DORhL I lOMEO WNERS ASSOCIATION, INC. CC

DECLARATION OF COVENANTS, CONDITIOHS AND RESTRICTIONS L c

Z = - 15 - t, -

THIS DECLARATION, made on t h e da t e hereinafter set forth by RAY-2 LIMITEA 4

PARTNERSHIP, a Maryland limited partnership, hereinafter referred t o as " ~ e c i a r a n t ~ . S v - - 5

W T T N E S S E T H : ----------

WHEREAS, Declarant is the owner of certain Property jn t he County of Montgomery, S t a t e of Maryland, which is more particularly described on the legal description attached hereto and made part hereof as Exhibit "AT1.

NOW, THEREFORE, Declarant hereby declares tha t all of t h e Property described on Exhibit "A1' and any additions there to made in accordance with the provisions of thjs Declaration, hereto shaU be held, sold and conveyed subject t o the following e2semqnJkA -,

.* .. .* iul;-g<! - . - . - - restrictions, covenants, and conditions, which are for the purpose of p r o t e c t i n g ~ ~ @ , ~ _ ~ a

.r-,.-'rnLr;

value and desirability of, and which shall run with t h e real property and be bind$gztihf '7 ,-;,? all parties having any right, t i t l e or interest in the Property described on ~xh?fif'f$&!!, ,, L::,t

. .. . ;. .e:. : :z here to, or any part thereof, their heirs, successors and assigns, and shall inurpCtd :- I = -khe--"- Vi: , .-. .-:% 1* - np

.*,an .r.-.*,,, - ." - -

benefit of each Owner thereof. L.!:s , , , "., , .*... x.-3 . .. , a . : : 8 * m: - - . - . - . . .- r C ' , r.,: ' i yay> .5, ,??.,.. i ,+L ' I,

-, . -;.IL.$> .. .. #$ ;i f ;-v- :, ,. -.-..., .l -7 .7.. .7 d

L . - - -,>. .;;: .- ..v. ., 1 > . . ,z 8 ;x: --; '--' ' n-;cit,sy k k : p - l :ik.i

ARTICLE I .-2 a,. a,.. . ;: ;*./ j f*/ ;: - . .

DEFINITIONS

Section 1.01. llAssociation" shall mean and refer to Dora1 Homeowners A s s ~ c i - ation, Znc., a nonstock, nonprofit corporation, i ts successors and assigns.

Section 1.02. "Common Area" shall mean all real property owned ar leased by t h e Association ( inc ludin~ the improvements thereto) or ctherwise .available for the common use and en joymei t of t h e Owners except as otherwise noted herein or in any Supplementary Declaration. The Common Area to be owned by the Association at t h e t ime of the conveyance of t h e first Lot is described more particularly on the legal description a t tached hereto a n d made part hereof as Exhibit "Bt'.

Section 1.03. "Common Expenses" shall mean and r e fe r to t h e actual and estirnafed expenses 0.f operating the Association, including Parcel Assessments (as defined jn this Declaration) and a reasonable reserve, d l as may be found to be necessary or appropriate by the Bozrd pursuant t o this Declaration, t h e Bylaws and the Articles of Incorporation of the Association.

Section 1.04. tlDeclarant" shall mean and refer t o Kay-2 Limited Partnership, a Maryland limited pzrtnership, its successors and assigns if such successors or assigns should acquire more than one undeveloped Lot from the Declarant for the purpose of development, but only to t h e extent that any of t h e rights, reservations, easements, interests, exemptions, privileges and powers of the Declarant are specifically assigned or transferred to such successors or assigns by an instrument in writing.

AFTER RECOmING, RETLTRN 92 -1- williasn L. &plan, Esqoire

1738 Elm Road, #318 Uver Spring, Maryhd 2 W 3

Section 1.05. 'lDeve1oprnen.t Planv shall mean the Site Development Plan dated July , 1987, prepared by Grecnhorne bc O'Marz, Inc., PLockville, Maryland, including all amendments thereto as may be made from t i m e to time.

Section 1 .06 . "Eligible Mortgage Holder" shall mean a holder of a first mortgage on a Lot who has requested notice f r o m the Association of amendments t o the Association documents or other significant matters which would affect t h e interests of the mortgagee.

Section 1 . 0 7. "Lot1' shall mean and refer t o any plot of land shown upon any recorded subdivision map of the Property upon which i t is intended t h a t a dwelling unit be constructed including, but not limited to, SFD Lots and Townhouse Lots.

Section 1.08. "Member" shall mean and r e f e r . to every person, group of persons, corporation, trust, or other legal entity, or any combination thereof, who holds any class of membership in the Association.

Sectjon 1-09. llMortgagee" shall mean the holder of any recorded mortgage, o r t h e party s ~ c u r e d or beneficiary of any recorded deed of t rust , encumbering one or more of the Lots. TIMortgage", a s used herein, shall include deed of trust. " f i r s t Mortgagetf, as used herein, shall mean a mortgage with priority over other rnortgages- As used in this Declaration, t h e t e r m "mortgagee" shall mean any mortgagee and shall not be limited t o institutional mortgagees. As used in this Declaration, the t e rm "institutional mortgageet1 or "institutional holder" shall include banks, t rus t companies, insurance companies, mortgage insurance companies, savings and loan associations, trusts, mutual savings banks, credi t unions, pension funds, mortgage companies, Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), all corporations and any agency or department of the United Sta tes Government or of any s t a t e or municipal government, or any other organization o r en t i ty which has a security interest in any Lot.

In t h e event any mortgage is insured by the Federal Housing Admini- strztion ("FHA") or guaranteed by the Veterans Administration ("VA"), then zs t o such mortgage, the expressions "mortgagee1' and "institutional mortgagee" inclcde the FJiA or t h e YA as t h e circumstances may require, acting, respectively, through the Federal Housing Commission and the Commissioner of Veterans Benefits or through other duly authorized agents.

Section 1.10. 'IOwnert1 shall mean and refer t o the record owner, whether one o r more persons or entities, of a fee simple title t o any Lot which is a part of t he Property, including contract sellers, but excluding those having such interest merely as secur i ty for the perf or mance of an obligation.

Section 1.11. "Parcelr1 shall mean and refer t o separately designated resi- dent ial areas comprised of various types of housing, initially or by Supplementary Declaration, made subject to this Declaration. The Declarant may designate in any Supplementary Declaration adding property t o the terms and conditions of this Declaration t h a t such properties shall constitute a separate Parcel o r Parcels and provided fur ther tha t the Board of Directors, by a two-'thirds (2/3) vote, may assign Parcel s tatus t o any area for which Parcel status has been requested by a majority of the Owners within such area.

Section 1.13. "Parcel Assessments1' shall mean zssessments for those portions of t h e Common Expenses, if any, which are incurred in connection wi th t h e promotion of t h e recreation, health, s a f e ty , welfzre, common benefit and enjoyment of t he Owners of t h e Lots against which t h e specifjc Parcel -4ssessment is levied and of maintaining t h e properties within a given Parcel, all as may be specifjcally authorized by t h e Board of Directors and t h e Parcel Committee (as defined in this Declaration) for s u c h Parcel. Parcel Assessments shall be lev ied equally against all owners of Lots in a Parce l for such purposes that are authorized by this Declaration, the Bylaws and t h e Board of Directors or the Parcel Committee for such Parcel from t ime to time. However, in t h e event of assessments for exterjor maintenance on dwellings or one or mare Lots, or 'Insurance on dwellings, or replacement reserves which pertain t o partjcular dwellings or any similar assessments which benefit one or more but less than all the Lot within a Parcel, s u c h assessments ( that are for the use and benefjt of particular Lots) shal l be levied on a pro-rata basis among the benefited Owners.

Section 1.13. "Parcel Committee" sha l l mean and r e fe r t o a committee selected in accordance with the Bylaws with respect to a n y particular Parcel, which shall be authorized to advise the Board of Directors regarding the manner in which t h e Parce l Common Area (as defined in this Declaration) situated within such Parcel shall be maintained, repaired or replaced; provided, however, the Board of Directors is not bound to such decisions or advice of the Parcel Committee, but shall take reasonable measures t o implement such advice unless to do so would not be in t he best interests of the Association as determined by the Board of Directors. The Parcel Committee shall also have t h e power t o propose to the Board of Directors reasonable rules and regulations with respect t o such Parcel which do not conflict with t h e provisions of thi's Declaration or with any reasonable rules and regulations promulgated by the Board of Directors of the Association pursuant t o this Declaration or t he Bylaws. A Parcel Committee shall also have such other powers and duties as set fo r th in the Bylaws. The Declarant shall 'have the authori ty to appoint the members of any Parcel Committee(s) in accordance with the Bylaws until t h e lapse of the Class 3 memberships as provided in this Declaration and such Declarant-appointed members need no t be Members of t h e Association or ~ e s i d e n t s of a Parcel.

Section 1.14. "Parcel Common Areat' shall mean and r e f e r t o t h e Common Area si tuated within any Parcel which is designated as Parcel Common Area in this Declaration or a Supplementary Declaration and which shall be reselved for t h e exclusive use and enjoyment of the Owners [and their lessees, guests and invitees) within such Parcel; provided, however that: the Parcel Common Area shall be subject t o an easement of ingress and egress for the benefit of all the Owners.

Section 1.15, "Project'l and the "Community1' as used in this Declaration shall mean t h a t cer tain community being developed by the Declarant (or affiliates, successors and assigns of the Declarant) in Montgam ery County, Maryland, known a s "DORAL".

Section 1.16. "Property" shall mean and re fer t o t h a t cer ta in real property described on Exhibit "A" hereto, and such additions thereto as may hereaf te r be brought within the jurisdiction of the Association.

Sectjon 1.17. IISFD Lottt shall mean and refer t o any Lot upon which there is situated, or is intended t o be situated, a single-family detached dwelling unit.

Section 1.18. uTownhouse Lot" shall mean and refer t o those Lots upon which there is situated, or is intended to be situated, a townhouse or s imi la r attached dwelling unj t,

Section 1.1 9. "Townhouse Parcel1' shall mean and refer to Bil of t h e Townhouse Lots subject t o this Declaration, including t h e dwellings constructed thereon, and the Common Area which is appurtenant t o and primarily serves and benefits such Townhouse Lots which is hereby deemed Parcel Common A r e a of such Townhouse Fareel,

ARTICLE I1 PROPERTY RIGHTS

Section 2.01. Owner 's Easements of Enjovment. Every Owner shall have a right and easement of enjoyment in and to the Common Area and certain Owners shall have an exclusjve right and easement of enjoyment in a Parcel Common Area t o the extent provided in this Declaration or any Supplementary Declaration, includjng an easement for the use and enjoyment of t h e private streets and parking lots and walkways within the Common Area, whicb shall be appurtenant t o and shall pass with the t i t l e t o every Lot, subject to the following provisions:

(a) the .r ight of t h e Association to charge reasonable and uniform admission and other fees f o r the w e of any recreational f a c i l i t y s i tuated upon the Common Aree or Parcel Common Area;

(b) the right of the Association t o suspend the voting rights and right t o use of any recreational facilities by an Owner for any period during which any assessment against his Lot remains unpaid; and for a period n o t t o exceed sixty (60) days f o r sLny infraction of i t s published rules and regulations, after not ice and an opportunity fo r a hearing;

(c) the right of the Association t o dedicate or t ransfer all or any part of the Common Area or Parcel Common Area to any public agency, authority, or ut i l i ty fo r such purposes and subject to such conditions as may be agreed to by t h e members. No such dedication or transfer shall be effectjve unless an instrflrnent signed by two-thirds (2/3) of each class of members and fifty-one percent (51%) of the Eligible Mortgage Holders agreeing t o such dedication o r transfer has been recorded, and unless the Maryland-National Capital Park and Planning Commission, ar its successor or assigns, has given i ts prior written approval thereof, which approval shall not be unreasonably withheld or delayed.

(d) the right of t h e Association to l imit the number of guests of Owners wiL& respect. t o such guests' use of the Common Area;

(e) t h e right of the Association to establish uniform rules and regu- lations pertaining t o t h e use of the Common Area or Parcel Common Area and the facilities, if any, thereon.

(f) the r ight of the Association or Parcel Committee to provide for the exclusive use by Owners of certain designated parking spaces within t h e Parcel Common Area.

(9) the right of t h e Association, the Declarant: utili ty companies, and other owners with respect to the easements established in Section 6.06 hereof.

(h) notwithstanding anything contained herein t o the contrary, the Association shall not unreasonably restrict pedestrian and vehicular ingress and egress to and from any Lot through t h e Common Area or Parcel Common Area.

Section 2.02. Deleyation of Use. Any Owner may delegate, in accordance with t h e Bylaws and Rules and Regulations of the Associatjon, his right of en joyment to t h e Common Area or Parcel Common Area and facilities situated thereon t o t h e members of his family, his tenan ts , social invjtecs, or contract purchasers who reside on t h e Property.

ARTICLE 111 MEMBERSHIP AND VOTING RIGHTS

Section 3-01.. Membership. Every Owner of a Lot. wnich is subject . to assessment shall be a member of the Associztion. Membership shall be appurtenant t o and may not be separated f r o m ownership of any Lot which is subject t o assessment,

Section 3.02. Voting Rights, The Association sfid have two (2) classes of voting membership;

Class A. W i t h the exception of the Declarant, every person, corpora- tion, partnership, trust or other legal entity, or any combination thereof, who is an Owner of any Lot which is part of t h e Property, or which otherwise becomes subject t o the covenants set forth in this Declaration to assessments by the Association, shall be a Class A Member of the Association; provided, however, that any such person, group of persons, corporation, partnership, trust or other legal entity who holds such in teres t solely as security f o r the performance ~ - r " an obligation shall not be a Class A Member solely on account of such interest. When more than one (1) person holds a n interest in any Lot, all such persons shall be Members. The vote f o r such Lot shall be exercised as they among themselves determine, but in no event shall more than one ( l )Fvote be cast with respect to any Lot.

Any Owner who leases his Lot may, in t h e lease or o t h e r wri t ten instrument, assjgn t h e voting right appurtenant to t ha t Lot t o the lessee, provided that a copy af such instrument is furnished t o the Association-

Class B. There shall initially b e four hundred seventy-one (471) Class 3 memberships in the Association. This number shall be decreased by three (3) memberships for each Class A membership existing at any one. t ime. The Class B Member shall be the Declarant, its nominee or nominees, and shall include every person, group of persons, corporation, partnership, trust or other legal e n t j t y , or any combination thereof, who shall obtain any Class 3 membership by specific assignment, in writing, from the Declarant.

The Class B Member(s) shall be entitled t o one (1) vote for each Class 3 membership. Each Clzss B membership shall lapse and become a nullity on the first t o happen of t h e fallowing events:

(i) th i r ty (30 ) days following t h e date on which the total authorized and outstanding vo tes of tile Class A Members equals one hundred seventeen (1 17); or

(ii) seven ( 7 ) years f r o m the date of recordation of this Declaration; provided, however, that if the Declarant is delayed in t h e improvement and development of t h e Property on account of a sewer, water or building permit moratorium o r any other cause or event beyond t h e DeclarantTs control, then t h e aforesaid seven (7)-year period shall be extended by a period of t i m e equal t o t h e length of the delays or an additional seven (7) years, whichever is less; or

(iii) upon the surrender of said Class B memberships by t h e then holders thereof for cancellation on the books of t h e Association.

Upon the lapse or surrender of the Class B memberships as provided for in this Article, the Declarant shall thereaf te r become a Class A Member of the Associatjon as t o each and every Lot in which the Declarant then holds the interest otherwise required f a r such Class A membership.

ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS

Section 4.01-. Creation of t h e Lien and Personal Oblieation of Assessrnents- The Declarant, for each Lot owned within the Property, hereby covenants, and each Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed t o covenant and agrees to pay t o the Association: (1) annual assessments or charges (including, but not l imited to, Parcel Assessments), and (2) special assessments fo r capi tal improvements, such assessments t o be established and collected as hereinafter provided. The annud and special assessments, together with interest, costs, late fees (if any) and reasonable attorneys1 fees, shall be a charge on the Lot (including all improvements thereon), and shall be a continuing lien upon t h e property against which each such assessment is made, provided t h e requirements of the Maryland Cont rac t Lien Act have been fulfilled. Each such assessment, fogether with interest, costs, l a te fees (if any) and reasonable attorneys' fees, shall also be t h e personal obligation of t h e person who was the Owner of such property a t t h e t ime when the assessment fell due- The personal obligation for delinquent assessments shall no t pass t o his successors in t i t le unless expressly assumed by them.

Section 4.02. Purpose of Assessments.

(a) The assessments levIed by the Association shall be used exclusjvely to promote the recreation, health, safety, and w e l f a r e of the residents in the Property and for the improvement and maintenance of the Common Area, t h e payment of real estate taxes, assessments and util i ty services for the Common Area, and management fees, adrnjnistration expenses and all other costs and expenses incurred by the Association in the proper conduct of its activities, including, without limitation, charges accruing under any cross-easement or reciprocal easement agreements or charges accruing with respect to off-site facili t ies required to be maintained by t h e Association or which the Association elects t o maintain whether such facilities are located within the Progerty or not, which a reas may include, wi thou t l imitation, off-site hiker/biker paths, and buffer strips or entrance a rea improvements.

(b) The Association sha l l also be responsible for mzintaining zny and sll stormwater management facilitjes, including, without limitation ponds, bzsins and d r a i n a g ~ areas, whether sucll facilities a r e located within t h e Property or not, which are designed t o benefit or serve any portion of the Property and are required t o be maintained by the Association. The cos t of such maintenance shall be a Common Expense of t h e Association.

Section 4.03. Max imum Annual Assessment. The initial annual assessment against SFD Lot s and Townhouse Lots shall be established by the Declarant, notwith- standing t h e procedures for establjshing the bndget and assessments set for th in this Article; provided, however, that the Declarant shall n o t pay any assessments (including special assessments) for Lots (if any) owned by the Declarant. Notwithstanding the foregoing, Declarant shall pay the full annual and speciaI assessments for Lots owned by Declarant upon which a dwelling unit has been completed and is occupied by a party o ther than t h e Declarant. Notwithstanding any provision contained in this Declaration t o the contrary, Declarant hereby covenants and agrees for t h e benefit of each Class A Member t o pay a n y and all expenses incurred by the Association during the Deficit Period (as such term is hereinafter defined) in furtherance of i ts purposes-to t h e extent t h a t the annual and special assessments levied during the 'Deficit Period a r e insufficient t o .pay such expenses; provided, however, t h a t a t such t ime as the Declarant has paid what would equal one hundred percent (100%) of the assessments f a r i t s Lots which a r e exempted f rom the payment of assessments as hereinabove referred to, then the Declarant shall only be obligated to pay any fur ther assessments during t h a t annual period in an amount equal to what would be due for such Lots had they been owned by a Class A member. As used herein, the te rm "Deficit PeriodT1 shall mean t h a t period of t i m e commencing on the date of recordation of this Declaration and ending on t h e da t e on which t h e Class B membership lapses and becomes a nullity in accordance with the provjsions of this Declaration.

I t shall be t he duty of t h e Board of Directors, at least forty-five (45) days before t h e beginning of the fiscal year and thir ty (30) days prior t o the meeting at wnich the budget shall be presented to the membership, t o prepare a budg.et covering the est imated costs of operating the Association during the coming year. The budget shal l include an amount sufficient t o establish and maintain a resehe fund in accordance with a reserve fund budget separately prepared by the Board of Directors pursuant t o Seetion 4.10 and may include the Parcel Assessments, if any. The Board shall cause a copy of the budget and the amount of the assessments t o be levied against each Lot fo r the following year t o be delivered t o each Owner at least f i f teen (15) days prior t o the meeting, The budget and the assessments shall become effect ive unless disapproved a t t h e meeting by a vote of at least a majority of both classes of t h e total Association membership. In the event Parcels are created p u r s u a n t to this Declaration o r any Supplementary Declaration the Parcel Committee f o r such Parcel(s) shall, in accordance with the Bylaws, present the Boacd of Directors with a proposed budget for the Parcel Assessments to be levied upon the Lots within such Parcel, which wil l include the cost of maintaining the 'Parcel Common Area as well as the reserves for repa i r and replacement of t h e capital improvements located within such Parcel Cornmon Area, The Board of Directors shall not unreasonably reject o r modify the Parcel Cornittees proposed Parcel Assessments; provided, however, t he Board of Directors has t h e authority t o modify any annual assessment or charge or Parcel Assessment from t ime t o time, in accordznce wi th this Declaration and the Bylaws. In

the absence of any recommendation by t h e Parcel Co.rnmitiee, the Board of Directors shall establish t h e Parcel Assessments for any Parcel.

Notwithstanding t h e foregoing, however, in the event the membership disapproves the proposed budget or t he Board of Directors fails for any reason so t o determine t h e budget fo r t h e succeeding year, t hen and u n t i l such t ime as a budget shall have been determined as provided herein, the budget in effect for t he then current year shall continue for the succeeding year.

(a) The Board of Directors may from t ime t o t ime fix the annual assessment a t an a m o u n t required t o meet the Common Expenses of t h e Association; provided, however, t ha t notice of any change in the annual assessment is provided t o each Owner no t less than thirty (30) days prior to such change.

(b) The Declarant may -establish a .working capi tal f k d for t h e initial operation of t h e Assocjation. Such working capital fund may be funded by a one- t ime assessment of two (2) times t h e normal monthly assessment for a Lot and shall be payable, if established, by the Declarantls grantee upon the set t lement of a completed dwelling located on any Lot

Section 4.04. Special Assessments f o r Capi ta l - Improvements . In addition t o the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment applicable t o that year only for tbe purpose of defraying, in whole or in part, t h e cost of any construction, reconstruction, repair or replacement .of: a capital improvement upon the Common Area or Parcel. Common Area; including f ixtures and personal p rope r ty related thereto, provided that' any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of Members in t h e Association or within the subject Parcel who are voting in person o r by proxy a t a meeting duly called for this purpose, The cost of any construction, reconstruction, repair or replacement of the capital improvement upon Parcel Common Area shal l be assessed against the Owners of the Lots within such Parcel.

Section 4.05. Uniform Rate of Assessment. Except as otherwise provided in this Declaration or the Bylaws, both annual and special assessments (including Parce l Assessments) must be fixed a t a uniform rate for all L o t s of a similar typ& znd may be col lected in advance on a monthly basis; provided, however, pursuant .to a resolution of the Board of Directors assessments may be collected on a semi-annual, quar ter ly , annual or other periodic basis.

Different rates of assessments may be assessed against SFD Lots and Townhouse Lots based upon the actual benefit received by such Lots f rom the services performed by the Ass~c ia t ion as determined by the Board of Directors and the Parcel Committee(s), if any.

Section 4.06. Date of Commencement of Annual Assessments: Due Dates- The annual assessments provided for herein shall commence as t o all Lots subject t o the provisions of Section 4.03 of this Declaration on the f i r s t day of the month following the f i r s t conveyance of t h e Common Area or Parcel Common Area or t h e conveyance of t h e f i rs t Lot t o the initial non-Declarant purchaser thereof, whichever occurs earlier. The f i r s t annual assessment shall be adjusted according to t h e number of months remaining in the calendar year. The Board of Directors shall f ix t h e amount of t h e annual assessment against each Lot et least thirty (30) days in advance of each

annual assessment period. Written notice of the annua l assessment sha l l be sen t t o every Owner subject ,thereto. The due dates shzll be established by the Board of Directors. The Assocjatjon shall, upon demand, and for a reasonabie charge, furnish a cer t i f icate signed by an officer for the Association setting for th whether t h e assessments on a specifjed Lot have been paid. A properly executed cer t i f icz te of t h e Assocjation with t h e s ta tus of assessments on the Lots shall be binding on the Association as of the d a t e of its issuance.

Section 4.07. Effec t of Noa-Pavment of Assessments: Remedies of the Asso- ciation. Any assessment not paid within thirty (30) days a f t e r the due date shall bear interest from t h e due d a t e until paid at the maximum ra te permitted by l a w (or such lesser s u m as V A and/or FHA may specify if any Lot subject t o this Declaration is then encumbered by a deed of trust or mortgage which is guaranteed by VA or insured by FHA). The Board of Directors may e lect to collect .a reasonable la te f e e , no t to exceed Twenty-Five Dollars ($25.00) for any assessment or installment thereof which is fifteen (15) or more days delinquent. Additionally, the entire balance of the unpaid annual assessments for t he remainder of the f i sca l year s h d l also become due, payable and collectible in the same manner as the delinquent portion of such annual assessment. The Association may bring an action a t law against the Owner personally obligated t o pay t h e same, and/or foreclose the lien against the Lot {and all improvements thereon). No Owner may waive or otherwise escape liability for the assessments provided f o r herein by non-me of the Common Area or Parcel Common Area or abandonment of his Lot.

Section 4.08, Subordination of the Lien t o Mortaaees. The lien of the assessments provided for herein shal l be subordinate t o the lien of any first rriortgage or deed of trust. Sale or transfer of any Lot shall n o t affect the assessment lien. However, t h e sale or transfer of any Lot pursuant t o mortgage or deed of t ru s t foreclosure or any proceeding in lieu thereof, shall extinguish the lien of such assessments as t o payments which became due prjor t o such sale or transfer. No s d e or transfer shall relieve such Lot from liability for any assessments thereaf te r becoming due or f rom t h e lien thereof. No amendment to this Section shall &feet the rights of the holder of any first mortgage on any Lot (or t he indebtedness secured thereby); recorded prior t o recordation of such amendment unless the holder thereof (or t h e indebtedness secured thereby) shall join in the execution of such arnendrnerlt.

Section 4..09. Additional Default. Any recorded f i r s t mortgage secured an a Lot shall provide that any deiault by the mortgagor in the payment of any assessment levied pursuant t o this Declaration, or any installment thereof, shall likewise be a default in such mortgage (or the indebtedness .secured thereby); b u t failure to include such a provision in any such mortgage shall not affect the validity or priority thereof and the protection extended t o the holder of such mortgage (or the indebtedness secured thereby) by reason of Section 4.09 shall .not be altered, modified or diminished by reason of such failure.

Section 4.10. Reserves for Reulacements. The Assocjation shall establish and maintain a reserve fund for replacements of t h e Common Area, Parcel C o m m o n Area and c o m m u n i t y facili t ies by the allocation and payment monthly (or such other periodic payment as determined by the Board of Directors) to such reserve fund of an amount t o be designated f rom time t o t i m e by t h e Board of Directors. The Parcel Committee(s), if any, may recommend items and t h e amount of reserves t o be collected therefor with

respect t o t h e Parcel such Parcel Committee is associated with. The reserve fund shall be conclusively deemed to be a Common Expense of the Association and mag be deposited in any banking institutjon, the accounts of which are insured by any State or by an agency of t h e United States of America or may, in t h e discretion of t h e Board of Directors, be invested in obligations of, or fully guaranteed as t o principal by, the United States of America. The reserve for replacements of t he Common Area, Parcel Common Area, and community facilities (including, but not l imited to, s torm water management facilitiei and equipment) may be expended only for t h ~ purpose of affecting the replacement of the Common Area and Parcel Common Area, major repairs to any equipment and replacement thereof, and for start-up expenses and operating contingencies of a non-recurring nature relating to the Common Area, Parcel Common Area and community facilities. The Association may establish such other reserves for such other purposes as the Board of Directors may f r o m t ime t o time consider t o be necessary or appropriate. The proportional interest of any Member in any such reserves shall be considered an appurtenance of his Lot and shall not be separately withdrawn, assigned or transferred or otherwise separated f r o m the Lot to which j t , appertains and shall be deemed to be transferred with such Lot.

ARTICLE V ARCHITECTURAL CONTROL

Section 5.01. Architectural Chane;e Approval. No builciing, fence, wall or other structure shall be commenced, erected or maintained upon the Property, nor shall any exterior addition to or change or alteration therein be made (including change in color) until t h e plans and specifications showing t h e nature, kind, shape, height, materials, and location of the same shall have been submitted to and approved in writing as t o harmony of external design and location in relation t o surrounding structures and topography and conformity with the design concept fo r the Property by the Bozrd of Directors of the Association, or by a covenant commit tee composed of three (3) or more representatives appointed by t h e Board of Directors of the Association ("Covenant Committeett), or with respect t o any Parcel , the Parcel Committee f o r such Parcel. If no Parcel Committee is fllnctioning f o r such Parce l t he Board of Directors or t h e Covenant Committee will carry out the Parcel Committee's duties under this Section 5.01 of this Declaration. In the event said Board, or i t s designated committee, or the Parce l Committee: fa i ls t o approve o r disapprove such design and location within sixty ( 6 0 ) days after said plans and specifications have been submitted t o it, approval will not be required and this Article win be deemed to have been fully complied with. Design approval by t he Covenant Committee o r by the Board or the Parcel Committee shall in no way be construed as t o pass judgment on the correctness of the location, s t ructural design, suitability of water flow o r drainage, location of utilities, or other qualities of the i tem being reviewed. The Board or t he Covenant Committee or the Parcel Commit tee shall have the right t o charge a reasonable fee for reviewing each application in en amount not t o exceed Fifty Dollars ($50.00). Any exterior addition t o or change or alteration m a d e wi thout application having first been made and approval obtained as provided above shall be deemed t o be in violation of this covenant and the addition, change or alteration may be required t o be restored to t h e original condition at the Owner's cost and expense. In any event, no such exterior addition to or change or zlteration shall be m a d e without approvals and permits therefor having first been obtained by the Owner f rom the applicable public authorities or agencies. Notwithstanding any provision of this Declaration to the

contrary, t h e provisions of t h i s Article V shall not be applicable t o t h e Declarant or any part of the Property owned by the Declaranr. Approval of t h e Bozrd, the Covenant Committee or the Parcel Committee, if applicable, shall no t be construed as a substitute for, or in lieu of, any approval(s), consent(s) or perrnit(s) required to be obtained from or issued by any governmental euthority or agency. Prior to t he initiatjon of any alteration, modifjcation, or structure, all sllch approvals, consents, and/or permits shall have been obtained in addition t o the approval of the Board or the Covenant Committee or Parcel Committee pursuant t o this Article.

Section 5.02. Initiation and Completion of Aaproved Chances. Construction o r alterations in accordance wi th plans and specifications approved by t h e Covenant Committee or the Board or the Parcel Committee pursuant t o t h e provisions of this Article shall be commenced within six ( 6 ) months following the date upon which t h e same are approved by the Covenant Cammittee or the Board o r t h e Parcel Committee (whether by affirmative action or by forebearance from act ion as provided in Section 5. Ol), and shall be substantially completed within twelve (12) months following the d a t e of commencement, or within such longer period as t h e Covenant Committee o r the Board or the Parcel Committee shall specify in i t s approval. In the event construction is not commenced within t h e period aforesaid, t hen approval of the plans and specifications .by the Covenant Committee or t he Board o r t h e Parce l Committee shall be conclusively deemed t o have lapsed and compliance -with the provisions of this Article shall again be required. There shall be no deviations f rom plans and specifications approved by the Covenant Committee or the Board or the Parcel Committee without any prior consent in wrjting of the Covenant Committee o r the Board or the Parcel Committee. Appr~va l of any particular plans and specifications or design shall not be construed as a waiver of the right of t he Covenant Commit tee or the Board or t h e Parcel Comrnjttee to disapprove such plans and specifications, or any elements or features thereof, in t h e event such plans and specifications a r e subse- quently submitted for use in any other instance.

Section 5.03. Certificate of Compliance. Upon completion of any construction or alterations or other improvements or s t ructures in accordance with plans and specifjcations approved by the Covenant Committee, or t h e Board o r the Parcel Committee, in accordance with the provisions of this Article, the Covenant Committee or t h e Board ( the Parcel Committee shall submit its approval to t h e Board or the Covenant Committee) shall, at the request of the Owner thereof, issue a cer t i f icate of compliance which shall be prima facie evidence that such construction, alteration or other improvements referenced in such cer t i f ica te have been approved b y the Covenant Committee or the Board or the Parcel Committee and construction or installation in full compliance with the provisions of this Article and with such o ther provisions and requirements of this Declaration as may be applicable.

Section 5.04. Covenant C o m m i t t e e Rules and Requlations; Appeal of Covenant Committee Decision. The Board or the Parcel Committee o r the Covenant Committee may from t i m e t o t ime adopt and promulgate such rules and regulations regarding the form and content of plans 2nd specifications to be submit ted for approval and may publish such s tatements of policy, standards, guidelines and/or establish such criteria relative t o architectural styles or details, or other matters, 8s it may consider necessary or appropriate. No such rules, reguktions, s ta tements , c r i te r ia or the like shzll be construed as a waiver of the provisions of t h i s Article or any other provision or requirement of this Declaratjon. The decisions of t he Parcel C o m m i t t e e or the

Covenznt Committee shall be iinal except t ha t any Member who is aggrieved by zny action or forebearance f r o m action by t h e Parcel Commit tee or the Covenant Committee may appeal t h e decision of t h e Parcel Committee or the Covenant Committee to the Board of Directors and, upon the request of such Member, shall b e entit led t o a hearing before t he Board of Directors. Two thirds (2/3) of the Board of Directors shall be required t o reverse the decision of the Parcel Committee or the Covenant Committee.

ARTICLE VI USE RESTRICTIONS

In addjtjon t o all other covenants contained herein, the use of the Property and each Lot therein is subject t o the following:

Section 6.01. Permit ted Uses. The Lots shall be used fo r residential purposes exclusively, and no building shall be erected, altered, placed or permit ted t o remain on zny such Lot other than one used as a single-family dwelling, except t ha t a professional office m a y be maintained in a dwelling, provided tha t (i) such maintenance and use is limited t o the person actually residing in the dwelling; (ii) no employees or staff other than a person actually residing in the dwelling are utilized; (iii) t h a t such maintenance and use is in s t r i c t conformity with the provisions of any applicable zoning law, ordinance or regulation. As used in th is Section, the te rm "professional office1' shall mean rooms used fo r office purposes by a member of any recognized profession, including doctors, dentists, lawyers, archi tects and the like, but not including medical or dental clinics. Nothjng contained in this Article, or elsewhere in this Declaration, shall be construed t a prohibit the Declarant from the use of any Lot or dwelling, or improvement thereon, for promotional or display purposes, or as "model homesu, a sales, rental, management and/or construction office, o r the like.

Section 6.02. Prohibited Uses and Nuisances. Except fo r t he activities of the Declarant during the constructjon or development of t h e community, or as may b e necessary in cqnnection with reasonable and -necessary repairs or maintenance t o any dwelling or upon t h e Common Area:

(a) no noxious or offensive trade or activity shall be carried on upon any Lot or within any dwelling or any other part of the Property, nor shall anything be done therein or thereon which may be or become an annoyance or nuisance t o the neighborhood or other members. Without limiting the generality of the foregoing, no speaker, horn, whistle, siren, bell, amplifjer or other sound device, except such devices es may be used exclusively for security purposes, shal l be located, installed or maintained upon the exterior of any dwelling or upon the exterior of any other improvements constructed upon any Lot.

(b) the maintenance, keeping, boarding o r raising of animals, live- stock, or poultry of any kind, regardless of number, shall be and is hereby prohibited on any Lot or within any dwelling, or other part of t he Property, except t h a t this shall not prohibit t he keeping of dogs, czts or caged birds as domestic pe ts provided (i) they a r e not kept, bred or maintained for commercial purposes; (ii) such domestic pets are not a source of annoyance or nuisance to the neighborhood or other members; (iii) no more than three (3) such domestic pets may be maintained upon a SFD Lot or the dwelling

erected thereon and no more than two (2) such domes t i c pets mag be maintained upon a Townhouse Lo t or the dweiling erected thereon; and (iv) such pets a re rnaintzined in strict conformance t o all laws a n d ordinances. The Board of Directors or, upon resolution of t h e Board of Directors, the Covenant Committee, shall have t h e authority, after hearing, t o determine whether a particular p e t js a nuisance or a source of annoyance t o other members, and such determination shall be conclusive. Pets shall be attended a t all t imes and shall be registered, licensed and innoculated as may from t ime to t ime be required by law. Pe ts shall not be permitted upon t h e Common Area or Parcel Common Area unless accompanied by a responsible person and llnless they are carried or leashed. The Board of Directors shall have the right t o adopt such additional rules and regulations regarding pets as it may f r o m t i m e t o t i m e consider necessary or appropriate.

(c) no burning of any trash and no accnmulation or s torage of l i t t e r , lumber, scrap metals, refuse, bulk materials, waste, new or used building materials, o r trash of any other kind shall be permitted on any Lo1 or other p a r t of the Property.

(d) except for parking within garages, and except as herein else- where provided, no junk vehicle, commercial vehicle (including vans used for cornmer- cia1 use), trucks over two and one-half (2 1/2) ton capacity (as defined by the Maryland Department of Motor Vehicles and/or by common usage and practice), unlicensed o r inoperable motor vehicle (which shall include, wi thout limitation, any vehicle which would not pass applicable s t a t e inspection criteria), trailer, camp truck, house trailer, boat or other similar machinery or equipment of any kind or charac te r (except for such equipment and machinery as may be reasonable, c u s t o m a r y and w u d l in connection with the use and maintenance of any dwelling and except fo r such equipment and machinery as the bssociation may require in connection with the maintenance and operation of t h e Common Area or Parcel Common Area and community facilities) shall be kept upon t h e Property nor (except for bona f ide emergencies) shall the repair or extraordinary maintenance of automobiles or other vehicles be carried out thereon. T h e Association may, in the discretion of t h e Covenant Committee, provide and maintain a suitable area designated for the parking of such vehicles or the like. The Association shall have t h e right to tow and remove from t h e Property (at the expense of t h e owner of such vehicle) any vehicle in violation of this Declaration, provided t h a t the AsSociation has placed (or has caused to be placed) a notice of intent t o tow a t least forty-eight (48) hours prior t o such towing and the Assocjation complies with any applicable state or local laws. Any expense incurred by the Association shall be collectible f r o m the Owner of t h e Lot in which the occupant thereof was in violation of this section in t h e same manner as any other. Common Expense as s e t for th in Ar t ic le iV of this Declaration.

( e ) t rash and garbage containers shzll not be permit ted to remain in public view except on days of trzsh collection or the evening prior t o the day of t rash collection. No incinerator shall be kept or maintained upon any Lot.

(f) no L o t shall be divided or subdivided and no portion of any Lot (other than the entire Lot) shall be transferred or conveyed f o r any purpose. The provisions of this subsection shall not apply t o the Declarant and, fur ther , t h e provisions hereof shall not be construed to prohibit the granting of any easement or right-of-way to any municipality, political subdivision, public utility or other public body or authority, or t o t h e Association, the Declarant or any other person for any purpose.

(g) no tree, hedge or other landscape f e a t u r e shall be planted or maintained in a location which obstructs sight-lines for vehicular traffic on public s t r ee t s or on private s t r ee t s a n d roadways.

(h) no wire or other lawn edging, fencing or other t r ea tmen t shall be placed or maintained on any Lot unless approved by the Board of Directors or t h e Covenant or Parcel Committee.

(i) no decorative lawn ornament, no s t ruc ture of a temporary character, and no t ra i ler , tent, shack, barn, pen, kennel, run, stable, shed or other buildings shall be erected, used or maintained on any Lot a t any time.

Cj) except for entrance signs, directional sips, signs for traffic control or safety, community "theme areas" and such promotional sign or signs as mzy be maintained by the Declarant or t h e Assocation, no signs or advertising devices of any character shall be erected, pasted or displayed upon, in or abou t any Lot or dwelling, provided, however, t h a t one sign not exceeding two (2) square f e e t in a r ea and not illuminated may be at tached t o a dwelling where a professional office (as herein elsewhere in this Declaration defined) is maintained, and provided, fur ther , t ha t one t e m p ~ r a r y ~ e a l estate sign not exceeding six (6) square f e e t in a rea may be erected upon any Lot-or attached t o any dwelling' placed upon the market f o r sale or rent. Any such temporary real es t a t e sign shall be removed promptly following t h e sale or rental of such dwelling. The provisions and limitations of this subsection shall not apply t o any instiitlltional f i rs t mortgagee of any Lot who comes into possession of t h e Lot by reason of a n y remedies provided by law o r in such mortgage or as a result of a f areclosure sale or o ther judicial sale or as a result of any proceeding, arrangement, assignment or deed ir. l ieu of foreclosure.

(k) no water pipe, sewer pipe, gas pipe, drainage pipe, television cable or other similar transmission line shall be installed or maintained upon any Lot above the surface of t h e ground and no wire, cable or other similar transmission line m a y be attached t o the exterior of any s tructure on any Lot. Except during periods of actual use, no hose shall be stored or placed in the f ront or s ide yard of any dwelling unless screened f rom public view.

(I) no play equipment, including, without l imitation, basketball backboards, basketball hoops and other equipment associated with either adul t or juvenile recreation, shall be attached in any manner t o the exter ior of any dwelling constructed on a Townhouse Lot.

(rn) no structure, planting or other material shall be placed or permitted t o remain upon any Lot which may damage or interfere with any easement for the installation o r maintenance of utilities, or which may unreasonably change, obstruct or retard direction or flow of any drainage channels.

(n) no outside television aerial or radio antenna, or other aer ial or antenna for e i ther reception or transmission (including, but not l imited to, satel l i te disc antennae), shall be maintained upon the Property except t h a t such aerials or antennae may be erected and maintained entirely within t h e dwellings located upon the Property.

(0) vegetable gardens shall be maintained only within the rear yard of any Lot, and shzll be maintained jn a neat and a t t rac t ive manner,

(p) lawn furniture shall b e used and maintained in r e a r yards only.

(q) no equipment or machinery (including, without limitatjon, equip- ment or machinery fo r use in connection with the maintenance of any dwelling) shall be s tored in the front , rear or side yard on eny Lot; provided, however lawn maintenance equipment may be kept in t h e rear yard of any Townhouse Lot if such equipment is shielded f r o m public view.

(r) no garbage or trash containers shall be kept on the f ront or side yard of any Lot and garbage and trash containers kept o r maintained in t h e rear yards of any Lots under or upon decks sball be screened from public view at all times.

{s) no Member shall make any private or exclusive or proprietary use of any of the Common Area or Parce l Common Area except with the saecific approval of the Covenant Committee and then only on a temporary basis, and no Member shall engage or d i r ec t any employee of t h e Association on any private business of the Member during the hours such employee is employed by t h e Association, nor shall any Member direct, supervise or in any manner a t t empt t o asser t control over any employee of the Association.

(t) any fence constructed upon the Property shall not extend for- ward of t h e r ea r building line of t h e dwelling on the Lot upon which any such fence is erected. No fence shall be more than six f e e t (6 ' ) in height, Chainlink and other wire fencing is specifically prohibited.

{u) bed sheets, plastic sheets, newspapers, plastic s torm windows or o the r .similar window t reatments shall not be hung or placed in or on any window on any dwelljng located on any Lot.

Iv) Except for basketball backboards erected upon a SFD Lot expressly approved by the Covenant Committee, children's play and sirnil%r equipment shall not be allowed t o remain overnight within any f r ~ n t yard of any Lot or within the Common Area or Parcel Common Area.

(w) childrenk outdoor permanent playhouses and swingjng or climb- ing apparatus or equipment may be installed, provided t h e Architectural Control requirements of Article 17 a re complied with. ,All such apparatus must be well maintained at all times. The Association shzll have the right t o remove, at t h e expense of t h e Owner upon whose Lot such apparatus is located (collectible in the same manner as Common Expenses as set for th in Article IV), any apparatus or equipment which is not, in the sole opinion of the Covenant Committee, well maintained.

(x) No exterior lighting, emanating f rom a Lot, shall be directed outside the boundaries of the Lot.

(y) No garage or outbuilding properly erected on a Lot shall a t any t ime be used fo r human habitation, temporarily or permanently, nor shall any structure of a temporary character be used for human habitation,

(z) no drying or air ing of any clothing or bedding shall be permjtted outdoors and wi th in any Lot other Than wi th in rear yards and between t h e hours of 8 a.m. and 5 p-m. on Monday through Friday and 8 a.m. and 1 p.m. on Saturdays (except when any such days shall fa l l upon a holiday) and clothes-hanging devices such as ljnes, reels, 'poles, f rames, etc,, shall be stored out of sight other than during t h e t imes aforementjoned.

(aa) notwithstanding anything t o the contrary contained in this De- claration, no garage may be al tered, rnodifjed or changed in any manner which would inhibit or in any way l i m i t its function as a parking area for vehicles without t h e approval of the Board of Directors or the Covenant Committee pursuant to the provjsjons of Article V of this Declaration.

Section 6.03. Leasing and Transfers.

(a) No portion of a dwelling unit, other than an entire dwelling unit, may be leased or rented. All leases shall be on forms approved by the Association and. shall (i) contain provisions advising the tenant of his/her. obligation to comply with all provisions of this Declaration, the Bylaws and t h e rules and regulations of the Association; (ii) provide t h a t t he Associatior! shall have t h e right t o terminate the lease upon default by the tenant in observing any of t he provisions of this Declaration, the Bylaws or rules and regulations of the Association, or of any other document, agreement or instrument governing the dwelling units and/or t h e Property. The Owner(s) af a leased Lot shall notify the Associatjon in writing of the Owners' current address. The Owner(s) of a leased or rented dwelling unit shall be jointly and severally liable with his tenant(s> to the Association t o pay any claim for injury o r damage t o persons or property caused by any action or omission, including, w i t b ~ u t limitation, t he negligence of t h e tenant(s). Every lezse shall be subordinate t o any lien f i l e d by t h e Association, whether before or after such lease was entered into. The minimum term any dwelling unit may be ren ted or leased shall be ninety (90) days, and in no event may a transient tenant be accomodated in any dwell ing unit.

(b) Prior t o the sale , conveyance or transfer of any Lot or dwelling unit t o any person, the Owner shall notify the Board of Directors in writing, by certified mail, return receipt requested of the name and address of the person t o whom the proposed sale, conveyance or t ransfer is t o be made and provide to it such o ther information as the Board of Directors may reasonably require. Failure to comply wi th the provisions of this Section 6.03(b) shall not void, prohibit or otherwise invalidate t h e sale, conveyance or transfer of any Lot or dwelling unit nor may it have any affect upon any mortgage or deed of t rus t thereon.

Section 6.04. House Rules, Etc. There shall be no violation of any reasonable rules for the use of the Common Area or Parcel Common Area and community facilities or Ithouse rules" or other community rules and regulations not inconsistent with t h e provisions of this Declaration which may from t i m e t o t ime be adopted by the Board of Diaectors of the Association and promulgated among the membership by them in writing, and t h e Board of Directors is hereby and elsewhere in this Declaration authorized to adopt such rules.

Section 6.05. Exemptjons. None of the foregoing res'rrjctions sha l l be appli- cable Po the activities of:

lIBER8 9 1 i FOLIO I 6 f

(a) Declarant, its officers, employees, agents or assigns, in their development, marketing, leasing and sale of Lots or other parcels within t he Property; 0 r

(b) To the Assacjation, i ts officers, employees and agents, in con- nection with t h e proper maintenance, repair, replacement and improvement of the Common Areas and community facilities.

Section 5.06. Declaration of Easements and Riehts. The following easements and rights are hereby declared or reserved:

(a) Declarant reserves the right to grant easements, both temporary and permanent, to all public authorities and utility companies over any part of the Common Area o r Parcel Common Area.

(b) Each Lot within the Property is hereby declared t o have an eas.ement, n o t exceeding one f o o t (1') i n width, over al l adjoining Lots and Comrnan Areas or Parcel Common Areas fo r the purpose of accommodating any encroachment due to engineering errors, errors in orrginal construction, settlement or shifting of the building, roof overhangs, gutters, architectural or other appendages, draining of rainwater f rom roofs, or any other similar cause. There shall be valid easements for the maintenance of said encroachments so long as they shall exist, and t h e rights and obligations of Owners shal l not be altered in any way by said encroachment, se-ttlement or shifting; provided, however, that in no event shall a valid easement for encroachment be created in favor of an Owner or Owners if said encroachment occurred due t o the willful misconduct of said Owner or Owners. In the event a structure on any Lot is partially or to ta l ly destroyed and then repaired or rebuilt, t h e Owners of each Lot agree that minor encroachments over adjoining Lots shdll be permitted and that there shall be vziid easements f o r the maintenance of said encroachments so long as they shall exist.

( c ) There is hereby reserved unto the Declarant [and t o such other party(ies') as the Declarant may specifically, and in writing, assign such rights], for the benefit of the real property shown on the Development Plan ("Benefited Property"), a blanket easement upon, across and under the Property (provided such easemknt does not encroach upon any building within t he Property or unreasonably interfere with the use and enjoyment of the Property), for vehjcular and pedestrian ingress and egress, curb cuts, slope, or grading easements, as well as for t h e installation, replacement, repair and maintenance of all utilities, including, but not limited to, water, sewer, drainage, s torm water detention and/or siltation, gas, cable television, telephones and electricity, and fu r the r including the right to connect to and use any such utilitjes which may exist or be located upon the Property from time t o time. By virtue of this easement, it shall be expressly permissible to erec t and maintain the necessary poles, pipes, lines and other equipment on t h e Property, to affix and maintain electrical or telephone wires and conduits, sewer and water drainage lines, on, above, or below any portion of the Property, including any improvements constructed thereon, and t o have construction vehicles, equipment and t h e like exercise the aforeszid right of ingress and egress over the Property. Further, there is hereby reserved fo r t h e benefit of the Benef i t ted Property a r igh t of any owner (or i t s tenant, licensee, occupant or other party entit led t o occupy any dwelling unit within the Benefited Property) of any dwelling within the Benefited Property t o use any recreational or other similar facilities that may, f r o m t ime t o t ime, be l ~ c a t e d within the Property; provided, however, that: (i) as a condition

precedeni t o t h e exercise of such rights, t h e intention t o allow t h e use of such faciljty(ies) is specjfically made by the Dec la r an~ pursuant t o a w r i t t e n instrument ~ e c o r d e d among t h e Land Records of Montgomery County, Maryland, and t h a t such election, once made, shall not be revoked without t he consent of the Declarant as well as at least seventy-five percent (75%) of t h e members of the Association; and (ii) the right to exercise such benefits, if not previously elected as provided in t he immedjately preceding provisions of Ii) above, may be waived by t he Declarant by a specific written waiver recorded among the Land Records of Montgomery County, Maryland, and tha t such election, once made, may not be revoked without t h e express prior written cansent of at least seventy-five percent ( 7 5 8 ) of the members of the Association and the Declarant; and (iii) if the rights contemplated by the provisions of (i) above a r e elected, then the parties benefi t ing from such rights to use the recreational faci l i t ies shall be obligated to pay their pro-rata share of the cost of maintaining, operating and repairing such facilities, which share shall be computed by multiplying the to ta l of such bona-fide costs times a fraction, the numerator of which shall be the number of completed dwelling units owned by the party from whom such contribution is sought and the denominator s h a l be the tota l number of completed dwelling units en t i t l ed t o use such recreational facilities. The computation c ~ n t e m p l a t e d by the immediately preceding sentence shzll be made at each t i m e a contribution for such costs is sought. The elections contemplated by (i) and (ii) above may be m a d e a t any t ime and from t ime to t ime with respect t o all or less than all of t he facilities involved and, wjthout limiting the generality of the foregoing, an election may be made under (i) above with respect to some facilities and pursuant to (ii) above with respect to others. There is fur ther reserved unto the Declarant the right to e rec t entry features, promotional and other similar items within the Property provided they do not unrezsonably interfere with the use, operation and enjoyment of the Property. There is fur ther reserved unto the Declarant the r igh t to grant specific easements, both temporary and permanent, t o any person or entity, including all publjc authorities and util i ty companies, over any par t of t h e Property in furtherance of the blanket easement created by this subsection (c). Further, without limiting the generality of the foregoing, the Declarant reserves t h e right t o unilaterally execute and record such additional easements and agreements as may be necessary in order to give effect t o the foregoing easements and other rights, which additional easements and other agreements need not be consented t o or joined in by any party having an interest in the Property; provided, however, t h a t if requested by the Declarant, any party having an interest in t h e Property shall promptly join in and execute such confirmatory easements and other agreements. Declarant also reserves t he rjght t o e n t e r into the Common Area for the purpose of carrying o u t any obligations i t may have, or assume, with respect t o the curing of any deiects in workmanship or materials in the Property or t h e improvements thereon. Each Lot shall further be subject to a public pedestrian access easement aver and upon any sidewalk (or the replacement thereof) constructed on t h e L o t b y t h e Declarant, which sidewalk is reasonably deemed t o be for the use af the community of which the Lot is a part.

(d) An easement is hereby reserved t o Declarant t o en ter the Common Area and Parcel Common Area during t h e period of construction and sale on the Property, and to maintain such facilities and perform such operations as in the sole opinion of Declarant may be reasonably required, convenient or incident21 t o t h e construction and sale of residences, including, without limitation, a business oifice, sales office, rental office, management office, storage area, construction yards, signs, displays and model units.

(e) Declarant also Teserves the r j g h t t o enter into the Common Area and Parcel Common Area for the purpose of carrying o u t any obligations i t may have, or assume, with respect to the c u r i n g of any defects in workmanship o r mate r ia l s in the Property or t he improvements thereon. There is fur ther reserved un to the Declarant and its agent(s) a non-exclusive easement over, across and through a U of t h e Common Area and Pa rce l Common Area for the purpose of access, the s t o r a g e of building supplies and rnaterjab and e q u i p m e n t and, without any limitation, fo r any and all purposes reasonably related t o the completion of t he development, construction or rehabilitation a n d repair of the Property.

(f) For a period of ten (1 0) years f rom the date of conveyance of the f i r s t Lot, t h e Declarant reserves a blanket easement and right on, over and under t h e Property to maintain and to correct drainage of surface water i n order t o maintain reasonable standards of health, safety and appearance. Such right expressly includes the right t o c u t any trees, bushes or shrubbery, make any gradings of the soil, or to t a k e any other similar action reasonably necessary, following which the Declarant shall restore the affected property t o its original condition a s near as practicable. The Declarant shall give reasonable notice of i n t e n t t o take .such act ion to all affected Owners, unless in the opinion of the Declarant a n emergency exis t s which precludes such notice- There is further reserved unto the Declarant the r igh t t o grant specific easements, both temporary and permanent, to any person or entity, including all public authorities and utility companies, over any par t of t h e Property in furtherance of t h e blanket easement created by this subsection (i).

(g) The rights and duties with respec t to sanitary sewer and water, storm drains, downspouts, yard drains, cable television, electr ic i ty , gas and telephone Lines and facili t ies shall be governed by the following:

(i) Whenever water, sani tary sewer and water, s torm drains, downspouts, yard drains, electricjty, gas, cable television o r te lephone connections, lines, cables or any portion thereof, are or have been installed within the Property, the Owner of any Lot, or the Association shall have the right, and z e hereby granted an easement t o t he extent necessary therefor, t o enter upon or have a ut i l i ty company en te r upon any portion of the Property in which said installations lie, t o rgpair, replace and generally maintain said installations.

(if) The right granted in Subparagraph (a) above shall be only to the extent necessary to entitle the property of t h e Owner or Association serviced by said installation to i ts full and reasonable use and enjoyment, and provided further that anyone exercising said right shall be responsible for restoring the surface of t h e easement a r e a s o used to its condition prior t o such use.

(iii) In the event of a dispute between Owners with respect t o the repair or rebuilding ,of said connections, o r with respect to t h e sharing of the c.ost thereof, upon written request of one of such Owners addressed to the Association, the matter shall be s u b m i t t e d t o its Board of Directors, who shall decide the dispute, and the decision of t h e Board shall be final and conclusive as to the parties.

{h) The Associatjon shall have an easement to e n t e r a n y portion of the Property for the performance of i ts duties hereunder; provided that except as provided in Artjcle VIII hereof, such easement shall no t entitle t h e entry within the

interjor portion of any dwelling located on 'she Property, but (by way of illustrztjon only and not in limitation of t h e r ights granted herein) shall permit t h e entry jnto fenced, or other similar areas of the Property.

(i) With respect to any s tep, patjo, deck, downspout or yard drain or o ther similar structure t ha t may benefit any Lot and is constructed by t h e Declarant and which may encroach upon any portion of the Common Area or Parcel Common Area, there is hereb? reserved for the benefit of t h e Lot for which such step, pat io , deck, downspout, drain or o the r structure serves, a perpetual easement for the location, maintenance, repair and use of such structure or i tems within t h e Common Area or Parcel Common Area, but only to the extent the Declarant's originzl construction thereof encroaches within t h e Common Area or Parcel Common Area. The Owner of the Lot benefiting from such.easernent agrees t o maintain such structure or item and to .indemnify and hold the Association harmless from any loss, liability or damage arising o u t of or ~esu l t i ng , f rom the use, enjoyment and benefit of the easement granted hereby.

(j) A mutual right and easement for util i ty services is hereby established for the benefit of all Owners, such that no Owner shall t a k e any ac t ion which would in any way interfere wi th utility services being.provided t o other Owners within the Project. If a Lot contains any utility pipes, ducts, conduits, wires or the like which are f o r the benefit, in whole or in part, of other Owners within t h e Project, then the Owner of such Lot shall promptly, a t his expense, repair any damage t o such util i t ies caused by the Owner, his guests or invitees.

(k) The Association, i t s agents and employees, shall have an i r r e - vocable right and an easement to enter the Lots for t he purposes of exercising the rights and fulfilling the obligations established by this Declaration and any Supple- mentary Declarations recorded .hereafter.

ARTICLE VII EXTERIOR MAINTENANCE

Section 7.01. R i ~ h t s and Responsibilities.

(a) Each Owner shall keep each Lot owned by him, and all improve- ments therein or thereon, in good order and repair and free of debris, including but not l imited to the seeding, watering and mowing of du lawns, the pruning and cutting of all trees and shrubbery and the painting (or other appropriate external care) of all buildings and other improvements, all in a manner and with such frequency as is consistent wi th good property management. In the event an Owner of any Lot in t h e Property shall fail t o maintain the Lot and the i rnpr~vements s i tuated thereon, the Board of Directors or i ts agent shall have t h e right t o enter upon said Lot t o correct drainage a n d to repair , maintain and restore the Lot and the exterior of the buildings and any other improvements erected thereon. All casts related to such correction, repair o r restoration shall become a lien upon such Lot, and such lien may be enforced in the same manner as an annual assessment levied in accordance with Azticle IV hereof. Any such lien shall be subordinate to t h e lien of any f i rs t mortgage or deed of t rust . Sale or t ransfer of any Lot shall not affect such lien. However, the sale or transfer of any Lot pursuant t o mortgage or deed of trust foreclosure or any proceedjng in l i eu thereof, shall extinguish any such l ien as to payments which became due prior t o such sale or

transfer. No sale or transfer shall relieve such Lot f r o m liability for any zssessmenis thereafter becoming d u e or from t he lien thereof. No amendment t o this Section shall a f fec t t h e rights of the holder of any first mortgage on any Lo t (or t h e indebtedness secured thereby) recorded prior to ~ecorda t ion of such amendment unless t h e holder thereof (or t he indebtedness sec~lred thereby) shall join in the execution of such arnendm ent.

(b) Associatjon Maintenance. The Association sbzll mzintain and keep in ~ o o d order t he Common Area and Parcel Common Area, including any improvements s i t i a t ed thereon, such maintenance to be funded as in this fleclaration. In addition, t h e Association shall majntain and keep in good repair rights-of-way and en t ry strips, if any, whether owned as par t of a Lot or dedicated fo r public use, so long as the rights-of-way or entry strips arc within or appurtenant to or benefit the Project, t h e cost of which shall be pa r t of the Common Expenses. The Association sihall maintain any s t o r m water management facilities, including, bu t not lirnjted to, basins, ponds, pumps, oil/grit separators or o the r equipment or facili t ies serving or benefiting t h e Property. The maintenance obligations described in this paragraph shall also include, but. not be ljmited to, maintenance, repair and replacement, subject t o any insurance then in effect, of all landscaping and ofher f lora , s t ructures and improvements s i tuated upon such areas.

ARTICLE VIIi INSURANCE

Section 8-01. Optional C o v e r a ~ e . The Board of Directors of the Association, or its duly authorized agent, shall have the authority to obtain insurance for all or any of the residential units located on the Property, unless t h e Owners thereof have supplied proof of adequate coverage to the Board of Directors' satisfaction, against loss or damage by fire or other hazards in an amount sufficient t o cover t h e ful l replacement cost of any repair or reconstruction work in the event of damage or destructian from any insured hazard. The insurance proceeds payable on account of loss or damage t o the Lot shall be applied to repair or restoration of the damaged property in substantial conformity t o t h e original plans and specifications.

Section 8.02. Required Coveraae. To the extent reasonably available (unless otherwise provided by any institutional mortgagee), t h e Board of Directors of the Association, or i ts duly authorized agent, shall be required to obtain, maintain and pay the premiums, as a Common Expense, upon a policy of property insurance covering all the Common Area and Parce l Common Area (except land, foundation, excavation and other items normally excluded from coverage) including f ixtures and building service equipment, to the extent t h a t they a re 8 part of the Common Area or Parcel Common Area of the Association, a s well as common personal property and supplies.

The insurance policy shall afford, as a minimum, protection against loss or damage by f i re and other perils normally covered by tbe standard extended coverage endorsement, as well as al l other perils which a r e customarily covered wi th respect t o projects similar in construction, location and use, including all perils normally covered by the standard "All Risk" endorsement, where such is available. The policy shall be in

an amount equal t o one hundred pcrcznr (100%) of t h e current replacement cost of the Common Area a n d Parcel Common Area (less a deductible deemed reasonable by the Board or̂ Directors) and s h a l l name the Association as the named insured.

Each hazard insurance policy must be wri t ten by a hazard insurance carrier which has a current rating by Best's Insurance Reports of B/VI or be t te r (or i t s equivalent). Hazard insurance policies are also accegtable f r o m any insurance carrier which has a financial rating by Best's Insurance Reports of Clzss V, provided i t has a general poljeyholder's ra t ing of a t least "A1'. Each insurer must be specifically licensed or authorized by law t o transact business within the State of Maryland. The policy contract shall provide that no assessment may be made against the mortgagees, and that any assessment made against others may not become a l i en on the mortgaged premises superior to the f i rs t mortgage.

All policies of hazard insurance must contain or have a t tached t h e standard mortgagee clause commonly acceded by private institutions as mortgage investors in t h e area in which the mortgaged premises are located. The mortgagee clause must provide that all property insurance poiieies must provide an Agreed Amount and Inflation Guard Endorsement, if available, and a Construction Code Endorsement if the Common Area or Parcel Common Aree in t he Association a r e subject to a construction code provision which would become operative and require changes t o undamaged portions of the building(s), thereby imposing significant costs in the event of partial destruction of the project by an insured peril.

If any portion of the Common Area or Parce l Common Area are in a special flood hazard area, as defined by t h e Federal Emergency Management Agency, the Board of Directors of the Associztion, o r i t s duly authorized agent , shal l be required to obtain, maintain and pay, as a common expense, t h e premiums upon a ''master" or flblanket" policy of flood insurance on Common Area. o r Parcel Common Area buildings and any other Common Area or Parcel Common Area property. The policy shall be in an amount deemed appropriate, but not less than t h e maxi mum coverage available under the National Flood Insurance Program for all buildings and other insurable property within any portion of t he Common Area or Parcel Common Area located within a designated flood hazard area or one hundred percent (IOU%? of cur ren t replacement cost af all such buildings and o ther insurable property.

The Association shall maintain, to the extent reasonably available (unless otherwise provided by any institutional mortgagee), comprehensive general liability insurance coverage covering all of the Common Area or Parcel Common Area, public ways of t h e project, and other areas t h a t are under i ts supervision (including, bu t not limited to, commercial spaces, if any, owned by the Association, whether or not they are leased to third parties). Coverage limits shall be in amounts generally required by private institutional mortgage investors for projects similar in construction, location and use. However, such coverage shall be for a t l ea s t One Million Dollars ($1,000,000.00) for bodily injury and property damage arising out of a single occurrence. Coverage under this policy shall include, without l imitation, legal l iabili ty of t h e insured for property damage, bodily injuries and deaths of persons in connection wi th the operation and maintenance or use of t h e Common Area o r Parcel Common Area, and legal liability arising out of lawsuits related to employment contracts in which t h e Associztion is a party. Such insurance poiicy shall cantain a %everability of interest'' clause or endorsement which shall preclude t he insurer f rom denying the claim of an

Owner because of negligent acts of the Association or other Owners. Such policies must provide that they may not be canceled or substantially modified, by any party, without a t least t en (10.1 days' prior written notice t o the Association.

The Association shall maintain, to the extent reasonably available, directors and officers ljabili t y insurance coverage for all officers, directors and committee members elected or appointed to the Covenant, Parcel or other duly created committees. Such coverage shall not be required t o be maintained during t h e period the Declarant or the Class B members control the Board of Directors. The amount and scope of such coverage shall be consistent with the standards for such insurance for similar projects in t he Washington, D.C. metropolitan area, but in no event shall provide less than One Million Dollars ($1,000,000.00) coverage fo r damages arising f rom a single occurrence or claim. The typical or usual exemptions including, but no t l imited to, non- coverage fo r Declarant appointed directors or officers, discrjrninatory behavior or actions and intentional, wanton or grossly negligent ac ts or omissions are permitted. The premium for director and officer liability insurance shall be a common expense of t he Associatjon.

To t h e extent reasonably available (unless otherwise provided by any institutional mortgagee), blanket fidelity bonds shall be required t o be maintained by the Association for a l l officers, directors, managers, trustees, employees and volunteers of the Association and all other persons handling or responsible f o r funds held or administered by t h e Association, whether or not they receive compensation for their services. Where the Association has delegated some or all of t h e responsibility for the handling of funds to a management agent, such management agent shall be covered by its own fidelity bond. Except for fidelity bonds t h a t a management agent obtains for its personnel, all other bonds should name the Association as an obligee and should have the i r premiums paid as a common expense by the Association. The to ta l amount of f ide l i ty coverage required shall be sufficient to cover the maximum funds that will be in t h e custody of the Association or management agent a t any time, but m u s t a t leas t equal the sum of three (3) months assessments on all Lots within the Property, plus the Association's reserve funds. The bonds shall provide t h a t they cannot be canceled or substantially modified (including cancellation for non-payment of premium) without at leas t ten (10) days prior written notice t o the Association and to all Eligible Mortgage Holders.

Section 8.03. Repair and Reconstruction of Common Area or Parce l Common Area After Fire or Other Casualtv. Except as hereinafter provided (and inconsistent herewith), in t he event of damage t o or destruction of any portion of the Common Area o r Parce l Common Area covered by insurance payable t o t h e Association as a result of f i r e o r other casualty, the Board of Directors shall arrange for the prompt repair and restoration thereof, and the Board of Directors or t h e Insurance Trustee (as hereinafter defined), a s the case may be, shall disburse the proceeds of all insurance policies to t he contractors engaged in such repair and restoration, as provided below.

The Insurance Trustee may rely upon a certificate of t h e Board of Directors which cer t i f ies whether or not the damaged Property is to be reconstructed or repaired. The Board of Directors, upon request of the Insurance Trustee, shall deliver such cer t i f icate as soon as practicable.

Immediately after a casualty causing damage to the Common Area or Parce l Common Area fo r which t h e Association has t h e responsibility of maintenance,

repair, and/or replacement, the Board of Directors shall obtain reliable 2nd detzi'ied est imates of t h e cost t o place the damaged portions of the Common Are2 or Parcel Common Area in as good a condition 2s existed before the casuelty. Sucn costs may include professional fees and premiums for s u c h bonds as t h e Board of Directors desire.

In t h e event of reconstruction or repair (as estimated by t h e Board of Directors) which shall exceed Twenty-Five Thousand Dollars (S25,O 00.00), al l proceeds of insurance shall be pajd over to a trust company or bank having trust powers and authorized t o engage in t h e t rus t business in the State of Maryland (hereinaf ter t h e "Insurance Trustee"), selected by the Board of Directors and shall be pajd out f rom t i m e t o t ime as the reconstruction a n d repair progresses in accordance with t h e provisions of an Insurance Trust Agreement and which contains, inter alia, the following provisions:

(a) the reconstructjon o r repair s h a l l be in the charge of a n archi tect or engineer, who may be an employee of t h e Association, and hereinafter called the l'Architectt';

(b) any res tora t ion or repair of t h e project shall be performed substantially in accordance wi th the Declaration and the original plans and specifica- tions, unless other action is approved by at leastf i f ty-one percent (51%) of the Eligible Mortgage Holders (bzsed upon one vote for each first mortgage owned), and two thirds (2/3) of the owners (other than t h e Declarant);

(c) each request for an advance of t h e proceeds of insurance shall be made t o t h e Insurance Trustee and shall be accompanied by a ce r t i f i ca t e f rom t h e Architect and Board of Directors to the effect t ha t (i) dl work then completed has been performed in accordance with t h e plans and specifications; and {ii) the amount requested t o be advanced is required t o reimburse the Board of Di rec to rs fo r payments previously made by t h e Board of Directors or is due to the contractor responsible f o r the restoration or repair, or t o subcontractors, materialmen, laborers, engineers, archi tects or t o other persons responsible f o r services or mater ia ls in connection with such restoration or repair, or for fees or the like necessari ly incurred in connection with "Lhe same; and (iii) when added to amounts previously advanced by t he insurance Trustee, the amount requested t o be advanced does not unreasonably e x c e e d the value of t h e work done and materials delivered to the date of such request;

(d) each request for an advance of the proceeds of insurance shall be accompanied by satisfactory waivers of liens covering that portion of the repair or reconstruction for which payment or reimbursement is being requested, together with appropriate evidence f rom a t i t l e insurance company or the like t o the e f f e c t tha t there has not been filed with respect t o the Common Area or Parcel. Common Area, or any part thereof, any mechanics or other lien, or notice of intention t o f i le the same, which has not been dismissed, bonded, or satisfied of record;

(el the fees and expenses of the Insurance Trustee, as agreed upon by the Board of Directors and the Insurance Trustee, shall be paid by the Association as a common expense, and such fees and expenses may be deducted from any insurance proceeds in the hands of the Insurance Trustee, pro rata , as the reconstruct ion or repair progresses;

(f) such other provisions not inconsistent w i t h t h e provisions hereof as the Board of Directors or t h e Insurance Trustee may reasonably require.

Upon completion of the reconstruction or repair a n d payment in ful l of all amounts due on account thereof, any proceeds of insurance then in the hands of the Insurance Trustee shall be paid t o the Board of Directors if such funds elate t o Common Areas, or (ii] t o the Owner of any Lot t o which any such proceeds may relate.

ARTICLE IX PARTY WALLS, DRIVEWAYS AND FENCES

The rights and duties of the Owners of Lots with respect t o party walls, driveways or fences shall be governed by the following:

Section 9.01, General Rules of Law t o Aunlv. Each wall, driveway or fence which is constructed as a par t of the original construction on the Property by t h e Declarant, and any part of which is placed on the dividing line between separate Lots, shall constitute a pa r ty wall, driveway or fence, as applicable, and wi th respect t o such party wall, driveway or ience, each of the adjoining Owners .shall assume the burdens, and be subject t o an easement for that portion of a party wall, driveway or fence on his Lot, and be entit led t o ihe benefits of these restrictive covenants and, t o the extent not inconsistent herewith, the general rules of la& regarding party walls, dr iveways or fences, and of liabjlity for ,property damage due t o negligence or willful acts or omissions, shall apply thereto.

Section 9.02. S h a r i n ~ of Repair and Maintenance and Destruction bv Fire or Other Casualtv. If any such pa r ty .wall, driveway or fence is damaged or destroyed by fire or other casualty or by some cause other than the act of one of the adjoining Owners, his agents, or f ami ly (including ordinary wear and tear and deterioration f r o m lapse of time), then, in such event, both such adjoining Owners shall proceed forthwith t o rebuild or repair the same t o as good condition as formerly, in proportion t o the i r respective use of t he pa r ty wall, driveway or fence.

Section 9.03. Repairs of Damage Caused bv One Owner. If any such par ty wall, driveway or fence is damaged or destroyed through the act of one adjoining Owner or any of his agents or guests or members of his family (whether or n o t such a c t is negligent or otherwise culpable) so as to deprive the other adjoining Owner of the f u l l use and enjoyment of such party wall, -drivewzy or fence, then the Owner responsible for such damage shall forthwith proceed to rebuild and repair the same t o as good condition as formerly, without cost t o the adjoining Owner.

Section 9.04. Encroachments. If any portion of a par ty wall, dr iveway or fence shall encraach upon any adjoining Lot, or upon t h e Common Area or irnprove- ments thereto, by reasan of reconstruction, set t lement or shifting of any building, or otherwise, a valid easement for t h e encroachment and for the maintenance of t h e same as long as t h e building stands shall exist.

Section 9.05. Other C h a n ~ e s . In addition to meeting the other requirements of these restrictive covenants, and of any building code or similar r e p l a t i o n s or ordi- nances, any Owner proposing to modify, make additions t o or rebuild his resjdence in

any manner which requires the extension or other alteration of a n y party wall, driveway or fence, shall first obtain t h e wri t ten consent of t h e adjoining Owner.

Section 9.06. Right t o Contributjon Runs with Land. The r ight of any Owner t o contribution from any other Owner under this Art ic le shall be a p p u r t e n a n t t o t h e land and shall pass t o such Owner's successors in t i t le .

Section 9.07. Dispute. In the event of a dispute b e t w e e n Owners wi th respec t to t h e repair or rebuilding of a par ty wall, dr iveway or f e n c e o r wjth respect t o t h e sharing of the cos t thereof, .then, upon wri t ten request of one of such Owners addressed to the Association, the m a t t e r shall be submitted t o its Board of Directors who shall decide the dispute, and t h e decision of such Board of Di rec to rs shall be final and conclusive upon t h e parties.

ARTICLE X MANAGEMENT

Section 10.01. -Manage'm'ent Agent. The Board of D i r e c t o r s may employ f o r the Association a p r o f e s s i ~ n a l management agent or manager (the "Management Agent") at a rate of compensation established by the Board of Di rec to rs t o perform such duties and services as the Board of Directors shall f rom t i m e t o t i m e authorize in writing. When professional management has been previously required by any Eligible Mortgage Holdkr, any decision t o establish self-management by the Association sball require the consent of six-ty-seven percent (6 7%) of t h e Owners and the approval of fifty-one p e r c e n t (51 96) of the votes of lots subject t o eligible holder mortgages.

Section 10.02. Duration of Manaqement dqrecment . Any m a n a g e m e n t agree- ment entered in to by the Association shall provide, inter alia, t ha t such a g r e e m e n t m a y be terminated f o r cause by either party upon th i r ty (30) days written notice thereof t o the other party. The term of any such management agreement shall not exceed one (1) year ; provided, however, t ha t t h e term of any such m a n a g e m e n t agreement may be renewable by mutual agreement of t h e parties for success ive o n e (1)-year periods.

ARTICLE XI GENERAL PROVISIONS

Section 11.01. Limitation of Liability. The Associa t ion shall not be liable for any failure of any servjces t o be obtained by the Assocjation o r paid for out of t h e com- mon expense funds, or for injury or damage t o person or property caused by the elements or result ing f rom water which may leak or f low from any portion of the Common Areas or eomrnunity facil i t ies, or from any wire, pipe, drain, conduit or the like. The Association shall not be liable to a n y member f a r loss or damage, by t h e f t o r otherwise, of articles which may be stored upon the Common Area or Parcel Common Area or community facilities. No diminution or a b a t e m e n t of assessments, as herein elsewhere provided for, shall be claimed or allowed for inconvenience o r discomfor t arising f r o m the making of repairs or improvements t o t h e Common A r e a o r Parcel Common Area or community facil i t ies, or f r om any action taken by the Association t o comply with any of the provisions of this Declaration or with any law or ordinance or with t h e order or directive of any municipal or other governmentd l authority.

Section 11.02. Enforcement. The Association, or any Owner, or any Mortgagee of any Lot sha l l have t h e r i g h t t o enforce, by any proceeding at l a w and/or in equity, all restrictions, conditions, covenants, reservations, easements, liens, charges or o ther obligations o r terms now or hereaf ter imposed by t h e provisions of this Declaration, o r t h e Articles of Incorporation or Bylaws or rules or regulations of the Association- Fai lure by t h e Association or by any Owner or by any mortgagee of any Lot t o enforce any covenant o r restrictions herein contained or any provision of the Bylaws or Articles of Incorporation or rules or regulations of t h e Association shall in no event be deemed a waiver of t h e right to d o so thereafter. There sball be and there is hereby created and declared t o be a conclusive presumption that any vjolation or breach or a t tempted violation o r breach of any of t h e within covenants or restrictions or any provision of t h e Bylaws or Articles of incorporation or rules or regulatjons of the Association cannot b e adequately remedied by action at law or exclusively by recovery of damages. If the Assocjation, or any Owner or Mortgagee of any Lot, successfully brings an action to extinguish a violation or otherwise enforce t h e provisions of this Declaration or t h e Articles of Incorporation or Bylaws or rules or regulations of the Association, the cos ts of such action, including legal fees, shall became a binding, personal obligation of t h e Owner committing or responsible for such violation, and such costs shall also be a l ien upon the Lot of such Owner.

Section 11.03. Severability. Inva l id~t ion of any -one of these covenants or restrictions by judgment or court order shall in no wise affect any other provisions, which shall remain in f u l l force and effect.

Section 11-04. Duration and Amendment. Except where permanent easements or other permanent rights o r jnterests are herejn created, t he cavenants and restric- t ions of t h e Declaration shall r u n with and bind the land for a t e rm of twenty (20) yea r s from the date this Declaration is recorded, aEter which t i m e they shall be automaticaUy extended for successive periods of ten (10) years. This Declaratjon may be amended dur ing the f i r s t twenty (20)-year period by the affirmative vote or written consent of not less than seventy-five percent (75%) of t h e Lot Owners, and thereaf ter , by t h e affirmative vote or written consent of the Owners of not less than sixty-six and two- thirds percent (66 2/3%) of the Lots. Any amendment must be recorded among the Land Records of Montgomery County, Maryland.

Section 1,1.05. Annexation. The Declarant shall have the right, for a period of seven (7 ) years following the date of recordation of this Declaration, without the consent of the members of t h e Association, t o annex and bring within the scheme of this Declaration additional land in future stages, which property is part of t he property shown on the Development Plan (and amendments thereto), provided t h a t so long as a Lot is encumbered by a deed of t rust or mortgage which is guaranteed or insured by VA or FHA, then VA or FKA, as applicable, shall approve any annexations not in accord w i t h any phasing or staging plan (and amendments theretd) as approved by them. The additions zuthorized shall be made by filing of record Supplementary Declarations of Covenants wi th respect t o t h e additional land which shall extend the s c h e m e of the covenants and restrictions of t h e Declaration to such land and thereby subject such land to t h e effect snd operation of this Declaration. Said Supplementary Declarations may contain such complementary additions and modifications of the covenants and restrictions contained in this Declaration as may be necessary t o reflect the different character , if any, of t h e added Lots and as are not inconsistent with t h e scheme of this Declaration. Except es otherwise herejnabove provided, annexations t o the Property shall require the consent of two-thjrds (2/3] of the Class A Members.

Section 11.06- FHA-VA A p ~ r o v a l s . Provided tha t any Lot subject to this Declaration is then encumbered by a deed of t rus t or mortgage which is insured by FHA or guaranteed by VA, and fur ther provided tha t there are then Class 3 membersnips of t h e Association outstanding, nejther the Members, t he Board of Directors, nor t he Association shall by act or omission, t ake any of the following actions without the prior written consent or approval of the Federal Housing Administration and the Veterans Administration, as circumstances may require:

(a) change the basic organization of the Association including the merger, consolidation, or dissolution of t h e Associatjon; or

Ib) dedicate, convey, or mortgage the Common Area or Parce l Common Area; or

(c) annex additional properties {other than a n annexation by the Declarant as provjded in Section 11.05); or

(d) otherwise materially modify or arnend any provision of this Declaration, the Bylaws or the Articles of Incorporation of the Association.

Section 11.07. Rights of t h e Marviand-National Capital Park and Plannine Commission (llCornmission" herein). Any other provision of this Declaration or the Bylaws or Articles of Incorporation of the Association t o the contrary notwithstanding, neither t h e Members, t h e Board of Directors nor the Association shall, by a c t or omission, take any of t h e following actions without the prior written consent of t h e Commission, which consent shall not be unreasonably withheld or delayed:

(a) abandon, p ~ r t i t i o n , dedicate, subdivide, encumber, sell or trans- fer any of the Common Area or Parcel Common Area or community facilities; provided, however, that the granting of rights-of-way, easements and t h e l ike for public utilities or for other purposes consistent wi th the use of the Common Area or Parcel Common Area and community facili t ies by the members of the Association shdll not be considered a transfer within the meaning of this Section; or

(b) abandon or t e rmina te the Declaration; o r

(c) modify or amend any material or substantive provision of this Declaration, or the Bylaws or the Articles of Incorporation of the Association; or

(d) merge or consolidate the Association with any other ent i ty o r sell, lease, exchange or otherwise transfer all or substantially all of the assets of the Association to any other entity; or

(e) substantially modify t h e method of determining and collecting assessments as provided in this Declaration.

The Commission shall have the right t o bring action for any legal or equitable relief necessary t o enforce the rights and powers granted t o t h e Commission hereunder.

Section 11.08. Consents. Any other provision of this Declaration or t h e Bylaws or Articles of Incorporation of the Association t o the c o n t r a r y norwithstanding, neither t h e Members, t h e Board of Directors nor t h e Association shall, by act or omission, take any of t h e following actions:

(a) abandon, partition, alienate, re lease , hypothecai~, dedicate, sub- divjde, encumber, sell or transfer any of the Common h e a or Parcel Common Area or community facil i t ies d i rec t ly or indirectly owned by the Association unless at l e a s t fifty-one percent (51%) of t h e Eligible Mortgage Eolders (based upon one vote for each first mortgage owned) and Lot Owners representing sixty-seven percent (67%) of the votes in t he Association have given their prior written approval; provided, however , that the granting of rights-of-way, easements and t h e like for public utilities or for other purposes consistent with the use of the Common Area or Parcel Common A r e a and community facilities by members of the Association s h d l not be considered a transfer within the meaning of th is Section; o r

(b) abandon or terminate th is Declaration unless a t l e s t sixty-seven percent (67%) of the Eligible Mortgage Eolders (based upon one vote for each first mortgage owned) and Lot Owners representing ninety percent (90%) of the v o t e s of the hsociation have given their prior written approval; or

c unless the prior written consent of fifty-one p e r c e n t (51%) of the Eligible Mortgage Rolders (based upon one vo te for each first-mortgage owned) and the requis i te number of Lot Owners as provided in Section Z1,Od of this Deciarztion hzs been obtained, modify or amend any material provision of this Declaration, which establish, provide for, govern or regulate any of the following:

voting rights;

(ii) assessments, assessment liens or subordination of such liens;

(iii) reserves for maintenance, repair and replacement of the Common Area or Parcel Common Area;

(iv) insurance or fidelity bonds;

(v) rights t o use of the Common Area or Parcel Common Area .by any Owner, except in accordance with Section 2.01(b);

(vi) responsibility for maintenance and repairs;

(vii) expansion or contraction of the property subject to this Declaration or the addition, annexation or withdrawal of proper ty t o or f r o m this Declara t ion, except in accord- ance with Section 11.05;

(viii) boundaries of any Lot;

(i:i) z decision by the Association to establish self manage- m e n t when professional management had been previously required by an Eligible Mortgage Holder;

( ) leasing of Lots;

(xi) imposition of any res-trjctions on the rights of zn Owner t o sell or transfer his or her Lot;

(xii) restoration or repair of t h e project (af ter a hazard damage or pa r t i a l condemnation) in a manner o ther than tha t specified in the documents;

(xiii) any provisions w h i c h expressly benefit mortgage holders, Eligible Mar tgage Holders or insurers or guarantors.

An addition or amendment t o the Declaration shall not be considered material if i t is for t h e purpose of correcting technical errors, or for clarification only. An Eligible Mortgage Holder who receives a wri t ten request t o approve such a non- material additions or amendments who fails t o submit a response within thirty (30) days shall be deemed to have approved s u c h request.

(d) substantially modify the method of determining and collecting assessments against Owner or his Lot as provided in this Declaration, unless at least sixty-seven percent (67%) of the f i rs t mortgagees (based upon one vote for each first mortgage owned) or Owners (other than the Declarant) of the individual Lots in t h e Association have given their prior written approval; or

(e) waive or abandon any scheme of regulations, or enforcement thereof, pertaining to the architectural design or the exterior appearance of buildings or s t ructures on the Lots, the exterior maintenance of buildings or structllres on the Lots, the maintenance of the Common Area or Parcel Common Area, party walkways o r common fences and driveways, or the upkeep of 'lawns and plantings within the Property unless a t least sixty-seven percent (67%) of the f i rs t mortgagees (based ubon one vote for each first mortgage owned) or Owners (other than the Declarant) of the individual Lots in the Association have given their prior writ ten approval; or

(f) fail t o maintain insurance in accordance with Section 8.02 of this Declaration unless a t least fifty-one percent (51%) of the Eligible Mortgage Holders (based upon one vo te for e a c h first mortgage owned) and sixty-seven percent (67%) of the Owners have given their prior written approval; o r

(g) use hazard insurance proceeds for losses to any Assocjztion Common Area or Parcel Common Area for other than the repair, replacement o r reconstruction of such Common Area or Parcel Common Area property, unless at least fifty-one percent (51%) of t h e Eligible Mortgage Kolders (based upon one vote for each first mortgage owned) and sixty-seven percent (67%) of t h e Owners have given their prior wri t ten approval.

Section 11.09. Additional Rights of M o r t ~ a ~ e e s - Notice. The Association shall promptly notify all Eligible Mortgage Holders who hold first mortgages on any Lot for

which am assessment levjed pursuant to t h e Declaration, o r any installment thereof, becomes delinquent fo r a period in excess of sixty (60) days and the Association shall promptly notify any Eligible Mortgage Rolder who holds a f i r s t mortgege on any Lot with respect t o which any default in any other provision of this Declaration remains uncured for a period in excess of sixty (60) days following the date of such default. Any failure to give any such notice shall not a f fec t t h e validity or priority of any Eligible Mortgage Holder on any Lot and the protecrion extended in this Declaration to t he holder of any such martgage shall not he altered, modified or diminished by reason of such failure.

No su i t or other proceeding may be brought t o foreclose t h e lien for any a s s e s s m e n t levied pursuant to this Declaration except a f t e r t e n ( 1 0 ) days' wr i t ten notice t o t he holder of the f i r s t mortgage on the Lot which is t he subject ma t t e r of such su i t or proceeding.

Any f i r s t mortgagee of any Lot may pay any taxes, uti l i ty charges or other charge levied against the Common Area or Parcel Common Area and community facilities. which are in default and which may or have become a charge or l ien against any of the Common Area or Parcel C o m m o n Area znd community facili t ies and any such first mortgagee may pay any overdue premiums on any hazard insurance poljcy or secure new hazard insurance coverage on the lapse of any policy, with r e spec t to t h e Common Area or Parcel Common h e a and community facili t ies. Any f i r s t mortgagee who advances any such payment shall be due immediate reimbursement of t h e amo.unt so advanced f rom the Association,

Section 11.10. Casualty Losses. In the event of substantjal damage or destruc- tion t o any of the Common Area or Parcel Common Area o r community facilities, the Board of Directors of t h e Association shall give prompt wr i t ten notice of such damage or destruction to the Eligible Mortgage Holders who hold f i r s t mortgages of record on the Lots. No provision of this Declaration or the Articles of Incorporation or the Bylaws of t he Association shal l entitle any Member t o any priority over the holder of any f i rs t mortgage of record on his Lot wi th respect t o t h e distribution t o such Member of any insurance proceeds paid or payable on account of any damage or destruction of any of the Common Area or Parcel Common Area or community facili t ies.

Section 11-11. Condemnation or Eminent Domain. In t h e event any part of t he Common Area or Parce l Common Area and community faci l i t ies is made t h e subject m a t t e r of any condemnation o r ernjnent domain proceeding, or is otherwise sought to be acquired by any condemning authority, then the Board of Directors of t h e Association shall give prompt wr i t t en notice of any such proceeding or proposed acquisition t o the Eligible Mortgage Bolders who hold first mortgages of record on the Lots. No provision of this Declaration or the Articles of Incorporation or the Bylaws of the Association shall entitle any Member to any priority over the holder of any first 'mortgage of record on his L o t with respect to the distribution t o such Member of t he proceeds of zny condemnation or set t lement relating t o a taking of any of t h e Common Area, Parcel Common Area and community facilities.

Section 11.12. Chanpes Reouired bv Lenders. Notwithstending any provision t o the contrary contained in the Articles of Incorporation or Bylaws of the Association or this Declaration, t h e Declarant shall have and hereby reserves the rjghi t o make modifications, additions ar deletions t o the Declaration, t h e Articles of Incorporation

and .the Bylaws of t h e Associnijon i f such rn odifications, addit; ons or deletions are required by VA, FHA, FHLMC or FNMA- The Declarant further reserves t h ~ rignt t o waive in writing any esemption, right or privilege granted or r e s e ~ v e d t o the Declarant by t h i s Declaration or the Articles of Incorporation or the Bylaws of t h e bssociztjon.

Section 11.13. Taxes and Assessments. I t is the intent of this Declaration t ha t insomuch as the interests of each Owner t o use and enjoy t h e Common Area is an interest in r e a l property appurtenant to each Lot, the value of the in te res t of each Owner in such Common Area and the Parcel Common Area shall be included in the assessment for each such Lot and as a result, any assessment ciirectly against such Common Area or Parcel Common Area should be of a nominal nature reflecting t h a t t h e full value of the same should be included in the several assessments of the various L0t.5.~

Section 11.14. Fines. The Board of Directors may levy reasonable fines upon any Owner or such Owner's tenant or guest or invitee or guest or invitee of such tenant, (not t o exceed Twenty-Five Dollars ($25.00) per violation) f o r violations of the provisians of this Declaration, the Bylaws, the A-rticles af Incorporations or any rule or regulatjon promulgated by t h e Board of Directors of the Assocjation provided tha t reasonable notice and an opportunity for a hearing is provided the violator and the Owner of t h e Lot if the Owner is not the violator. Each day a v i o l a t i ~ n continues unabzted af ter wri t ten notice to the violator and/or t he Owner sha l l be considered a sepa ra t e violation. In order t o complement this section t h e Board shall, by resolution, adapt and distribute t o all Owners the procedures to be followed in order t o levy fines. Any fine properly levied according t o such procedures shall be subject t o collection by the Association in t h e same manner as any other assessment as set for th in this. Declaration.

Section 11.15.. Cantions and Gender. The captions contained in this Declaration are for convenience only and are n o t a part of this Declaration and are not intended in any way t o l i m i t or enlarge the terms and provisions of this Declaration. Whenever the context so requires, t h e male shall include all genders and t h e singular shall include the plural.

IN WITNESS WHEREOF, the undersigned, being the DECLARANT herein, has executed this instrument this /gTbfday of J= L y 2 -- !369.

ATTEST: KAY-2 LIMITED PARTNERSHIP, a Maryland limited partnership

By: RICHMARR CONSTRUCTION CORPORATION, a Delaware corporation, General Partner

By: -- Lv<'. -/zypJ ,'

, (Vice) p'resjdenf Thomas L, Knoll

f. i t o wit: - &LZ j@dd$

A,'

On this /3 - day of 8 before me, t h e undersigned officer, personally appeared Y$$%?%e ~h as -IA3d and Marv in L. Kav , who have been satisfactorily proven t o be the persons whose names are subscribed ta this writ ten instrument, who acknowledged themselves to be (Vice) President and kir*m Secretary, respectively, of Rjchmarr Construction Corporation, a Delaware corpora- tion, general partner of Kay-2 Limited Partnership, a Marylznd limited partnership, and that said Thornas L - K n o l l and Marvin L Kay , as such (Vice) President and &iw&m&$ Secretary, being authorized so t o do, executed t h e foregoing instrument for t h e purposes therein contained, by signing the name of the corporation by themselves a s (Vice) President and W ~ L ' ; X & Secretary, respectively.

GIVEN under my hand and seal this /3 d a ~ of @&: , / g7

CERTIFICATION

? !

I HEREBY CERTIFY that the foregoing instrumdnt was prepared on behalf of Kay-2 Limited Partnership, the party thereto. /

L o t - 7 7 7 8 7 9 80 81 82 83 8 4 x 5 86 87 88 89 90 91 92 9 3 94 9 5 96 97 9 8 99 100 101 102 103 104

LlBmS 9 1 1 REID1 7 8

EXHIBIT A

The Proptrties Descr ibed B e l o w All Appear On A Plat of Subdivision

'Recorded In Plat Book 150 at Plat 1'7087 E n t i t l e d " P l a t 11 - SHERWOOD FOREST MANORJ1

.A11 'Properties A r e In District 5, Subdivision 2 2

Block 0 0 0 Q 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q

Accoun t 2797883

A t t h e present t i m e Dora1 Homeowners Association, f n c . does not own any common area. It is contemplated t h a t in the f u t u r e the homeowners association will t a k e title to v a r i o u s pa rce l s i d e n t i f i e d on -the plats of s u b d i v i s i o n f o r Sherwood F o r e s t Manor .