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<br /> Section 2. PURPOSE OF ASSESSMENTS. The assessments levied by the
<br /> Association shall be used exclusively to promote the recreation,health, safety and welfare of
<br /> the residents in the Property and for the improvement and maintenance of all easements,
<br /> utilities, and the Common Area,as conveyed to the Association and as shown on the recorded
<br /> plat of The Lodges at Chapel Hill Subdivision, and repair of any other amenities located
<br /> upon the common areas, the costs of enforcing this Declaration, maintenance of the roadways
<br /> until such roads are accepted for maintenance by NC Department of Transportation, and the
<br /> payment of all other expenses associated with the common areas, including the prompt and
<br /> full payment of all ad valorem property taxes and insurance for said common area(s),
<br /> and, in addition, for the Association to keep the property in neat and good order, and to
<br /> provide for the health, welfare, and safety of the Owners and residents of The Lodges at
<br /> Chapel Hill.
<br /> Section 3. ANNUAL ASSESSMENTS. A Lot shall become subject to annual
<br /> assessments from the day following the day of conveyance by the Declarant or Developer to the
<br /> Owner. The annual assessments shall be determined as follows:
<br /> a. Until January 1 of the year immediately following the initial conveyance of a Lot by
<br /> Developer to an Owner, the annual assessments shall be in the amount of$1,000.00
<br /> (and shall be in addition to a one-time capital contribution of $1,000.00 payable to
<br /> the Association at the closing of the purchase and sale of each Lot pursuant to Section
<br /> 7 of this Article) in order to carry out the responsibilities of the Association.
<br /> Following the purchase of any Lot by an original Owner, at the time that any Lot is
<br /> sold, transferred, or conveyed by an Owner thereafter, the new Owner shall pay a
<br /> one-time capital contribution of $1,000.000 to the Association, in addition to the
<br /> payment of the annual assessment, as it becomes due.
<br /> b. From and after January 1 of the year immediately following the conveyance of a Lot
<br /> to an Owner by Developer, the maximum annual assessment may be increased each
<br /> year not more than ten (10%) percent above the maximum assessment for the
<br /> previous year without a vote of the membership.
<br /> c. From and after January 1 of the year immediately following the conveyance of a Lot
<br /> to an Owner by Developer, the maximum annual assessment may be increased
<br /> above ten (10%) percent by vote of the owners of 2/3 of the Lots within the
<br /> Property who are eligible to vote and voting, whether in person or by proxy, at a
<br /> meeting duly called for this purpose.
<br /> Section 4. SPECIAL ASSESSMENTS FOR CAPITAL IMPROVEMENTS. In
<br /> addition to the annual assessments authorized above, the Association may levy,in any assessment
<br /> year, a special assessment applicable to the year only for the purpose of defraying, in whole or in
<br /> part, the cost of any construction, reconstruction, repair or replacement of a capital improvement
<br /> upon the Common Area, including fixtures and personal property related thereto, provided that
<br /> any such assessment shall have the approval of the Owners of 2/3 of the Lots who are eligible to
<br /> vote, whether the owners are voting in person or by proxy at a meeting duly called for this purpose.
<br /> Section 5. INSURANCE. The Board of Directors, on behalf of the Association, as a
<br /> common expense, shall at all times keep the property of the Association, if any, insured against
<br /> loss or damage by fire or other hazards or other such risks, including, but not limited to,
<br /> director's liability and public liability insurance, upon such terms and for such amounts as may
<br /> be reasonably necessary from time to time to protect the Property and Common Area, which
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