ARTICLE VII

ASSESSMENTS

 

7.1  Creation of Assessments.  The Association may levy assessments against each Dwelling Unit for Association expenses as the Board may specifically authorize from time to time.  There shall be three(3) types of assessments:  (a) Base Assessments to fund Common Expenses for the general benefit of all Dwelling Units; (b) Special Assessments; and (c) Benefited Assessments.  Each Owner, by accepting a deed or entering into a recorded contract of sale for any portion of the Properties, is deemed to covenant and agree to pay these assessments.

Assessments shall be paid in such manner and by such dates as the Board may establish.  Unless the Board otherwise provides, the Base Assessment for a Dwelling Unit shall be due and payable in advance on the first day of the Association’s fiscal year; provided, that, upon the first conveyance of a Dwelling Unit to a purchaser for value, the pro rata portion of such assessments for the balance of the fiscal year shall be due and payable upon conveyance of the Dwelling Unit.  If any Owner is delinquent in paying any assessments or other charges levied on his or her Dwelling Unit, the Board may require any unpaid installments of all outstanding assessments to be paid in full immediately.

The Association shall, upon request by an Owner, furnish to any Owner liable for any type of assessment a certificate in writing signed by an Association officer setting forth whether such assessment has been paid and any delinquent amount.  Such certificate shall be conclusive evidence of payment.  The Association may require the advance payment of a reasonable processing fee for the issuance of such certificate.

No Owner may exempt himself or herself from liability for assessments by non-use of Common Area, abandonment of his or her Dwelling 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. 

7.2  Computation of Base Assessment.  Not less than sixty (60) days before the beginning of each fiscal year, the Board shall prepare a budget covering the Common Expenses estimated to be incurred during the coming year.  The budget shall include a capital contribution to establish a reserve fund in accordance with a budget separately prepared as provided in Section 7.3.The Base Assessment shall be levied equally against all Dwelling Units subject to assessment and shall be set at a level which is reasonably expected to produce total income for the Association equal to the total budgeted Common Expenses, including contributions to reserves.  In determining the level of assessments, the Board, in its discretion, may consider other sources of funds available to the Association.  In addition, the Board shall take into account the number of Dwelling Units subject to assessment under Section 7.10 on the first day of the fiscal year for which the budget is prepared and the number of Dwelling Units reasonably anticipated to become subject to assessment during the fiscal year.

A budget and a proposed assessment may be disapproved at a meeting of the Members upon the vote of Voting Members representing at least a majority of the total Association vote.  There shall be no obligation to call a meeting for the purpose of considering the budget and proposed assessment except on petition of the Voting Members as provided for special meetings in the Bylaws, which petition must be presented to the Board within thirty (30) days after notice of the proposed assessments.  Notice of proposed assessments shall be posted in a prominent place within the Properties and included in the Association’s newsletter, if any.  If the proposed budget is disapproved or the Board fails for any reason to determine the budget for any year, then and until such time as a budget shall have been determined as provided herein, the budget in effect for the immediately preceding year shall continue for the current year.

7.3  Reserve Budget.  The Board shall annually prepare reserve budgets for general purposes 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.  Such reserve budgets may also anticipate making additional capital improvements and purchasing additional capital assets.  The Board shall include in Base Assessments reserve contributions in amounts sufficient to meet these projected needs.  So long as the Board exercises business judgment in determining an adequate amount of reserves, the amount of the reserve fund shall be considered adequate.

The Board may adopt resolutions regarding the expenditure of reserve funds, including policies designating the nature of assets for which reserve funds may be expended.  Such policies may differ for general Association purposes..

7.4  Subsequent Member Fee.  As an additional funding source, in addition to the administrative or transfer fee collected to cover administrative costs of membership transfer,  the Association shall, subject to the contractual provisions set forth below for paying fifty percent (50%) of the Subsequent Member Fee to the previous property owner per a contractual requirement imposed in the sale of the land for Falls Run, collect a Subsequent Member Fee upon each transfer of title to a Dwelling Unit, other than exempt transfers as set forth herein.  The Subsequent Member Fee shall be charged to the grantor of the Dwelling Unit, shall be payable by grantor or grantee as their contract provides to the Association (or fifty percent (50%) to the Association and fifty percent (50%) to the previous property owner as provided below) at the closing of the transfer, and shall be secured by the Association’s lien for assessments.  Each Owner transferring a Dwelling Unit shall notify the Association’s secretary or designee at least seven days prior to the scheduled closing.  Such notice shall include the name of the buyer, the date of title transfer, and other information the Association may reasonably require. 

The fee shall equal 1/3 of one percent of the Gross Selling Price of the Dwelling Unit, with all improvements, upgrades and premiums included, and shall be due upon the transfer of title to the Dwelling Unit.  For purposes hereof, the “Gross Selling Price” shall be the total cost to the purchaser of the Dwelling Unit, excluding governmental transfer taxes, if any, imposed on the transfer.

Subsequent Member Fees shall be used for purposes which the Association Board deems beneficial to meet the general operating needs of the Association. By way of example and not limitation, Subsequent Member Fees may be used to assist the Association or one or more tax-exempt entities in funding operating and maintenance costs for recreational facilities, common areas open space preservation and all other funding needs for operating the Association.

Notwithstanding the above, no Subsequent Member Fee shall be levied upon transfer of title to property:

(i)  by a co-Owner to any Person who was a co-Owner immediately prior to such transfer;

(ii)  to the Owner’s estate, surviving spouse, or heirs at law upon the death of the Owner;

(iii)  to an entity wholly owned by the grantor or to a family trust created by the grantor for the direct benefit of the grantor and his or her spouse and/or heirs at law, or foreclosure of such a Mortgage; provided, upon any subsequent transfer of an ownership interest in such entity, the Subsequent Member Fee shall become due; or

(iv)  to an institutional lender as security for the performance of an obligation pursuant to a Mortgage.

7.5  Special Assessments.    The Board may from time to time levy Special Assessments consistent with Virginia Code Section 55-514.

There shall be no obligation to call a meeting for the purpose of considering Special Assessments except on petition of the Voting Members or Owners as provided for special meetings in the Bylaws, which petition must be presented to the Board within thirty (30) days after notice of the Special Assessment.  Notice of Special Assessment shall be provided as set forth in Section 7.2.  A Special Assessment may be payable in installments extending beyond the fiscal year in which the Special Assessment is approved.

7.6  Benefited Assessments.  The Board may levy “Benefited Assessments” against particular Dwelling Units for expenses incurred or to be incurred by the Association, as follows:

(a)  to cover the costs, including overhead and administrative costs, of providing benefits, items, Special Services or Optional Services to the Dwelling Unit or Residents thereof, 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 a Dwelling Unit or Dwelling Units into compliance with the terms of the Governing Documents, or costs incurred as a consequence of the conduct of the Owner or Residents of the Dwelling Unit, their agents, contractors, employees, licensees, invitees, or guests; provided, the Board shall give the Dwelling Unit Owner prior written notice and an opportunity for a hearing, in accordance with the Bylaws, before levying any Benefited Assessment under this subsection (b).

7.7 Creation of Lien and Personal Obligation:  Each Owner of a Dwelling Unit by acceptance of a deed therefore (whether or not it shall be so expressed in any such deed or other conveyance) shall be and is deemed to covenant and hereby agrees to pay to the Association all Charges made with respect to the Owner or the Owner’s Dwelling Unit.  Each Charge, together with interest thereon, late charges, and reasonable costs of collection (including attorney’s fees), if any, as hereinafter provided, shall be a continuing lien upon the Dwelling Unit against which such Charge is made and also shall be the personal obligation of the Owner of the Dwelling Unit at the time when the Charge becomes due.  The lien or personal obligation created under this Section shall be in favor of and shall be enforceable by the Association. 

7.8  Non-Payment of Charges:  Any Charge which is not paid to the Association when due shall be deemed delin­quent. Any Charge which is delinquent for thirty (30) days or more shall bear interest at twelve percent (12%) or less, if required by law, per annum from the due date to the date when paid and the Association may assess a late fee in an amount of five percent (5%) of the delinquent amount and may (i) bring an action against the Owner person­ally obligated to pay the Charge to recover the Charge (together with interest, late fees, costs and reasonable attorney’s fees for any such action, which shall be added to the amount of the Charge and included in any judgment rendered in such action), and (ii) en­force and foreclose any lien which it has or which may exist for its benefit.  The Association shall also have all rights set forth in Virginia Code Section 55-516.

7.9  Lien for Charges Subordinated to Mortgages:  The lien for a Charge, provided for in Section 7.7, shall be subordi­nate to a Mortgage on the Dwelling Unit which was recorded prior to the date that the lien for any such Charge attached.  Except as hereinafter provided, the lien for Charges, provided for in Section 8.7, shall not be affected by any sale or transfer of a Dwelling Unit.  Where title to a Dwelling Unit is transferred pursuant to foreclosure of the superior Mortgage or by deed or assignment in lieu of foreclosure of the superior Mortgage, such transfer of title shall extinguish the lien for unpaid Charges which became due prior to the date of the transfer of title.  However, the trans­feree of the Dwelling Unit shall be per­sonally liable for his share of the Charges with respect to which a lien against his Dwelling Unit has been extinguished pursuant to the preceding sentence where such Charges are reallocated among all the Owners pursuant to a subsequently adopted annual or revised Base Assessment, , Benefited Assessment, Special Assessment, and non-payment thereof shall result in a lien against the transferee’s Dwelling Unit, as provided in this Article.

7.10  Date of Commencement of Assessments.  The obligation to pay assessments shall commence as to each Dwelling Unit on the first day of the month following:  (a) the month in which the Dwelling Unit is made subject to this Declaration, or (b) the month in which the Board first determines a budget and levies assessments pursuant to this Article, whichever is later.  The first annual Base Assessment, if any, levied on each Dwelling Unit shall be adjusted according to the number of months remaining in the fiscal year at the time assessments commence on the Dwelling Unit.

7.11  Failure to Assess.  Failure of the Board to fix assessment amounts or rates or to post, deliver or mail each Owner an assessment notice shall not be deemed to be a waiver, modification, or release of any Owner from the obligation to pay assessments.  In such event, each Owner shall continue to pay Base Assessments, and Benefited 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 collections.

7.12  Exempt Property.  The following property shall be exempt from payment of Base Assessments, Benefited Assessments and Special Assessments:

(a)  All Common Area; and

(b)  Any property dedicated to and accepted by any governmental authority or public utility.

In addition, the Association shall have the right, but not the obligation, to grant exemptions to certain Persons qualifying for Section 501(c) status under the Internal Revenue Code so long as such Persons own property subject to this Declaration for purposes listed in Section 501(c).

7.13  Utility Costs Billed to Owners:  Certain utility charges incurred in connection with the use, operation and maintenance of the Common Area may not be separately metered to the Common Area.  If such charges are metered to an individual Dwelling Unit rather than being separately metered for the Common Area, then the following shall apply: 

(a)  If, in the opinion of the Board, each Owner is sharing in a fair and equitable manner the cost of such service, then no adjustment shall be made and each Owner shall pay his own bill; or

(b)  If, in the opinion of the Board, the Owner of a Dwelling Unit is being billed disproportionately for costs allocable to the Common Area, then the Association shall pay, or reimburse such Owner, an amount equal to the portion of the bill which in the reasonable determination of the Board is properly allocable to the Common Area, as the case may be, and the amount thereof shall be Common Expenses hereunder, as applicable. 

Any determinations or allocations made hereunder by the Board shall be final and binding on all parties.