any structure or dwelling located on the Common Area or any Unit (if such sign would be visible from the exterior of such structure or dwelling as determined in the ARB's sole discretion). All signs must be professionally prepared. The ARB reserves the right to restrict the color, lettering and placement of all signs. This provision shall not apply to entry, directional, or other signs installed by the Declarant or its duly authorized agents as may be necessary or convenient for the marketing and development of the Properties. (g) Window Treatmelal$. Unless otherwise approved in writing by the ARB, all windows on any structure or dwelling shall have window treatments, and any portion thereof visible from outside such structure or dwelling shall be white or neutral in color. (h) Minimum Dwelling Size. Each residential dwelling located on any Unit shall have established a minimum square footage of enclosed, heated and cooled living space in the Design Guidelines. Upon written request of an Owner, the ARB may waive such square footage requirement if, in the ARB's sole discretion, the resulting appearance of such residential dwelling will preserve the overall appearance, scheme, and design within the Properties. (i) Water Ouality and Erosion Control. The plans for each Unit shall comply with easements, this Declaration and the Peachtree City Erosion Control Ordinance with regard to water quality facilities and erosion control. 9.5. Construction Period. The initial construction of all structures must be completed within one (1) year after issuance of a building permit, unless extended by the ARB in its sole discretion. All other construction shall be completed within the time limits established by the ARB at the time the project is submitted to the ARB for approval 9.6. No Waiver of Future Approvals. Approval of proposals, plans and specifications, or drawings for any work done or proposed, or in connection with any' other matter requiring approval, shall not be deemed to constitute a waiver of the right to withhold approval as to any similar proposals, plans and specifications, drawings, or other matters subsequently or additionally submitted for approval. -21 - 80Ol 1_. 1 i .LJ' Pb,'$E {J o.'l_" BOOK ii. 4 PAGE 9.7. Variance. The ARB may authorize variances from compliance with any of its guidelines and procedures when circumstances such as topography, natural obstructions, hardship, or aesthetic or environmental considerations require, but only in accordance with duly adopted rules and regulations. Such variances may only be granted, however, when unique circumstances dictate and no variance shall (a) be effective unless in writing; (b) be contrary to this Declaration; or (c) estop the ARB from denying a variance in other circumstances. For purposes of this Section, the inability to obtain approval of any governmental agency, the issuance of any permit, or the terms of any financing shall not be considered a hardship warranting a variance. 9.8. ~. Review and approval of any application pursuant to this Article is made on the basis of aesthetic considerations only and the ARB shall bear no responsibility for ensuring the structural integrity or soundness of approved construction or modifications, nor for ensuring compliance with building codes and other governmental requirements including without limitation the Peachtree City Erosion Control Ordinance. Neither the Declarant, the Association, the Board, the ARB, nor member of any of the foregoing shall be held liable for any injury, damages, or loss arising out of the manner or quality of approved construction on or modifications to any Unit. In all matters, the ARB, and its members shall be defended and indemnified by the Association as provided in Section 4.7. 9.9. Enforcement. Any member of the ARB or its representatives shall have the right, during reasonable hours and after reasonable notice, to enter upon any Unit to inspect for the purpose of ascertaining whether or not any structure or improvement is in violation oF this Article. Any structure, improvement or landscaping placed or made in violation of this Article shall be deemed to be nonconforming, except to the extent that a variance has been granted pursuant to Section 9.7. Upon written request from the ARB, Owners shall, at their own cost and expense, remove such structure or improvement and restore the property to substantially the same condition as existed prior to the nonconforming work. Should an Owner fail to remove and restore as required, the Board may enforce the decisions of the ARB by any means of enforcement described in Section 4.4. In addition, the ARB shall have the right to enter the property, remove the violation, and restore the property to substantially the same condition as previously existed. Entry by the ARB or its representatives onto a Unit for the purpose of inspecting or enforcing compliance with this Article shall not constitute a trespass. All costs, together with the interest at the maximum rate then allowed by law, may be assessed against the benefitted Unit and collected as a Specific Assessment which shall be subject to enforcement as set forth in Article 8. Unless otherwise specified in writing by the ARB, all approvals granted hereunder shall be deemed conditioned upon completion of all elements of the approved work and all work previously approved with respect to the same Unit in the manner approved, unless approval to modify any application has been obtained. In the event that any Person fails to commence and diligently pursue to completion all approved work, the Association shall be authorized, after notice to the Owner of the Unit and an opportunity to be heard in accordance with the By-Laws, to enter upon the Unit and remove or complete any incomplete work and to assess all costs incurred against the Unit and the Owner thereof as a Specific Assessment, which shall be subject to enforcement pursuant to Section 8.7. Neither the ARB, nor any member of the foregoing nor the Association, the Declarant, or their officers or directors shall be held liable to any Person for exercising the rights granted by this Article. Any contractor, subcontractor, agent, employee, or other invitee of an Owner who fails to comply with the terms and provisions of this Article or the Design Guidelines may be excluded by the ARB from the Properties, subject to the notice and hearing procedures contained in the By-Laws. In addition to the foregoing, the Association shall have the authority and standing to pursue all legal and equitable remedies available to enforce the provisions of this Article and the decisions of the ARB. Article 10. USE RESTRICTIONS 10.1. General Use RestrictioD~. This Article sets out certain use restrictions which must be complied with by all Owners and occupants of any Unit. The Properties shall be used only for residential, recreational, and related purposes (which may include, without limitation, model homes and sales offices for Builders, an information center and/or a sales office for any real estate broker retained by the Declarant to assist in the sale of property described on Exhibit A or Exhibit B. offices for any property manager retained by the Association, or business offices for the Declarant or the Association) consistent with this Declaration and any Supplemental Declaration. 10.2. Residential Use. All Units shall be used exclusively for residential purposes and shall not be used to conduct business or trade. An Owner or occupant residing in a Unit may conduct business activities within the Unit so long as: (i) the existence or operation of the business activity is not apparent or detectable by sight, sound, or smell from outside the Unit; (ii) the business activity conforms to all zoning requirements for the Properties; (iii) the business activity does not involve regular visitation of the Unit by clients, customers, suppliers, or other business invitees or door-to-door solicitation of residents of the Properties; and (iv) the business activity is consistent with the residential character of the Properties and does not constitute a nuisance, or a hazardous or offensive use, or threaten the security or safety of other residents of the Properties, as may be determined in the sole discretion of the Board. The terms "business" and "trade," as used in this provision, shall be construed to have their ordinary, generally accepted meanings and shall include, without limitation, any occupation, work, or activity undertaken on an ongoing basis which involves the provision of goods or services to persons other than the provider's family and for which the provider receives a fee, compensation, or other form of consideration, regardless of whether: (x) such activity is engaged in full or part-time, (y) such activity is intended to or does generate a profit, or (2) a license is required. The leasing of a Unit shall not be considered a business or trade within the meaning of this Section. This Section shall not apply to any activity conducted by the Declarant or a Builder approved by the Declarant with respect to its development and sale of the Properties or its use of any Units which it owns within the Properties, including the operation ora timeshare or similar program. 10.3. Leasing. Units may be leased for residential purposes only for a minimum term of six (6) months. All leases shall require, without limitation, that the tenant acknowledge receipt of a copy of the Declaration, By-Laws, use restrictions, and rules and regulations of the Association. The lease shall also obligate the tenant to comply with the foregoing. The Board may require notice of any lease together with such additional information deemed necessary by the Board. 10.4. Rules and Regulations. In addition to the rules and regulations stated in this Article, the Board may, from time to time, without consent of the Members, promulgate, modify, or delete rules and regulations applicable to the Properties. Such rules and regulations shall be distributed to all Owners and occupants prior to the date that they are to become effective and shall thereafter be binding upon all Owners and occupants until and unless overruled, canceled, or modified in a regular or special meeting by a Majority of the Members, and the written consent of the Declarant, so long as the Declarant owns any property which is subject to this Declaration or which may be unilaterally subjected to this Declaration by the Declarant. - 23 - 10.5. Vehicles. All vehicles shall be subject to such reasonable rules and regulations as the Board of Directors may adopt. In addition, the following shall apply: (a) Automobiles and non-commercial trucks and vans shall be parked only in the garages or in the driveways, if any, serving the Units unless otherwise approved by the ARB; provided however, the Declarant and/or the Association may designate certain on-street parking areas for visitors or guests subject to reasonable rules. No automobile or non-commercial truck or van may be left upon any portion of the Properties, except in a garage, if it is unlicensed or if it is in a condition such that it is incapable of being operated upon the public highways. Such vehicle shall be considered a nuisance and may be removed from the Properties. No motorized vehicles shall be permitted on unpaved Common Area except for public safety vehicles authorized by the Board. (b) Recreational vehicles shall be parked only in the garages, if any, serving the Units. The term "recreational vehicles," as used herein, shall include, without limitation, motor homes, mobile homes, boats, trailers, other towed vehicles, motorcycles, minibikes, scooters, golf carts, go-carts, campers, buses, commercial trucks and vans. Any recreational vehicle parked or stored in violation of this provision in excess of two (2) days shall be considered a nuisance and may be removed from the Properties. Trucks with mounted campers which are an Owner's or occupant's primary means of transportation shall not be considered recreational vehicles, provided they are used on a regular basis for transportation and the camper is stored out of public view. 10.6. Nuisance. It shall be the responsibility of each Owner and occupant to prevent the development of any unclean, unhealthy, unsightly, or unkempt condition on his or her property. No property within the Properties shall be used, in whole or in part, for the storage of any property or thing that will cause such Unit to appear to be in an unclean or untidy condition or that will be obnoxious to the eye; nor shall any substance, thing, or material be kept that will emit foul or obnoxious odors or that will cause any noise or other condition that will or might disturb the peace, quiet, safety, comfort, or serenity of the occupants of surrounding property. No noxious or offensive activity shall be carried on within the Properties, nor shall anything be done tending to cause embarrassment, discomfort, annoyance, or nuisance to any Person using any property within the Properties. There shall not be maintained any plants or animals or device or thing of any sort whose activities or existence in any way is noxious, dangerous, unsightly, unpleasant, or of a nature as may diminish or destroy the enjoyment of the Properties. Without limiting the generality of the foregoing, no speaker, horn, whistle, siren, bell, amplifier or other sound device, except such devices as may be used exclusively for security purposes or as approved by the ARB, shall be located, installed or maintained upon the exterior of any Unit unless required by law. 10.7. Storage of Materials. Trash. Garbage. Dumping. Etc, (a) No lumber, metals, bulk materials, refuse, trash or other similar materials shall be kept, stored, or allowed to accumulate outside the buildings on any Unit, except during the initial construction period of the improvements to the Unit, not to exceed one (1) year in duration, and then only during periods of actual construction. In addition, during construction the building materials on any Unit shall be placed and kept in an orderly fashion. Any Unit on which construction is in progress shall be policed prior to each weekend and during the weekend all materials shall be neatly stacked or placed and any trash or waste materials shall be removed. (b) All garbage cans shall be located or screened so as to be concealed from view of neighboring streets and property. All rubbish, trash, and garbage shall be regularly removed and shall not be allowed to accumulate. Declarant and Builders may dump and bury rocks and trees removed from a building site on such building site. Owners and occupants may burn or bury biodegradable trash, leaves, debris or other materials only in accordance with rules established by the Board and applicable governmental laws and regulations. 10.8. Animals and Pets. No animals, livestock, or poultry of any kind may be raised, bred, kept, or permitted on any Unit, with the exception of dogs, cats, or other usual and common household pets in reasonable number, as determined by the Board. No animals shall be kept, bred or maintained for any commercial purpose. All pets shall be reasonably controlled by the owner whenever outside a Unit and shall be kept in such a manner as to not become a nuisance by barking or other acts. The owners of the pet shall be responsible for all of the pet's actions. If, in the sole opinion of the Board, any animal becomes dangerous or an annoyance or nuisance in the Properties or to nearby property or destructive of wildlife, they shall be removed from the Properties. By way of explanation and not limitation, this Section may be enforced by exercising self-help rights provided in Section 4.4. 10.9. General Prohibitioos. The following are strictly prohibited: (a) Guns. The discharge of firearms on the Properties. The term "firearms" includes without limitation "B-B" guns, pellet guns, and firearms of all types. The Board shall have no obligation to take action to prevent or stop such discharge. (b) Combustible Liquid. Storage of gasoline, heating or other fuels, except for a reasonable amount of fuel that may be stored on each Unit for emergency purposes and operation of lawn mowers and similar tools or equipment; provided that the Association shall be permitted to store fuel for operation of maintenance vehicles, generators and similar equipment. 10.10. Streams. No streams which run across any Unit may be dammed, or the water therefrom impounded, diverted, or used for any purpose without the prior written consent of the Board, except that the Declarant shall have such rights as provided in Article 11. 10.11. Wetlands. All areas designated on a recorded plat as "wetlands" shall be generally left in a natural state, and any proposed alteration of the wetlands must be in accordance with any restrictions or covenants recorded against such property and be approved by all appropriate regulatory bodies. Notwithstanding anything contained in this paragraph, the Declarant, the Association, and the successors, assigns, affiliates and designees of each may conduct such activities as have been or may be permitted by the U.S. Army Corps of Engineers or any successor thereof responsible for the regulation of wetlands. 10.12. Drainage and Grading. (a) Catch basins and drainage areas are for the purpose of natural flow of water only. No obstructions or debris shall be placed in these areas. No Owner or occupant may obstruct or rechannel the drainage flows after location and installation of drainage swales, storm sewers, or storm drains. (b) Use of the areas designated as "Drainage Easement Areas" on any recorded subdivision plat of the Properties, shall be subject to strict prohibitions against encroachment of structures into, over or across the Drainage Easement Areas, and the right of the City and Declarant to go upon and maintain the Drainage Easement Areas. Such maintenance activities may include disturbance of landscaping pursuant to the terms contained in the Declaration of Easements, notwithstanding approval of the landscaping as set forth in Article 9. - 25 - (c) No Person shall alter the grading of any Unit without prior approval pursuant to Article 9 of this Declaration. The Declarant hereby reserves for itself and the Association a perpetual easement across the Properties for the purpose of altering drainage and water flow. The exercise of such an easement shall not materially diminish the value' of or unreasonably interfere with the use of any Unit without the Owner's consent. (d) All Persons shall comply with the Peachtree City Erosion Control Ordinance in construction of improvements on any Unit and in conducting any activity within non-disturbance buffer zones and restricted areas of impervious surface. 10.13. Water Ouality Facilities. The Properties are located in the vicinity of bodies of water and for that reason involve special considerations regarding water runoff from the Properties. In order to control water quality, there shall be no dumping of grass clippings, leaves or other debris; rubbish, trash or garbage; petroleum products, or other potentially hazardous or toxic substances in or on any drainage ditch, stream, pond, Water Quality Facility, greenbelt, buffer zone, or nondisturbance area within or adjacent to the Properties. Fertilizers may be applied to landscaping only if care is taken to minimize runoff. In addition, Declarant has designed and constructed Water Quality Facilities which the Declarant or City will maintain to assure performance of those facilities as intended. All areas designated as "water quality facilities" appearing on a recorded subdivision plat of the Properties shall be generally left in a natural state, and any proposed alteration or landscaping of the Water Quality Facilities must be in accordance with any restrictions or covenants recorded against such property and be approved by all appropriate regulatory bodies and the ARB in accordance with Article 9. 10.14. Greenbelts. Buffer Zones. and Nondi${~rbanc¢ Areas. The Properties are located adjacent to other subdivisions which are separated from the Properties by a greenbelt, buffer zone or nondisturbance area. All areas designated as "greenbelts" "buffer zones" or "nondisturbance areas" shall be generally left in a natural state, and any proposed alteration or landscaping of these areas must be in accordance with any restrictions or covenants recorded against such property and be approved by all appropriate regulatory bodies and the ARB in accordance with Article 9. 10.15. Sight Distance at IntersectionS;. All property located at street intersections or driveways shall be landscaped so as to permit safe sight across such areas. 10.16. Subdivision of Unit. No Unit shall be subdivided or its boundary lines changed after a subdivision plat including such Unit has been approved and filed in the Public Records. Declarant, however, hereby expressly reserves the right to replat any Unit or Units which it or any Builder owns, with the written prior consent of the owner of the Unit or Units affected. Any such division, boundary line change, or replatting shall not be in violation of the applicable subdivision and zoning regulations, if any. i0.17. Occupancy of Unfinished Units. No dwelling erected upon any Unit shall be occupied in any manner before commencement of construction or while in the course of construction, nor at any time prior to the dwelling being fully completed. For the purposes of this Section, commencement of construction shall mean that (i) all plans for such construction have been approved by the ARB; (ii) a building permit has been issued for the Unit by the appropriate jurisdiction; and (iii) construction of a residential dwelling on the Unit has physically commenced beyond site preparation. Completion of a dwelling shall mean that a certificate of occupancy has been issued by the appropriate jurisdiction for the Unit. F:~,WP~I~DATA'~RED'~PCD~K.HILL~CCR.V2 - 26 - 10.18. l)~dll~lIll~g~l. All provisions of the Declaration, By-Laws, and of any rules and regulations, use restrictions or Design Guidelines governing the conduct of Owners and establishing sanctions against Owners shall also apply to all occupants even though occupants are not specifically mentioned. Fines may be levied against Owners or occupants. If a fine is first levied against an occupant and is not paid timely, the fine may then be levied against the Owner. Article 11. EASEMENTS 11.1. Easements of Encroachmerl~. There shall be reciprocal appurtenant easements of encroachment, and for maintenance and use of any permitted encroachment, between adjacent Units and between each Unit and any adjacent Common Area and between adjacent Units due to the unintentional placement or settling or shifting of the improvements constructed, reconstructed or altered thereon (in accordance with the terms of these restrictions) to a distance of not more than three (3) feet. However, in no event shall an easement for encroachment exist if such encroachment occurred due to willful and knowing conduct on the part of, or with the knowledge and consent of, the Person claiming the benefit of such easement. 11.2. Easements for Utilities. Etc. (a) There are hereby reserved to the Declarant, so long as the Declarant owns any property which is subject to this Declaration or which the Declarant may unilaterally subject to this Declaration, the Association, and the designees of each (which may include, without limitation, any governmental or quasi-governmental entity and any utility company, whether public or private) perpetual non-exclusive easements upon, across, over, and under all of the Properties (but not through a structure) to the extent reasonably necessary for the purpose of installing, constructing, monitoring, replacing, repairing, maintaining, operating and/or removing cable television or master antenna systems; security systems; roads and walkways; wetlands and drainage systems; irrigation systems, street lights; signage; and all utilities including but not limited to water, sewers, telephone, gas, and electricity and utility meters; and an easement for access of vehicular and pedestrian traffic over, across and through the Properties, as necessary, to exercise the above-described easements. Declarant specifically grants to the local water supplier, electric company, telephone company and natural gas supplier easements across the Properties for ingress, egress, installation, reading, replacing, repairing, and maintaining utility lines, meters and boxes, as applicable. (b) There is hereby reserved to the Declarant, so long as the Declarant owns any property which is subject to this Declaration or which may be unilaterally subjected to this Declaration by the Declarant, the non-exclusive right and power to grant such specific easements as may be necessary, in the sole discretion of Declarant, in connection with the orderly development of any property described on Exhibit A or Exhibit B. (c) Any damage to a Unit resulting from the exercise of the easements described in paragraphs (a) and (b) of this Section shall promptly be repaired by, and at the expense of, the Person exercising the easement. The exercise of these easements shall not extend to permitting entry into the structures on any Unit, nor shall it unreasonably interfere with the use of any Unit and, except in an emergency, entry onto any Unit shall be made only after reasonable notice to the Owner or occupant. (d) Declarant reserves unto itself the right, in the exercise of its sole discretion, upon the request of any Person holding, or intending to hold, an interest in the Properties, or at any other time, - 27 - (i) to release all or any portion of the Properties from the burden, effect, and encumbrance of any of the easements granted or reserved under this Section, or (ii) to define the limits of any such easements. 11.3. Easement for Slope Control and Drainage Maintenance. The Declarant, for itself and the Association, and their respective representatives, successors and assigns, contractors and agents, hereby establishes and reserves a permanent and perpetual non-exclusive easement appurtenant over, across, under, through and upon each Unit for the purposes of: (a) controlling soil erosion, including grading and planting with vegetation any areas of any Unit which are or may be subject to soil erosion and complying with the Peachtree City Erosion Control Ordinance; (b) the Properties; drainage of natural or man-made water flow and water areas from any portion of (c) changing, modifying or altering the natural flow of water, water courses or waterways on or adjacent to any Unit; (d) the Properties; and dredging, enlarging, reducing or maintaining any water areas or waterways within (e) installing such pipes, lines, conduits, Water Quality Facilities, or other equipment or facilities as may be necessary for slope control, drainage and waterway maintenance of any portion of the Properties. 11.4. Easements for Water Ouality Facility. Drainage Easement Area Maintenance, (a) The Declarant reserves for itself and its successors, assigns, and designees the nonexclusive right and easement, but not the obligation, to enter upon the ponds, streams, and wetlands located within the Area of Common Responsibility to (i) install, keep, maintain, and replace pumps in order to provide water for the irrigation of any of the Area of Common Responsibility; (ii) construct, maintain, and repair any structure retaining water; and (iii) remove trash and other debris therefrom and fulfill maintenance responsibilities as provided in this Declaration. The Declarant's rights and easements provided in this Section shall be transferred to the Association at such time as the Declarant shall cease to own any property subject to the Declaration, or such earlier time as Declarant may elect, in its sole discretion, to transfer such rights by a written instrument. The Declarant, the Association, and their designees shall have an access easement over and across any of the Properties abutting or containing any portion of any pond, stream, or wetland to the extent reasonably necessary to exercise their rights under this Section. (b) Declarant reserves easement rights for a non-exclusive, perpetual easement to allow the passing, discharging and draining of surface waters over and across the Properties to the drainage easement areas and Water Quality Facilities shown on recorded subdivision plats of the Properties. The easement rights reserved are perpetual and run with and are appurtenant to title to the Properties and constitute a perpetual burden upon the Drainage Easement Areas. The rights reserved include without limitation the right of the Declarant to go upon the Drainage Easement Areas to effect maintenance, repair and replacement, and the right of the City to go upon the Drainage Easement Areas to effect maintenance, repair and replacement of the drainage and Water Quality Facilities, and to disturb existing landscaping within the Drainage Easement Areas and to temporarily pile dirt and plant material upon the Drainage Easement Areas, provided the area is restored to a neat and attractive condition to the extent practical, as soon as reasonably possible after completion of the activities authorized hereunder. Use of the Drainage Easement Areas is limited to landscaping. Encroachment of structures into, over, or across Drainage Easement Areas is strictly prohibited. Landscaping in the Drainage Easement Areas is subject to removal in the reasonable discretion of Declarant and/or City in the ordinary course of maintenance of the drainage and water quality facilities. Such landscaping shall be installed in conformance with Article 9 herein. (c) In addition to the foregoing, the Declarant reserves for itself and its successors, assigns, and designees the nonexclusive right and easement, but not the obligation, to enter upon the Properties to (i) construct, maintain, and repair any Water Quality Facility, wall, dam, or other structure retaining water; and (ii) remove trash and other debris therefrom and fulfill any maintenance responsibilities assumed by Declarant. All persons entitled to exercise these easements shall use reasonable care in, and repair any damage resulting from the intentional exercise of such easements. Nothing herein shall be construed to make Declarant or any other Person liable for damage resulting from flooding due to heavy rainfall or other natural disasters. (d) Declarant reserves unto itself the right, in the exercise of its sole discretion, upon the request of any Person holding, or intending to hold, an interest in the Properties, or at any other time, (i) to release all or any portion of the Properties from the burden, effect, and encumbrance of any of the easements granted or reserved under this Section, or (ii) to define the limits of any such easements. 11.5. Easement for Greenbelt Maintenance. (a) The Declarant reserves for itself and its successors, assigns, and designees the nonexclusive right and easement, but not the obligation, to enter upon greenbelts, buffer zones and nondisturbance areas located within the Area of Co~mnon Responsibility to remove trash and other debris therefrom and fulfill maintenance responsibilities as provided in this Declaration. The Declarant's rights and easements provided in this Section shall be transferred to the Association at such time as the Declarant shall cease to own any property subject to the Declaration, or such earlier time as Declarant may elect, in its sole discretion, to transfer such rights by a written instrument. The Declarant, the Association, and their designees shall have an access easement over and across any of the Properties abutting or containing any portion of greenbelt, buffer zone or nondisturbance area to the extent reasonably necessary to exercise their rights under this Section. (b) Encroachment of structures into, over, or across greenbelts, buffer zones and nondisturbance areas shown on any recorded subdivision plat of the Properties is strictly prohibited. Landscaping in these areas is subject to removal in the reasonable discretion of Declarant and/or City in the ordinary course of maintenance of these areas. Any landscaping permitted shall be installed in conformance with Article 9 herein. All persons entitled to exercise these easements shall use reasonable care in, and repair any damage resulting from the intentional exercise of such easements. (c) Declarant reserves unto itself the right, in the exercise of its sole discretion, upon the request of any Person holding, or intending to hold, an interest in the Properties, or at any other time, (i) to release all or any portion of the Properties from the burden, effect, and encumbrance of any of the easements granted or reserved under this Section, or (ii) to define the limits of any such easements. 11.6. Easements to Serve Additional Prop~'ty. The Declarant hereby reserves for itself and its duly authorized agents, representatives, and employees, successors, assigns, licensees, and mortgagees, an easement over the Common Area for the purposes of enjoyment, use, access, and development of the - 29 - property described in ~, whether or not such property is made subject to this Declaration. This easement includes, but is not limited to, a right of ingress and egress over the Common Area for construction of roads and for connecting and installing utilities and improvements on such property. In addition, Declarant reserves the non-exclusive right and power to grant such specific easements as may be necessary, in the sole discretion of Declarant, in connection with the orderly development of any property described on Exhibil A or Exhibit B. 11.7. Easement for Right of Entry_. The Association shall have the right, but not the obligation, to enter upon any Unit for emergency, security, and safety reasons, to perform maintenance pursuant to Article 5 hereof, and to inspect for the purpose of ensuring compliance with this Declaration, any Supplemental Declaration, By-Laws, and rules. Such right may be exercised by any member of the Board, the Association's officers, agents, employees, and managers, members of the ARB pursuant to Article 9, and all police officers, fire fighters, ambulance personnel, and similar emergency personnel in the performance of their duties. Except in an emergency situation, entry shall only be during reasonable hours and after notice to and permission from the Owner. The Association may also enter a Unit to abate or remove, using such measures as may be reasonably necessary, any structure, thing or condition which violates the Declaration, any Supplemental Declaration, the By-Laws, the Design Guidelines, or the rules. All costs incurred, including reasonable attorneys' fees, may be assessed against the Owner as a Specific Assessment. This easement includes the right to enter any Unit to cure any condition which may increase the risk of fire, immediate danger of personal injury or other hazard if an Owner fails or refuses to cure the condition with a reasonable time after request by the Board, but shall not authorize entry into any dwelling without permission of the Owner, except as set forth herein for emergencies. 11.8. Easement for Lateral Support. Every portion of the Common Area, every Unit, and any improvement which contributes to the lateral support of another portion of the Common Area or of another Unit shall be burdened with an easement for lateral support, and each shall also have the right to lateral support which shall be appurtenant to and pass with title to such property. 11.9. Easement for Special l~ver~t$. Declarant hereby reserves for itself, its successors, assigns and designees a perpetual, non-exclusive easement over the Common Area for the purpose of conducting educational, cultural, entertainment, or sporting events, and other activities of general community interest, including without limitation the Tour of Homes, at such locations and times as Declarant, in its sole discretion, deems appropriate. Each Owner, by accepting a deed or other instrument conveying any interest in a Unit, acknowledges and agrees that the exercise of this easement may result in a temporary increase in traffic, noise, gathering of crowds, and related inconveniences, and each Owner agrees on behalf of itself and the occupants of its Unit to take no action, legal or otherwise, which would interfere with the exercise of such easement or to recover damages for or as the result of any such activities. 11.10. Liability for Use of Easements. No Owner shall have a claim or cause of action against the Declarant, its successors or assigns, arising out of the exercise or non-exercise of any easement reserved hereunder or shown on any subdivision plat for the Properties, except in cases of willful or wanton misconduct. 11.! l. Non-Merger. Notwithstanding the fact that Declarant is the current owner of the Properties, it is the express intention of Declarant that the easements in Articles 2 and 11 herein established for the benefit of the Properties and Owners shall not merge into the fee simple estate of individual lots conveyed by Declarant or its successor, but that the estates of the Declarant and individual lot owners shall remain as separate and distinct estates. Any conveyance of all or a portion of the Properties shall be subject to the terms and provisions of this Declaration, regardless of whether the instrument of conveyance refers to this Declaration. I1.12. Grants. The parties hereby declare that this Declaration, and the easements created hereunder in Articles 2 and 11 shall be and constitute covenants running with the fee simple estate of the Properties. The grants of easements in this Declaration are independent of any covenants and contractual agreements undertaken by the parties in this Declaration and a breach by either party of any such covenants or contractual agreements shall not cause or result in a forfeiture or reversion of the easements granted in this Declaration. Article 12. MORTGAGEE PROVISIONS The following provisions are for the benefit of holders, insurers and guarantors of first Mortgages on Units in the Properties. The provisions of this Article apply to both this Declaration and to the By-Laws, notwithstanding any other provisions contained therein. 12.1. Notices of Action. An institutional holder, insurer, or guarantor of a first Mortgage who provides a written request to the Association (such request to state the name and address of such holder, insurer, or guarantor and the street address of the Unit to which its Mortgage relates, thereby becoming an "Eligible Holder"), will be entitled to timely written notice of: (a) Any condemnation loss or any casualty loss which affects a material portion of the Properties or which affects any Unit on which there is a first Mortgage held, insured, or guaranteed by such Eligible Holder; (b) Any delinquency in the payment of assessments or charges owed by a Unit subject to the Mortgage of such Eligible Holder, where such delinquency has continued for a period of sixty (60) days, or any other violation of the Declaration or By-Laws relating to such Unit or the Owner or Occupant which is not cured within sixty (60) days; (c) Any lapse, cancellation, or material modification of any insurance policy maintained by the Association; or (d) Holders. Any proposed action which would require the consent of a specified percentage of Eligible 12.2. Special FHLMC Provision. So long as required by the Federal Home Loan Mortgage Corporation, the following provisions apply in addition to and not in lieu of the foregoing. Unless at least sixty-seven (67%) of the first Mortgagees or Members representing at least sixty-seven (67%) of the total Association vote consent, the Association shall not: (a) By act or omission seek to abandon, partition, subdivide, encumber, sell, or transfer all or any portion of the real property comprising the Common Area which the Association owns, directly or indirectly (neither the conveyance of property in accordance with Section 4.3 nor the granting of easements for utilities or other similar purposes consistent with the intended use of the Common Area shall be deemed a transfer within the meaning of this paragraph); -31 - (b) Change the method of determining the obligations, assessments, dues, or other charges which may be levied against an Owner of a Unit; (c) By act or omission change, waive, or abandon any scheme of regulations or enforcement pertaining to architectural design, exterior appearance or maintenance of Units and the Common Area (the issuance and amendment of Design Guidelines, architectural standards, procedures, roles and regulations, or use restrictions shall not constitute a change, waiver, or abandonment within the meaning of this provision); (d) Fail to maintain insurance, as required by this Declaration; or (e) Use hazard insurance proceeds for any Common Area losses for other than the repair, replacement, or reconstruction of such property. First Mortgagees may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against the Common Area and may pay overdue premiums on casualty insurance policies or secure new casualty insurance coverage upon the lapse of an Association policy, and first Mortgagees making such payments shall be entitled to immediate reimbursement from the Association. 12.3. No Priority. No provision of this Declaration or the By-Laws gives or shall be construed as giving any Owner or other party priority over any rights of the first Mortgagee of any Unit in the case of distribution to such Owner of insurance proceeds or condemnation awards for losses to or a taking of the Common Area. 12.4. Notice to Association. Upon request, each Owner shall be obligated to furnish to the Association the name and address of the holder of any Mortgage encumbering such Owner's Unit. 12.5. Construction of Article 12. Nothing contained in this Article shall be construed to reduce the percentage vote that must otherwise be obtained under the Declaration, By-Laws, or Georgia law for any of the acts set out in this Article. 12.6. Failure of Mortgagee to Respond. Any Mortgagee who receives a written request from the Board to respond to or consent to any action shall be deemed to have approved such action if the Association does not receive a written response from the Mortgagee within thirty (30) days of the date of the Association's request, provided such request is delivered to the Mortgagee by certified or registered mail, return receipt requested. Article 13. DECLARANT'S RIGHTS 13.1. Transfer to Association. Any or all of the special rights and obligations of the Declarant set forth in this Declaration or the By-Laws may be transferred or assigned in whole or in part to other Persons, provided that the transfer shall not reduce an obligation nor enlarge a right beyond that which the Declarant has under this Declaration or the By-Laws. No such transfer or assignment shall be effective unless it is in a written instrument signed by the Declarant and duly recorded in the Public Records. 13.2. Development. The Declarant and Builders authorized by Declarant may maintain and carry on upon portions of the Properties such facilities and activities as, in the sole opinion of the Declarant, may F:\WPSI~DATA'~RED~,PCD~K-HILL~CCR.V2 - 32 - be reasonably required, convenient, or incidental to the development of the Properties, and/or construction or sale of Units, including, but not limited to, business offices, signs, model homes, and sales offices. The Declarant and authorized Builders shall have easements for access to and use of such facilities. 13.3. Improvements to Common Area. The Declarant and its employees, agents and designees shall also have a right and easement over and upon all the Common Area as it deems appropriate in its sole discretion. 13.4. Additional Declarations. No Person shall record any declaration of covenants, conditions and restrictions, declaration of easements or similar instrument affecting any portion of the Properties without Declarant's review and written consent. Any attempted recordation without such consent shall result in such instrument being void and of no force and effect unless subsequently approved by written consent signed by the Declarant and recorded in the Public Records. 13.5. Amendments. Notwithstanding any contrary provision of this Declaration, no amendment to or modification of any use restrictions, rules or Design Guidelines made after termination of the Class "B" Control Period shall be effective without prior notice to and the written consent of Declarant so long as the Declarant owns any property which is subject to this Declaration or which Declarant may unilaterally subject tot the Declaration. This Article may not be amended without the written consent of the Declarant. The rights contained in this Article shall terminate upon the earlier of (a) twenty (20) years from the date this Declaration is recorded, or (b) upon recording by Declarant of a written statement that all sales activity has ceased. Article 14. GENERAL PROVISIONS 14.1. Duration. (a) Unless terminated as provided in this Section or unless otherwise limited by Georgia law, this Declaration shall have perpetual duration. If Georgia law hereafter limits the period during which covenants may run with tile land, then, unless terminated as provided herein or, if such termination method is not consistent with Georgia law, in such other manner as required by Georgia law, this Declaration shall automatically be extended at the expiration of such period for successive periods of twenty (20) years each. Notwithstanding the above, if any of the covenants, conditions, restrictions, or other provisions of this Declaration shall be unlawful, void, or voidable for violation of the rule against perpetuities, then such provisions shall continue only until twenty-one (21) years after the death of the last survivor of the now living descendants of Elizabeth Il, Queen of England. (b) Unless otherwise provided by Georgia law, this Declaration may be terminated within the first twenty (20) years after the date of recording by an instrument signed by Owners of at least ninety percent (90%) of the total Units within tile Properties, which instrument is recorded in the Public Records; provided, however, regardless of the provisions of Georgia law, this Declaration may not be terminated without the prior written consent of the Declarant so long as the Declarant owns any property which is subject to this Declaration or which the Declarant may unilaterally subject to this Declaration. After twenty (20) years from the date of recording, this Declaration may be terminated only by an instrument signed by Owners owning at least fifty-one percent (51%) of the Units and constituting at least fifty-one percent (51%) of the total number of Owners, and by the Declarant, if the Declarant owns any portion of the Properties, which instrument complies with the requirements of O.C.G.A. {}44-5-60(d) and is recorded in -33 - the Public Records. Nothing in this Section shall be construed to permit termination of any easement created in this Declaration without the consent of the holder of such easement. 14.2. Amendment. (a) By Declarant. Until termination of the Class "B" Membership, Declarant may unilaterally amend this Declaration for any purpose. Thereafter, the Declarant may unilaterally amend this Declaration at any time and from time to time if such amendment is necessary (i) to bring any provision into compliance with any applicable governmental statute, rule, regulation, or judicial determination; (ii) to enable any reputable title insurance company to issue title insurance coverage on the Units; (iii) to enable any institutional or governmental lender, purchaser, insurer or guarantor of Mortgage loans, including for example, the Department of Veterans Affairs, the Federal Housing Administration, Federal National Mortgage Association, or Federal Home Loan Mortgage Corporation, to make, purchase, insure or guarantee Mortgage loans on the Units; or (iv) to satisfy the requirements of any local, state or federal governmental agency. However, any such amendment shall not adversely affect the title to any Unit unless the Owner shall consent in writing. In addition, so long as the Declarant owns property which is subject to this Declaration or which Declarant may unilaterally subject to this Declaration, it may unilaterally amend this Declaration for any other purpose, provided the amendment has no material adverse effect upon any right of any Owner. (b) By the Board. The Board shall be authorized to amend this Declaration without the consent of the Members for tbe purpose of submitting the Properties to the Georgia Property Owners' Association Act, O.C.G.A. §44-3-220, et seq. (1994) and conforming this Declaration to any mandatory provisions thereof. Any such amendments shall require the written consent of the Declarant, so long as the Declarant owns any property wbich is subject to this Declaration, or which Declarant may unilaterally subject to this Declaration. (c) By Meml~er$. Except as otherwise specifically provided above and elsewhere in this Declaration, this Declaration may be amended only by the affirmative vote or written consent, or any combination thereof, of Members holding at least sixty-seven percent (67%) of the total Class "A" votes in the Association, including sixty-seven percent (67%) of the Class "A" votes held by Members other than the Declarant, and the consent of the Declarant, so long as the Declarant owns any property which is subject to this Declaration, or which Declarant may unilaterally subject to this Declaration. Notwithstanding the above, the percentage of votes necessary to amend a specific clause shall not be less than the prescribed percentage of affirmative votes required for action to be taken under that clause. (d) Validity and Effective Date. Any amendment to the Declaration shall become effective upon recording in the Public Records, unless a later effective date is specified in the amendment. Any procedural challenge to an amendment must be made within six months of its recordation or such amendment shall be presumed to have been validly adopted. In no event shall a change of conditions or circumstances operate to amend any provisions of this Declaration. No amendment may remove, revoke, or modify any right or privilege of the Declarant or the Class "B" Member without the written consent of the Declarant, the Class "B" Member, or the assignee of such right or privilege. If an Owner consents to any amendment to this Declaration or the By-Laws, it will be conclusively presumed that such Owner has the authority to consent, and no contrary provision in any Mortgage or contract between the Owner and a third party will affect the validity of such amendment. F:'~WP:~I'~DATA~,RED~,PCD'~K-HILL~'~CCR.V2 - 34 - 14.3. Severability. Invalidation of any provision of this Declaration, in whole or in part, or any application of a provision of this Declaration by judgment or court order shall in no way affect other provisions or applications. 14.4. Alternative Dispute Resolutions. It is the intent of the Association and the Declarant to encourage the amicable resolution of disputes involving the Properties and to avoid the emotional and financial costs of litigation if at ali possible. Accordingly, the Association, the Declarant and each Owner covenants and agrees that it shall attempt to resolve all claims, grievances or disputes involving the Properties, including, without limitation, claims, grievances or disputes arising out of or relating to the interpretation, application or enforcement of this Declaration, the By-Laws, the Association rules, or the Articles through alternative dispute resolution methods, such as mediation and arbitration. To foster the amicable resolution of disputes, the Board may adopt alternative dispute resolution procedures. Participation in alternative dispute resolution procedures shall be voluntary and confidential. Should either party conclude that such discussions have become unproductive or unwarranted, then the parties may proceed with litigation. 14.5. Litigation. Except as provided betow, no judicial or administrative proceeding shall be commenced or prosecuted by the Association unless approved by a vote of Members holding seventy-five percent (75 %) of the total Class "A" votes in the Association. This Section shall not apply, however, to (a) actions brought by the Association to enforce the provisions of this Declaration (including, without limitation, the foreclosure of liens); (b) the imposition and collection of assessments as provided in Article 8; (c) proceedings involving challenges to ad valorem taxation; (d) counterclaims brought by the Association in proceedings instituted against it; or (e) actions brought by the Association against any contractor, vendor, or supplier of goods and services arising out of a contract for services or supplies. This Section shall not be amended unless such amendment is approved by the percentage of votes, and pursuant to the same procedures, necessary to institute proceedings as provided above. 14.6. Cumulative Effect: ConflicL The provisions of this Declaration shall be cumulative with the provisions of any applicable Supplemental Declaration. The Association shall have the standing and authority to enforce the provisions of any Supplemental Declaration. 14.7. Use of the Words "Kedron Hills". No Person shall use the words "Kedron Hills" in any printed or promotional material without the Declarant's prior written consent. However, Owners may use the words "Kedron Hills" in printed or promotional matter where such terms are used solely to specify that particular property is located within the Kedron Hills development and the Association shall be entitled to use the words "Kedron Hills" in its name. 14.8. Compliance. Every Owner and occupant of any Unit shall comply with this Declaration, any applicable Supplemental Declaration, the By-Laws, and the Association roles. Failure to comply shall be grounds for an action by the Association or by any aggrieved Unit Owner(s) to recover sums due, for damages or injunctive relief, or for any other remedy available at law or in equity, in addition to those enforcement powers granted to the Association in Section 4.4. 14.9. Notice of Sale or Transfer of TiU¢. Any Owner desiring to sell or otherwise transfer title to his or her Unit shall give the Board at least seven (7) days' prior written notice of the name and address of the purchaser or transferee, the date of such transfer of title, and such other information as the Board may reasonably require. The transferor shall continue to be jointly and severally responsible with the transferee for all obligations of the Owner of the Unit, including assessment obligations, until the date upon which such notice is received by the Board, notwithstanding the transfer of title. 14.10. E~ibi~. ~, ~ and ~attached to this Declaration are incorporated by this reference. Amendment of ~ and ~ shall be governed by the provisions of Section 14.2. All other exhibits are attached for informational purposes and may be amended as provided therein or in the provisions of this Declaration which refer to such exhibits. IN WITNESS WHEREOF, the undersigned Declarant has executed this Declaration this day of ~¢~.n. Oo~.~' , 19 qG . DECLARANT: PEACHTREE CITY HOLDINGS, L.L.C., a Georgia limited liability company By: Nam~~ ~ .~~ t..~.. Title: Signed, sealed, and delivered 19 c1[, , in ~e presence of: ~itness F:~WP$1~.DATA~RED'~PL'D~K.HtLI..~CCR. V'Z - 36 - Land Initially Submitted Ail that tract or parcel of land lying and being in Land Lots 122 and 123 of the 7th District, City of Peachtree City, Fayette County, Georgia, as shown on plat of survey captioned "Final Plat of Kedron Hills, Phase 1" by M. T. Perdue, Georgia Registered Land Surveyor No. 2261, dated December 13, 1996, filed December 13, 1998 and recorded in Plat Book 28, Pages 155 through 157 inclusive, Fayette County, Georgia Records, which plat is incorporated herein by this reference and made a part of this description. LESS AND EXCEPT any streets, rights-of way, alleys, cart paths, water courses, drains, easements, greenbelts and public places dedicated on the above-referenced plat to the City of Peachtree City. Exhibit A Page 1 of 1 EXHIBIT B Land Subject to Annexation All that tract or parcel of land lying and being within one mile of the outer perimeter boundary of that certain tract or parcel of land known as "Kedron Hills, Phase 1", as more particularly described on Exhibit A hereto. Exhibit B ~:~w~'s~D^'r^~rEraPcD~K-.,.us~ccr. v2 Page I of 1 EXHIBIT C BY-LAWS OF KEDRON HILLS COMMUNITY ASSOCIATION, INC. 3.15. 3.16. 3.17. C. 3.18. 3.19. 3.20. 3.21. 3.22. 3.23. 3.24. 3.25. Conduct of Meetings ......................................... 7 Open Meetings ............................................. 7 Action Without a Formal Meeting ................................ 7 Powers and Duties .......................................... 7 Powers .................................................. 7 Duties .................................................. 7 Right of Class "B" Member to Disapprove Actions ..................... 8 Management .............................................. 9 Accounts and Reports ........................................ 9 Borrowing .............................................. 10 Right to Contract .......................................... 10 Enforcement ............................................. 10 Article 4 ........................................................... 11 Officers ........................................................... 11 4.1. Officers ................................................ 11 4.2. Election and Term of Office ................................... 11 4.3. Removal and Vacancies ...................................... 11 4.4. Powers and Duties ......................................... 11 4.5. Resignation .............................................. 11 4.6. Agreements, Contracts, Deeds, Leases, Checks, Etc ................... 12 4.7. Compensation ............................................ 12 Article 5 ........................................................... 12 Committees 5.1. 5.2. General ................................................ 12 Covenants Committee ....................................... 12 Article 6 ........................................................... 12 Miscellaneous ....................................................... 12 6.1. Fiscal Year .............................................. 12 6.2. Parliamentary Rules ........................................ 12 6.3. Conflicts ................................................ 12 6.4. Books and Records ......................................... 12 6.5. Notices ................................................. 13 6.6. Amendment .............................................. 13 F:~.Wp$ I ~DATA~,RED~,PCD~,K.}i iLI~By LAW$.V2 - ii- BY-LAWS OF KEDRON HILLS COMMUNITY ASSOCIATION, INC. Article 1. Name, Principal Office, and Del'tuitions I.I. Name. The name of the corporation is Kedron Hills Community Association, Inc. (the "Association"), a Georgia non-profit corporation. 1.2. Principal Office. The principal office of the Association shall be located in Fayette County, Georgia. The Association may have such other offices, either within or outside the State of Georgia, as the Board of Directors may determine or as the affairs of the Association may require. 1.3. Definitions. The words used in these By-Laws shall be given their normal, commonly understood del'tuitions. Capitalized terms shall have the same meaning as set forth in that Declaration of Covenants, Conditions, and Restrictions for Kedron Hills Community Association, Inc. filed in the Public Records, as it may be amended (the "Declaration"), unless the context indicates otherwise. Article 2. Association: Membership, Meetings, Quorum, Voting, Proyies 2.1. Membership. The Association shall have two dlasses of membership, Class "A" and Class "B," as more fully set forth in the Declaration, the terms of which pertaining to membership are incorporated by this reference. 2.2. Place of Meetings. Meetings of the Association shall be held at the principal office of the Association or at such other suitable place convenient to the Members as the Board may designate, either within the Properties or as conveniently as possible and practical. 2.3. Annual Meetings. The first meeting of the Association, whether a regular or special meeting, shall be held within one (1) year from the date of incorporation of the Association. Subsequent regular annual meetings shall be set by the Board so as to occur during the third quarter of the Association's fiscal year on a date and at a time set by the Board. 2.4. Special Meetings. The President may call special meetings. In addition, it shall be the duty of the President to call a special meeting if so directed by resolution of the Board or upon a petition signed by Members representing at least twenty-five percent (25 %) of the total Class "A" votes of the Association. 2.5. Notice of Meetirlg~. Written notice stating the place, day, and tkne of any meeting of the Members shall be delivered, either personally or by mail, to each Member entitled to vote at such meeting, not less than ten (t0) nor more than thirty (30) days before the date of such meeting, by or at the direction of the President or the Secretary or the officers or persons calling the meeting. In the case of a special meeting or when otherwise required by statute or these By-Laws, the purpose or purposes for which the meeting is called shall be stated in the notice. No business shall be transacted at a special meeting except as stated in the notice. If mailed, the notice of a meeting shall be deemed to be delivered when deposited in the United States mail addressed to the Member at the address of the Member as it appears on the records of the Association, with postage prepaid. 2.6. Waiver of Notice. Waiver of notice of a meeting of the Members shall be deemed the equivalent of proper notice. Any Member may, in writing, waive notice of any meeting of the Members, either before or after such meeting. Attendance at a meeting by a Member or the Member's proxy shall be deemed waiver by such Member of notice of the time, date, and place thereof, unless such Member or proxy specifically objects to lack of proper notice at the time the meeting is called to order. Attendance at a special meeting also shall be deemed waiver of notice of all business transacted at such meeting unless an objection on the basis of lack of proper notice is raised before the business is put to a vote. 2.7. Adjournment of Meetings. If any meeting of the Association cannot be held because a quorum is not present, Members or their proxies holding a Majority of the votes represented at such meeting may adjourn the meeting to a time not less than five (5) nor more than thirty (30) days from the time the original meeting was called. At the reconvened meeting, if a quorum is present, any business may be transacted which might have been transacted at the meeting originally called. If a time and place for reconvening tile meeting is not fixed by those in attendance at the original meeting or if for any reason a new date is fixed for reconvening the meeting after adjournment, notice of the time and place for reconvening the meeting shall be given to Members in the manner prescribed for regular meetings. The Members represented at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum, provided that any action taken is approved by at least a Majority of the votes required to constitute a quorum. 2.8. Voting. The voting rights of the Members shall be as set forth in the Declaration and in these By-Laws, and such voting rights provisions are specifically incorporated by this reference. 2.9. Proxies. At all meetings of Members, each Member entitled to cast the vote for his or her Unit pursuant to Section 3.2. of the Declaration may vote in person (if a corporation, partnership, limited liability company or trust, through any officer, director, partner, member, duly authorized manager or trustee duly authorized to act on behalf of the Member) or by proxy, subject to the limitations of Georgia law and any specific provision to the contrary in the Declaration or these By-Laws. All proxies shall be in writing specifying the Unit(s) for which it is given, signed by the Member or a duly authorized attorney-in-fact, dated and filed with the Secretary of the Association prior to any meeting for which it is to be effective. Unless otherwise specifically provided in the proxy, a proxy shall be presumed to cover all votes which the Member giving such proxy is entitled to cast, and in the event of any conflict between two (2) or more proxies purporting to cover the same voting rights, the later dated proxy shall prevail, or if dated as of the same date, both shall be deemed invalid. Every proxy shall be revocable and shall automatically cease upon conveyance of any Unit for which it was given, or upon receipt of notice by the Secretary of the death or judicially declared incompetence of a Member who is a natural person, or of written revocation, or eleven (11) months from the date of the proxy, unless a shorter period is specified in the proxy. -2- 3.4. Nomination and Election Procedures. (a) Nomination of Directors. Except with respect to directors selected by the Class "B" Member, nominations for election to the Board of Directors shall be made by a Nominating Committee. The Nominating Committee shall consist of a chairperson, who shall be a member of the Board of Directors, and three (3) or more Class "A" Members or representatives of Class "A" Members. Tile Nominating Conunittee shall be appointed by the Board of Directors not less than thirty (30) days prior to each election to serve a term of one (1) year or until their successors are appointed, and such appointment shall be announced at each such election. The Nominating Committee shall make as many nominations for election to the Board of Directors as it shall in its discretion determine, but in no event less than the number of positions to be filled as provided in Section 3.5 below. Nominations shall also be permitted from the floor. The Nominating Committee shall nominate separate slates for the directors, if any, to be elected at large by all Class "A" votes. In making its nominations, the Nominating Committee shall use reasonable efforts to nominate candidates representing the diversity which exists within the pool of potential candidates. All candidates shall have a reasonable opportunity to communicate their qualifications to the Members and to solicit votes. (b) Election Procedures. Each Owner may cast all votes assigned to the Unit which it represents for each position to be filled from the slate of candidates on which such Owner is entitled to vote. There shall be no cumulative voting. That number of candidates equal to the number of positions to be filled receiving the greatest number of votes shall be elected. Directors may be elected to serve any number of consecutive terms. 3.5. Election and Term of Office. Notwithstanding any other provision of these By-Laws: (a) Within thirty (30) days after the time that Class "A" Members other than Builders own fifty percent (50%) of the Units permitted by the Master Plan for the property described in Exhibit A and Exhibit B of the Declaration, or whenever the Class "B" Member earlier determines, tile Association shall hold an election at which the Class "A" Members shall elect one (1) of tile three (3) directors, who shall be an at-large director and shall serve a term of two (2) years or until the occurrence of the event described in subsection (b), whichever is shorter. If such director's term expires prior to the occurrence of the event described in subsection (b), a successor shall be elected for a like term. The remaining two (2) directors shall be appointees of the Class "B" Member. (b) Within ninety (90) days after termination of the Class "B" Control Period, tile Association shall hold an election at which tile Class "A" Members shall elect two (2) of the three (3) directors, who shall serve as at-large directors and shall serve u.ntil the first annual meeting following the termination of the Class "B" Control Period. If such annual meeting is scheduled to occur within ninety (90) days after termination of the Class "B" Control Period, this subsection shall not apply and directors shall be elected in accordance with subsection (c) below. The remaining director shall be appointed by the Class "B" Member. (c) Not later than the first (lst) annual meeting after the termination of the Class "B" Control Period, the Board shall be increased to five (5) directors and an election shall be held. Four (4) directors shall be elected by the Class "A" Members. Two (2) directors shall serve a term of two (2) years, and two (2) directors shall serve a term of one (1) year, as such directors determine among themselves. -4- BOOK _-I. :J l 6 5 5 Until termination of the Class "B" membership, the Class "B" Member shall be entitled to appoint one (1) director. Upon termination of the Class "B" membership, the director appointed by the Class "B" Member shall resign and the remaining directors shall be entitled to appoint a director to serve until the next annual meeting, at which time the Class "A" Members shall be entitled to elect a director to fill such position. Such director shall be elected for a term of two (2) years. Upon the expiration of the term of office of each director elected by the Class "A" Members, Class "A" Members, the Class "A" Members entitled to elect such director shall be entitled to elect a successor to serve a term of two (2) years. The directors elected by the Class "A" Members shall hold office until their respective successors have been elected. 3.6. Removal of Directors and Vacancies. Any director elected by the Class "A" Members may be removed, with or without cause, by Members holding a Majority of the votes entitled to be cast for his or her election. Any director whose removal is sought shall be given notice prior to any meeting called for that purpose. Upon removal of a director, a successor shall be elected by the Class "A" Members to fill the vacancy for the remainder of the term of such director. Any director elected by the Class "A" Members who has three (3) or more consecutive unexcused absences from Board meetings, or who is more than thirty (30) days delinquent (or is the Resident ora Unit that is delinquent or is the representative of a Member who is delinquent) in the payment of any assessment or other charge due the Association, may be removed by a Majority of the directors present at a regular or special meeting at which a quorum is present, and the Board may appoint a successor to fill the vacancy until the next annual meeting, at which time the Class "A" Members shall elect a successor for the remainder of the term. In the event of the death, disability, or resignation of a director elected by the Class "A" Members, the Board may declare a vacancy and appoint a successor to fill tile vacancy until the next annual meeting, at which time the Class "A" Members shall elect a successor for the remainder of the term. This Section shall not apply to directors appointed by the Class "B" Member nor to any director serving as a representative of tile Declarant. Tile Class "B" Member shall be entitled to appoint a successor to fill any vacancy on the Board resulting from the death, disability or resignation of a director appointed by or elected as a representative of the Class "B" Member. B. Meetings. 3.7. Organizational Meetings. The first meeting of the Board following each annual meeting of tile membership shall be held within ten (10) days thereafter at such time and place as the Board shall fix. 3.8. Re~,ular Meetings. Regular meetings of the Board may be held at such time and place as a Majority of the directors shall determine, but at least one (1) such meeting shall be held during each quarter. 3.9. Special Meetings. Special meetings of the Board of Directors shall be held when called by written notice signed by the President or Vice President or by any two (2) directors. 3.10. Notice. Notice of the time and place of a regular meeting shall be communicated to directors not less than four (4) calendar days prior to the meeting. Notice of the time and place of a special meeting shall be communicated to directors not less than seventy-two (72) hours prior to the meeting. No notice need be given to any director who has signed a waiver of notice or a written consent to holding of the meeting. The notice shall specify the time and place of the meeting and, in the case of a special meeting, the nature of any special business to be considered. Notices shall be given to each director by: (i) personal delivery; (ii) first class mail, postage prepaid; (iii) telephone communication, either directly to the director or to a person at the director's office or home who would reasonably be expected to communicate such notice promptly to the director; (iv) telecopier transmission to the director's home or office, with confirmation of receipt by the receiving telecopier; (v) telegram, charges prepaid; or (vi) overnight or same day delivery service, charges prepaid. All such notices shall be given at the director's telephone or telecopier number or sent to the director's address as shown on the records of the Association. Notices sent by first class mail shall be deemed communicated when deposited into a United States mailbox. Notices given by personal overnight or courier delivery, telephone, telecopier or telegraph shall be deemed communicated when delivered, telephoned, telecopied or given to the telegraph company. 3.11. Waiver of Notice. The transactions of any meeting of the Board, however called and noticed or wherever held, shall be as valid as though taken at a meeting duty held after regular call and notice if (a) a quorum is present, and (b) either before or after the meeting each of the directors not present signs a written waiver of notice, a consent to holding the meeting, or an approval of the minutes. Tile waiver of notice or consent need not specify the purpose of the meeting. Notice of a meeting also shall be deemed given to any director who attends the meeting without protesting before or at its commencement about tile lack of adequate notice. 3.12. Telephonic Participation in M~:¢tings. Members of the Board or any committee designated by the Board may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this subsection shall constitute presence in person at such meeting. 3.13. Ouorum of Board of Directors. At all meetings of the Board, a Majority of the directors shall constitute a quorum for the transaction of business, and the votes of a Majority of the directors present at a meeting at which a quorum is present shall constitute the decision of the Board, unless otherwise specifically provided in these By-Laws or the Declaration. A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of directors, if any action taken is approved by at least a Majority of the required quorum for that meeting. If any meeting of the Board cannot be held because a quorum is not present, a Majority of the directors present at such meeting may adjourn the meeting to a time not less than five (5) nor more than thirty (30) days from the date of the original meeting. At the reconvened meeting, if a quorum is present, any business which might have been transacted at the meeting originally called may be transacted without further notice. 3.14. Compensation. Directors shall not receive any compensation from the Association for acting as such unless approved by Members representing a Majority of the total Class "A" votes in the Association at a regular or special meeting of the Association. Any director may be reimbursed for expenses incurred on behalf of the Association upon approval of a Majority of the other directors. Nothing herein shall prohibit the Association from compensating a director, or any entity with which a director is affiliated, for services or supplies furnished to the Association in a capacity other than as a director -6- pursuant to a contract or agreement with the Association, provided that such director's interest was made known to the Board prior to entering into such contract and such contract was approved by a Majority of the Board of Directors, excluding the interested director. 3.15. ~l~;lgfd~lg~l~. The President shall preside over all meetings of the Board, and the Secretary shall keep a minute book of Board meetings recording all Board resolutions and all transactions and proceedings occurring at such meetings. 3.16. Open Meetings. Subject to the provisions of Section 3.17, all meetings of the Board shall be open to all Members, but Members other than directors may not participate in any discussion or deliberation unless permission to speak is requested on his or her behalf by a director. In such case, the President may limit the time any Member may speak. Notwithstanding the above, the President may adjourn any meeting of the Board, reconvene in executive session, and exclude persons other than directors to discuss matters of a sensitive nature. 3.17. Action Without a Formal Meeting. Any action to be taken at a meeting of the directors or any action that may be taken at a meeting of the directors may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the directors, and such consent shall have the same force and effect as a unanimous vote. C. Powers and Duties. 3.18. Powers. The Board of Directors shall have ali of the powers and duties necessary for the administration of the Association's affairs and for performing all responsibilities and exercising all rights of the Association as set forth in the Declaration, these By-Laws, the Articles, and as provided by law. The Board may do or cause to be done all acts and things unless the Declaration, Articles, these By-Laws, or Georgia law direct certain acts or things to be done and exercised exclusively by the membership generally. 3.19. Duties. The duties of the Board shall include, without limitation: (a) preparing and adopting, in accordance with the Declaration, an annual budget establishing each Owner's share of the Common Expenses; (b) levying and collecting such assessments from the Owners; (c) providing for the operation, care, upkeep, and maintenance of the Area of Common Responsibility; (d) designating, hiring, and dismissing the personnel necessary to carry out the rights and responsibilities of the Association and where appropriate, providing for the compensation of such personnel and for the purchase of equipment, supplies, and materials to be used by such personnel in the performance of their duties; (e) depositing all funds received on behalf of the Association in a bank depository which it shall approve and using such funds to operate the Association; provided, any reserve fund may be deposited, in the directors' best business judgment, in depositories other than banks; (f) making and amending use restrictions and rules in accordance with the Declaration; (g) required; opening of bank accounts on behalf of the Association and designating the signatories (h) making or contracting for the making of repairs, additions, and improvements to or alterations of the Common Area in accordance with the Declaration and these By-Laws; (i) enfoming by legal means the provisions of the Declaration, these By-Laws, and the rules adopted by the Board and bringing any proceedings which may be instituted on behalf of or against the Owners concerning the Association; provided, the Association shall not be obligated to take action to enforce any covenant, restriction or rule which the Board reasonably determines is, or is likely to be construed as, inconsistent with applicable law, or in any case in which the Board reasonably determines that the Association's position is not strong enough to justify taking enforcement action; O) obtaining and carrying property and liability insurance and fidelity bonds, as provided in the Declaration, paying the cost thereof, and filing and adjusting claims, as appropriate; (k) paying the cost of all services rendered to the Association; (1) keeping books with detailed accounts of the receipts and expenditures of the Association; (m) making available to any prospective purchaser of a Unit, any Owner, and the holders, insurers, and guarantors of any Mortgage on any Unit, current copies of the Declaration, the Articles of Incorporation, the By-Laws, rules and all other books, records, and financial statements of the Association, as provided in Section 6.4; (n) permitting utility suppliers to use portions of the Common Area reasonably necessary to the ongoing development or operation of the Properties; (o) indemnifying a director, officer or committee member, or former director, officer or committee member of the Association to the extent such indemnity is required under Georgia law, the Articles of Incorporation or the Declaration; and (p) assisting in the resolution of disputes between Owners and others without litigation, as set forth in the Declaration. 3.20. Right of Class "B" Member to Disapprove Actions. So long as the Class "B" membership exists, the Class "B" Member shall have a right to disapprove any action, policy or program of the Association, the Board and any committee which, in the sole judgment of the Class "B" Member, would tend to impair rights of the Declarant or Builders under the Declaration or these By-Laws, or interfere with development of or construction on any portion ,of the Properties, or diminish the level of services being provided by the Association. No action, policy or program subject to the right of disapproval set forth herein shall become effective or be implemented until and unless the requirements of the following subsections (a) and (b) above have been met. -8- (a) The Class "B" Member shall be given written notice of all meetings and proposed actions approved at meetings (or by written consent in lieu of a meeting) of the Association, the Board or any committee. Such notice shall be given by certified mail, return receipt requested, or by personal delivery at the address it has registered with the Secretary of the Association, shall comply with Section 3.10 and shall, except in the case of the regular meetings held pursuant to the By-Laws, set forth in reasonable particularity the agenda to be followed at the meeting. The Class "B" Member may waive its right to receive notice in the same manner as provided in Section 3.11; and (b) The Class "B" Member shall be given the opportunity at any such meeting to join in or to have its representatives or agents join in discussion from the floor of any prospective action, policy, or program which would be subject to the right of disapproval set forth herein. The Class "B" Member, its representatives or agents may make its concerns, thoughts, and suggestions known to the Board and/or the members of the subject committee. The Class "B" Member, acting through any officer or director, agent or authorized representative, may exercise its right to disapprove at any time within ten (i0) days following the meeting at which such action was proposed or, in the case of any action taken by written consent in lieu of a meeting, at any time within ten (10) days following receipt of written notice of the proposed action. This right to disapprove may be used to block proposed actions but shall not include a right to require any action or counteraction on behalf of any committee, or the Board or the Association. The Class "B" Member shall not use its right to disapprove to reduce the level of services which the Association is obligated to provide or to prevent capital repairs or any expenditure required to comply with applicable laws and regulations. 3.21. Management. The Board of Directors may employ for the Association a professional management agent or agents at such compensation as the Board may establish, to perform such duties and services as the Board shall authorize. The Board may delegate such powers as are necessary to perform the manager's assigned duties, but shall not delegate policy-making authority or those duties set forth in Sections 3.19(a), 3.19(b), 3.19(0, 3.19(g) and 3.19(i). The Declarant, or an affiliate of the Declarant, may be employed as managing agent or manager. The Board may delegate to one (1) of its members the authority to act on behalf of the Board on all matters relating to the duties of the managing agent or manager, if any, which might arise between meetings of the Board. 3.22. Accounts and Reports. The following management standards of performance shall be followed unless the Board by resolution specifically determines otherwise: (a) employed; accrual accounting, as defined by generally accepted accounting principles, shall be (b) accounting and controls should conform to generally accepted accounting principles; (c) cash accounts of the Association shall not be commingled with any other accounts; (d) no remuneration shall be accepted by the managing agent from vendors, independent contractors, or others providing goods or services to the Association, whether in the form of commissions, finder's fees, service fees, prizes, gifts, or otherwise; any thing of value received shall benefit the Association; (e) any financial or other interest which the managing agent may have in any firm providing goods or services to the Association shall be disclosed promptly to the Board; (f) commencing at the end of the quarter in which the first Unit is sold and closed, financial reports shall be prepared for the Association at least quarterly (such financial statements shall include an income statement reflecting all income and expense activity for the preceding period on an accrual basis and may include such other reports as deemed necessary by the Board); and (g) an annual financial report shall be made available to all Members within one hundred (120) days after the close of the fiscal year. Such annual report may be prepared on an audited, reviewed or compiled basis, as the Board determines; provided, upon written request of any holder, guarantor or insurer of any first Mortgage on a Unit, the Association shall provide an audited financial statement. 3.23. Borrowine. The Association shall have the power to borrow money for any legal purpose; provided, the Board shall obtain Member approval in the same manner provided for Special Assessments in Section 8.5 of the Declaration if the proposed borrowing is for the purpose of making discretionary capital improvements and the total amount of such borrowing, together with all other debt incurred within the previous twelve (12)-month period, exceeds or would exceed ten percent (10%) of the budgeted gross expenses of the Association for that fiscal year. 3.24. Right to Contract. The Association shall have the right to contract with any Person for the performance of various duties and functions. This right shall include, without limitation, the right to enter into common management, operational, or other agreements with trusts, condominiums, cooperatives, or neighborhood and other owners or residents associations, within and outside the Properties; provided, any common management agreement shall require the consent of a Majority of the total number of directors of the Association. 3.25. Enforcement. (a) Notice. Prior to imposition of any sanction requiring compliance with the procedures as set forth in the Declaration, the Board or its delegate shall serve the alleged violator with written notice including (i) the nature of the alleged violation, (ii) the proposed sanction to be imposed, (iii) a statement that the alleged violator may present a written request for a hearing to the Board or the Covenants Committee, if one has been appointed pursuant to Article 5 herein, within fifteen (15) days of the notice; and (iv) a statement that the proposed sanction shall be imposed as contained in the notice unless a request for a hearing is received within fifteen (15) days of the notice. If a timely request is not received, the sanction stated in the notice shall be imposed; provided, however, the Board or Covenants Committee may, but shall not be obligated to, suspend any proposed sanction if the violation is cured within the fifteen (15)-day period. Such suspension shall not constitute a waiver of the right to sanction future violations of the same or other provisions and rules by any Person. In the event of a continuing violation, each day the violation continues beyond the fifteen (15)-day period constitutes a separate offense, and fines may be imposed on a per diem basis without further notice to the violator. In the event of a violation which recurs within one (1) year from the date of any notice hereunder, the Board or Covenants Committee may impose a sanction without notice to the violator. - I0- BOOK ] i 6 6 2 (b) Hearing. If a hearing is requested within the allotted fifteen (15)-day period, the hearing shall be held before the Covenants Committee, or if none has been appointed, then before the Board in executive session. The alleged violator shall be afforded a reasonable opportunity to be heard. Prior to the effectiveness of any sanction hereunder, proof of proper notice shall be placed in the minutes of the meeting. Such proof shall be deemed adequate if a copy of the notice, together with a statement of the date and manner of delivery, is entered by the officer, director, or agent who delivered such notice. The notice requirement shall be deemed satisfied if the alleged violator or its representative appears at the meeting. The minutes of the meeting shall contain a written statement of the results of the hearing and the sanction, if any, imposed. (c) Appeal. If a hearing is held before the Covenants Committee, the violator shall have the right to appeal the decision to the Board of Directors. To exercise this right, a written notice of appeal must be received by the manager, President, or Secretary of the Association within fifteen (15) days after the date of the Covenants Committee hearing. Article 4. Officers 4.1. Officers. The officers of the Association shall be a President, Vice President, Secretary, and Treasurer. The President and Secretary shall be elected from among the members of the Board; other officers may, but need not be members of the Board. The Board may appoint such other officers, including one or more Assistant Secretaries and one or more Assistant Treasurers, as it shall deem desirable, such officers to have such authority and perform such duties as the Board prescribes. Any two (2) or more offices may be held by the same person, except the offices of President and Secretary. 4.2. Election and Term of Office. The Board shall elect the officers of the Association at the first meeting of the Board following each annual meeting of the Members, to serve until their successors are elected. 4.3. Removal arKl Vacancies. The Board may remove any officer whenever in its judgment the best interests of the Association will be served and may fill any vacancy in any office arising because of death, resignation, removal, or otherwise for the unexpired portion of the term. 4.4. Powers and Duties. The officers or' the Association shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as may specifically be conferred or imposed by the Board of Directors. The President shall be the chief executive officer of the Association. The Treasurer shall have primary responsibility for the preparation of the budget as provided for in the Declaration and may delegate all or part of the preparation and notification duties to a finance committee, management agent, or both. The Secretary shall be responsible for preparing minutes of meetings of the Members and the Board, and for authenticating records of the Association. 4.5. Resignation. Any officer may resign at any time by giving written notice to the Board of Directors, the President, or the Secretary. Such resignation shall take effect on the date of the receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 4.6. Agreements. Contracts. Deeds. Leases. Checks. Etc. All agreements, contracts, deeds, leases, checks, and other instruments of the Association shall be executed by at least two (2) officers or by such other person or persons as may be designated by Board resolution. 4.7. Compensation. Compensation of officers shall be subject to the same limitations as compensation of directors under Section 3.14. Article 5. Committees 5.1. General. The Board may appoint such committees as it deems appropriate to perform such tasks and to serve for such periods as the Board may designate by resolution. Each committee shall operate in accordance with the terms of such resolution. 5.2. Covenants Committee. In addition to any other committees which the Board may establish pursuant to Section 5.1 herein, the Board may appoint a Covenants Committee consisting of at least three (3) and no more than five (5) Members. Acting in accordance with the provisions of the Declaration, these By-Laws, and resolutions the Board may adopt, the Covenants Committee, if established, shall be the hearing tribunal of the Association and shall conduct all hearings held pursuant to Section 3.25 of these By-Laws. Article 6. Miscellaneous 6.1. Fiscal Year. The fiscal year of the Association shall be the calendar year unless the Board establishes a different fiscal year by resolution. 6.2. Parliamentary Rules. Except as may be modified by Board resolution, Robert's Rules of Order Newly Revised (current edition) shall govern the conduct of Association proceedings when not in conflict with Georgia law, the Articles of Incorporation, the Declaration, or these By-Laws. 6.3. Conflicts. If there are conflicts between the provisions of Georgia law, the Articles of Incorporation, the Declaration, and these By-Laws, the provisions of Georgia law, the Declaration, the Articles of Incorporation, and the By-Laws (in that order) shall prevail. 6.4. Books and Records. (a) Inspection by Members and Mortgagees. The Board shall make available for inspection and copying by any holder, insurer or guarantor of a first Mortgage on a Unit, any Member, any prospective purchaser of a Unit or the duly appointed representative of any of the foregoing at any reasonable time and for a purpose reasonably related to his or her interest in a Unit: the Declaration, By-Laws, and Articles of Incorporation, any amendments to the foregoing, the rules of the Association, and the minutes of meetings of the Members, the Board, and committees. The Board shall provide for such inspection to take place at the office of the Association or at such other place within the Properties as the Board shall designate. 12- (b) Rules for Inspection. The Board shall establish reasonable rules with respect to: (i) notice to be given to the custodian of the records; (ii) hours and days of the week when such an inspection may be made; and (iii) payment of the cost of reproducing documents requested. (c) Inspection by Directors. Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of the Association and the physical properties owned or controlled by the Association. The right of inspection by a director includes the right to make a copy of relevant documents at the expense of the Association. 6.5. Notices. Except as otherwise provided in the Declaration or these By-Laws, ali notices, demands, bills, statements, and other communications under the Declaration or these By-Laws shall be in writing and shall be deemed to bare been duly given if delivered personally or if sent by United States mail, first class postage prepaid: (a) if to a Member, at the address which the Member has designated in writing and filed with the Secretary or, if no such address has been designated, at the address of the Unit of such Member; or (b) if to the Association, the Board of Directors, or the managing agent, at the principal office of tile Association or the managing agent, or at such other address as shall be designated by notice in writing to the Members pursuant to this Section. 6.6. Amendment. (a) By Declarant. Until termination of the Class "B" membership, Declarant may unilaterally amend these By-Laws for any purpose. Thereafter, the Declarant may unilaterally amend these By-Laws at any time and from time to time if such amendment is necessary (i) to bring any provision into compliance with any applicable governmental statute, rule, regulation, or judicial determination; (ii) to enable any reputable title insurance company to issue title insurance coverage on the Units; (iii) to enable any institutional or governmental lender, purchaser, insurer or guarantor of Mortgage loans, including, for example, the Department of Veterans Affairs, the Federal Housing Administration, the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, to make, purchase, insure or guarantee Mortgage loans on the Units; or (iv) to satisfy the requirements of any local, state, or federal governmental agency. However, any such amendment shall not adversely affect the title to any Unit unless the Owner shall consent thereto in writing. In addition, so long as the Declarant owns any property which is subject to the Declaration or which may be unilaterally subjected to the Declaration by Declarant, it may unilaterally amend these By-Laws for any other purpose, provided the amendment has no material adverse effect upon any right of any Member. (b) By the Board. The Board shall be authorized to amend these By-Laws without the consent of the Members for the purpose of submitting the Properties to the Georgia Property Owners' Association Act, O.C.G.A. §44-3-220, et seq. (1994) and conforming these By-Laws to any mandatory provisions thereof. Any such amendment shall require the written consent of the Declarant, so long as the Declarant owns any property which is subject to this Declaration or which Declarant may unilaterally submit to the Declaration. (c) By Members. Except as provided above, these By-Laws may be amended only by the affirmative vote or written consent, or any combination thereof, of Members holding at least sixty-seven percent (67%) of the total Class "A" votes in the Association, and the written consent of the Declarant, so long as the Declarant owns any property which is subject to this Declaration or which Declarant may unilaterally submit to the Declaration. If a meeting is called for the purpose of considering a proposed amendment hereunder, such meeting shall be called in accordance with Section 2.5. Notwithstanding the above, the percentage of votes necessary to amend a specific clause shall not be less than the prescribed percentage of affirmative votes required for action to be taken under that clause. (d) Validity and Effective Date. Any amendment to these By-Laws shall become effective upon recordation in the Public Records, unless a later effective date is specified therein. Any procedural challenge to an amendment must be made within six (6) months of its recordation or such amendment shall be presumed to have been validly adopted. In no event shall a change of conditions or circumstances operate to amend any provisions of these By-Laws. No amendment may remove, revoke, or modify any right or privilege of Declarant or the Class "B" Member without the written consent of Declarant, the Class "B" Member, or the assignee of such right or privilege. If a Member consents to any amendment to the Declaration or these By-Laws, it will be conclusively presumed that such Member has the authority to consent and no contrary provision in any Mortgage or contract between the Member and a third party will affect the validity of such amendment. - 14-