ARTICLE V - ASSESSMENTS REV 8/6/2003

Section 5.01. Creation of the Lien and Personal Obligation of Assessments. The Declarant for each Unit owned by it within the Property hereby covenants, and each Owner of any Unit within the Property by acceptance of a deed or other conveyance for such Unit, whether or not it shall be so expressed in any such deed or other conveyance, shall be deemed to covenant to pay to the Association: (a) Regular Assessments, (b) Reimbursement Assessments, (c) Capital Improvement Assessments and (d) Reconstruction Assessments, such Assessments to be levied and collected from time to time as provided in this Article. The Assessments, including any associated interest, late charges and reasonable costs of collection as provided in the Article entitled "Nonpayment of Assessments", shall be a continuing lien upon the Unit against which each such Assessment is made as provided in such Article. Each such Assessment, including appropriate interest, charges and costs, shall also be the personal obligation of the person or entity who was the Owner of such Unit at the time the Assessment fell due and shall bind his heirs, devisees, assignees, personal representatives, and successors: provided, however, the personal obligation shall not pass to his successors in title unless expressly assumed by them.

Section 5.02. Purpose of Assessments. The Regular Assessments levied by the Association shall be collected, accumulated and used exclusively for the purpose of providing for and promoting the pleasure, recreation, health, safety and social welfare of the Members, including the enhancement of the value, desirability and attractiveness of the Property, the improvement and maintenance of Common Area or -  any Association Property and any Maintenance Area, and the discharge of any obligations or duties imposed on the Association or the Board by this Declaration, the Articles or Bylaws. Reimbursement, Capital Improvement and Reconstruction Assessments shall be used exclusively for the purposes for which such Assessments were levied as provided for in this Declaration. The Association shall not impose or collect any Assessment, penalty or fee that exceeds the amount necessary for the purpose or purposes for which it was levied.

Section 5.03. Regular Assessments.  (also known as homeowners dues and maintenance fees)

(a) Amount and Time of Payment. Regular Assessments shall be levied on a calendar or fiscal year basis ("Assessment Period") as determined by the Board. The amount of said Assessments shall be determined by the Board after giving due consideration to the Common Expenses. Each Owner shall pay his Regular Assessment to the Association in regular installments as established by the Board; provided, however, that such installments shall be paid on a monthly basis until the Board determines otherwise.

 (b) Date of Commencement of Regular Assessments. Regular Assessments shall commence as to all Units in Project No. 1 on the first day of the month following the conveyance of the first Unit within Project No. 1 to an Owner. Regular Assessments for Units annexed to the Initial Property shall commence with respect to all Units within the Annexed Property on the first day of the month following the conveyance of the first Unit within the Annexed Property to an Owner.

(c) Assessment Procedures. At least sixty days advance of each Assessment Period, the Board shall estimate the total Common Expenses to be incurred by the Association for such Assessment Period and shall at that time determine and fix the amount of the Regular Assessment to be levied against each Unit subject to assessment for such Assessment Period, which amount shall include an adequate reserve fund for the maintenance repairs and replacement of all Common Area and any Association Property that must be replaced on a periodic basis. Written notice of such Regular Assessment shall be sent to every Owner subject to assessment at least sixty days in advance of each Assessment Period.

(d) Increases, Decreases and Limitations. Subject to the terms of Section 5.05, in the event the Board determines at any time that the Regular Assessments levied for a current Assessment Period are or will become inadequate to meet all Common Expenses for any reason, it shall immediately determine the approximate amount of such inadequacy, issue a supplemental estimate of the total Common Expenses, increase the amount of Regular Assessments against each Owner and fix the date or dates when due. In the event the amount budgeted to meet Common Expenses for an Assessment Period proves to be excessive in light of the actual Common Expenses, the Board, in its discretion, may reduce the amount of the Regular Assessments.

Section 5.04. Capital Improvement Assessments. Subject to the terms of Section 5.05, the Board may levy Capital Improvement Assessments for any Assessment Period, applicable to that Assessment Period only, for the purpose of defraying in whole or in part the cost of any construction or reconstruction, unexpected repair or replacement of a capital improvement upon any of the Common Area within the Property or any Association Property, to the extent the same is not covered by Reconstruction Assessments, or any unexpected improvement to or maintenance of any Maintenance Area, including necessary fixtures and personal property. Capital Improvement Assessments shall be due and payable at times fixed by the Board.

Section 5.05. Limitation on Increases in Regular and Capital Improvement Assessments. Notwithstanding any other provision of this Declaration to the contrary, the Board may not (a) impose a Regular Assessment for any fiscal year that is more than twenty percent greater than the Regular Assessment for the Association's preceding fiscal year, or (b) impose Capital Improvement Assessments which in the aggregate exceed five percent of the budgeted gross expenses of the Association for that fiscal year, without the approval of Members, constituting a quorum, casting a majority of the votes at a meeting or election of the Association.  For purposes of this Section, quorum means more than fifty percent of the Members. The foregoing provisions shall not limit Assessment increases necessary for emergency situations.

For purposes of this Section, an emergency situation is any one of the following: (a) an extraordinary expense required by an order of a court; (b) an extraordinary expense necessary to repair or maintain the Property or any part of it or any Maintenance Area located outside of the boundaries of the Property for which the Association is responsible where a threat to personal safety on the Property or such Maintenance Area is discovered; or (c) an extraordinary expense necessary to repair or maintain the Property or any part of it or any Maintenance Area located outside of the boundaries of the Property for which the Association is responsible that could not have been reasonably foreseen by the Board in preparing and distributing the pro forma operating budget required under the Bylaws.

However, prior to the imposition or collection of an Assessment necessary for emergency situations, the Board shall (a) pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process, (b) give written notice of the Assessment to every Owner subject to assessment at least ten days in advance of the date on which the Assessment is due and payable, as such date shall be determined by the Board, and (c) distribute the resolution to the Owners with the notice of Assessment.

Section 5.06. Reimbursement Assessments. Reimbursement Assessments may be levied by the Board from time to time (a) against Units with respect to which particular costs or expenses have been incurred by the Association for materials or services furnished at the request or with the consent of the Owner of any such Unit or (b) in accordance with any provisions of this Declaration which may provide for the levying of Reimbursement Assessments by the Board. Reimbursement Assessments shall be due and payable at the times fixed by the Board.

Section 5.07. Certificate of Payment. Upon demand, the Association shall furnish to any Owner liable for Assessments a certificate in writing signed by an officer or authorized agent of the Association setting forth whether said Assessments have been paid. Such certificate shall be conclusive evidence of payment of any Assessments stated to have been paid. A reasonable charge may be made by the Board for the issuance of any such certificate.

Section 5.08. Assessment of Units Owned by Declarant. Without exception, each Unit owned by the Declarant shall be subject to assessment to the same extent and in the same manner as any other Unit owned by any Owner.

Section 5.09. Nonuse and Abandonment. No Owner may waive or escape personal liability for Assessments or release the Unit owned by him from the Assessment liens by nonuse of any of the Common Area or any Association Property or abandonment of his Unit.

Section 5.10. Uniform Rate of Assessment. Unless otherwise provided in a Supplementary Declaration as to the Units within the Annexed Property covered by the Supplementary Declaration, all Regular and Capital Improvement Assessments shall be fixed at a uniform rate for all Units.

Section 5.11. Exempt Property. The following property shall be exempt from the Assessments and liens created in this Declaration: (a) Association Property; (b) all properties dedicated to and accepted by a public authority; and (c) all properties exempted from taxation by the laws of St. Vincent & The Grenadines, upon the terms and to the extent of such legal exemption. Notwithstanding any provision in this Section, no real property or improvements devoted to residential dwelling use shall be exempt from said Assessments or liens.

Section 5.12. Offsets. All Assessments shall be payable in the amount specified in the Assessment. No offsets against such amount shall be permitted for any reason, including without limitation, a claim that the Association is not properly exercising its duties of maintenance or enforcement.

Section 5.13. Reserves. That portion of Regular Assessments which are collected as Common Expense reserves shall be deposited by the Board in a separate bank account to be held in trust for the purposes for which they are collected and are to be segregated from and not commingled with any other Association funds. Such reserves shall be deemed a contribution to the capital account of the Association by the Members.

Section 5.14. Working Capital Fund.  [SaJ1] Upon the conveyance of record title to a Unit by Declarant to an Owner, the Owner shall pay the first and last monthly installments. At the time the vessel is purchased 100% of the shares of World Yacht Club representing the condo units are held by Declarant.  As the units are sold, management of the units and the income from them will shift from Declarant to the Owners and management responsibilities from Declarant to the Association.  Payments in the amount of 50% of any rental income on unsold units held by Declarant will be paid to the Association.

Section 5.15. Contribution to Association by Declarant.   Declarant will make a financial contribution to the Associations Reserve or Working Capital Account from new funds resulting from unit sales. 

Section 5.16 Reserve account.  Association will establish and maintain a Reserve Fund in the amount of 50% of the estimated cost of routine and expected repair and replacement of the ships equipment including navigation and communications equipment, engine room and deck equipment, hotel and housekeeping equipment and at the discretion of Association water sports equipment.  5%, or more of Regular Assessments (Association Dues) will be allocated for and be paid into the Reserve Account.  The Reserve Fund will be held in interest bearing funds, stocks, bonds, security investments and not more then in unsold inventory of units.  Distressed units and units acquired by deed in lieu of foreclosure may be acquired in addition the 50% allocation but units must placed on the market for sale at prices below market to encourage a quick sale until the allocation owned by Association is less than 50% of Reserve Fund.  

 

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