4.1 CREATION OF LIEN AND PERSONAL OBLIGATION OF ASSESSMENTS

The Declarant, for each Lot owned within the properties, hereby covenants, and each Owner of any Lot by acceptance of a Deed therefore, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay to the Association for capital improvements and maintenance, such assessments to be established and collected as hereafter provided  (1)  annual assessments or charges, and (2) special assessments together with interest, cost and reasonable attorney’s fees, shall be a charge on the land and shall be continuing lien upon the property against which each assessment is made.  Each such assessment, together with interest, costs and reasonable attorney’s fees, shall also be the personal obligation of the person who was the Owner of such property at the time when the assessment fell due.  The personal obligation for delinquent assessments shall not pass to his successors in title unless expressly assumed by them; provided, however, that in the case of a sale of any lot which is charged with the payment of an assessment or assessments payable in installments, the person or entity who is the owner immediately prior to the date of any such sale, contract or assignment shall be personally liable only for the amount of the installments failing due prior to said date.  The new owner or contract purchaser shall be personally liable for installments which become due on and after said date.

4.2 DATE OF COMMENCEMENT OF ASSESSMENTS

The annual assessments provided for herein shall commence on each lot on the 1st day of the month following the conveyance of the lot.  The first annual assessment shall be adjusted according to the number of months remaining in the calendar year.  The Board of Directors shall fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period.  Written notice of the annual assessment shall be sent to every Owner subject thereto.  The due dates shall be established by the Board of Directors.  The Association shall, upon demand, and for a reasonable charge, furnish certificate signed by an officer of the Association setting forth whether the assessments of a specified Lot have been paid.  A properly executed certificate of the Association and to the status of assessments on a Lot is binding upon the Association as of the date of its issuance.

4.3 EFFECT OF NONPAYMENT OF ASSESSMENTS

Any assessments which are not paid when due shall be delinquent.  If the assessment is not paid within thirty (30) days after the due date, the assessment shall bear interest from the date of delinquency at the rate of Twelve (12%) percent per annum, and the Association may bring an action at law against the owner personally obligated to pay the same and/or foreclose the lien against the property, and interest, costs, and reasonable attorney’s fees of any such action shall be added to the amount of such assessment.  The lien shall be foreclosed in like manner as a mortgage of real property.  No owner may waive or otherwise escape liability for the assessment provided for herein by non-use of the Common Area or abandonment of his lot.  Owners’ voting rights shall be suspended in the event of any assessment is past due ninety (90) days or more.

4.4 MAXIMUM ASSESSMENT

The basis and maximum of annual (monthly) assessments shall be as follows:

(A) Until the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment shall be $300.

(B)  From and after December 31, 1988, the maximum annual assessment may not be materially increased with an affirmative vote of two-thirds (2/3) of each class of member who are voting in person or by proxy, at a meeting duly called for such purpose.  A “material increase” shall be an increase which, cumulatively for the Association’s fiscal year, increases the annual assessment for common expenses by a percentage in excess of the percentage increase in the Consumer Price Index over the twelve (12) month period ending one (1) month before the start of the fiscal year (or the next earliest date that the Index shall have been published).  The consumer Price Index shall be that applicable to “All Urban Consumers" published by the Bureau of Labor Statistics for the Seattle-Everett SMSA.  In the event the Index mechanism significantly changes or disappears, there shall be substituted such comparable Index as may be published by the United States Department of Labor Statistics or successor governmental department of bureau.  If a comparable Index is not published, there shall be substituted such method of adjustment as the Board of Directors of the Association shall determine to reflect changes in what is commonly called the “cost of living”.

(B) The Board of Directors may fox the annual assessment at an amount not in excess of the maximum.

4.5 NOTICE OF QUORUM

Written notice of any meeting called for the purpose of taking any action authorized under Articles 3 or 4 shall be sent to all members not less than thirty (30) days nor more than sixty (60) days in advance of the meeting.  At the first such meeting called, the presence of members or of proxies entitled to cast sixty (60%) percent of all votes of each class of membership shall constitute a quorum.  If the required quorum is not present, another meeting may be called subject to the same notice requirement, and the required quorum at the subsequent meeting shall be one-half (1/2) of the required quorum at the preceding meeting.  No such subsequent meeting shall be held more than sixty (60) days following the preceding meeting.

4.6 PURPOSE OF ASSEMENTS

The assessments levied by the Association shall be used exclusively to promote recreation, health, safety and welfare of the residents of the properties, including without limitation, the construction, establishment, improvement, repair and maintenance of the Common Area, and services and facilities related to the use and enjoyment of the Common Area, and payment of taxes and insurance on the Common Area.  Monthly charges shall include an adequate reserve fund for maintenance, repair and replace of those elements of the common Area that must be replaced on a periodic basis.  There shall further be established from said assessments reserve fund not to exceed 2,500.00 for legal services for enforcement of these Covenants, conditions and Restrictions.

4.7 ROAD MAINTENANCE, SEWAGE DISPOSAL MAINTENANCE AND STORM    RETENTION MAINTENANCE

Road Maintenance, sewage disposal maintenance, and storm retention maintenance shall be the responsibility of the Association.  The Association shall be responsible to maintain and operate the private road system, any on-site sewage disposal systems and any storm retention system within the properties legally described on Exhibit “A” and ”B”.

In the event the Homeowners Association becomes unable to meet these responsibilities, the Declarant shall take over each system for maintenance and repair in trusteeship for the Association General Assessments and Special Assessments of the Association shall be used for the purpose of maintenance and repair while being managed in trust.

Upon completion of the storm drainage facilities, the developer will be required to post a 2-year maintenance bond for the facility.  The developer will be responsible for providing regular and adequate maintenance during this 2-year  period as well as supportive maintenance records.  At the end of this time, the County will inspect the system and, when the facility is acceptable and 80% of the residences in that phase have been completed, the county will take over maintenance and operation of the system.  Homeowners will then be required to pay a monthly fee (currently $3.00 per month per lot) for this service.

All roads within the boundaries of Exhibit A and B are private, with the owners and occupants of each lot and tract lying within Exhibit A and B having a non-exclusive easement right for ingress, egress, utilities and drainage, and for such purpose an easement is hereby granted and conveyed to said owners, occupants and guests of each lot over all roads, lanes, walkways for ingress and egress.

Each of the lot owners, together with their respective heirs, personal representatives and assigns shall be responsible for maintenance of said roads equally to be administered by the Declarant as set forth above in the event the Homeowners Association becomes unable to meet their responsibilities.

4.8 SPECIAL ASSESSMENT FOR CAPITAL IMPROVEMENTS

In addition to the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment applicable that year only for the purpose or defraying, in whole or in part, the cost of any construction reconstruction, repair or replacement of a capital improvement upon the Common Area, including fixtures and personal property related thereto, provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of members who are voting in person or by proxy at a meeting duly called for this purpose, written notice of which shall be sent to all members not less than thirty (30) days nor more than sixty (60) days in advance of the meeting, setting forth the purpose of the meeting.

4.9 SUBORDINATION OF LIEN TO MORTGAGES

The lien of the assessments provided for herein shall be subordinate to the lien of any first mortgage.  Sale or transfer on any Lot shall not affect the assessment lien.  However, the sale or transfer of any Lot pursuant to the foreclosure of the lien or a mortgage or Deed of Trust with respect thereto, or any  proceeding in lieu thereof, shall extinguish the lien of such assessments as to payments that become due prior to such sales or transfer.  No sale or transfer shall relieve such Lot from transfer.  No sale or transfer shall relieve such Lot from liability for any assessments thereafter becoming due or from the Owner (the mortgagor or grantor under the mortgage or deed of trust being foreclosed the personal liability of said Owner) pursuant to Section 5.3 above.

4.10 UNIFORM RATE OF ASSESSMENTS

Both annual and special assessments must be fixed at a uniform rate for all Lots and may be collected on a monthly basis.