Assessments

ARTICLE V
Assessments

5.01 Covenant for Assessments and Creation of Lein and Personal Obligation. Each Owner, jointly and severally, for himself, his heirs, distributees, legal representatives, successors, and assigns, by acceptance of a deed for a Lot, whether or not the covenants contained herein shall be expressed in any such deed, hereby covenants and agrees as follows.

(a) to timely pay to the Association the Annual Assessments (as hereinafter defined) that may or shall be levied by the Board of Directors pursuant to the Bylaws and this Declaration against all Lots owned by him;

(b) to timely pay to the Association any Special Assessments (as hereinafter detined) that may or shall be levied by the Board of Directors pursuant to the Bylaws and this Declaration against all Lots owned by him;

(c) to timely pay to the Association the Specific Assessments (as hereinafter defined) that may or shall be levied by the Board of Directors pursuant to the Bylaws and this Declaration against all Lots owned by him;

(d) to timely pay to the Association the Parcel Assessments (as hereinaiter defined) that may or Shall be levied by the Board of Directors pursuant to the Bylaws and this Declaration against all Lots owned by him;

(e) to timely pay to the Association the Master Assessments (as defined in Article IV) that may or shall be levied by the Board of Directors pursuant to the Bylaws and this Declaration against all Lots owned by him;

(f) that there is hereby created a continuing charge and lien upon all Lots owned by him against which any and all such assessments are made to secure payment of such assessments and any interest thereon as provided in Section 5.10 hereof and costs of collection including reasonable attorneys’ fees;

(g) that such continuing charge and lien on such Lots binds such Lots in the hands of the then Owner, and the Owner’s heirs, devisees, legal representatives, successors, and assigns. Such charge and lien is superior to any and all charges, liens, or encumbrances that may hereafter in any manner arise or be imposed upon such Lots whether arising from or imposed by judgment or decree or by any agreement, contract, mortgage, deed of trust, or other instrument, except (i) such liens for taxes or other public charges as are by applicable law made superior and (ii) all deeds to secure debt given to secure a loan, the proceeds of which are used (1) to purchase a Residence or Residences for the Lot (together with any and all Structures that may from time to time be placed or located thereon), and (2) to finance the construction repair or alteration of Structures on the Lot. A person or entity acquiring a lien or encumbrance on a Lot after this Declaration is recorded shall acknowledge, by the act of filing an instrument creating such lien, that such lien or encumbrance is inferior to the continuing lien for the charge and lien provided for herein, whether or not such acknowledgment is specifically stated in the instrument creating the lien or encumbrance, except as provided by Subsections (i) and (ii) above;

(h) that no sale or transfer at foreclosure or in lieu of foreclosure shall relieve any Lot from liability for any assessment thereafter assessed;

(i) that all assessments (together with interest thereon as provided in Section 5.10 of Declaration and costs of collection including reasonable attorneys’ fees) levied against any Lot owned during the period that he is an Owner shall be (in addition to being a continuing charge and lien against such Lot as provided in Section 5.0l(c) of this Declaration) a personal obligation that will survive any sale or transfer of the Lot owned by him; provided, however, that such personal obligation for delinquent assessments shall not pass to an Owner’s successor in title unless expressly assumed by such successor; and

(j) failure to pay any assessment when due shall constitute a default of the Owner's obligations hereunder, and shall entitle the Association to exercise the remedies provided under the terms of Declaration.

5.02 Purpose of Assessment. The assessments levied by the Association shall be used exclusively for the purpose of providing for the common good and general welfare of the Owners, including, but not limited to, security, the acquisition, construction, improvement, maintenance, insuring, and equipping of Common Property; maintenance of private streets and driveways or other improvements or landscaping that are designated by Declarant to be maintenance obligations of the Association; the enforcement of the Restrictions contained in this Declaration; the enforcement of the Design Standards of the ACC, the payment of operating costs and expenses of the Association including, without limitation, any ad valorem real and personal property taxes on any real and personal property owned by the Association, and the payment of all principal and interest when due on all debts owed by the Association.

5.03 Accumulation of Funds Permitted. The Association shall not be obligated to spend in any calendar year all the sums collected in such year by way of assessments, and may carry forward, as surplus, any balances remaining. Nor shall the Association be obligated to apply such surplus to the reduction of the amount of the assessments in any succeeding year, but may carry forward from year to year such surplus as the Board may deem to be desirable for the greater financial security of the Association and the effectuation of its purposes.

5.04 Annual Assessment.

(a) Beginning on the Commencement Date and continuing thereafter until January l of the year immediately following the Commencement Date, each Lot shall be subject to an Armual Assessment of two hundred seventy—five and no/ 100 dollars ($275.00) per Residence. However, if the Commencement Date falls on a day other than January 1, the Annual Assessment for such year shall be prorated so that each Owner pays an Annual Assessment proportional to the number of days remaining in the calendar year. The words "Assessment Year" as used herein shall mean the calendar year, with the first Assessment Year commencing on January 1 of the year immediately following the Commencement Date. For so long as Declarant has the right to appoint and remove Directors and Officers of the Association, the Annual Assessment shall not be reduced below $240.00 without the express written consent of Declarant.

(b) Commencing with the first Assessment Year and continuing thereafter, the Annual Assessment may be increased at any time and from time to time during each Assessment Year by Declarant.

5.05 Special and Parcel Assessments.

(a) In addition to the Annual Assessments authorized by this Article V, the Association may levy, in any Assessment Year and with such frequency as the Association shall deem necessary, Special Assessments for the purpose of paying, in whole or in part, any unanticipated operating expenses, as well as the cost of any construction, reconstruction, repair, or replacement of a capital improvement on the Common Property or on any private drives designated by Declarant to be a maintenance obligation of the Association.

(b) The Association shall also be authorized to levy, in any Assessment Year and with such frequency as the Association shall deem necessary, Parcel Assessments for the purpose of paying, in whole or in part, the cost of estimated expenses for the sole benefit of a particular Parcel, which Parcel Assessments shall be allocated equally among the Residences in a Parcel.

5.06 Specific Assessments. The Board shall have the power to specifically levy Specific Assessments against any Owner as, in the Board’s discretion, it shall deem appropriate. Failure of the Board to exercise its authority under this Section shall not be grounds for any action against the Association or the Board and shall not constitute a waiver of the Board's Right to exercise its authority under this Section in the future with respect to any expenses, including an expense for which the Board has not previously exercised its authority under this Section. The Board may levy a Specific Assessment for the following expenses, except for expenses incurred for maintenance and repair of items that are the maintenance responsibility of the Association as provided herein:

(a) Expenses of the Association which benefit less than all of the Lots, which may be assessed equitably among the Lots that are benefited according to the benefit received;

(b) Expenses incurred by the Association pursuant to Section 8.16 hereof; and

(c) Reasonable fines as may be imposed in accordance with the terms of this Declaration and the Bylaws.

5.07 Assessment Procedure. The Board shall establish any and all assessments for each Assessment Year and shall also establish the date during the Assessment Year on which each Assessment shall be due and payable (hereinafter referred to as the "Due Date"). The Board shall also establish an annual budget which shall list the estimated operating expenses and shall contain an amount to be set aside each year into a reserve allowance to be used for future repair and replacement of the Common Property. However, in no event shall the Board be required to provide for a reserve sufficient to cover all such future repair and replacement of the Common Property, it being intended that a portion of such costs will be covered by Special Assessments. The Board shall cause the Association to send to each Owner at least thirty (30) days in advance of the Due Date written notice setting forth the amount of the assessment and the Due Date. The assessment shall become due on the thirtieth (30th) day following such written notice or the Due Date, whichever is later. The Board may establish reasonable payment procedures to allow or require payment of assessments in installments during the Assessment Year.

5.08 Uniform Rate of Assessment. Both Annual and Special Assessments must be fixed at a uniform rate for all Lots.

5.09 Contribution by Declarant. For so long as Declarant has the authority to appoint and remove Directors and Officers of the Association, Declarant shall not be liable for the payment of any assessments; provided, however, during said period Declarant shall advance funds to the Association sufficient to satisfy the deficit, if any, between the actual operating expenses of the Association (but specifically not including an allocation for the reserve allowance), and the sum of assessments collected by the Association in any Assessment Year, and such advances shall be evidenced by promissory notes from the Association to Declarant.

5.10 Effect of Non-payment of Assessments. Any assessment that is not paid on or before the Due Date shall bear interest alter the Due Date at the lower of (i) the highest legal rate of interest which can be charged, or (ii) the rate of eighteen percent (18%) per annum, or (iii) at such rate as the Board may from time to time establish; provided, however, that in no event shall the Board have the power to establish a rate of interest in violation of the laws of the State of Texas. In the event of default in the payment of any one or more installments of an assessment, the Board may declare any remaining balance of the assessment at once due and payable. In the event that an Owner shall fail to pay fully any portion of any assessment prior to the Due Date, such unpaid portion (including any remaining balance declared immediately due and payable in accordance with the preceding sentence), together with interest and costs of collection including reasonable attorneys’ fees, shall be a binding personal obligation of such Owner, as well as a lien on such Owner’s Lot enforceable in accordance with the provisions of this Declaration.

5.11 Certificate of Payment. Upon written demand by an Owner, the Association shall within a reasonable period of time issue and furnish to such Owner a written certificate stating that all assessments (including penalties, interest, and costs, if any) have been paid with respect to any Lot owned by said Owner as of the date of such certificate or that all assessments, interest, and costs have not been paid, setting forth the amount then due and payable. The Association may make a reasonable charge for the issuance of such certificate. Any such certificate, when duly issued as herein provided, shall be conclusive and binding with regard to any matter therein stated as between the Association and any bona fide purchaser of, or lender on, the Lot in question.

5.12 Approval by Declarant. Notwithstanding anything to the contrary contained herein, no Special Assessment shall be made without the approval of Declarant for so long as Declarant has the right to appoint officers and directors of the Association.

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