DECLARATION OF CONDOMINIUM

FOR

QUAIL RUN CONDOMINIUM

FILED FOR RECORD DECEMBER 21, 1981

RECORDED IN BOOK 1278

PAGES 38 THROUGH 93

IN THE OFFICE OF THE REGISTER OF DEEDS                              OF CATAWBA COUNTY, NORTH CAROLINA

CONSISTING OF _________ PAGES   NUMBERED 1 THROUGH _________     AND EXHIBITS A THROUGH F

TABLE OF CONTENTS

DECLARATION OF INTENTION TO SUBMIT PROPERTY   TO THE PROVISIONS OF   THE NORTH CAROLINA UNIT OWNERSHIP ACT

Paragraph Title Page

  1. 1. Definitions.....................................1
  2. 2. Name of Condominium.................. ..........4
  3. 3. General Description of Property.................4
  4. 4. Description of Building.........................4
  5. 5. Description of Units............................4
  6. 6. Encroachments...................................5
  7. 7. Common Areas and Facilities.....................5
  8. 8. Use of Common Areas and Facilities..............6
  9. 9. Description of Limited Common Areas 

  and Facilities................................6

  1. 10. Statement of Purposes, Uses and Restrictions....7
  2. 11. Persons to Receive Service of Process...........8
  3. 12. Easements.......................................8
  4. 13. Partitioning....................................9
  5. 14. Liens...........................................9
  6. 15. Nature of Interest in Units.....................9
  7. 16. Separate Tax Listings..........................10
  8. 17. Assessments for Common Expenses................10
  9. 18. Insurance......................................10
  10. 19. Distribution of Insurance Proceeds.............13
  11. 20. Duty to Repair.................................14
  12. 21. Partition......................................14
  13. 22. Power of Attorney to Board of Directors........15
  14. 23. Ownership or Lease of Units by                                               Board of Directors...........................16
  15. 24. Rights of Declarant............................16
  16. 25. Units Subject to Declaration, Bylaws,                                  Rules and Regulations........................16
  17. 26. Personal Property..............................16
  18. 27. Homeowners Association.........................17
  19. 28. Interpretation.................................18
  20. 29. Amendment to Declaration.......................18
  21. 30. Termination of Condominium.....................19
  22. 31. Enforcement....................................20
  23. 32. Invalidity.....................................20
  24. 33. Waiver.........................................20
  25. 34. Captions.......................................20

35. Law Controlling................................21DECLARATION OF INTENTION TO SUBMIT PROPERTY                  TO THE PROVISIONS OF CHAPTER 47A OF THE                     NORTH CAROLINA GENERAL STATUTES

THIS DECLARATION, and the exhibits which are attached hereto and made a part hereof, are made and executed this 4th day of December, 1981, by SPINNAKER PROPERTIES, a Louisiana partnership, (the “Declarant”), for itself, its successors and assigns, pursuant to the provisions of Chapter 47A (as amended) of the North Carolina General Statutes entitled the “Unit Ownership Act”;

WITNESSETH:

WHEREAS, the Declarant is the owner of certain real property in the City of Hickory, Catawba County, North Carolina, more particularly described in Exhibit A, attached hereto and made a part hereof, together with a multi-unit residential project and other improvements constructed thereon; and

WHEREAS, it is the desire and intention of the Declarant to divide the project into “condominium units” or “units,” as those terms are defined under the provisions of the North Carolina Unit Ownership Act, and to sell and convey the same to various purchasers, subject to the covenants and restrictions herein reserved for the Declarant, its successors and assigns; and

NOW, THEREFORE, the Declarant does hereby publish and declare that all of the property described in paragraph 3 below, is held and shall be held, conveyed, hypothecated, encumbered, used, occupied and improved, subject to the following covenants, conditions, restrictions, uses, limitations and obligations, all of which are declared and agreed to be in furtherance of a plan for the improvement of said property and the division thereof into condominium units, and shall be deemed to run with the land, and shall be a burden and benefit to the Declarant, its successors and assigns, and any person(s) acquiring and owning an interest in the real property and improvements, their grantee successors, heirs, executors, administrators, devisees and assigns.

  1. 1. DEFINITIONS. Certain terms, as used in this Declaration and the exhibits attached hereto and made a part hereof, shall be defined as follows, unless the context clearly indicates a different meaning therefor:
    • a. “QUAIL RUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC.” or “Homeowners Association” shall mean the association of unit owners as defined in the North Carolina Unit Ownership Act (as amended), and shall mean all of the Unit Owners acting as a group in accordance with the Declaration and the By-laws.
    • b. “North Carolina Unit Ownership Act” shall mean the provisions of Chapter 47A (as amended) of the North Carolina General Statutes.
    • c. “Board of Directors” or “Board” shall mean the governing body of the Homeowner’s Association, elected pursuant to the Bylaws.
    • d. “Building(s)” shall mean all structures erected upon the property.
    • e. “Bylaws” shall mean the Bylaws of QUAIL RUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC. attached hereto as Exhibit B, and made a part hereof.
    • f. “Common Areas and Facilities” shall have the meaning as set forth in the North Carolina Unit Ownership Act, and as more fully described in paragraph 7 hereof.
    • g. “Common Expenses” shall mean and include:
      • i. All sums assessed against the Unit Owners by the Homeowner’s Association;
      • ii. Expenses of administration, maintenance, repair or replacement of the Common Areas and Facilities;
      • iii. Expenses agreed upon as “common expenses” by the Homeowner’s Association; and 
      • iv. Expenses declared to be the “common expenses” by the provisions of the North Carolina Unit Ownership Act, or by this Declaration or the Bylaws.
    • h. “Common Expense Fund” shall mean the separate accounts to be kept in accordance with the provisions of Section 2, Article VII of the Bylaws.
    • i. “Common Interest” shall mean the aggregate of the undivided interests of the Unit Owners in the Common Areas and Facilities.
    • j. “Condominium shall mean the entire estate in the property submitted to the provisions of the North Carolina Unit Ownership Act, including the undivided interests in the Common Areas and Facilities and the ownership of the Units by all Unit Owners.
    • k. “Condominium Documents” shall mean this Declaration and all of the exhibits hereto, as the same shall from time to time be amended. Said exhibits are as follows:

Exhibit A Legal description of property;

Exhibit B Bylaws of the Homeowners Association;

Exhibit C Master Site Plan;

Exhibit D Plans;

Exhibit E Unit Designation;

Exhibit F Common Area Designation

    • l. “Owner” or “Unit Owner” shall mean a person, firm, corporation, partnership, association, trust or other legal entity, or any combination thereof, having an ownership interest of record in a unit within the property.
    • m. “Limited Common Areas and Facilities” shall mean those parts of the common areas and facilities reserved for the use of a certain Unit to the exclusion of all other Units; and more specifically described in paragraph 9 hereof.
    • n. “Mortgage” shall mean a deed of trust as well as a mortgage.
    • o. “Mortgagee” shall mean a beneficiary under or a holder of a deed of trust, as well as a mortgagee.
    • p. “Property” shall mean the entire parcel of real property referred to in this Declaration to be divided into condominium units (and more fully described in Exhibit A), and the Buildings, and all improvements and structures thereon, all owned in fee simple absolute, all easements, rights and appurtenances belonging thereto, and all articles of personal property intended for common use in connection therewith.
    • q. “Unit” shall mean those parts of the condominium property described in paragraph 5 hereof which are the subject of individual ownership.
    • 2. NAME OF CONDOMINIUM. The name by which the condominium property shall be known is “QUAIL RUN CONDOMINIUM.”
    • 3. GENERAL DESCRIPTION OF THE PROPERTY. The Condominium Property consists of real property described and identified on Exhibit A, attached hereto and made a part hereof, and the Buildings and other improvements erected thereon, and all articles of personal property intended for use in connection therewith.
    • 4. DESCRIPTION OF THE CONDOMINIUM. The Condominium is located at the 1050 21st Avenue, NW, Hickory, North Carolina. There are one hundred one, two and three bedroom units on a 12.2 acre site. Units are of the garden and townhouse design. The site is surrounded on three sides by Hickory Lake. There are seven buildings containing the Units plus a separate building containing an all-purpose room and maintenance facilities. The recreational areas include a swimming pool and adjacent clubhouse and pool deck, and lighted tennis court. The building exteriors are of wood.

A plat of physical survey or the property by PROFESSIONAL ENGINEER ASSOCIATES, INC., showing the location of the Buildings on the property is attached hereto and made a part hereof as Exhibit C. The Buildings are more particularly described in the plans attached hereto as Exhibit D, which Exhibit depicts all particulars or the Buildings, including the layout, the number of Units, the location of each Unit and its number, dimensions, ceiling and floor elevations and the locations of the limited and general Common Areas and Facilities appurtenance to and affording access to each Unit.

    • 5. DESIGNATION OP UNITS.
    • (a) The unit designation of each Condominium Unit and other data concerning its proper. identification are set forth In Exhibit E, attached hereto and made a part hereof. Access to the Common Areas and Facilities from each Unit is direct as is fully shown on the drawings attached hereto as Exhibit F.
    • (b) Each Unit shall constitute a single freehold estate and shall consist of all of the space bounded by the undecorated and/or unfinished interior surfaces of its perimeter walls, loadbearing walls, uppermost surface of the floor construction, lowermost surface of the ceiling construction, interior surface of the windows and window frames, Unit doors and door frames, except Unit entrance doors. Each Unit includes both portions of the Building within such boundaries , and the space so encompassed, including without limitation, the decorated surfaces, including paint, lacquer, varnish, wallpaper, paneling, tile, carpeting and any other finishing materials applied to interior walls, door, floors and ceilings, and interior surfaces of permanents walls, interior non-load bearing walls, interior surface of the windows, doors, floors and ceilings. Also included as part of the Unit shall be those portions of the heating and air conditioning system for the Unit which are located within the perimeter walls of the unit and those portions of the heating and air conditioning system located in the Common Areas and Facilities.
    • 6. ENCROACHMENTS. If any portion of the Common Areas and Facilities encroaches upon any Unit, or if any Unit now encroaches upon any other Unit, or upon any portion of the Common Areas and Facilities, or if any such encroachment shall occur hereafter as a result of settling or shifting of any of a Building, a valid easement for the encroachment and for the maintenance of same shall exist so long as the Building or Buildings stand. In the event a Building or Buildings, the Unit, any adjoining Unit, or any adjoining Common Area or Facility shall be partially or totally destroyed as a result of fire or other casualty or as a result of condemnation or eminent domain proceedings, and then rebuilt, encroachment of parts of the Common Areas and Facilities upon any Unit or of any Unit upon any other Unit or upon any portion of the Common Areas and Facilities due to such rebuilding shall be permitted, and valid easements for such encroachments and the maintenance thereof shall exist so long as the Building or Buildings shall stand.
    • 7. COMMON AREAS AND FACILITIES. The Common Areas and Facilities consist of all of the Property other than the Units as described in paragraph 5 above, including without limitation, the following (except such portions of the following as may be included within an individual Unit):
    • (a) The Land upon which the Buildings are erected and all land surrounding the Buildings, as more fully described in paragraph 3 above.
    • (b) All foundations, columns, girders, beams, supports and other structural members.
    • (c) The Common Area yards, parking lots, landscaping, and driveways.
    • (d) All roofs, exterior walls and interior walls except those partitioned walls wholly within a unit.
    • (e) All central and appurtenant installations for utilities and services whether or not currently located in the Buildings, such as powers, lights, water, sewer, and all tanks, pumps, motors, fans, cables, conduits, flues, ducts, mechanical systems, storm drains, central mail box and common dumpsters, master TV antenna, and all other items used in connection therewith, whether located in Common Areas and Facilities or in Units.
    • (f) All exterior walkways and front porches of the Buildings.
    • (g) All other parts to the Property and apparatus and installations, including all items of personal property existing in the Buildings or upon the Property for common use or which are necessary or convenient to the existence, maintenance or safety of the Property.
    • (h) Swimming pool, pool deck, clubhouse, and tennis court.

There shall be appurtenant to each Unit an undivided interest in the Common Areas and Facilities, subject to the provisions of Paragraph 21 hereof. The undivided interest stated as percentages in the Common Areas and Facilities which are appurtenant to each Unit shall be as set forth in Exhibit E attached hereto and made a part hereof.

    • 8. USE OF COMMON AREAS AND FACILITIES. Each Unit Owner shall have the right to use the Common Areas and Facilities in accordance with the purposes for which they are intended, and for all purposes incident to the use and occupancy of his Unit, and such right shall be appurtenant to and run with his Unit; provided, however, that no person shall use the Common Areas and Facilities or any part thereof in such manner as to interfere with or restrict or impede the use thereof by others entitled to the use thereof, or in any manner contrary to or not in accordance with this Declaration, the Bylaws, and such rules and regulations as may be established from time to time by the Board of Directors.
    • 9. DESCRIPTION OF LIMITED COMMON AREAS AND FACILITIES.                            Limited Common Areas and Facilities shall mean and include those Common Areas and Facilities reserved for use by a certain Unit or Units to the exclusion of other Units, including the balconies and storage areas, all as more fully designated in Exhibit F attached hereto and made part hereof. References hereunder to Common Areas and Facilities shall include Limited Common Areas and Facilities, unless the context clearly indicates otherwise. Each Unit Owner is hereby granted an exclusive and irrevocable license to use and occupy the Limited Common Areas and Facilities associated with and/or assigned to such Unit Owner’s Unit and shall be responsible for the routine maintenance of such areas and Facilities.
    • 10. STATEMENT OF PURPOSE, USES AND RESTRICTIONS. The Units, Common Areas and Facilities and Limited Common Areas and Facilities shall be occupied and used as follows:
    • (a) The Condominium Property shall be used for single-family residential purposes and common recreational purposes auxiliary thereto, and for no other purposes.
    • (b) There shall be no obstruction of the Common Areas and Facilities.
    • (c) Nothing shall be done or kept in any Unit or in the Common Areas and Facilities which will increase the rate of insurance on the Common Areas and Facilities without the prior written consent of the Board of Directors. No Owner shall permit anything to be done or kept in his Unit or in the Common Areas and Facilities which would result in the cancellation of insurance on any Unit or part of the Common Areas and Facilities, or which would be in violation of any law or for any immoral or improper purpose. No waste will be committed to the Common Areas and Facilities.
    • (d) No sign of any kind shall be displayed to the public view from any Unit or from the Common Areas and Facilities, without the prior written consent of the Board of Directors.
    • (e) No animals, livestock or poultry of any kind shall be raised, bred or kept in any Unit or in the Common Areas and Facilities, except that dogs, cats or other household pets may be kept in any Unit, subject to rules and regulations adopted by the Board of Directors.
    • (f) No noxious or offensive activity shall be carried on in any Unit, or in the Common Areas and Facilities; nor shall anything be done therein which will be an annoyance or nuisance to other Owners.
    • (g) Nothing shall be altered or constructed in or removed from the Common Areas and Facilities except upon the written consent of the Board of Directors.
    • (h) No Unit shall be rented by the Unit Owner for transient or hotel purposes, which shall be defined as (i) rental for any period less than thirty (30) days, or (ii) any rental if the occupants of the Units are provided customary hotel services. Other than the foregoing restrictions, Unit Owners shall have the right to lease their respective Units, provided that said lease is made subject to the covenants and restrictions in this Declaration and Bylaws, and a failure by the lessee to comply with the terms of the Condominium Documents shall be a default under the lease. All leases are to be in writing.
    • (i) The Board of Directors of the Homeowners Association is authorized to adopt rules for the use of the Condominium, said rules to be furnished in writing to the Owners. There shall be no violation of said rules.
    • (j) Notwithstanding anything herein to the contrary, Declarant, and such persons as he may select, shall have the right of ingress and egress over, upon and across the Common Areas and Facilities, the right to utilize one or more Units as a model, office or for other promotional purposes, the right to erect signs upon the Property for the purpose of advertising availability of Condominium Units and similar uses, and the right to store materials on the Common Areas and Facilities, and to make such other use thereof as may be reasonably necessary incident to construction, development and sale of the Units.
    • 11. PERSON TO RECEIVE SERVICE OF PROCESS. The Chairman of the Board of the Homeowners Association is hereby designated to receive against or in relation to the Condominium. The Homeowners Association’s initial address and place of business is 1050 21st Avenue, NW, Hickory, North Carolina 28601, which is located within the county in which the Property is located.
    • 12. EASEMENTS. The Declarant and each Unit Owner shall have an easement in common with the other Owners of all other units to use, install, repair, maintain and restore all pipes, wires, ducts, cables, air conditioning conduits, public utility lines and other common facilities located in any of the other Units and serving his Unit or the Unit owned by Declarant. Each Unit shall be subject to an easement in favor of the Owners of all other Units to use, install, repair, maintain and replace the pipes, ducts, cables, wires, air conditioning conduits, public utility lines and other common facilities serving such other Units and located in such Unit. The Board of Directors, or its agent(s), shall have the right of violations therefrom, and to maintain, repair or replace the common facilities contained therein or elsewhere in the building, such right of access to be limited in accordance with the Bylaws.

The Board of Directors may hereafter grant easements for utility purposes for the benefit of the Property, including the right to install, lay, maintain, repair and replace water lines, pipes, sewer lines, gas mains, telephone wires and equipment and along and on any portion of the Common Areas; and each Unit Owner hereby grants the Board of Directors an irrevocable power of attorney to execute, acknowledge and record for and in the name of each Unit Owner such instruments as may necessary to effectuate the foregoing.

    • 13. PARTITIONING. The Common Areas and Facilities shall not be divided, nor shall any right to partition any part thereof exist. Nothing herein contained, however, shall be deemed to prevent ownership of a Condominium Unit by more than one person, either as tenants by the entireties, or tenants in common or in any other form by law permitted.
    • 14. LIENS. While the property remains subject to this Declaration and the provisions of the North Carolina Unit Ownership Act, no liens of any nature shall arises or be created against the Common Areas and Facilities, except with the unanimous consent in writing of all of the Owners and the holders of the first liens thereon, except for (i) such liens as may arise or be created against the several units and their respective common interests under the provision of the North Carolina Unit Ownership Act, and, (ii) with respect to Units and their said respective common interest, title to which has not been conveyed, or which have not been leased by Declarant, the lien of any mortgage given by Declarant to secure financing for the Buildings and other improvements on the Property. Every agreement for the performance of labor or the furnishing of materials to the Common Areas and Facilities whether oral or in writing, must provide that it is subject to provisions of this Declaration.
    • 15. NATURE OF INTEREST IN UNITS. Every Condominium Unit, together with its undivided common interest in the Common Areas and Facilities, shall for all purposes be, and it is hereby declared to be and to constitute, a separate parcel of real property, and the Unit Owner thereof shall be entitled to the exclusive ownership and possession of his Unit, subject only to the covenants, restrictions, easements, bylaws, rules, regulations, resolutions and decisions adopted pursuant hereto, and as may be contained herein and in the accompanying Bylaws and in the minutes of the Board of Directors of the Homeowners Association. The percentage of undivided Common Interest in the Common Areas and Facilities of each Unit shall not be separated from the Unit to which it appertains, and shall be deemed to be transferred with the Unit, even though such interest is not expressly mentioned or described in the conveyance, encumbrance, release or other instrument transferring such Unit.
    • 16. SEPARATE TAX LISTINGS. Every Unit, together with its undivided interest in the Common Areas and Facilities, shall constitute a separate parcel of real property, and shall be separately assessed and taxed by each assessing unit for all types of taxes authorized by law. Each Unit Owner shall be liable solely for the amount of taxes against his individual Unit.
    • 17. ASSESSMENTS FOR COMMON EXPENSES.
    • (a) Unit Owners. Each Unit Owner shall contribute pro rata, in proportion to his Percentage of Interest in the Common Areas and Facilities, as set forth in Exhibit E hereto attached, toward the Common Expenses, including the expenses of administration, maintenance and repairs of the Common Areas and Facilities and any other expense lawfully agreed upon; and shall pay any special assessment duly assessed by the Board of Directors, all in accordance with the Bylaws of the Condominium.
    • (b) Declarant. Declarant shall contribute pro rata, in proportion to its Percentage of Interest in the Common Areas and Facilities, as set forth in Exhibit E hereto attached, towards the expenses of administration, maintenance and repairs specified in Article VI, Section I of the By-laws, as set forth in Exhibit B hereto attached.
    • 18. INSURANCE. The Board of Directors shall obtain and maintain at all times, insurance of the type and kind in not less that the amounts provided in this Declaration and the Bylaws, and including insurance for such other risks, of a similar or dissimilar nature, as are or shall hereafter customarily be covered with respect to other condominium properties similar in construction, design and use. Such insurance shall be governed by the following provisions:
    • (a) The Board of Directors shall have the authority to and shall be furnished to each Unit Owner and his Mortgagee upon request. Unit Owners may, at their option, obtain insurance coverage at their own expense, upon their own personal property and tor the living expenses, and such other coverage as they may desire.
    • (b) The Board of Directors shall make every effort to secure insurance policies that will provide the following minimum coverages: 
    • (i) Fire and Extended Coverage. The building and all other improvements upon the land and all personal property included in the Common Areas and Facilities shall be insured in an amount equal to the 100$ insurable replacement value.

The policies evidencing such coverage shall contain clauses providing for waiver of subrogation, the standard SMP Condominium Endorsement (Form MP-29A, Ed. 7-77) (excepting the waiver subrogation provision contained therein). All such policies or insurance shall contain standard mortgage clause endorsements in favor of the mortgagee of each unit and such policy shall not be terminated, cancelled or substantially modified without at least ten (10) days’ prior written notice to the mortgagee of each unit. Such coverage shall provide protection against:

        1. 1. Loss or damage by fire or other hazards covered a standard extended coverage endorsement, and
        2. 2. Such other risks as from time to shall be customarily covered with respect to buildings similar in construction, location and use as the Building, including but not limited to vandalism and malicious mischief.

All such policies shall provide that adjustment of loss shall be made by the Board of Directors as insurance trustee and

              • (i)
              • (ii) Public Liability. The Board of Directors shall also be required to obtain and maintain to the extent obtainable, public liability insurance in such limits as the Board of Directors may from time to time determine, covering each member of the Board of Directors, the managing agent, if any, and each Unit Owner, with respect to his liability arising out of the ownership, maintenance or repair of the Common Areas and Facilities; Such insurance shall include a severability or interest endorsement which shall preclude the insurer from denying the claim of a Unit Owner because or negligent acts of the Homeowner's Association or other unit owners. The Board of Directors shall review such limits annually. Until the first meeting or the Board of Directors following the initial meeting of the Unit Owners, such public liability insurance shall be in amounts not less than $1,000,000 per occurrence for personal injury and/or property damage. Each Unit Owner, at his own expense, shall keep in force comprehensive personal liability insurance in such amounts as the Board of Directors shall from time to time determine, but in any case, not less than $100,000.00 for each occurrence.
              • (iii)Other. Such other insurance coverages, including workmen’s compensation, as the Board of Directors shall determine from time to time to be desirable.
              • (c) Premiums upon insurance policies purchased by the Board of Directors shall be paid for by the Board or Directors and charged as a Common Expense.
              • (d) The Board of Directors shall make every effort to secure insurance policies which will provide for the following:
      • i. The master policy on the property cannot be cancelled, invalidated or suspended on account or the conduct of any one or more of the individual owners.
      • ii. The master policy on the property cannot be cancelled, invalidated or suspended on account of the conduct of any officer employee of the Board of Directors, or managing agent, without prior demand in writing that the Board of Directors or managing agent cure the defect.
      • iii. That any “no other insurance” clause in the master policy on the property exclude individual Owners’ policies from consideration.
      • (e) All insurance policies purchased by the Board of Directors shall be for the benefit of the Board of Directors and the Unit Owners and their Mortgagees, as their interest may appear, and shall provide that all proceeds thereof shall be payable to the Board, as insurance trustee. The sole duty of the Board of Directors as insurance trustee shall be to receive such proceeds as are paid, and to hold the same in trust for the purposes elsewhere stated herein, and for the benefit or the Unit Owners and their Mortgagees, in the following shares:
      • i. With respect to proceeds on account of damage to Common Areas and Facilities, an undivided share for each Unit Owner, such share being in the same as each Unit Owner’s undivided common interest in the Common Areas and Facilities.
      • ii. Proceeds on account of damaged to Units shall be held in the following undivided shares:
        1. 1. When the Building is to be restored, for the owners of damaged Units in proportion to the cost of repairing the damage suffered by each Unit Owner, which cost shall be determined by the Board of Directors.
        1. 2. When the Building is not to be restored an undivided share for each Unit Owner, such share being the same as his undivided common Interest in the Common Areas and Facilities.
      • iii. In the event a mortgagee endorsement has been issued with respect to a Unit, the share of the Unit Owner shall be held in trust for the Mortgagee and the Unit Owner, as their respective interests may appear; provided that no Mortgagee shall have the right to determine or participate in the determination as to whether or not any damaged property shall be reconstructed or repaired.
      • 19. DISTRIBUTION INSURANCE PROCEEDS. Proceeds of Insurance policies received by the Board of Directors as insurance trustee shall be distributed to or for the benefit of the beneficial owners in the following manner:
    • a. All expenses of the Insurance trustee shall be first paid or provision made therefor.
    • b. If it is determined, as provided in paragraph 20 hereof, that the damaged property, with respect to which the proceeds are paid shall not be reconstructed or repaired, the remaining proceeds shall be distributes to the beneficial owners thereof.
    • 20. DUTY TO REPAIR. In the event of damage to or destruction of the Building or Buildings and/or the Common Areas and Facilities as a result of tire or other casualty, and the property is not partitioned as provided In paragraph 21 , the Board of Directors shall arrange tor the prompt repair and restoration of the Building or Buildings and/or the Common Areas and Facilities (including any damaged Unit, but not including any decoration or coverings for walls, ceilings or floors, or other furniture, furnishings, fixtures or equipment in the Unit, unless the subject insurance policy covers a portion or all of such loss to the Unit, in which event the Board shall repair or replace such damaged property), and the Board of Directors shall disburse the proceeds of all insurance policies to the contractors engaged in such repair and restoration in appropriate progress payments. Any cost for such repair and restoration in excess or the Insurance proceeds shall constitute a Common Expense.

Any reconstruction or repair shall be in accordance with the plans and specifications of the original Buildings and/or Common Areas and Facilities, portions of which are attached to this Declaration as Exhibits, or not, then according to plans and specifications approved by the Board of Directors and Declarant, if the Declarant is the owner of one or more Units ae such time.

    • 21. PARTITION. If the Buildings shall be more than two-thirds (2/3) destroyed by fire or other disaster, and Unit Owners owning seventy—five (75%) per cent in common interest of the Condominium duly resolve not, to proceed with repair or restoration, then and in that event:
    • (a) The entire Property shall be deemed as owned as tenants in common by the Unit Owners; 
    • (b) The undivided common interest in the Property owned by each Unit Owner shall be his undivided common interest In the Common Areas and Facilities previously appurtenant to his Unit(s);
    • (c) Any liens or encumbrances affecting any Unit shall be deemed transferred in accordance with the existing priorities: to the percentage of undivided common interest of the subject owner in the property as hereinabove provided; and
    • (d) The property shall be sub Sect to an action for sale In lieu of partition at the suit of any Unit Owner, in which event the net proceeds of insurance policies, if any, shall be considered as one fund and shall be divided among the Unit Owners in the proportion to their percentage interests in the Common Areas and Facilities previously appurtenant to their Units, after the respective shares of the Unit Owners, to the extent sufficient for that  purpose, have first been applied to the payment of all liens on the Unit of each Unit Owner.

The determination of whether the Buildings are “more than two-thirds (2/3) destroyed” for the purpose herein seated shall be determined as follows: An appraisal of the value of the Buildings (excluding the land) as of the day immediately preceding the damage shall be obtained from any M.A.I. appraiser by the Board of Directors. The cost of repairs and restoration shall then be determined by the Board of Directors by securing not less than three (3) independent bids, in writing, from three (3) reputable building contractors in the community of their proposed charges for making said repairs or restoration, the lowest of which shall be deemed to be the said cost. If the said cost exceeds two-thirds (2/3) of the said appraised value, the Buildings shall be deemed to have been more than two— thirds (2/3) destroyed.

    • 22. POWER OF ATTORNEY TO BOARD OF DIRECTORS. Each Unit Owner shall grant and hereby conveys to the persons who shall from time to time constitute the Board of Directors an Irrevocable power of attorney, coupled with an interest, to acquire title to or; lease any Unit whose Owner desires to sell or lease the same to the Board of Directors, or which may be the subject of a foreclosure or other Judicial sale, in the name of the Board of Directors or its designee, corporate or otherwise, as trustees on behalf of all or less than all Unit Owners, and to hold, convey, sell, lease, mortgage, vote the votes appurtenant thereto or otherwise deal with any such Unit so acquired or to sublease any unit so acquired by the Board of Directors.
    • 23. OWNERSHIP OR LEASE OF UNITS BY BOARD OF DIRECTORS. The Board of Directors may purchase or lease other Units pursuant to the provisions of the Bylaws and this Declaration. In the event that the Board of Directors shall purchase and/or hold a Unit as provided hereunder, title to any such Unit}, together with all interests appurtenant thereto, shall be held by the Board of Directors or its designee corporate or otherwise, as trustees on behalf of all such Unit Owners, in proportion to their respective common interests, or in the event that such Unit shall have been acquired on behalf of one or more, but less than all, Unit Owners, such lease shall be held in the proportions as designated by such Unit Owner(s);
    • 24. RIGHTS OF DECLARANT. Notwithtand1ng anything contained in this Declaration or the Bylaws or any rules or regulations as may be adopted from time to time by the Board of Directors, the Declarant shall have the right Co transact any business I necessary to consummate sales or rentals of Units or portions thereof, including, but limited to the right to maintain models, have signs, use the Common Areas and Facilities and show Units. The sales office(s), signs and all Items pertaining to sales shall not be considered Common Areas and Facilities, and shall remain the property of the Declarant.
    • 25. UNITS SUBJECT TO DECLARATION BYLAWS RULES AND REGULATIONS. All present and future Owners, tenants, occupants and guests of Units shall be subject to and shall comply with the provisions of this Declaration, the Bylaws and any rules and regulations as may be adopted in accordance with the Bylaws, as said Declaration, Bylaws, rules and regulations may be amended from time to time. The acceptance of a deed of conveyance or the entering into of a lease or the entering into occupancy of any Unit shall constitute an agreement that the provisions or this Declaration, Bylaws and any rules and regulations which may be adopted are accepted and ratified by such Owner, tenant or occupant, and all such provisions shall be deemed and taken to be covenants running with the land, and shall bind any person having at any time any interest or estate in such Unit, as though such provisions were made a part or each and every deed of conveyance or lease.
    • 26. PERSONAL PROPERTY. The Board of Directors may acquire and hold for the benefit of the Owners, tangible and intangible personal property, and may dispose of the same by sale or otherwise, and the beneficial interest in such personal property Shall be held by the Owners in the same proportion as their respective undivided Common Interests in the Common Areas and Facilities, and shall not be transferable, except with a transfer of a Unit. A transfer of a Unit shall vest in the transferee ownership of the transferor's beneficial interest in such personal property. At the time when the first conveyances of Units are made by the Declarant to the owners, Declarant shall execute and deliver a bill of sale to the Board or Directors, transferring title to all items of personal property located on the Property and furnished by Declarant, which personal property is intended for the common use and enjoyment of Owners.
    • 27. HOMEOWNERS ASSOCIATION. 
    • a. In order to provide for the maintenance, repair, replacement, administration and operation of the Property, there is hereby created an association to be known as "QUAIL RUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC.  Membership therein shall be composed of all of the Owners or the Units at QUAIL RUN CONDOMINIUM. Each Owner 0t a Unit shall be a member of the Homeowners Association, but membership shall be automatically terminated when such person ceases to be an Owner, and will be transferred to the new Owner.
    • b. QUAIL RUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC., shall be governed in accordance with and as prescribed by the By—laws. 
    • c. Declarant, by this Declaration, and all Unit Owners, by the acceptance of their deeds, covenant and agree to be bound by the conditions, restrictions and obligations contained in the By-laws of QUAILRUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC., and the provisions of this Declaration.
    • d. The duties and power of the Homeowners Association shall be those set forth in this Declaration and the By-laws or QUAIL RUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC., including the power and authority to make assessments as provided tor in the By—laws.
    • e. The Declarant reserves the right, so long as Declarant is the owner of one or more Units in QUAIL RUN CONDOMINIUM to incorporate the QUAIL RUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC., as a North Carolina non—profit corporation. In addition, the Homeowners Association, upon affirmative vote of seventy-rive percent (75%) rate the QUAIL RUN CONDOMINIUM HOMEOWNERS ASSOCIATION, INC., as a North Carolina non-profit corporation; provided, however, that should the Homeowners Association so elect the Declarant reserves the right to approve the form and content of the articles of incorporation of said non—profit corporation.
    • f. Except as provided by statute, the QUAIL RUN CONDOMINIUM HOMEOWNÉRS ASSOCIATION, INC., may not partition or subdivide any Unit or by act or omission, seek to abandon, partition, subdivide, encumber, sell or transfer the Common Elements (the granting of easements for public utilities or public purposes consistent with the Intended use of the Common Elements by the condominium project shall not be deemed a transfer within the meaning hereof) unless the prior written consent of all the Unit Owners and all first mortgagees is obtained.
    • 28. INTERPRETATION. The provisions or this Declaration and the By-Laws shall be liberally construed to effectuate its purpose of creating a uniform plan for the development and operation of the Condominium,
    • 29. AMENDMENT TO DECLARATION.
    • a. This Declaration may be amended by the vote of Unit Owners holding at lease three-fourths (3/4) of the Percentage of Interest in the Common Areas and Facilities, cast in person or by proxy at a meeting duly held in accordance with the provisions of the By—laws , which such amendment shall become effective upon recordation of a written instrument duly executed and acknowledged by Unit Owners holding at least three—fourth(3/4) of the Percentage of Interest in the Common Areas in the Office of the Register of Deeds for Catawba County, North Carolina; provided, however, that any amendment which amends or alters the percentage of undivided common interest in the Common Areas and Facilities, or voting rights, shall require the approval of all Unit Owners and the written consent of all first mortgagees. And provided, further, that no amendment shall be adopted which would affect the rights or existing Mortgagees of Condominium Units, or insurance on such Units, without the written consent of such Mortgagees. The Homeowners Association shall cause written notice to be given to the holder of any Mortgage on any Unit in the Condominium at lease thirty (30) days prior to the effective date or any amendment to this Declaration.
    • b. Notwithstanding anything herein to the contrary, until all Units have been sold by Declarant, no amendment to this Declaration shall be effective unless approved in writing by the Declarant, and during said period, Declarant reserves the right to change the interior design and arrangement of any unsold Units, to alter the boundaries between unsold Units, and to add such additional Common Facilities or recreational facilities as it may deem desirable without amendment this Declaration in the manner hereinbefore set forth, so long as such change shall not increase the number of Units or alter the boundaries of the Common Areas and ties. If Declarant shall make any changes in Units, as provided in this subparagraph, such changes shall be reflected by an amendment of this Declaration, with plans attached, reflecting such authorized alteration of Units, and said amendment heed only be executed and acknowledged by Declarant. The plans shall be certified in the manner required by the Unit Ownership Act. If more than one Unit is concerned, Declarant shall reapportion between the Units the shares in the Common Areas and Facilities appurtenant to the Units concerned, together with reapportioning the Common Expenses and common profits of the Units concerned, and such share of the Common Areas and Facilities, Common Expenses and common profits shall be duly noted in the amendment to this Declaration.
    • 30. TERMINATION OF CONDOMINIUM.
    • (a) Agreement. This Condominium may be terminated and the Condominium property removed from the provisions or the Unit Ownership Act by an Instrument to that effect executed by all of the Unit Owners and recorded, provided that the holders of all liens affecting any of the Units must consent thereto, thereafter, the Unit Owners shall own the Property ag tenants in common, each Unit Owner to receive an interest equal to the Percentage Interest of such Unit Owner in the Common Areas and Facilities, as set forth In Exhibit E to the Declaration.
    • (b) Destruction. In the event it is determined in the manner provided in this Declaration and Bylaws hereof that the property shall not be repaired or reconstructed after fire or other casualty, the Condominium will be terminated and the Condominium Documents revoked. The determination to repair or reconstruct after fire or other casualty shall be evidenced by a certificate of the Association certifying as to faces effecting the termination, which certificate shall become effective upon being duly recorded in the Catawba County Public Registry.
    • (c) Condemnation. In the event a condemnation involves more than ten per cent (10%) or the value of the Common Areas (limited or general) and/or more than fifteen per cent (115%) of the total value of all Units, the Condominium may be terminated by written approval of not less than ninety per cent (90%) of all of the members of the Association entitled to vote.
    • 31. ENFORCEMENT. Each Owner shall comply strictly with the provisions of this Declaration, the Bylaws and the rules, regulations and decisions issued pursuant thereto and as the same may be lawfully amended from time to time. Failure to do so shall be grounds for establishment and enforcement of liens on an individual Unit In accordance with the Bylaws, an action to recover sums due for damages, injunctive relief, or a combination of remedies, maintainable by the Board of Directors or managing agent on behalf of the Homeowners Association, or, in a proper case, by an aggrieved Owner.
    • 32. INVALIDITY. The Invalidity of any provision or this Declaration shall not be deemed to impair or affect in any manner the validity and enforceability or effect of the remainder or this Declaration, and in such event, all of the other provisions or this Declaration shall continue in full force and effect as if such invalid provision had never been included herein.
    • 33. WAIVER. No provision contained in the Declaration shall be deemed to have been abrogated or waived by reason of any failure to enforce the same, irrespective of the number of violations or breaches which may occur.

34. CAPTIONS. The captions herein are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of this Declaration or the intent of any provisionIN WITNESS WHEREOF, the parties have set their hands and seals this 4th day of December, 1981

________________________________(SEAL)Gerald A. Derks d/b/a SpinnakerProperties, a Louisiana Partnership

________________________________(SEAL)Mark Storen d/b/a SpinnakerProperties, a Louisiana Partnership

STATE OF LOUISIANA

PARISH OF ORLEANS

I, a Notary Public, do hereby certify that GERALD A. DERKS, as one of the two partners of SPINNAKER PROPERTIES, a Louisiana partnership, personally appeared before me this day and acknowledged the due execution of the foregoing Declaration of Condominium for Quail Run Condominium as a partner of Spinnaker Properties and for and on behalf of and as the act and deed of the aforesaid partnership.

WITNESS my hand and notarial seal on this, the 4th day of December, 1981.

    _________________________________(SEAL)     Janice Russell – Notary Public

My Commission Expires: at death.

STATE OF LOUISIANA

PARISH OF ORLEANS

I, a Notary Public, do hereby certify that MARK STOREN, as one of the two partners of SPINNAKER PROPERTIES, a Louisiana partnership, personally appeared before me this day and acknowledged the due execution of the foregoing Declaration of Condominium for Quail Run Condominium as a partner of Spinnaker Properties and for and on behalf of and as the act and deed of the aforesaid partnership.

WITNESS my hand and notarial seal on this, the 4th day of December, 1981.

    _________________________________(SEAL)     Janice Russell – Notary Public

My Commission Expires: at deathCONSENT AND SUBORDINATION

TO

DECLARATION OF CONDOMINIUM

EDWARD A. SOKOLOFF, Trustee, and HOME OWNERS FEDERAL SAVINGS AND LOAN ASSOCIATION, Beneficiary, under that certain Deed of Trust date September 22, 1981 and recorded in book 1271 at page 724 in the Office of the Register of Deeds for Catawba County, hereby consent to this Declaration of Condominium without assuming or imposing any liability by virtue of such consent, and subordinate the lien of the Deed of Trust to the provisions of this Declaration of Condominium.

______________________________________(SEAL)   Edward A. Sokoloff, Trustee

(CORPORATE SEAL)

HOME OWNERS FEDERAL SAVINGS AND LOAN ASSOCIATION

BY:_______________________________  Vice President

ATTEST

                    __________________________ Secretary

COMMONWEALTH OF MASSACHUSETTS        Suffolk, ss.     December 4, 1981

I, Michael E. Katin, a Notary Public, do hereby certify that EDWARD A. SOKOLOFF, Trustee, personally appeared before me this day and acknowledged the due execution of the foregoing Consent and Subordination to Declaration of Condominium.

Witness my hand and notarial seal, this, the 4th day of December, 1981.

  __________________________________   Notary Public

                      My Commission Expires: September 10, 1987

COMMONWEALTH OF MASSACHUSETTS        Suffolk, ss.     December 4, 1981

I, Michael E. Katin, a Notary Public, do hereby certify that Ruth C. Trainor personally came before me this day and acknowledged that she is Secretary of HOME OWNERS FEDERAL SAVINGS AND LOAN ASSOCIATION and that by authority duly given and as the act of the corporation, the foregoing Consent and Subordination to Declaration of Condominium was sign in its name by its Vice President, sealed with its corporate seal, and attested by him/her as its Secretary. 

Witness my hand and notarial seal, this, the 4th day of December, 1981.

  __________________________________   Notary Public

                      My Commission Expires: September 10, 1987

NORTH CAROLINA CATAWBA COUNTY

The foregoing certificates of Janice Russell, Notary Public of Parish of Orleans, Louisiana, and of Michael E. Katin, of Commonwealth of Massachusetts, are certified to be correct.

Filed on December 21, 1981, at 12:43 P.M., and recorded in Book 1278 at Page 38

  __________________________________   REGISTER OF DEEDS