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Book 2702 Page 582 NORTH CAROLINA DECLARATION OF COVENANTS, AND WHEREAS, Declarants have formed the McFadyen Lake Association, Inc., of which Declarants are members, and which is empowered to establish policies, rules and regulations governing the use and enjoyment of McFadyen Lake; NOW, THEREFORE, Declarants and the McFadyen Lake Association, Inc. do hereby declare that all members of the McFadyen Lake Association, Inc. shall be subject to the following rules, regulations, covenants, conditions and restrictions and that all lots, as hereinafter defined, shall be held, sold and conveyed subject to the following rules, regulations, easements, restrictions, covenants and conditions which shall run with the real property and be binding on all parties having any right, title or interest in the lots of any part thereof, their heirs, successors and assigns, and shall inure to the benefit of each owner thereof. ARTICLE I DEFINITIONS Section 1. "Association" shall mean and refer to McFadyen Lake Association, Inc., its successors and assigns. Section 2. "Owner" shall mean and refer to the record owner, whether one or more persons or entities, of fee simple title to any Lot which is a part of the Properties, including contract sellers, but excluding those having such interest merely as security for the performance of an obligation. Section 3. "Properties" shall mean and refer collectively to all of the Lots and the Common Area, as defined below, and to such additions thereto as may hereafter be brought within the jurisdiction of the Association. Section 4. “Common Area” shall mean all real property owned by the Association for the common use and enjoyment of the owners.Section 5. "Lot" shall mean and refer to any plot of land shown upon any recorded subdivision map of any subdivision which borders at any point on McFadyen Lake, and to any other plot of land which borders on McFadyen Lake, with the exception of the Common Area. Section 6. "Declarants" shall mean and refer to American Classic Industries, Inc. , WBC Co, Wachovia Mortgage Company, Mc-B Land Company, and James A.Chestnut, their successors and assigns, if such successors or assigns should acquire more than one undeveloped Lot from the Declarant for the purpose of development. Section 7. "Lake" shall mean and refer to that body of water known as McFadyen Lake, located in Seventy-First Township, Cumberland County, North Carolina. Section 8. "Member" shall -mean and refer to those persons entitled to membership in the Association as set forth hereinbelow and in. the Bylaws of the Association. PROPERTY RIGHTS Section 1. Owners’ Easements of Enjoyment. Every Owner shall have a right and easement of enjoyment in and to the Lake and any Common Areas which shall be appurtenant to and shall pass with the title to every Lot, subject to the following provisions: (a) the right of the Association to charge reasonable admission and other fees for the use of any recreational facility situated upon the Common Area or around the Lake; (b) the right of the Association to limit the number of guests of members; (c) the right of the Association to suspend the voting rights and right to use of the recreational facilities and the Lake by an Owner for any period during which anyassessment against his Lots remains unpaid; and for a period not to exceed 60 days for an infraction of its published rules and regulations; (d) the right of the Association to dedicate or transfer all or any part of the Common Area and/or Lake to any public agency, authority or utility for such purposes and subject to such conditions as may be agreed to by the members. No such dedication or transfer shall be effective unless an instrument signed by two-thirds (2/3) of each class of members agreeing to such dedication or transfer has been recorded. (e) the right of the Association to approve regulations for the use and enjoyment of the Common Area and the Lake and improvements thereon or thereabouts, whichregulations may further restrict the use of the Common Area and the Lake. Section 2. Delegation of Use. Any Owner may delegate, in accordance with the Bylaws, his right of enjoyment to the Common Area, facilities and the Lake to the members of his family, his tenants, or contract purchasers who reside on the property, so long as such delegation of use is not in violation of Article VI, Section 2 of this Declaration. ARTICLE III MEMBERSHIP AND VOTING RIGHTS Section 1. Every Owner of a Lot which is subject to assessment shall be a member of the Association. Every Declarant shall also be a non-dues paying member of the association. Membership shall be appurtenant to and may not be separated from ownership of any Lot which is subject to assessment. Section 2. The Association shall have four classes of membership: Class A. Class A members shall be all members owning real property bordering on McFadyen Lake with the exception of the Declarants, and shall be entitled to one vote for each Lot owned. When more than one person holds an interest in any Lot, all such persons shall be members. The vote for such Lot shall be exercised as they among themselves determine, but in no event shall more than one (1) vote be cast with respect to any Lot. Class B. The Class B member(s) shall be the Declarants and shall be entitled to three (3) votes for each Lot owned or twelve (12) votes for each acre owned if the property of a Class B member has not been subdivided into lots. The Class B membership shall cease and be converted to Class A membership on the happening of either of the following events, whichever occurs later: (b) at such time as Declarants no longer own any Lots. Class C. Class C members shall be all members owning real property not bordering on McFadyen Lake but being situate in any subdivision which borders at any point on McFadyen Lake. Class D. Class D members shall be, any other members of the Association as the Board of Directors may from time to time admit to membership on terms and conditions agreed upon between the said Board and Class D member. ARTICLE IV COVENANTS FOR MAINTENANCE ASSESSMENTS Section 1. Creation of the Lien and Personal Obligations of Assessment. Class A and Class C members are deemed to covenant and agree to pay to the Association: (1) annual assessments or charges, and (2) special assessments for capital improvements, such assessments to be established and collected as hereinafter provided; (3) to the appropriate governmental taxing authority, a pro rata share of ad valorem taxes levied against the Common Area and the Lake if the Association shall default in the payment therefor for a period of six (6) months, all as hereinafter provided. The annual and special assessments, together with interest, costs, and reasonable attorney's fees, shall be a charge on the land and shall be a continuing lien upon the property against which each assessment is made. Each such assessment, together with interest, costs and reasonable attorney's fees, shall also be the personal obligation of the person who was the Owner of such property at the time when the fell due. The personal obligation for delinquent assessments shall not pass to his successors in title unless expressly assumed by them. Section 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety and welfare of the residents in the Properties and for the improvements and maintenance of the Lake and Common Area. Section 3. Maximum Annual Assessment. Until January 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment shall be $50.00, but such annual assessment shall be a lesser figure if the Board of Directors by majority vote agrees to reduce same. (b) From and after January 1 of the year immediately following the conveyance of the first Lot to an owner, the maximum annual assessment may be increased above three percent (3%) by a vote of two-thirds (2/3) of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose. (c) The Board of Directors may fix the annual assessment at an amount not in excess of the maximum. Section 4. Special Assessments for Capital Improvements. In addition to the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon or around the Lake or Common Area, including fixtures and personal property related thereto, provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of members who are entitled to vote in person or by proxy at a meeting duly called for this purpose. Section 5. Insurance. As an additional annual assessment, the Association may levy against the Owners equally an amount sufficient to pay the annual cost of liability insurance premiums for such insurance on the Lake and Common Area. Section 6. Notice and Quorum for Any Action Authorized Under Sections 3 and 4. Written notice of any meeting called for the purpose of taking any action authorized under Sections 3 and 4 shall be sent to all members not less than 30 days nor more than 60 days in advance of the meeting. At the first such meeting called, the presence of members or of proxies entitled to cast sixty percent (60%) of all the votes of each class of membership shall constitute a quorum. If the required quorum is not present, another meeting may be called subject to the same notice requirement, and the required quorum and the subsequent meeting shall be one-half (1/2) of the required quorum at the preceding meeting. No such subsequent meeting shall be held more than 60 days following the preceding meeting. Section 7. Uniform Rate of Assessment. Both annual and special assessments must be fixed at a uniform rate for all Lots and may be collected on a monthly basis, provided that Class B members shall not be subject to annual or special assessments. Section 8. Date of Commencement of Annual Assessments: Due Dates. The annual assessments provided for herein shall commence as to all Lots on the first day of the month following the filing the Articles of Incorporation of the Association with the Secretary of State of North Carolina. The first annual assessment shall be adjusted according to the number of months remaining in the calendar year. The Board of Directors shall fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period. Written notice of the annual assessment shall be sent to every Owner subject thereto. The due dates shall be established by the Board of Directors and the Board of Directors shall have the authority to require the assessments to be paid in pro rata monthly installments. The Association shall, upon demand, and for a reasonable charge, furnish a certificate signed by an officer of the Association setting forth whether the assessments on a specified Lot have been paid. Section 9. Effect of Nonpayment of Assessments: Remedies of the Association. Any assessment not paid within thirty (30) days after the due date shall bear interest from the due date at the rate of six percent (6%) per annum. The Association may bring an action at law against the Owner personally obligated to pay the same, or foreclose the lien against the property. No owner may waive or otherwise escape liability for the assessments provided for herein by nonuse of the Common Area and Lake or abandonment of his Lot. Section 10. Effect of Default in Payment of Ad Valorem Taxes or Assessments for Public Improvements by Association. Upon default by the Association in the payment to the governmental authority entitled thereto of any ad valorem taxes levied against the Common Area and/or Lake or assessments for public improvements to the Common Area and/or Lake, which default shall continue for a period of six (6) months, each owner of a Lot in the development shall become personally obligated to pay the taxing or assessing governmental authority a portion of such unpaid taxes or assessments in an amount determined by dividing the total taxes and/or assessments due the governmental authority by the total number of Lots in the development. If such sum is not paid by the Owner within thirty (30) days following receipt of notice of the amount due, then such sum shall become a continuing lien on the Lot of the then owner, his heirs, devisees, personal representatives and assigns,and the taxing or assessing governmental authority may either bring an action at law or may elect to foreclose the lien against the Lot of the owner. However, the sale or transfer of any Lot pursuant to mortgage foreclosure or any proceeding in lieu thereof shall extinguish the lien of such assessments as to payments which became due prior to such sale or transfer. No sale or transfer shall relieve such Lot from liability for any assessments thereafter becoming due or from the lien thereof. ARTICLE V ANNEXATION OF ADDITIONAL PROPERTIES Section 1. Annexation of additional property shall require the assent of two-thirds (2/3) of the Class A members and two-thirds (2/3) of the Class B members, if any, at a meeting duly called for this purpose, written notice of which shall not be sent to all members not less than 30 days nor more than 60 days in advance of the meeting. The presence of members or proxies entitled to cast sixty percent (60%) of the votes of each class of membership shall constitute a quorum at meetings called for this purpose. If the required quorum is not forthcoming at any meeting, another meeting may be called subject to the notice requirement set forth above and the required quorum at each subsequent meeting shall be one-half (1/2) of the required quorum of the preceding meeting. No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting. In the event that two-thirds (2/3) of the Class A membership or two-thirds (2/3) of the Class S membership are not present in person or by proxy, members not present may give their written assent to the action taken thereat. ARTICLE VI RULES OF THE ASSOCIATION The Association does hereby establish the following rules and regulations governing the use and enjoyment of the Lake:
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