Assessment for Common Expenses
13.1 Assessment. Each Owner, inclusive of Declarant, provided Declarant is an Owner, shall be obligated to pay a proportionate share of the expenses of the administration and operation of the Association and Feature Areas and of other expenses incurred in conformity with the Bylaws or this Declaration. Assessments for this purpose shall be imposed by the Board of Directors to meet the Common Expenses. The assessments shall be made pro rata according to each Owner's voting right in the Association unless, in its reasonable discretion, the Board of Directors shall, by two-thirds vote thereof, determine that another method of proration of an Owner's share of the total assessment is equitable. Assessments for the estimated Common Expenses shall be due monthly, in advance, on the first day of each month. The Manager or Board of Directors shall prepare and deliver or mail to each Owner an itemized annual budget showing the various estimated or actual expenses for which the assessments are made.
The Assessment for Common Expenses includes but is not limited to expenses of management, premiums for insurance of the types and kinds provided for in Section 13.5 hereafter, landscaping and care of grounds, common utilities, repairs and renovations, security, expenses and liabilities incurred by the Manager or Board of Directors under or by reason of this Declaration, deficits remaining from a previous period, and other costs and expenses relating to the Feature Areas. Further, it shall be mandatory for the Board to establish and segregate, out of such monthly assessments, a contingency or reserve fund for the repair, replacement and maintenance of those Feature Areas that must be replaced periodically. The omission or failure of the Board of Directors to fix the assessment for any period of time shall not be deemed a waiver, modification or release of the Owners from their obligation to pay same.
Any Owner or first Mortgagee may inspect the Association's records of receipts and expenditures at any reasonable time during convenient weekday business hours upon ten days' written notice of such intent to the Board of Directors or the Manager, if any. Upon payment of a reasonable fee, not to exceed Fifty Dollars ($50.00), any Owner or first Mortgagee of such Owner shall be furnished a statement of account setting forth the amount of any unpaid assessments or other charges due and owing from such Owner. At the end of any calendar year, the Board of Directors may, but shall not be required to, refund to each Owner his proportionate share of funds then held by the Association which are not deemed to be necessary to meet the Common Expenses.
13.2 Special Assessment. The Board of Directors shall have the right during any calendar year to levy and assess against all of the Owners a special assessment for such purpose or purposes, in accordance with this Declaration, the Articles or Bylaws, as may be necessary to keep the Property as a first class residential subdivision or community, in the Board's discretion. Such special assessment shall be borne by the Owners in accordance with each Owner's voting interest in the Association and shall be due and payable as determined by the Board of Directors.
13.3 Assessment Reserves. The Association may require the Owners to deposit with the Association an amount not exceeding six times the amount of the then estimated monthly assessment, which sum shall be held, without interest, by the Association as a reserve to be used for working capital. Said sum may be required to be added to from time to time to reach the then current six month limit. Such an advance payment shall not relieve an Owner from making the regular monthly payment of the monthly assessment as the same comes due. Upon the transfer of its Lot, an Owner shall be entitled to a credit from its transferee but not from the Association, for any unused portion thereof. Such reserves shall at all times remain as capital of the Association.
13.4 Additions, Alterations and Improvements - Common Areas. There shall be no special assessments for any capital additions, or improvements to or alterations of the Feature Areas by the Association requiring expenditure(s) in excess of Ten Thousand Dollars ($10,000.00) in the aggregate in any one calendar year without, in each case, prior approval by the Owners holding a majority of the voting rights in the Association, except in the event of an emergency, as deemed by the Board in its reasonable discretion.
(a) The Board of Directors shall obtain and maintain at all times, to the extent obtainable, policies of insurance, written with financially responsible and able companies licensed to do business in Tennessee, covering the risks set forth below. The types of coverages to be obtained and risks to be covered are as follow, to-wit:
(1) Bodily injury and property damage liability in a minimum amount of not less than $1,000,000.00 per person or per occurrence covering all claims for bodily injury or property damage. Coverage shall include, without limitation, liability for personal injuries, operation of automobiles on behalf of the Association, and activities in connection with the ownership, operation, maintenance and other use of the Common Areas. All liability insurance shall name the Association, the Board, the Manager, the Declarant, first Mortgagees (of which the Association has written notice, mere public filing being insufficient), the Owners and the Officers of the Association, as insureds thereunder. Such policy or policies shall protect each of the insureds as if each were separately insured under separate policies; provided, however, that such policy or policies shall not require the insurers to pay any amount in excess of the maximum limits stated therein.
(2) Worker's Compensation and employer's liability insurance and all other similar insurance with respect to employees, if any, and subcontractors of the Association in the amounts and in the forms now or hereafter required by law.
(3) Fidelity coverage against dishonesty of employees or any other persons handling funds of the Association, destruction or disappearance of money or securities and forgery. Said policy shall also contain endorsements thereto covering any Persons who serve the Association without compensation.
(4) The Association may obtain insurance against such other risks, of a similar or dissimilar nature, as it shall deem appropriate with respect to the Property, including insurance for any personal property located thereon and Directors and Officers liability insurance with respect to the actions of the Board of Directors and Officers of the Association.
(b) All policies of insurance, to the extent obtainable, shall contain waivers of subrogation and waivers of any defense based on invalidity arising from any acts of an Owner and shall provide that such policies may not be canceled or modified without at least thirty (30) days' prior written notice to first Mortgagees and the Association. The types of coverage and limits of all insurance carried pursuant to these provisions shall not be subject to question or claim against the Board for failure to carry adequate coverage.