• • EXHIBIT D to • DECLARATION OF COVENANTS AND RESTRICTIONS FOR • THE VILLAGE GRANDE AT ENGLISH MILL By-Laws of The Village Grande at English Mill Homeowners Association, Inc. THIS PAGE HAS BEEN. INTENTIONALLY LEFT BLANK TABLE OF CONTENTS FOR BY-LAWS OF THE VILLAGE GRANDE AT ENGLISH MILL HOMEOWNERS ASSOCIATION INC Page ARTICLE 1 NATURE OF BY-LAWS 1 1..01 Purpose 1 1.02 Definitions 1 1.03 Fiscal Year 1 1.04 Principal Office 1 ARTICLE II MEMBERSHIP AND VOTING RIGHTS 1 2.01 Meiribers ....................... ....................... ..................1 2.02 Member in Good Standing . ...........................................2 2.03 Associate Members 2 2.04. Change of Membership 2 2.05 Rights of Membership 2 2.06 Suspension of Rights ................................................ 3 2.07 Association Initiation Fee 3 2.08 Contribution to Working Capital ..................................... 4 2.09 Votes 4 ARTICLE III MEETINGS OF OWNERS 5 3.01 Place of Meetings 5 1.02 Annual Meetings 5 3.03 Special Meetings 5 3.04 Notice of Meeting 6 3.05 Quorum and Adjourned Meetings ........................................... 6 3.06 Organization 6 3.07 Voting On Questions 6 3.08 Voting in Elections of Trustees 7 3.09 Ballot by Mail ............................................ 7 3.10 Proxies 8 3 11 Judges 9 3.12 Order of Business .................................................... .9 ARTICLE IV BOARD OF TRUSTEES ... ................................................. 10 4.01 Qualifications 10 4.02 Number .............................................•................... 11 573609.04 ± . ' . 4.03 Transition Elections .....................................'13 4.04 Term of Office ................S 13 4.05 Removal of Members of the Board of Trustees 4 06 Vacancies 13 ARTICLE V TRANSACTION OF BUSINESS BY THE . , ..................................14 14 5.01 Express and Implied Powers and Duties 14 5.02 Developer's Protective Provisions 5.03 Meeting of the Board, Notices Waiver of Notice 15 5.04 Quorum and Adjourned Meetings 16 5.05 Joinder in Meetings by Approval of. Minutes 16 5.06 Non-Waiver .........................................................17 .5 .07 Consent in Lieu of Meeting and Vote 17 5 08 Meetings Open to Owners Notice 17 ARTICLE VI POWERS AND DUTIES OF BOARD OF TRUSTEES 18 6.01 General Powers and Privileges 18 6.02. Duties and Responsibilities 21 ARTICLE VII FISCAL MANAGEMENT 26 . 7 .01 Budget, Common Expense Assessments 26 7.02 Determination of Common Expenses 27 7.03 Disbursements .....................................................27 7.04 Depositories 27 7 -.05 Accounts 27 7 06 Reserves 29 7.07 Notice Emergencies 30 7 08 Acceleration of Assessment Installment Upon Default 30 7 09 Interest and Counsel Fees 31 7.10 Assessment 'of Expenses in Actions by or against Association Allocation of Awards 32 7.11 Power of Attorney to Holder of a Permitted Mortgage 33 7.12 Annual Audit 33 7.13 Examination of Books 34 .7 .14 Fidelity Bonds 34 ARTICLE VIII OFFICERS .............S j4 8.01 8 01 Designation 34 .8 .02 Election of Officers 35 8.03 Removal of Officers 35 573609.04 8.04 - Duties and Responsibilities of Officers . 35 8.05 Other Duties and Powers ...............................................36 8.06 Eligibility of Trustees ...........................................36 ARTICLE IX COMPENSATION, INDEMNIFICATION AND ........ 36 9.01 Compensation .........................................................36 9.02 Indemnification ....................................................36 . .... 9.03 Exculpability ............... ................................ ...... 37 ARTICLE 'X ARCHITECTURAL CONTROL COMMITTEE .....................................37 I 10.01 Purpose.,.. .......... .............................................. 37 10.02 Powers ...............................................................38 10.03 Authority ...........................................................38 ARTICLE XI OTHER COMMITTEES ..................................................39 11.01 Committees ....................................................... 11.02 Subcommittees ...................................................39 11.03 Duties ............................................................... ARTICLE XII ENFORCEMENT ...........................................................39 12.01 Enforcement ..........................................................39. 12.02 Fines ...........• ....................................... 40 12.03 Waiver ...................................................., ........40 12.04 Cause of Action Against Association ...............................40 12.05 Alternative Dispute Resolution Procedure .........................40 .12.06 Compliance By Members ............................................41 12.07 Civ.il.Action for Damages .........................................42 ARTICLE XIII AMENDMENTS .....................................................42 ARTICLE XIV CONFLICT; INVALIDITY..; ..........................................43 14.01 Conflict .........................................................43 14.02 Invalidity .........................................................43 ARTICLE XV NOTICE ............................................................43 ARTICLE XVI CORPORATE-SEAL ...................................................43 573609.04 . . BY-LAWS OF THE VILLAGE GRANDE AT ENGLISH MILL HOMEOWNERS ASSOCIATION-INC. ARTICLE I NATURE OF BY-LAWS . 1.01. Purpose. These By-Laws are intended to govern the administration of The Village Grande at English Mill Homeowners Association, Inc (the "Association"), a non-profit corporation organized under Title iSA of the New Jersey Statutes Annotated and provide for the management, administration, utilization and maintenance of the Property described in the • Declaration for The Village Grande at English Mill the "Declaration"), and : • any amendments or supplements thereto • 1.02. Definitions. Unless the context clearly indicates otherwise, all definitions set forth in the Declaration for The Village Grande at English • Mill are incorporated herein by.reference. 1.03. Fiscal Year. The fiscal year of the corporation'.shall be determined by the Board of Trustees .1.64. Principal Office The principal office of the corporation is initially located at 20 Gibson Place, Freehold,-New Jersey 07728. ARTICLE II MEMBERSHIP AND VOTING RIGHTS • ' • 2.01. Members Every person firm association corporation or other legal entity, including the Developer, who is a record Owner or Co-Owner of the 'fee simple title to any Home shall be a Member of the Association; provided, however, that any person firm association corporation or legal entity who holds such title or interest to a Home merely as a security for the performance of an obligation (including but not limited to mortgagees or trustees under deeds of trust) shall not be a Member, of the Association. Despite anything to the contrary in the preceding the Developer shall have one (1) membership in the Association for each contemplated Home which has not, 573609.04 •. ,. . , .. been conveyed to an individual purchaser, not to exceed the number of Homes approved by the municipality. 2.02..Member in Good Standing. A Member shall be deemed to be in good standing for voting purposes as well as any related requirement as may be established by the Board of Trustees if at least thirty (30) days prior to the date fixed for such meeting he has fully paid all installments due for assessments made or levied against him and his Home by the Board of Trustees as hereinafter provided, together with all interest, costs attorney "s fees penalties and other expenses, if any, properly chargeable to him and to his Home Any date set forth in these By-Laws for determining good standing for voting purposes as well as any related requirement which may be established by the Board of Trustees shall be deemed supplemental to, and not in derogation of, the record date provisions of N.J.S.A.' 15A:5-7. .2.03. Associate Members Every person who is entitled to possession and occupancy of a Home as a tenant or lessee of a Owner pursuant to Article X of the Declaration may be an Associate Member of the Association, but shall not be entitled to any vote with respect to Association matters 2.04. Change of Membership Change of membership shall be accomplished by recording in the Office of the Atlantic County Clerk a deed or other instrument establishing a record title to a Home and delivery, to the Secretary of the Association of a certified copy of such instrument,, together 0 with such sums of money as are required for the payment of any initiation' .fee contribution to capital or escrow deposit The membership of the prior Owner shall be thereby terminated 2.05. Rights of Membership. 0' Every person who, is entitled to . membership in the Association and permanently resides in a Home pursuant to the provisions of the Certificate of Incorporation and these By-Laws, including any Associate Member, shall be privileged to use and enjoy the Common Property, subject to the right of the Association to Promulgate adopt and enforce rules and regulations a) governing such use and enjoyment, and 0 0 0 2 573609 .04' 0 ' 0 Suspend the use and enjoyment of the Common Property (b) as provided in Section 2.06; and. . (c) Transfer, grant or obtain easements, licenses and other' property rights, with respect to the Common Property as provided in Section 6 01(k) of Article VI 1-. nrrS f The membership and voting rights of 2.06. Suspension of Rights . any member maybe suspended by the Board of Trustees for any period during which any assessment 'against the Home to which his membership is appurtenant remains unpaid but upon payment of such assessments and any interest accrued thereon, and any costs associated with the collection thereof, including reasonable attorneys', fees,. by cash, . money order,: or certified or collected funds, his .rights and privileges shall be immediately. and automatically restored. Section .2.02 hereof shall govern the restoration of voting rights. Further, if rule and regulations governing the use of the Common Property or Homes or the conduct of persons in the Community thereon have been adopted and published, as authorized in these By-Laws, the rights and privileges of any person in violation thereof or in violation of any non-monetary covenant of the Declaration may be suspended at the discretion of the Board of Trustees for a period not to exceed thirty (30) days for any single violation, but if the violation is of a continuing nature such rights and privileges may be suspended indefinitely until such time as the violation is abated No such action shall be takenby the'Board of Trustees until the Owner is afforded an opportunity for a hearing consistent with the principles of due process of law. 2.07 AssociatiOn Initiation Fee. Each Owner, . excluding Developer, shall pay to the Association upon acquisition of title to his Home a nonrefundable and nontransferable Association initiation fee of not more than $350.00, which will be available to the Association'for (i) the, off-set of cash flow or budget deficits, (ii) payment of operating expenses, (iii) operating 'contingency reserves, (iii) repair and replacement .and/o± deferred maintenance reserve, (iv) working capital reserve, and/or (v) any other lawful 3 573609.04 . If imposed, payment of • purposes(s) perinitted.by the Governing .Documents... such sum shall be a condition precedent to exercise rights of membership in the Association upon the initial sale or a subsequent transfer of title to a Home6 Any unpaid initiation fee shall be deemed a lien on the Home in the same manner as any unpaid Commdn Expenses attribuable to such Home.. . . 2.08. Contribution to Working Capital Each Owner, excluding Developer, shall pay to the Association upon acquisition of title to his Home a nonrefundable and nontransferable contribution to the working capital of the Association in an amount of $550 00 at the time of the acquisition, which will be available to the Association for (i) the off-set of cash flow or, budget deficits (ii) payment of operating expenses, (iii) operating contingency reserves,.(iii) repair and replacement and/or deferred maintenance reserve (iv) working capital reserve and/or (v) any other lawful purpses(s) permitted by the Governing Documents. . Payment of such sum shall be: .a condition precedent to the exercise of rights of membership in the Association upon the initial sale or a subsequent transfer of title to a Home..Any unpaid working capital contribution shall be deemed a lien on the Home in the same manner as. any unpaid Coiiirnon Expenses attributable to such Home. . .2.09. Votes. Each Owner. s1all be entitled to • such .vote .(s for each Home to which he holds title as is provided in Article V Section 5.01 of the Declaration. When more than one person holds title, the vote(s) foreach 0 Home shall be exercised as the Co-Owners themselves determine When one or. more Co-Owners signs a proxy or purports to vote for his or her Co-Owners such vote(s) shall be counted unless one or more of the other Co-Owners is present and objects to such vote(s) or, if not present submits a proxy or objects in a writing delivered to the Secretary of the Association before the vote(s) is counted If Co-Owners disagree as to the vote(s), the vote shall be split equally among the Co-Owners 4 573609.04. . • ARTICLE III MEETINGS OF OWNERS. All meetings of the Members of the .3.01. Plaöe of Meetings. Association shall be' held at the Community or at such other place convenient, to the members as may be designated by the Board of Trustees. ' All annual meetings' of the Association. 3.02. Annual Meetings. shall be held on the day and month of the year to be established by the Board of Trustees,, except that' the first such' annual meeting, shall be held not .more than thirteen (13) months following the incorporation of the Association. The election of Trustees, shall take, place at each annual. meeting subsequent to the Transition Elections held in accordance with Section 4.03. If thee,lection of. Trustees is not held at the annual meeting or any'adjburnment 'of such meeting, the Board of Trustees shall cause the election to be held at a special meeting as soon., thereafter as may be convenient. At such special meeting, the Owners may elect the Trustees and transact other business with the same force and effect as at an annual meeting duly called and held. . All 'proxies validly received for he originally scheduled meeting shall remain.in full force and' effect for any such adjourned meeting or special meeting, and new proxies may be' received for any such subsequent meeting. .. 3.03. Special Meetings. ' Following' the Transition _Elections, special meetings, of Owners may be called by the President whenever he deems such a 'meeting adisable, or shall be called, by the Secretary upon the' order of the Board of Trustees or upon the written request of Members representing. not less than twenty-five (25%) percent of all the votes entitled to be cast. at such meeting. ' Such request shall state the purpose(s) of' such meeting and 'the matter(s) proposed to be acted upon. Unless Owners representing atleast ' fifty (50%) percent of all votes entitled to be cast request such a meeting no special meeting may be called to consider any matter which is substantially the same as a matter voted upon at any meeting of the Owners held during .'the- preceding twelve' (12) months, which determination shall be made in the sole and absolute discretion of the Board of Trustees. 5 573609.04 3.04. Notice of Meeting. Except: as otherwise provided by law and , Section 4.03 herein with respect to transition elections, law or these By-Laws, notice of each meeting of Owners whether annual or special, shall be given not less than ten (10) days, : nor more than ninety (90) days before the day on which the meeting is to be held, to each Owner at his last known address by delivering a written or printed notice to each Owner, or by mailing such notice, postage prepaid Every such notice shall state the time place and purpose of the meeting Notice of any meeting of Owners shall not be required to have been sent to any Owners who shall attend such meeting in person or by proxy. Notice of any adjourned meeting of the Owners shall no be' required to be given except when expressly required by law Except as otherwise expressly required by law, no publication of any notice of a meeting , of Owners shall be required. 3.05. Quorum and Adjourned Meetings At such meeting of the Association persons.,.(including Developer or its representatives) holding twenty-five (25%) percent of the authorized votes present, in person or by proxy, shall constitute a quorum for the transaction of business except where otherwise provided by law. In the absence of a quorum, the person holding votes present in person or by proxy and entitled to vote, may, by majority vote adjourn the meeting from time to time until a quorum shall be present or represented At any such adjourned meeting at which a quorum may be present any business may be transacted which might have been transacted at the meeting originally called 3 06 Organization At each meeting of the Association, the President or, in his absence, the Vice President or in the absence of both of them, a person schosen by a majority vote of the Members in Good Standing present an person or represented by proxy, shall act as .a chairperson, and the Secretary or in has absence a person whom the chairperson shall appoint, shall act as Secretary of the meeting 3 07 Voting On Questions.'. Only Owners who are Members in Good Standing shall be entitled to vote on questions A majority of votes present in person or by proxy at any duly constituted meeting of the membership shall 6 573609.04 be sufficient on those questions submitted to a vote of the membership The vote on any question need not be taken by ballot unless (i) the chairperson of the meeting determines a ballot to be advisable or (ii) a majority of the votes present at the meeting determine that the vote on the question submitted shall be taken by ballot 3.08. Voting in Elections of Trustees Only Owners who are Members in Good Standing shall be entitled to vote in elections of Trustees The election of Trustees shall be conducted by written ballot and the Owner(s) of each Home present in person or by proxy shall be entitled to one vote for each Home to which he holds title If, at any meeting at which an election is held, more than twice the number of candidates to be elected are nominated, there shall be two ballots cast At the end of the tabulation of the first ballot the field of nominees shall be reduced so that there are twice as many candidates as there are positions to be filled with..the remaining candidates receiving the fewest votes being eliminated from the ensuing ballot A second ballot shall be held and on the second ballot the persons receiving the plurality of votes will be deemed to be elected in order to fill the vacant positions If there are not more than twice the number of nominees for the number of positions to be filled there shall be one ballot with the persons receiving the highest numbers of votes being elected in order to fill the vacancies on the Board If ever applicable candidates polling the highest numbers of votes will be considered elected for the longest period of years Election of Trustees at all meetings shall be in accordance with this Section 3.08. 3.09. Ballot by Mail The Board in lieu of calling a membership meeting may submit any question or election other than a Transition Election to a vote of the membership by a ballot by mail No ballot by mail shall be valid or tabulated unless the signature of the Owner(s) submitting the ballot has been verified on the ballot according to procedures adopted by the Board of Trustees, if any. The Board shall appoint judges to tabulate the ballot whose report shall be included in the minute book. In order to conduct a ballot by. mail for a question submitted to a vote of the membership, the Board 7 573609.04 . • of Trustees shall serve a. notice.upon all Members in GoodStanding which shall (i) state with specificity in terms of motion (s) the question(s) upon which the vote is to be taken (ii) state the date by which ballots must be received - (iii) provide an official ballot for'the.purposes of in order to. be counted;., the vote; and (iv) state .the, date upon which the 'action contemplated by. the' motion(s) shall be effective, which date shall be not less than ten (10) days after the date ballots must be received No actions contemplated by a motion or question submitted to a ballot by mail shall be taken unless that number of Members in Good Standing that would constitute a quorum under the provisions of Section 3.05 herein submit ballots'and a majority 'o'f the ballots cast approve such motion or, question. . . .. . . . . . . In 'order to 'conduct a, ballot by 'mail for an election of Trustees, the Board shall , serve 'a notice upon all Members which shall (i) provide an official ballot. .for the,purposes of the election; and (ii) state the date by . which the ballot must be received to be counted 3.10. Proxies.' Proxy ballots shall be permitted with respect to (i) all elections of Trustees,. '(ii) 'all amendments to the Certificate of Incorporation, . the Declaration or these By-Laws, (iii) or any other' matter which properly .comes.before a meeting of,the membership of the 'AssociatiQn. Each proxy shall., be in writing,' signed by the individual Owners ..(r in the case of joint owners by anyone of them), or by his or 'their duly authorized .representative(s) and delivered to. the Secretary of the Association, or such other person.as the President may designate, at least -24 hours prior to the. commencement' of the. meeting at: which ballots are to be cast. Proxies may be revoked at any time prior to: the opening of the polls, and no proxy shall be voted on after eleven (11) months from its date unless the proxy provides for ,.a longer, period, , ngt to exceed three (3) yeais 'from 'the date Of execution.' All proxies 'shall 'be substantially in the form prescribed'.' by the Board of : Trustees;' :and 'if' not', in ,uch..form, shall be deemed 'invalid, which': '. determination shall be made in the sole and absolute discretion of the Board of ' Trustees'. 8. 573609.04 3.11: Judges. If at any meeting of the Owners a vote by ballot shall be taken the chairperson of such meeting shall appoint two (2) persons to act as Judges with respect to the ballots Each Judge so appointed shall first subscribe an oath to execute faithfully the duties of a' Judge with strict impartiality and according to the best of his ability. Such Judges shall decide upon the qualifications of voters, shall report the number of votes represented at the meeting and entitled to vote on such question shall conduct and accept the votes, and when the voting is completed shall ascertain and report the . number of 'votes 'respectively for and against 'the questions, but, as to the election of Trustees, the number of votes received by each candidate need not be reported. ' Reports of Judges shall be in writing and subscribed and deliveredby,'them to the Secretary of the meeting. The Judges need not be Members of the Association, and anyofficer or 'Trustee of the Association may be a Judge on any question other than a vote for or against his election to any position with the Association or any other question in which' he may be. directly interested. 3.12. Order of Business. The order of business at the annual meeting of the Owners or at any special meetings insofar as practicable shall be: • '(a) Calling of the roll and certifying the proxies. (b). Proof of notice of meeting and waiver of notice.,' Reading and disposal of any unapproved minutes. (c) ' (d) Appointirent of Judges of 'Election, if appropriate. (e) • Election of Trustees, if appropriate. (f) Receiving reports of officers (g) Receiving reports of committees (h) Old business (i)' New business. (j) Adjournment. ' •' 9 573609.04 • • ARTICLE IV' BOARD OF TRUSTEES • 4.01. QualificatiOns. The following criteria shall bequalifica- tions for nomination appointment or election to a Trusteeship (a) Member in Good Standing Membership in good standing • S and: ownership 'of a Home shall be a qualification, for nomination appointment election or service as a Trustee and for continued service on the Board excluding any Trustee representing the Developer.. (b) Representation Partnerships corporations limited liability companies or fiduciaries holding memberships in good standing may designate individuals to be eligible for nomination appointment or election as Trustees in accordance with the following qualifications (i) Partnership designees shall b6'.members, employees or agents of the partnership, (ii) Corporate designees shall be officers stock- holders, employees or agents of,the .corporaton; (iii)Limited liability company designees shall be members or managers of the limited liability company and (iv) Fiduciary designees shall be fiduciaries, officers or employees of the fiduciary. Co-Owners holding 'a membership in good standing may designate any one of them but only one of them to be eligible for nomination appointment or election as a Trustee; however,, in the case of. any disagreement, the express consent of a majority of such Co-Owners shall be required for any one of them to be eligible • . Disqualification of Trustees. •' Any Trustee whose • • (c) membership in the Association is not in good standing • • • for thirty (30) 'consecutive 'days shall automatically . '. 10' ' • ' '' . 573609.04 be disqualified as a Director upon expiration.of said thirty (3 0) day period and a replacement shall be • . . appointed by the Board of. Trustees within thirty (30) days thereafter to serve the remainder of the term as contemplated by Section 4.06 hereof. Despite the aforesaid, any Trustee who conveys, title to his Home and no longer holds title to any other Home is automatically disqualified as a Trustee effective on the date of said conveyance. .. . . . 4.02. Number. The Board of Trustees shall initially consist of three (3) Trustees (Trustees A", "B". and "C"). :Upon the initial conveyance of 'one hundred' (100) 'Homes (i.e. 25% of the total number of proposed Homes), expanded to five (5) 'Trustees, designated Trustees "A", the Board-shall. be and 4.03. Transition' Elections.. Within thirty (30) days after the the Developer of one hundred (100) Homes (i.e. 25% of initial conveyances.-by, the total number of proposed 1-omeà)'1 the President shall' call a specil. meeting of the Membership of the Association for: the 'purpose. of holding the first electiOn of Owners to the Board of'Trustees ("Transition Election")'. At this special meeting, Owners 'other' than Developer shall be entitled to vote for and elect Trustees A and B from among such Owners in accordance with the provisions of Article III' of these By-Laws, and the Developer 'shall be entitled'to'appoint Trustees C, D and E. 'Within thirty '('30) 'days after the initial conveyance by the Developer of two hundred ninety-eight (298) Homes (i.e. 75% of the, total . number of.proposed'Homes),' the President shall again' call a special 'meeting of the' Membership of the Association for the purpose of holding a Second Transition Election... At this special meeting, OWners other than the Developer shall be entitled to vote for and elect, Trustees C and D from among such Owners in accordance with the provisions of. Article , III of these By-Laws and the Developer 'shall be entitled to appoint Trustee E. for so long as any : Home 'ordinary course of its business. remains unsold in' the 11' 573609.04 Within thirty (30) days after' all Hones have, been initially conveyed the President shall..again call a special meeting for the third entitled. Transition Election at which Owners, other than the Developer shall.be to vote for and elect Trustee E from among such Owners in accordance with the provisions of Article III hereof provided that the Developer shall be entitled in its discretion to relinquish Trusteeship E at the time of the second Transition Election or any time thereafter prior to the conveyance of the last Home In spite of the foregoing, if ten (lO.):yeárs after the conveyance of the first Home, Owners other than the Developer still. on, less.. than 298 . Homes, . . 'Owners. other than the Developer may, elect Trustees: sufficient to assume control of the Board provided. that the Owners other than the Developer agree by majority vote to assume such control as provided by N J A C 5:2.6- 8.4(d). . . . . ., . . •, : ' . . . . . S . Further, only Owners who are Members in Good Standing shall be eligible to be nominated, elected or to serve on the Board of Trustees except that in the case of Owners which are partnerships, corporations limited liability companies or fiduciaries, including Developer, a designee shall be eligible if the Owner is a Member in Good Standing Notice of the special meetings called pursuant to this Section for the purpose of holding Transition Elections shall be given not less than twenty (20) nor more than thirty (30) days prior to the date of the meeting Regardless of: whether or not administrative control of-the Boa rd of. Trustees has been surrendered to the Owners, as improvements to theCommon. Property are completed, the Developer shall: cause same to be turned over to the Association at which time the Association shall assume responsibility for the repair and maintenance of same The satisfactory completion of such improvements shall be evidenced by a certificate signed by an independent architect or engineer selected by the Board of Trustees This 'willi in no way relieve the Developer of its warranty obligations pursuant to N J S A 46:3B-1 et seq. 12 573609 .04 Developer-appointed Trustees A and B shall 4.04.Term of Office serve until their successors have been qualified and elected at the Transition Election Trustees A and B elected at the First Transition Election shall serve terms expiring at the annual meeting of the membership held in the second calendar year following the year in which the Transition Election is held Trustees C D and E shall serve a term expiring at the annual meeting held in the calendar year following the year in which the current term of Trustees A and B expires Thereafter all Trustees shall serve for two year terms It . is the purpose and intent hereof that subsequent to the Second and Third Transition Elections whichever is applicable the terms of Trustees A and.B shall expire in alternate years to the terms of Trustees C, D and E. 4.05. Removal of Members of the Board of Trustees. At. any duly held and constituted regular or special meeting of the Owners, any one or more Trustees may be removed with or without cause by vote of the majority of the Owners present provided that the notice of the meeting expressly includes this item A successor may then and there be appointed by a majority of the remaining Owner-elected Trustees to fill the vacancy thus created. Each person so appointed shall be a Trustee for the remainder of the term of the Trustee whose term he is filling and until his successor is duly elected and qualified Any Trustee whose removal has been proposed shall be given an opportunity to be heard at the meeting The failure of any Trustee to be a Member in Good Standing for a period of thirty (30) days or more shall be grounds for removal without any vote of the Members. An Owner-elected Trustee cannot be removed, except by a majority vote of the Owners present other than . the Developer. 'In the event that all of the Trustees are removed, successors shall be elected by the Owners o.ther than the Developer in the manner set forth in Section 403 to fill the vacancies thus created. This section shall .not apply to any Trustee appointed by the Developer.' . 4.06. Vacancies. Vacancies on the Board of Trustees caused by any reason 'other than the removal of a Trustee by a vote of the Owners shall be •' filled by a vote of a majority of the remaining Trustees, including the 573609.04 13 Developer's appointees, at a special meeting of the Board of Trustees held for that purpose promptly after the occurrence of any such vacancy Each person • . so elected shall, be a Trustee: for' the. remainder of the term. of: the Trustee • whósete'±n he,is fillingand until his successor shall have been duly elected and qualified Despite the foregoing until the First Transition Election, the . Developer, shall have the right to fill all vacancies on the Board of Trustees by appointment Owner-elected vacancies on the Board of Trustees shall only be filled by 'Owners other than. the Developer, whether, same 'are . pursuant , appointed to the provisions. herein, or elected pursuant to the' provisions of Section 4.05. ARTICLE V TRANSACTION OF BUSINESS BY' THE BOARD OF TRUSTEES 5.01. Express ' and Implied Powers aid' Duties. ' The property, affairs and business of the Association. shall' be managed by the .Bard of Trustees,. which' shall have all; those powers granted to it by the'Certificate of Incorporation,, the Declaration, these By-Laws, and by law. 5.02. Developer's 'Protective Provisions. , After control of the Board of Trustees has become vested in Trustees elected by Members other,than, the Developer, and so long.. as' the Developer owns at least.. one (1) Home' and holds same for sale in the ordinary course of business the following shall apply:'',., ,,':• ' ' • ' ' ' ,, •' ' ' (a). Neither the Association 'nor its Board of Trustees' shall .take any . action that will impair or adversely affect the rights 'of.' the Developer, or' cause the Developer, to . suffer any , 'financial, ', legal or other detriment including but not limited to any direct or indirect interference with the sale of Homes, or the 'assessment:'of the Developer for capital 'improvements. (b) The Association and its Board of Trustees shall continue the sanie,level of maintenance, operation and • " ' . ' ' '' 14' 573609.04 services as provided immediately prior to the assumption of control of' the 'Association and the Board • of Trustees byMembers other than'the'Developer. •' S (c) In furtherance of the foregoing provisions,' the Developer shall have the right to veto any and all actions of the , Association or the' Board of Trustees which may have any direct or indirect detrimental • impact upon the DeVeloper as may be determined in the S • sole'discretion of the Developer. S (d) The Developer shall exercise its veto right, in its sole and absolute discretion, within ten' (10) days after its receipt of notice that aresolution or other' action is 'proposed or within ninety (90) '. days' of receiving notice that a,resolution or other, action has been taken by the Association or its Board' 'of Trustees In such event the Developer shall notify the Secretary of the Association of its exercise of its veto right and any such proposal or action shall ' be deemed null and void ab initio and of no further force and effect'.' ' S •,, ' The aforementioned protective provisions shall be construed' in accordance with and not in derogation of N.JA.0 5:26-8.4of'the regulations 'Real. Estate Development Full promulgated pursuant to the New Jersey Planned Disclosure Act, N.J.S.A. 45:22A-1 'et seq., and same shall not be amended without the express written consent of the Developer. 5.03. Meeting of the Board; Notices; Waiver of Notice. The first meeting of the 'Board shall be held within, ten (10) days after the first annual meeting of the 'Owners and at such time: and place as shall be fixed' by a majority of the. Board. 'No notice shall be'necessary. Thereafter, regular meetings of the Board may be held ,at such time and place as shall be determined from time to time by a majority of' the Board, but',at, least two ,(2) meetings shall be held each year. Notice of regular meetings of the Board 15 573609.04 Trustee by telephone, mail, or telegram at least three shall be given to. each. (3) days prior to the day of the meeting Special meetings of the Board may be called by the President on three (3) days notice to each Trustee given by telephone, mail or telegram, which notice shall state the time, place and purpose of the meeting Special meetings of the Board shall be called by the President or the Secretary in like manner and on like notice on the written request of at least two (2) Trustees.' Trustee may waive notice of any meeting of the Board in writing at any time and such waiver shall be deemed equivalent...to the giving of notice Actual attendance by a Trustee at any meeting. of-the Board shall constitute 'a waiver of notice by him of the time and place thereof. If all . the Trustees are present at any meeting. of the Board, no notice shall be required and any business may be transacted at such meeting Meetings of the Board of Trustees shall be conducted in accordance with N J S A 45 22A-46 and N J A C 5:20-1.1 and Section 5 08 herein 5.04. quorum and Ad-journed Meetings At all meetings of the Board of Trustees a majority of the Trustees shall constitute a quorum for the transaction of business and the votes of a majority of the Trustees present and voting at : a meeting at which .a quorum is present shall constitute a valid decision. If at any meeting of the Board, there shall be less than a quorum present, the Trustee present shall adjourn the meeting to 'a new date., At any such adjourned meeting at •which aqubrum is present, any business which may have been transacted at the original meeting may be transacted without further notice The vote of a majority of those present at a Board meeting at which a quorum is present shall be necessary for valid action by the Board on any matter. 5.05. Joinder in Meetings by Approval of Minutes Subject to the provisions of N J S A 45:,22A-46 and N J A C 5:20.-.1.1, the transaction of any business at any meeting of the Board, however called and noticed or wherever held, shall be as valid as if transacted at a meeting duly held after regular call and notice if (i) a quorum is:, present, and (ii) either before or after the meeting,.each Trustee signs a.-written'-waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof or of the 573609.04 16. All such waivers consents or resolution or act adopted at such meeting approvals shall be in writing and filed with the-Secretary-and made a part of the minutes of the meeting even though filed subsequent thereto. . 5.06. Non-Waiver. All the rights, duties and privileges, of the: Board shall be deemed to be continuing and shall not , be exhausted by any single act or series of acts. To the same extent, the failure to' use or employ any remedy or right hereunder or, hereafter granted shall not preclude its exercise in the future nor shall any custom bind the Board. 5.07. 'Consent in Lieu 'of' Meeting and Vote. Subject to the provisions, of N.J.S.A. 45:22A-46 andN.JA.C. 5:20-l.i, despite .anything to the contrary in these By-Laws, the Certificate of Incorporation or the Declaration, the entire Board of'Trustees shall have the power to take action on any matter on which it''is authorized to act, ..without the necessity. of a formal meeting and vote if 'the entire Board, or all the Trustees 'empowered to act, whichever the case may be, shall consent in writing to such action. 5.08. Meetings Open to Owners; Notice. All Meetings of the Board of 'Trustees, except conferences or working sessions at which no bindingvotes are to be taken, shall" be open to attendance by all Owners, subject to those exceptions set forth' inN.J.S.A. 45:22A-46and N.JA'.C.5:20-l.'l, as now or hereafter amended The Board of Trustees may exclude or restrict attendance at those meeting's, or portions of meetings, at which any of the following matters are to be discussed: 1) any ma€tér the disclosure of which would constitute 'an unwarranted invasion of individual privacy; 2) any pending or anticipated litigation or contract negotiations 3) any matters falling within the attorney-client privilege, to the extent, that confidentiality is required in order for the attorney to exercise his ethical duties as a lawyer; Or .4) any matter involving the employment,, promotion, discipline or dismissal of a specific officer or employee of the Association. , 'Adequate written notice of the time, place and 'the agenda, to the extent - known,, of all such open meetings shall be 'given by the ,Board of Trustees' to all Owners at least forty-eight (48)hours' in advance of such meeting in the' manner required by N.J.'A.C. 5:20- 1.2(b). Moreover, the Board of Trustees shall also 'within seven (7) days 17 573609.04 ' " following the Annual Meeting of the Association post, mail to newspapers and file with the administrator of the business office 'of. the : Association a schedule' of the regular meetings of , the Board of Trustees to be held in the succeeding 'year, as prescribed by N.J.A.C. 5:20-1.2(c) and make. appropriate. revisions thereto, alias required by N.J.A.C. 5:20-1.2(c)i. : . ARTICLE Vi. ' POWERS AND DUTIES OF BOARD OF TRUSTEES 6.01. General Powers and Privileges. , Subject tothe Declaration, the Association may do all that it is legally entitled to' do under' the laws. applicable to its forin' of, organization;: , The Association shall discharge its powers in a,rnariner that protects and furthers' the health,' safety,andgeneral. welfare of the residents of the Community.: The Association 'shall' provide a fair and efficient procedure for the resolution of disputes between individual Owners and the Association, and 'between different Owners, ; that shall' be readily available as an alternativ,e to' litigation. The Board of Trustees, -shall "have these ' 'powers,' which include but which are not necessarily limited to the following, together with such other powers as may be provided ,herein or in the 'Declaration, or By-Laws, or which may be necessarily implied. (a) 'To employ; by contract ,or. otherwise, ',a manager, managing, agent or an independent contractor, to oversee, supervise and carry out ;the 'responsibilities . of the Board. ' ,'Such manager,' or independent. contracor shall be compensated upon such terms as Board :the deems necessary and proper;' and (b) . To employ any person, firm-or corporation'. to repair, . maintain or renovate the Property; to lay' pipes or culverts, to bury utilities, to put up lights or poles; to erec't, signs and traffic and aféty controls ' of various sorts on the Property and 18 573609.04 ' ' To employ professional counsel and to, obtain advice (c) from persons, firms or 'corporations such as, but not .to, ' . landscape architects, architects, limited 'and accountants; and engineers, lawyers (d) Toeraploy or contract for water. and sewer, electricity and gas or other forms of utilities, cable or-master antenna television; '.and. .. To adopt amend, and publish rules and regulations e) covering the details of the operation and use of the Property and (f) To 'employ 'all' managerial personnel necessary, or enter into a managerial contract for the efficient discharge • of the duties of the Board of.Trustees hereunder; and (g). To arrange for security protection as necessary; and • . (h) . To enforce obligations of the Owners and do anything and everything else necessary and proper for the sound management of the Property, including the right to bring or defend lawsuit to enforce the terms, conditions ' and restrictions contained in the Declaration; these By-Laws, or any Rules and Regulations; and (i) To borrow and repay, monies giving notes, mortgages or • . other security upon such term or terms as it deems S , necessary; and (j) To invest' and reinvest monies, sue and be sued, collect interest,, dividends, and capital gains; exercise rights; pay taxes;, make and enter into contracts; enter into leases. or concessions; make and execute any and all proper affidavits for various 'purposes; compromise any action without 'leave of court;., and all other powers 'contained herein, and 'those necessary and., incidental thereto; and 19 573609.04 ' To transfer, grant or obtain easements, licenses and (k) other property rights with respect to the Property in • a. manner not 'inconsistent, with the, rights of Owners; and To purchase or lease or otherwise acquire. in the name of the Association or its: designees, corporate or otherwise, on behalf of all Owners, Homes offered for sale .or lease or. surrendered by their Owners to the • Board provided that the ..foregoing . shall not be • 0 construed to constitute a right of first refusal; 'and (m) To purchase Homes within the' Community at foreclosure or other judicial sales in the name of the Association . or its designees, corporate or otherwise, on behalf of • all Owners; and (n) To, sell, lease, . mortgage (but not." vote the votes. appurtenant . thereto) or otherwise deal with Homes' acquired by the 'Association, and sublease any' such Homes leased, by the Association or its designees,. on . behalf of 'all' Owners; 'and • " To'bring and, defend, actions by or against more than (0) one Owner which are" pertinént to. the operation of the . Community, the health, safety or general welfare of .'. . the Owners, 'or.any other legal action to which the,. • ' :'.: Owners may consent in accordance with these' By-Laws; and • . ' .: ' . ' ' '(p) To appOint' '.n lilsurance Trustee, who, shall not be a. • Member of the Association, an. employee of the Developer, or the manager, who shall discharge his duties in .accordanc.é with these ''By-Laws.' In the absence of such an appointment; the' Board of Trustees . shall be responsible for . the disposition of all • insurance proceds; and 20 ' 573609.04 To create, appoint members to and disband such, • (g) committees as shall from time to time be deemed appropriate or necessary to aid the Board of Trustees, 'in the discharge of its duties, functions and powers; and '(r) . To establish an Architectural' Control Committee as heréinàfter provided in Article X. 6.0,2. Duties and Responsibilities.' ' It shall be the affirmative and perpetual obligation iand duty of the Board of Trustees to perform the following: (a) To cause the Common Property to be maintained according to accepted standards and as set forth. in the Declaration. All repairs and replacements shall be 'substantially similar' to the original application. and installation and shall be of first class quality; and ' (b) To investigate, hire, pay, supervise and discharge' the personnel necessary to be employed, and provide the 'equipment and materials necessary, to properly and maintain operate ' the Common Property. Compensation for the services of such employees (as evidenced by certified payroll)' shall be considered'an operating expense of the Association; and (c) To cause to be kept a complete record of all its acts and' corporate affairs and to present a summary report thereof to the Members at the annual meeting' or'at.any special meeting when requested in writing at least twenty-one (21) days'. in advance by.Mernbers entitled to • cast at least twenty-five' (25%) percent of the total', ' votes of the Association; and • , ' (d) To allocate common surplus or make repairs, additions, improvements to, or restoration of the Common Property 21 573609.04 ' • . in accordance with the provisions of these By-Laws and • S . the Declaration after damage or destruction by any casualty, or as a result of condemnation or eminent domain proceedings and • To take such action as.. may be necessary to comply (e) promptly with any and all orders or requirements affecting the premises maintained by the Association placed thereon by any federal state county or municipal authority having jurisdiction thereover, and order of the Board of Fire Underwriters . or other similar bodies; and •..• . . . To manage the fiscal affairs of the Association as (f) • . . Provided in ArticleV.II; . . .. • . (g). ..To-cause :the Community to continue to qualify as 55 or Over Housing under the 'housing for older persons exemption of the Fair Housing Amendments Act of 1988 and the Housing for Older Persons Act of 1995, by the publication . and adherence to the. policies . and procedures that demonstrate said intent including but not limited to the manner in which the Community is described (i) to . prospective . Permitted Residents; . the • . . advertising. designed to attract prospective Permitted Residents, the lease provisions, the Rules and Regulations, the Deed and the terms of • • . . the Declaration of Covenants and Restrictions, including all restrictions the maintenance and consistent application of relevant procedures actual practices of the Community, and the public posting on the Common Property of statements describing the Community as housing fOr persons. 55 years. of age or. older.;; • •: • 1. . .22 • .. 573609.04 . .. . . . . . .,. . . . . the enforcement of age restrictions contained in (11) • . ' S S .... Article IV'df the Declaration; (iii) the Association must produce verification of compliance with the Act through reliable surveys • and affidavits; the Association must develop. procedures for routinely determining the occupancy of each Home, including the • . identification of Homes occupied by persons 55 years of age or older,, which ,procedures must take place at least once every two years, which • include appropriate shall documentation, including but not limited to,, driver's license,. • . "birth ', certificate, certification or other document' signed by a Permitted . Resident asserting that at least one Permitted Resident of the Home is 55 years of age or older, except to the extent that particular persons have previously provided age verification, copies of which are. 'still.available in the records of the Association. '. S (h) To place and keep in force. all insurance coverages. required to: ' be maintained by'. the Association, applicable to its property, and Members including, but not limited to: . . . (1) Physical . Damage Insurance.. , To the extent available in the normal commercial marketplace,. . • ' .broad : form insurance against loss by fire and, against loss by lightning, windstorm., and other risks normally included within all risk extended coverage including vandalism and malicious mischief, insuring all Common. Property: and supplies belonging to the Association; and' 573609.04 • covering, the interest of the Association, the. , all Owners and any. Board, the Developer • ' . . Mortgage. Holder' 'who has requested the Association in writing to be named as loss payee, as their respective interests may appear, • ' : in an amount equal to the full replacement value of the Common Property (exclusive of foundations and. footings) The amount of any deductible and the responsibility for payment of same shall be determined by the Board in its sole discretion (ii) Public Liability Insurance To the extent available in the normal commercial marketplace, public liability insurance for personal injury and death..from accidents occurring within the Community (and any other areas which the Board of Trustees may deem advisable) and the defense of any actions brought by injury or death of a person or damage' to . property occurring .within the Community and not arising by reason of any act or negligence of any individual Owner..Such insurance shall be in such limits as the Board of Trustees may, from time to time determine, covering each Trustee, officer, the managing agent the manager,.and each Member, and also covering cross liability claims of one insured against another. Until the first meeting of the Board • of, Trustees following the ' first • annual meeting, such public liability insurance shall be in a single limit of $1 000 000 00 covering all claims for personal injury or property damage arising out of any one occurrence The 24' 573609.04 ' • V ' ' ' ' ' ' ' Board of Trustees shall review such limits once • . a year.' •, " ' •. ' . ,..• • (iii) Tfustees and Officers Liability Insurance. To the extent available in the normal commercial marketplace, . liability insurance indemnifying and defending the Trustees and Officers of the Association for their own 'negligence, against' the liability for errors and omissions occurring in connection with the performance of their duties, in an amount of at least $1,000, 000 00, with any 'deductible: amount to 'be In the sole, discretion''of the Board of Trustees. Workers Insurance. (iv) Compensation Workers compensation and New Jersey disability benefits insurance as required bylaw. Other Insurance. (v) Such other' insurance as the Board of Trustees may determine. ' All policies shall: (i) provide' that adjustment of 'loss shall be' made by the Board of Trustees, (ii) to the extent obtainable contain agreed amount and inflation guard endorsements, construction code endorsement, contingent liability from operation of building laws endorsement demolition cost endorsement; and 'increased' cost of construction' endorsement; (iii) • ' require that, the proceeds of physical damage insurance be applied' to the' restoration of such Property and structural portions and service machinery as required by the Declaration and these By-Laws, (iv) provide that the insurance will not be prejudiced by any act or omission of individual Members that are not under the control of the Association (v) provide that the policy will be primary, even if insurance covering the same loss is held by any Member(s) (vi) to the extent obtainable contain waivers of subrogation and waivers of any defense based on co-insurance or of invalidity arising from any acts of the insured and (vii) provide that such policies may not be cancelled without 25 573609.04, • at least thirty• (30) days prior written notice to all of the named insureds, including all Owners and Eligible Mortgage Holders All policies shall show the named insured s: 'The Village .Grande l at English Mill Homeowners Association Inc and must require the insurer to notify, an writing the Association and each Eligible Mortgage Holder or other entity named in the mortgagee clause at least thirty (3 0) days before it terminates or substantially changes the Association s coverage The Board of Trustees may determine, in its sole discretion, the amount of any deductible and the responsibility for payment of same as to any policy of insurance maintained under this subsection. Despite any; other provisions of this subsection the Association shall not be required to provide any type or amount of insurance not commonly available in the normal commercial, marketplace. •• S The premiums for any and all insurance coverage maintained by the Association shall be a Common Expense of the Association In addition to the insurance required to be provided by Section 11.09 of the Declaration Owners shall not be prohibited from carrying other insurance for their own benefit provided that all such policies shall contain waivers of subrogation and, further provided that the liability of the carriers issuing insurance obtained by the Board of Trustees shall not be affected or diminished by reason of any, such additional insurance carried by any Owner. ARTICLE VII FISCAL MANAGEMENT 7.01. Budget Common Expense Assessments The Board of Trustees shall prepare an annual Common Expense budget which reflects the anticipated operating expenditures and repair and replacement reserve accumulation requirements for the next ensuing fiscal year of the Association Common Expenses shall include but are not limited to, the estimated costs for the operation, repair and maintenance of the Common Property, the estimated costs for the operation of the • Association, and any reserves for deferred maintenance, replacement, or capital impovements.of the, Property. • The Board oil 573609.04 of Trustees shall have the duty to collect from each Owner, his heirs, administrators successors and assigns as 'Common Expense Assessments, ". the proportionate part, of the Common Expenses assessed against such Owner as provided in the Declaration, the Certificate of Incorpo-atior, these By-Laws, and in accordance with applicable law. 7.02.. Determination of Common Expenses. The amount of monies for Common Expenses deemed necessary by the Board of Trustees and the manner of expenditure thereof, including but not limited to the allocation thereof, shall be.a matter for the sole discretion of the Board of Tiustèes. 7.03. Disbursements The Board of Trustees shall take and hold the funds as collected and shall disburse-the same for'thepurposes and in the 'manner set forth herein and as required by the Declaration, Certificate of Incorporation, and applicable law. 7.04. Depositories. The depository of the Association shall be such a'bank or banks as shall be designated froth tima to time by the Board of Trustees and in which the monies of the Association' shall 'be deposited. Withdrawal' of monies from such accounts shall be only by checks signed, by such parties' ,as are authorized by the'Bo'ard of Trustees, provided that a management agreement may include; among its provisions authority for the manager to sign' checks on behalf of the Association for payment of the obligations 'of the Association, if the proper fidelity bond is furnished: to the Association. 7.05. Accounts The receipts and expenditures of the Association shall 'be Common 'Expense, Assessments and Common Expenses respectively,, and shall be credited and charged to accounts under the following classifications as the Board of Trustees shall deem appropriate all of which expenditures shall' be. Common Expenses: (a) ' Current' expenses, which shall include expenditures within the year for which the budget is made .including reasonable 'allowances for contingencies and working funds Current expenses shall not include expenditures chargeable to reserves At the end of each,' year, ' the unexpended amount remaining, in this 27 573609.04 account shall be applied to reduce the assessments for succeeding year or, may be for the current expenses the membership in same current to the distributed • shall Board of Trustees as :the as. assessed, :manner determine (b) Res ere. for deferred maintenance, which shall include :.funds for maintenance items that occur less frequently • than annually. (c) Reserve. for. replacement, Which shall include funds for 'and those repair-or replacement of the Common Property improvements the Common. . portions the located. on • .. . . of : Association is . obligated which. the to. Property which is required because of maintain or repair The amounts in damage depreciation or. obsolescence each of this shall be:. allocated among the account • . . replacement items, separate. categories of which • . . . the sole. and . amounts and items shall be determined in absolute .discretioxi of the Board of Trustees which may, to the end that a determination may be.. be made not to replace any given item upon the expiThtion • . of its useful life. • . . . .. . . .. (d) Reserves for capital improvements which shall include the funds to be used for capital expenditures or for acquisition of additional personal property that will , be part of the Common Property • ..,Operations, which shall include all funds from the use. (e) of the Common Property or from any other sources. direct Only the additional expense required by any • . ... • revenue producing operation ill be charged. to this account, surplus from and any any . operation . or otherwise shall be used to reduce the assessrnent for .. current ; expenses for the succeeding year, or at the • 28 . . . . .. 573609.04 . . . .. . . . . . . . . . discretion of the Board of Trustees, distributed to the current membership in the same manner as assessed Losses from operations or otherwise shall be met by special assessments against Owners which assessments • may be made in advance in order to provide a working fund.. . . . (f) Working capital, including those nonrefundable and nontransferable initiation fees imposed upon each • Owner upon acquisition of title to a Home pursuant to • ,. ' Section 2.07, 'which may be used by the Board of Trustees in its reasonable discretion to meet unanticipated or other expenses of the Association (but not in order to reduce the annual Common Expense assessment) (g) Bulk real estate tax reserve which shall be those funds collected by the Association as Miscellaneous Assessments to enable the Association to pay to the Township of Egg Harbor those amounts estimated or assessed and billed as real estate taxes against the, Commoh Property as a whole until such time. as the Township of Egg. Harbor assesses and bills all real estate taxes on a per unit basis. . . The Board of Trustees shall not be required, to physically segregate the funds held in the above accounts except for' reserves for replacement and repair, which funds must be maintained in separate accounts The Board of Trustees may, in its sole discretion maintain the remaining funds in one or more consolidated accounts As to each consolidated account the division into the various accounts set forth above need be made only on the Association's records. 7.06. Reserves.' ' The Board of Trustees' 'shall not be 'obligated to spend all of the revenues collected in any accounting period and must maintain reasonable ' reserves ' for, ' among other things', repairs, replacements, 29 573609.04 emergencies, contingencies for bad weather or uncollected' accounts. Despite. anything herein to the contrary, the Board of Trustees in its determination of the Common Expenses and the preparation of a budget shall specifically designate and identify that portion of the Common Expenses which is to be assessed against the Owners as a capital contribution and is allocable to reserves for each separate item of capital improvement of and to the Common Property. The amounts assessed and collected for the reserves shall be,kept in one or more interest-bearing savings accounts or certificates of deposit and shall not be utilized for any purpose other, than that which was contemplated at the time of the assessment The foregoing shall not be construed to mean that the Board of Trustees shall not be permitted to keep additional cash on hand in a checking or petty cash account, for the necessary discharge of.its functions. 7.07. Notice; Emergencies. The 'Board of Trustees shall give 'written, notice to each Owner and Eligible Mortgage Holder of the amount estimated by the Board of Trustees for Common Expenses for the management and operation of the-Association-for the next ensuing budget period directed to the Owner at his last known address by ordinary mail or by hand delivery. The' notice shall be conclusively presumed to have been delivered five (5) days after deposit in the United States mails After the Developer turns over control of the Board of Trustees to the Owners if an Annual Common Expense Assessment is not made as required an assessment shall be presumed to have been made in the amount of the last prior year s assessment, and monthly installments on such assessment.,shall be due upon each installment payment date until changed by an amended assessment In the event the Annual Common Expense Assessment proves to be insufficient the budget and Assessments may be amended at any time by the Board of Trustees provided that nothing herein shall serve to prohibit or prevent the Board of Trustees from imposing an Emergency Assessment in the case of any immediate need or..emergency that cannot be met by reserve funds allocated for such contingency. 7'.08. Acceleration of Assessment Installment Upon Default If. an Owner shall be an default for more than thirty (30) days an the payment of an 30' 573609.04 installment upon any assessment the Board of Trustees may accelerate the remaining installments of the assessment and file a lien for such accelerated amount upon notice to the delinquent Owner, and if the delinquent installment has not been theretofore paid the then unpaid balance of the assessment shall become due upon the date stated in the notice, which date shall not be less than five (5) days after delivery of the notice to the Owner or not less than ten (10) days after the mailing of such notice to him by registered or certified mail; whichever shall first occur. If no, such notice is given and default shall continue for .a period of thirty (30) days the Board of Trustees shall be required to accelerate the remaining installments of the assessment upon similar notice to the Owner and to file a lien for such accelerated assessment as permitted by law if the delinquent assessment has not been heretofore paid In the latter event the Board of Trustees may also notify. any Eligible Mortgage Holder holding a mortgage which encumbers the Home affected by such default or publish appropriate notice of such delinquency to the membership of the Association If any default continues for a period of ninety (90) days the Board of Trustees shall foreclose the foregoing lien pursuant to law or commence a suit against the appropriate parties to collect the assessment or both. , 7.09. Interest: and Counsel Fees. The Board of Trustees at its ' option shall have the right in connection with the collection of any assessment or other charge to impose a late fee of any reasonable amount or interest at the legal maximum rate permitted by law for the payment of delinquent real estate taxes or both, if payment is made after a date certain stated in such notice In the event that the Board of Trustees shall effectuate collection of assessments or charges by resort to counsel or the filing of a lien or both the Board of Trustees may add to those assessments or charges as counsel fees plus the reasonable costs for preparation filing and discharge of the lien, in addition to such other costs as may be allowable' by law.' ' 31 573609.04 ' 7.10. Assessment of Expenses in Actions by or against Association;. Allocation of Awards (a)... . Common Expenses.. :. In the case of any action or proceeding brought or defended by the Association or. the Board of Trustees pursuant to the provisions of the Declaration, Certificate of Incorporation, these By-Laws, or any Rule or Regulation, the reasonable costs and expenses of preparation.and litigation, including attorneys' fees, shall be a Common Expense, allocated among all Owners, other than Developer. . All Common Expense assessments received and to be received by the Board of. Trustees for the purpose of paying. any judgment obtained. against the Association or the. Board of Trustees, and the right to receive such funds, shall constitute trust funds and shall be expended f ir.st, for such purpose. before being expended in whole or in part for any other purpose... (b) ' Allocation of Awards. . . . . . . . . . Money judgments recovered by the Association in any action or proceeding brought hereunder, including costs, penalties or damages shall be deemed a special fund to be applied to (1) the payment of unpaid litigation expenses; (2) refunding to the Owners the cost and expenses of litigation advanced by them; (3) Common Expenses, if the recovery thereof was. the, purpose of the litigation; (4) repair or recons.tructiori of. the Property if recovery, of ' damages to .. same was . the motivation for the litigation; and. (5) any, amount not .applied to (1):, (2), (3.) and (4). above shall b. at the . '. • . , dIscretion of the. Board of Trustees '. -treated either as (i) a common surplus which shall be allocated and distributed pursuant to the provisions of Section 6.18 of the Declaration or (ii) a' set off against the Common . - Expense assessments. Despite the foregoing, if a owner (s) the 32 573609.04 . . •' , Board of Trustees or any other person or legal entity affected by any,,such distribution shall assert that the damages sustained or the diminution in value suffered by a Owner(s) was disproportionate to his or their percentage of common interest the matter shall be submitted to binding arbitration in accordance with the procedures set forth in Article XV hereof. Recovery by Owner (c) In the event that an Owner(s) obtains a judgment or order against the Association or the Board of Trustees, he shall • also be entitled to the restitution or recovery of any sums paid to the Board of Trustees as Common Expense assessments • for litigation expenses in relatiOn to said action or proceeding in : addition to any other 'sums 'to which said • Owner(s) would otherwise be 'entitled by such judgment or order. ' 7.11. Power of Attorney to Holder of a Permitted Mortgage In the event the Board of Trustees shall not cause the enforcement procedures provided in Sections• 7.08 and 7.09 above to be implemented within the time provided, any holder of 'a Permitted Mortgage for any Home as to which there shall be such unpaid Common'Expense assessments is hereby irrevocably granted'' a power of attorney to commence such actions and to invoke 'such 'other, remedies all in the name of the Association This power of attorney is expressly stipulated to be coupled with an interest in the subject -matter. 7.12. Annual Audit.. The Board of Trustees shall submit the books; records and memoranda of the Association to an annual audit by an independent, certified public accountant who shall audit same and render a report thereon in writing to the' Edard, of Trustees and in summary 'form 'to the Owners and such Eligible Mortgage Holders or other persons firms or corporations as may be entitled' to same. • While' the Developer maintains a majority of the Board of Trustees, it shall have an annual audit of Association funds prepared by an independent public accountant a copy of ' 33 ' • 573609.04 which shall be delivered to each Owner. and Eligible Mortgage Holder upon the submission of a written request for s, ame by said Eligible Mortgage Holder within. ninet' , (90)' days of the' expiration .of, the fiscal year of the Association The audit shall cover the operating budget and reserve accounts 7.13. Examination of Books. Each Owner shall - he permitted to examine the books of account of the Board' of Trustees by appointment in the offices of the Association or such other place as may be designated therefor by the Board of Trustees at a reasonable time on business days, provided however, that the Treasurer has been given at least ten (10) days prior written notice of 'the Owner'sdesire to make such an examination.. 7.14. Fidelity Bonds The Board of Trustees shall require fidelity bonds from all persons handling or responsible for Association funds The amount.' of such bonds shall be in. the', amount of the maximum 'funds that will be in the custody of the Association at any one time,.but in no event less than the sum of three (3) months assessments of all Homes. This amount , shall. determined by the Board of Trustees. be While the Developer maintains a majority of representation on the Board, of Trustees, it. shall post, 'at the Association's expense, a fidelity bond or other guaranty acceptable to the New Jersey Department of Community Affairs in an amount equal to the annual budget For the second and succeeding years in which the Developer maintains a majority of representation on the Association's Board of Trustees, the amount of the..bond or other guaranty shall also include accumulated reserves The premiums on such bonds shall be paid by the Association ARTICLE VIII OFFICERS The principal officers of the Association 8.01. Designation shall be a President, a Vice-President, both of whom shall be members of the Board of Trustees a Secretary and a Treasurer. The Board of Trustees may also appoint such other Assistant Treasurers and Assistant Secretaries as in its judgment may be necessary. Pny two (2) offices, except that of President and Vice-President may be held by one person 34 573609.04 8.02. Election of Officers. The officers of the Association shall be elected annually by the Board of Trustees at its first meeting following each annual meeting and such officers shall hold office at the pleasure of the Board of Trustees 8.03. Removal of Officers Upon an affirmative vote of a majority of the full number of 'Trustees, any officer may be removed, either.with or without cause, after opportunity for a hearing, and his successor elected at any regular meeting of the Board of Trustees, or at any, special meeting of the ' Board of Trustees called for such purpose. ' 8.04. Duties and Responsibilities of Officers (a) The President shall be the chief executive officer of the Association. He shall preside at all meetings of the Association and of the Board of Trustees He shall have all of the general powers and duties which are usually vested in the office of President of' an Association. (b) The Vice-President shall take 'the place of, the President ' and perform ' his duties whenever the President. shall be absent or unable to If act. neither the President nor the Vice-President is able to act, the Board of Trustees shall appoint some other Trustee to so do on an interim basis The Vice-President also perform such other duties as shall from time to time be imposed upon him by the Board of Trustees The Secretary shall keep the minutes of all meetings (C) of the Board of Trustees and the minutes of all meetings of the Members of the Association He shall have charge of such books and papers as the Board of .Trustees may direct. The Secretary shall, in general, perform all the duties incident to the office of the Secretary. 35 ' 573609. 04 . • '. The Treasurer shall have the responsibility for the (d) custody of Association funds and securities and shall be responsible. for keeping full and accurate accounts ,•. of all receipts and disbursements in books belonging to the Association. He shall be responsible for the • deposit of all, monies and other valuable . effects in . • . . the name, and to the credit of, the Association'. in . . . such depositories as may. from time to time be : • . '. authorized by the Board of Trustees..,. 8.05. Other Duties and Powers. .'. The officers, 'shall have such other duties, powers and responsibilities as shall, from time to time, be authorized by the Board -of Trustees. . 8.06. Eligibility of Trustees. • Nothing herein contained shall prohibit.a.Trustee..from being an officer. • '.' ' ARTICLE IX :' ', .' COMPENSATION, INDEMNIFICATION AND EXCULPABILTTY OF OFFICERS, AND COMMITTEE MEMBERS 9.01. Compensation. No compensation shall be 'paid to the President or. the Vice-President' or any Trustee, or committee member for acting . 9 Secretary as such. The or Treasurer or both' may be compensated for their. services if . the . Board, of Trustees determines,: that such compensation is appropriate Nothing herein stated shall prevent any officer, Trustee or committee member from' being reimbursed for" out-of--pocket expenses or compensated, for services.' rendered in, any other': capacity to or, for the Association, provided that any such expenses incurred or services 'rendered shall have been authorized in advance by the Board of Trustees 9.02. Indemnification.. Each Trustee, offic or' committee member of the Association shall be indemnified and defended..by the Association against the actual amount of net loss including counsel fees reasonably incurred by or imposed upon' 'him in connection with any action, suit or WR 573609.04 proceeding to which he may be a party by reason of his being or having been a Trustee officer, or committee member of the Association or delegee, except as to matters for which he shall be ultimately found in such action to be liable for gross negligence or willful misconduct. That is, each Trustee, Officer or Committee Member shall be entitled to indemnification for any loss, including reasonable attorneys' fees for such ordinary negligence as may be attributable thereto In the event of a settlement of any such case, indemnification shall be provided only in connection with such matters covered by the settlement as to which the Association is advised by counsel that the person to be indemnified had not been guilty of gross negligence or willful misconduct. S Unless acting in bad faith, neither the 9.031 Exculpability. Board of Trustees as a body nor any Trustee officer, or committee member shall be personally liable to any Owner in any respect for any action or lack of action arising out of the execution of his office Each Owner shall be bound by the good faith actions of the Board of Trustees officers and committee members of the Association, in the execution of the duties of said Trustees officers and committee members Nothing contained herein shall:* be construed to exculpate members of the Board of Trustees appointed by the Developer from discharging their fiduciary responsibilities ARTICLE X ARCHITECTURAL CONTROL COMMITTEE 10.01. Purpose. The Board of Trustees may establish an Architectural Control Committee consisting of three (3) to five (5) members appointed by the Board of Trustees each to serve for a staggered term of two years in order to assure that the Property shall always be maintained in a manner: (a) providing for architectural consistency, visual and aesthetic harmony and soundness of repair, (b) avoiding activities deleterious to the aesthetic or property values of the Community, 37 573609.04 (c) .. furthering's the comfort of the Owners, their guests, invitees and lessees, and • promoting the general welfare and safety of the '. (d) Property if The Architectural Control Committee 10.02. Powers established shall regulate the external design, appearance use and maintenance of the Common Property in accordance with standards and guidelines contained in the Declaration or these By-Laws or otherwise adopted by the Board of Trustees The Architectural Control Committee shall have the power to issue a cease and desist order to an Owner, his-guests,.invitees or lessees whose actions are inconsistent with the provisions of the Governing Documents (upon petition of any. Owner or upon its own motion) The Architectural Control Committee shallprovide interpretations of the Governing Documents requested to do so by an Owner or the Board of Trustees Any action, ruling or decision of the Architectural Control Committee may be appealed to the Board of Trustees by any party deemed by the Board of Trustees to have standing as an aggrieved party, within forty-five (4 5) days of the receipt of the written determination of the Architectural Control Committee. If said action ruling or decision is appealed to the Board of Trustees within said forty-five (45) day period the Board of Trustees may modify, reverse or confirm any such action, ruling or decision If said action, ruling or decision is not appealed to the Board of Trustees within said forty-five (45) day period the decision of the Architectural Control Committee shall be binding The decision of the Board of Trustees can only be appealed to a court of competent jurisdiction or, with the consent of the parties to an independent arbitrator for binding arbitration subject to the right of mediation in Section .12 .05. hereof. • • . . . 10.03.. Authority The Architectural Control Committee shall have such additional duties, power and authority as the Board of Trustees may from time to time provide pursuant to Section 12 02 hereof The Board of Trustees may relieve the Architectural Control Committee of any of its duties powers and authority either generally.oron .a: case-by-case basis. The Architectural 38 573609.04 . . Control Committee shall carry out its duties and exercise its powers and. authority in the manner provided for in the Rules and Regulations adopted by the Board of Trustees Despite the foregoing no action may be taken by the Architectural Control Committee without giving the Owner(s) involved at least ten (10) days prior written notice and affording him the opportunity to be heard with or without counsel, with respect to the violation(s) asserted ARTICLE XI OTHER COMMITTEES 11.01. Committees The Board of Trustees may appoint other committees of the Association including but not limited to an Alternative Dispute Resolution Committee ( 'ADR Committee"), from time to time as needed Each committee shall consist of a chairman and two or more members and shall include a member of the Board of Trustees 11.-02. Subcommittees Each of the committees shall have power to appoint a subcommittee from among its members and may delegate to any such subcommittee any of its powers, duties and functions. 11 03 Duties It shall be the duty of each committee to receive complaints from Members on any matter involving Association functions duties and activities within its field of responsibility. It shall dispose of such complaints as it deems appropriate or refer them to such other committee Trustee or officers of the Association as is further concerned with the matter presented ARTICLE XII ENFORCEMENT 12.01. Enforcement The Board of Trustees shall have the power at its sole option, to enforce the terms of this instrument or any rule or regulation promulgated pursuant thereto by any or all of the following self-help sending notice to the offending party to cause certain things to be done or undone restoring the Association to its original position and charging the breaching party with the entire cost or any part thereof complaint to the duly constituted authorities or by taking any other action before any court, summary or:otherwise, as may be provided by law. 39 573609.04 • 12.02. Fines. To the extent now or hereafter permitted by the law of the State of New Jersey, the Board of Trustees shall have the power to levy fines against any Owner(s) for violation (s). of any Rule or Regulation of the Association or for any covenants or restrictions contained in the Declaration or By-Laws No fine may be levied for more than $50.00 for any one violation • Each : day a violation continues after notice shall be considered a separate • 'violation Collection of fines may be er forced against any Owner(s) involved as if the fine were a Common Expense Assessment owed by •the' particular Owner(s.) . Despite the foregoing; before the Board of Trutees, imposes any fine the Owner involved shall be given at least ten (10) days prior written notice and afforded an opportunity to be heard with respect to 'the violation(s) asserted. . . . . . . 12.03. Waiver. No restriction condition obligation or covenant • contained in these By-Laws shall be deemed to, have been abrogated or waived by reason of the failure to enforce the same irrespective of the number of violations or breaches thereof which may occur. 12.04. Cause 'of Action Against Association. ,Owners shall have" a cause,of action, to the extent permitted by the laws. of. this State, against the As,sociation for .its' failure to act in accordance with the Declaration, Certificate of Incorporation, these By-Laws, any Rules or, Regulations: governing the-Community or any formal decisions of the Association., • ' 12.05.' Alternative Dispute Resolution Procedure.. • ', ' Authority. a. In addition to' the mediation authority granted , to it herein, the ADR Committee, if created, shall' have such additional duties,' power and authority as the Board of Trustees may from time, • to time 'provide' by resolution. • This 'shall include the' right 'to resolve disputes arising, under and to' enforce the provisions, of .the Governing Documents including the right to (i) impose temporary cease and desist orders and (ii) levy fines pursuant to Section 12.02 hereof to the extent-permitted,.. by law. The ADR Committee shall carry out its duties and exercise its powers and authority ,in the manner provided for in the Rules and Regulations' or by: Resolution of the Board of TriListèes. Despite the foregoing, no action may be • ' ' . 40 573609.04 taken by the ADR Committee without giving the Owner(s) involved at least ten (10) days prior written notice and affording the Owner an opportunity to be heard with or without counsel with respect to the violation(s) asserted Further, any Owner who is aggrieved by any decision of the ADR Committee shall have the right to appeal such decision to a court of competent jurisdiction Any dispute between or among Owners or with the Association, other than collection matters, must first be submitted to the APR Committee for mediation or non-binding arbitration before any litigation is commenced with respect to the dispute in question all as contemplated by N J S 45 22A-44(c) and Section 12.02 hereof. If there is not an appeal to a court of competent jurisdiction within forty-five (45) days of the decision by the ADR Committee, the decision of the APR Committee shall be binding on all parties and shall have the full force and effect allowed under the laws of the State of New Jersey b Mediation Alternative Prior to the commencement of any non-binding arbitration hearing by the APR Committee pursuant to Section 12.01, any party to the dispute, or the Committee on its own motion, may request mediation of the dispute by an impartial mediator appointed by the Committee in order to attempt 'to settle the dispute in good' faith. Such mediator may be a member of the APR Committee its counsel or any other qualified mediator. Any such mediation shall be concluded within fifteen (15) days after such request,.unless extended by the mediator for good cause In the event that no settlement is reached within said fifteen (15) day period all relevant time periods in the hearing process shall be extended for fifteen (15) days plus any extension period 12.06..Compliance By Members Each Member shall comply with and shall assume ownership or occupancy subject to the laws rules and regulations of those governmental authorities having jurisdiction over the Corniriunity and the provisions of the Declaration the Certificate of Incorporation and By- Laws of the Association Rules and Regulations or any ether documents amendments or supplements to the foregoing Failure. -to comply with any of the foregoing shall be grounds for commencement of action for the recovery of 41 573609.04 damages, or for injunctive relief,, or both, by the Developer, the Association, or any Member; in anycourt. or. administrative tribunal having 'jurisdiótion, .. against any person or persons, firm or corporation violating or attempting to violate or circumvent any of the. aforesaid, and against any Member, to enforce any lien 'created by the Declaration or any covenant contained : therein. Failure by the Developer, the Association, or aiy. Member to enforce any covenant therein contained for any period of time shall in no event be deemed a waiver or estoppel of the right to thereafter enforce same. The Association shall not be 12.07. Civil Action for Damages. liable' in any' civil action, brought by or on behal• .of a Owner to respond in. damages as a result of 'bodily injury to the Owner occurring on the premises' of the Asociation except as a result of its willful, wanton or.grossly negligent' act of commission or omission. That is, the Association, Board of Trustees' ' and the members, agents and employees thereof, will beheld harmless for' any loss suffered by any Owner and caused by the ordinary negligence of the Association, the Board, of Trustees,' any committee or any employee., agent or member of such body. ARTICLE XIII AMENDMENTS Subject to the restrictions in Article XIII of the'.Declaration these By-Laws, or any of them, may be altered or repealed', or new-By-Law's. fray be made, at any meeting of the Association duly held for such.'purpose .and: previous to which written notice to Owners of the exact language of the amendment or of the repeal, shall have been sent, a quorum being present, by. an affirmative 'vote of fifty-one (51%) percent in number and in interest. of the ' votes entitled to be cast in person or by proxy, except that (i) the first 'annual meeting may not 'be advanced, (ii) the first' Board' of Trustees (including replacements in case of vacancies) may not"be enla,rged'or'rembved, (iii) the obligation or, the proportionate responsibility for the payment of Common Expenses with respect to the Homes or the Property may not be changed '. . by reason - of any such new By-Law,, amendment or repeal, br, (iv)'..nosuch'new'. By-Law, amendment or repeal shall in any 'way, adversely affect,, the Developer,' 42 '.. . 573609.04 . . .. .. .. . , including any successor of the Developer, unless the Developer., or its successor, has given its.pri.or written consent thereto . ARTICLE XIV • . . . • •. . . . CONFLICT; INVALIDITY .14.01.. Conflict. Despite anything to the contrary herein, if any provision of these By-Laws is in conflict with or contradiction of the Declaration, the Certificate of Incorporation or with the requirements of any law, the requirements of said Declaration, Certificate of Incorporation or law shall be deemed controlling. . S .. 14.02.. Invalidity. The invalidity of any part of these By-Laws shall not, impair or affect in any manner the enforceability or affect the, remaining -provisions of the By-Laws. ARTICLE XV NOTICE Any notice required to be sent to any Owner under the provisions of the Declaration the Certificate of Incorporation or these By-Laws shall be deemed' ,to have been properly sent and notice thereby given, when mailed by regular post with. postage prepaid, addressed to the Owner at his last known post office address on the records of the Association at the time of such mailing. Notice to one of. two or more co-owners of a Home shall constitute notice to all co-owners. It shall be the obligation of every Owner 'to immediately notify the Secretary, of the Association in writing of any change of address. Valid notice may also be given, to Owners by (i) personal delivery to any - occupant of said Home over the age of fourteen (14) years of age or (ii) by affixing the notice to or sliding same under the front door of any' Home. ARTICLE XVI CORPORATE SEAL The Association shall have a. seal in circular form having within its circumference the words "The Village Grande at English Mill Homeowners Association, Inc." • . . . 43 573609.04 . • EXHIBIT E to DECLARATION OF COVENANTS AND RESTRICTIONS FOR THE VILLAGE GRANDE AT ENGLISH MILL Housing for Older Persons Act of 1995 Compliance Affidavit COMPLIANCE AFFIDAVIT HOUSING FOR OLDERPERSONS ACT OF 1995.. This Affidavit acknowledges that the undersigned has this day purchased the Home and situated in The Village Grande' at English Mill, an age identified as restricted community located in Egg Harbor Township, Atlantic County, New Jersey. The Village Grande at English Mill is subject to the Housing for Older Persons Act of 1995, which requires that the developer and/or The Village Grande at English Mill Homeowners Association: maintain a census of the occupants of the community (Homeowners Association) and their ages. This will further acknowledge that based upon my personal knowledge each person's age is indicated below. I agree to sign a census form that may be requested of me from time to time by the Homeowners Association, in order to update this information. I swear that the statements . made in this Affidavit are true. PLEASE PRINT RELATIONSHIP TO RESIDENT(S) BIRTH.DATE(S) OTHER OCCUPANTS NAMES (S) AGE(S) As verification of the above information, please attach to this notice a copy of one of the following for each person named above:. . . . .• . i. Driver's License ii. Birth Certificate iii. Passport iv. Any other official identification that shows a birth date . and that the above information is true. I hereby acknowledge that the statements made herein are true to 'the best 'of my knowledge and belief. Signature Date 596191.0] EXHIBIT 2 PROJECTED OPERATING BUDGET FOR THE.. INITIAL FISCAL YEAR BASED ON PHASE I (273 HOMES) WITHOUT AMENITIES AND FULL OCCUPANCY (397 HOMES), 5 , . ESTIMATED COMMON EXPENSE ASSESSMENTS AND LETTERS OF BUDGET AND INSURANCE ADEQUACY General assessment billed to all units .. Association Maintenance Fees $323,787 Operating Interest Interest generated from operating checking accounts $0 Animal I (eese Uontrol Contracted wildlife management expenses $1,000 Common Area Lighting Maintenance / Supply Interior and exterior parts and supplies .• $750 Electric - Common Area Lighting Monthly electric service for common area lighting, Sign's $1,200' Electric - Irrigation Monthly electric cost of operating irrigation clocks, valves, etc. $650 Electric - Other• Cost of operating aerators, etc. $150. Exterminating/Pest Control Pest control of moles, squirrels, bees, etc. $800 Lake / Pond Maintenance Pond Treatments, aerator maintenance, erosion control $2,500 Landscaping Contracted landscape maintenance service . 0 $163,800 Landscaping Additions Annual, perennial, tree and shrub plantings, etc. $2,500 • Maintenance Supplies Miscellaneous repairs to common elements $650 Snow Removal Contract Based on (3) 2 to 6' snowfalls $39.,31 2 Sprinkler & Irrigation Repairs Contracted startup/winterization, repairs . $1 ,700 Subcontractor Maintenance Labor Contracted unscheduled repairs/painting, etc. . $500 TOTAL COMMON AREA EXPENSES $215,512 Audit Contracted fee to produce financial statement/tax return Accounting Services I $1,800 Bank & Credit Card Fees Lock box fees, check orders, wire transfers $240 CAI Membership Annual Membership Fee . . $250 Coupon Books Distribution of printed coupons by outside printer . $850 Federal Income Taxes Taxes due on Reserve interest earned, other income $0 Insurance Property, Liability, Directors .& Officers coverage . $25,000 Insurance - Umbrella $5,000,000 coverage over underlying package policy . $2,000 Insurance - Workers Compensation Coverage for Association employees $1 ,000 Legal Counsel Fees General counsel fees . $1,500 Legal Collection Fees Fees for collection of outstanding debts $1,000 Management Contract Contracted fee for Management Services $27,846 Miscellaneous Administration Minor expenses not otherwise allocated. $500 Office Equipment/ Furniture Leases Copier, office furniture, postage meter, etc. $4,000 Office Supplies Consumables supplies, paper, ink cartridges, etc. $2,000 Postage Cost for distribution of mailings, bills, etc. . . $2,650 Postage Meter Lease Cost to maintain a postage meter for Association mailings Printing, Copies & Fax • $480. Envelopes, stationary, fax costs, etc. $1,550 Telephone Cost of monthly usage and alarm lines. $2,000 Petty Cash Amount set aside for out-of-pocket expenses $1, 000 Real Estate Taxes Property tax assessment on Clubhouse facilities • .• $0 Social Committee Expense Expenses paid out for Social Activities • • . $1,500 TOTAL GENERAL & ADMINISTRATIVE EXPENSES $77,166 Concrete Service Walk Reserves • • Cost to replace unit entry walks • • . $6,910 Concrete Sidewalk Reserves . • • • Cost to replace common walks • $9,589 Walking Path Reserves . • Surface Replacement . $650 The Village Grande at English Mill Budget Footnotes 2004 Revenue: Association Maintenance Fees - Annual fees assessed to homeowners and paid on a monthly basis. The estimate is based on phase one at 273 homes. Common Area Expenses: Common Area Electric— Estimated cost associated with lighting the common area fixtures on the clubhouse areas and two entrance signs.: Also included is the .cost of operating the irrigation system timers, entry pond fountains, etc Connectiv provides electric Service Common Area Landscaping - Total contract for all property is based on an estimate of $50.00 per unit/month. Also included are the costs associated with seasonal plantings, tree/shrub replacements, maintenance of retention basins, etc Common Area Lighting Maintenance/Supply Costs to keep on hand the needed light fixtures, ballasts, bulbs and other supplies to maintain the lights in the common areas Common Area Maintenance Supplies - Costs associated with minor maintenance supplies such as products for trash collection in the common areas, cleaning and other such items Common, Area Snow Removal Contract - Estimated cost to clear snow from the common area streets, sidewalks and dnveways of the housing areas, common areas and clubhouse facilities.. Estimate is based on three storms of a 2" to 6" accumulation. .. . Common Area Sprinkler I Irrigation Maintenance - Estimated cost to setup, perform routine repairs, inspect monthly and winterize the common area, clubhouse and residential irrigation systems Common Area Subcontractor Maintenance Labor - Costs to provide services such as minor painting, electrical and maintenance repairs to the Association conimon elements Common Area Water I Irrigation - Estimated cost associated with providing water service for the irrigation of the common area and unit turf. General & Administrative Expenses: Accounting Services I, Audit —'Estimated cost to retain an independent accountant to audit the Association's financial records and to provide professional investment & tax advice Bank & Credit Card Fees —Annual bank service fees, based on $20 00 per month CAI Membership - Annual cost for a professional membership to the Community Associations Institute Coupon Books Cost to provide coupon payment systems for the remittance of the monthly assessment to the Association Service provided by Southdata Federal Income Taxes - Taxes paid to the Internal Revenue Service on income gained from earned interest on the Association's reserve investment accounts Insurance The cost to provide a br ioad,form insurance policy to cover hazard insurance on the Association owned prOperty, general liability, directors &officers,.uinbrella and fidelity bond coverage based on an estimate from' Richard Hardenbergh Insurance Company. Insuranëe - Workers Compensation - Estimated cost for a'policy to cover all Association employees. ' Legal Counsel Fees - The amount allocated to provide 15 hours of legal consultation and services for minor general issues at a rate of $150.00 per hour Management Contract - The amount allocated to provide financial accounting and general administrative support based on a contract proposal from Wentworth Property Management. Office Supplies - The cost to purchase office supplies, such as copier paper, toner, pens, envelopes, printer cartridges, etc Operating Contingency - The amount set aside to fund unforeseen operating expenses Postage - Annual cost for Association mail. Including US Postal Service and overnight delivery services. Also included is the cost to lease a postage meter from Pitney Bowes based on a 36 month lease Printing, Copies & Fax -- Cost for reproduction of documents.'- Telephone - The estimated cost of operating a two-phone line system with voice mail Additional lines are included to service the building alarm system, along with the required pool phones. Contracted fee to produce financial statement/tax return. . Accounting Services / Audit .... $1,800 Bank & Credit Card Fees .. Lock box fees, check orders, wire transfers . . ... . $240 CAI Membership.: Annual Membership Fee .. . . . . . . . $250 Coupon Books Distribution of printed coupons by outside printer . $850 Tacés due on Reserve interest earned, other income Federal Income Taxes . . $0 Insurance .. Property, Liability, Directors & Officers coverage $25,000 Insurance - Umbrella $5,000,000 coverage over underlying package policy . $2,000 Insurance - Workers Compensation Coverage for Association employees $1,000 .. Legal Counsel Fees General counsel fees . $1,500 Legal Collection Fees Fees for collection of outstanding debts . . $1,000 Management Contract Contracted fee for Management Services $27,846 Miscellaneous Administration Minor expenses not otherwise allocated • $500. Office Equipment/ Furniture Leases Copier, office furniture, postage meter, etc: $4,000 Office Supplies Consumables supplies, paper, ink cartridges, etc. $2,000 Postage Cost for distribution of mailings, bills, etc. $2,650 Postage Meter Lease Cost to maintain a postage meter for Association mailings . $480 Printing, Copies & Fax Envelopes, stationary, fax costs, etc. $1 ,550 . Telephone . . . of monthly usage and alarm lines Cost $2,000 Petty Cash Amount set aside for out-of-pocket expenses $1 .000 .... Real Estate Taxes Property tax assessment on clubhouse facilities Social Committee Expense Expenses paid out for Social Activities $1,500 TOTAL GENERAL & ADMINISTRATIVE EXPENSES $77,166 Bocci/Shuffleboard Repairs & Maintenance Minor equipment, surface repairs . . . 250 Exercise Equipment Service Contract Contracted service agreement - Routine maintenance . . $1,200 Exercise Equipment Repairs. Repairs and parts outside of agreement $500 Pool & Spa Utilities Annual electric, gas and water for two pools . $5,000 Pool & Spa Management - Indoor Contracted annual maintenance . . $10,000 Pool Management - Outdoor Contracted seasonal maintenance, lifeguard service $14,500 Pool & Spa Supplies & Equipment Miscellaneous chemicals, supplies, etc $1,000 Pool & Spa Repairs Repairs to non-capital replacement parts . .$4,000 Pool & Spa Laundry Service Contracted towel service . $1,200 Pool Table Supplies & Maintenance Cue sticks, chalk, minor repairs . . . $250 Recreation Equipment Supplies Cards, games, miscellaneous . . . Telephone - Aux (pool, payphone) $800 Cost to provide common phone serviceC /pool service phone $1,500 Tennis Court Repairs & Maintenance Cost to provide repairs and purchase replacement netting. $800 TOTAL RECREATIONAL EXPENSES $41,000 Asphalt 1 1/2 Cap Overlay at end of useful life . .. $2,067 Asphalt Sealcoating . Cost to seal parking areas - 5 yrs schedule . $1,228 Concrete Driveway Reserves .. Cost to replace unit driveways . $13,960 Concrete Service Walk Reserves Cost to replace unit entry walks. . . . $6,910 Concrete Sidewalk Reserves Cost to replace common walks $9,589 Clubhouse Reserves Roofing, siding, gutters, leaders . $2,850 Pool Deck Concrete, area drainage, etc. . $1,500 Pool Fence : Fence structure, gates, hardware . $250 Pool Filters Housings, replacement media . . . $500 Pool Furniture Restrapping, replacement . $1,000 Tennis Court Reserves Resurfacing, restriping .$2,500 Tennis Court Fence Fence structure, gates, hardware . $400 Swimming Pool Reserves Pumps, heaters, valves, misc. equipment . $3,000 Walking Path Reserves Surface Replacement . $650 TOTAL.RESERVE & DEFERRED MAINTENANCE . . . $46,404 - -I- i1IIU lice Payroll Salary, Manager, Assistant Taxes paid on behalf. of employees, employer at 12% .yroll Taxes & Benefits $7,200: S )TAL 'ADM INISTRATJVE PAYROLL : . $67,200 arms & Monitoring . Central Station Dispatch Alarm monitoring contract ' , ' ' $540 rpbt Cleaning & Repairs Annual cleaning , ' ' ' " ' ' $500 aning Supplies Supplies for daily use - Trash can liners, etc. ' , $700 ibhouse Cable Internet Charge to provide High Speed Internet Connection , .' $1 ,080 Charge to provide basic television service , : ' ' jbhôuse Cable TV $780 Monthly electric service for clubhouse bhouse Electric , ' ', $4,800 Monthly gas service to clubhouse bhouse Gas ' ' ' ' ' ' ', $2,500 Interior and exterior parts and supplies bhouse Lighting Maintenance / Supply ' .. ', ' ' ''', .$500 bhouse Sewer Quarterly sewer service to clubhouse $450 kbhouse Water Quarterly water service to clubhouse and irrigation ' ' ' $1,600 Monthly service to clubhouse ?mati1.Pest Control ' ' ' $900 Extinguisher Inspections Annual inspection and recharge servicing $500 Sprinkler Systems Annual inspection/service contract Cost of replacement flags and parts g Replacement ' $400 Annual inspection/service contract 0 , , , AC Contract , ' ' $1,500 itorialfMaintenance Services Routine unscheduled maintenance/cleaning services , $9,360 intenance Supplies Consumable parts, supplies for clubhouse , $500 Cost of spring cleaning of sand and debris king Lot Cleaning & Sweeping' , ' ,' $500 Contracted access control system purity Contract ' : , $1,000 sh Removal Contracted dumpster pickup ' ' , ' , , . ' $21100 TAL CLUBHOUSE EXPENSES '$31,410 Contracted wildlife management expenses rn Geese Control ' S ' ' I ' $1,000 Interior and exterior parts and supplies nmon Area Lighting Maintenance / Supply ' , , ' . ' $750 'ctric - Common Area Lighting' Monthly electric service for common area lighting, Signs $1,200 ctric - Irrigation Monthly electric cost of operating irrigation clocks, valves, etc. ' $650 ptric - Other Cost of operating aerators, etc. Pest control of moles, squirrels, bees, etc. rminating/Pest Control' ' ' ' ' $800 'e / Pond Maintenance Pond Treatments, aerator maintenance, erosion control ,. ' $2,500 Contracted landscape maintenance service dscaping' , , ' ' $163,800 dscaping Additions Annual, perennial, tree and shrub plantings, etc. ' .", $2,500' ' ntenance Supplies Miscellaneous repairs to common' elements ' ' $650 Cost of minor turf repairs, etc. h-N-Putt Maintenance ' S , , , $200 Based on (3) 2' to 6' snowfalls w Removal Contract ' ' ' ' " , $39,312: Contracted startup/winterization, repairs nkler & Irrigation Repairs' ' S ' ' $1,700 contractor Maintenance Labor Contracted unscheduled repairs/painting, etc. , ' ' " $500 AL COMMON AREA EXPENSES $215,712 Real Estate Taxes - We are not assuming any taxes tobe assessed directly to the Association for the clubhouse or other amenities. Should any taxes be assessed by Egg Harbor Township for these amenities, the amount shown in the budget would .be adjusted. accordingly .& Deferred Maintenance Expenses Reserve Concrete Driveway Reserves - The annual amount set aside to replace 50% of an estimated 124,090SF of concrete sidewalk at a cost of $6.75SF over a useful life of 30 years. Concrete Service Walk Reserves The annual amount set aside to replace 50% of an estimated 61,425SF of concrete sidewalk at a cost of $6.75SF over -a useful life of 30 years. S : Concrete Sidewalk Reserves - The annual amount set. aside to replace 50% of an estimated 85,245SF of concrete sidewalk at a cost of $6.75SF over a useful life of 30 years. Walking Path Reserves - The cost to replace 52 CY of wood chip surface for the walking path at a cost of $25.00 per CY every other year.. •. . . .. S . S • • Revenue: Association Maintenance Fees - Annual fees assessed to homeowners and paid on 'a monthly basis The estimate is based on phase one at 273 homes Admimstrative Payroll Office Payroll -,Cost to provide an on-site community association manager, along with an assistant manager/activities director on a 40 hour per week basis Payroll Taxes & Benefits - Cost to fund the employer's share of federally mandated taxes, along with normal benefit package. The estimated amount is 12% of the total. payroll. Chibhouse Expenses: Clubhouse Electric/Gas - Estimated cost to provide electric and gas service to the clubhouse Connectiv provides electric service and SJ Gas provides Gas service Clubhouse Exterminating - Cost to provide monthly service to the clubhouse based on an estimate provided by United Exterminating Clubhouse Fire Extinguisher Inspections - Estimated cost to perform annual inspections and maintenance for any necessary hand held fire extinguishers. . . Clubhouse Fire Sprinkler Systems - Cost estimate for annual testing and service to the clubhouse fire safety system. • S Clubhouse Garbage Removal - Cost estimate from Integrated Waste Systems to provide pickup for one (1) four yard refuse dumpster, twice a week An additional amount of $400.00 was added for two extra pickups that may be needed for parties, large functions, etc Clubhouse HVAC Contract - Estimated cost for service and repair to the clubhouse mechanical system. Includes routine service visits for preventative maintenance. 'ClubhoUse Internet - Estimated annual cost to Comcast to provide High Speed Cable Internet service to the clubhouse. Clubhouse Maintenance - Cost to perform routine maintenance tasks in the clubhouse such as repairs to the doors, windows or other such items, along with janitorial functions, event setup/breakdown, etc Estimate is based on 15 hours per week at a rate of $12.00 per hour. Also included are costs associated with carpet cleaning, cleaning supplies, lighting and maintenance supplies and sweeping of the clubhouse parking lot Estimated cost based $45.00 per month on an individual system in Clubhouse Security,- each clubhouse building for the monitoring and daily testing of a fire/security alarm system The prices are based on an verbal estimate from 13-Corn Security. Also incorporated are the costs anticipated to provide routine maintenance for a proximity access control system for the clubhouse, and other needed common area controls. Clubhouse Sewer.— Annual cost to the Association for sewer services. Clubhouse Water - Estimated cost for water services provided by the Amencan Water Company Common Area Expenses Common Area Electric - Estimated cost associated with lighting the common area fixtures on the clubhouse areas and two entrance signs. Also included is the cost of operating the irrigation system timers, entry pond fountains, etc. Coñnectiv provides electric Service. Common Area Landscaping - Total contract for all property is based on an estimate of $50.00 per unit/month. Also included are the costs associated with seasonal plantings, tree/shrub replacements, maintenance of retention basins, etc Common Area Lighting Maintenance/Supply - Costs to keep on hand the needed light fixtures, ballasts, bulbs and other supplies to maintain the lights in the common areas Common Area Maintenance Supplies - Costs associated with minor maintenance. . supplies such as products for trash collection in the common areas, cleaning and other such items. Common Area Snow Removal Contract - Estimated cost to clear snow from the common area streets, sidewalks and driveways of the housing areas, common areas and clubhouse facilities Estimate is based on three storms of a 2" to 6" accumulation Common Area Sprinkler / Irrigation Maintenance - Estimated cost to setup, perform routine repairs, inspect monthly and winterize the common area, clubhouse and residential irrigation systems Common Area'S ubcontractor Maintenance Labor - Costs to provide services such as minor painting, electrical and maintenance repairs to the Association common elements. Common Area Water / Irrigation - Estimated cost associated with providing water . .'. service for the irrigation of the common area and unit turf S S General & Administrative Expenses: Accounting Services / Audit - Estimated cost to retain an independent accountant to audit the Association's financial records and to provide professional investment & tax advice. Bank & Credit Card Fees - Annual bank service fees, based on $20.00 per month. CAI Membership - Annual cost for a professional membership to the Community Associations Institute. Coupon Books— Cost to'provide coupon payment systems for the remittance of the monthly assessment to the Association. Service provided by Southdata. ' Federal Income Taxes - Taxes paid to the Internal Revenue Service on income gained from earned interest on the Association's reserve investment accounts. Insurance - The cost to provide a broad form insurance policy to cover hazard insurance on the Association owned property, general liability, directors & officers, umbrella and fidelity bond coverage based on an estimate from Richard Hardenbergh Insurance S S Company. S S S Insurance - Workers Compensation - Estimated cost for a policy, to cover all Association S , employees. S ' ' S ' •. ' Legal Counsel Fees - The amount allocated to provide 15 hours of legal consultation and services for minor general issues at .a rate of $150.00 per hour . Management Contract -The amount allocated to provide financial accounting and .' general adrninistratiye support based on a contract proposal from Wentworth Property Management. Office Supplies -- The cost to purchase office supplies, such as copier paper, toner, pens, envelopes, printer cartridges, etc. Operating Contingency - The amount set aside to fund unforeseen operating expenses. Postage - Annual cost for Association mail. Including US Postal Service' and overnight delivery services. Also included is the cost to lease a postage meter from Pitney Bowes ' based on a 36 month lease. Printing, Copies & Fax - Cost for reproduction of documents Telephone - The estimated cost of operating a two-phone line system with voice mail Additional lines are included to service the building alarm system, along with the required pool phones. RiealEstateTaxes - We are not assuming any taxes to. be assessed directly to the .. . Association for the.clubhouse or other amenities. Should any taxes be assessed by Egg. Harbor Township for these amenities, the amount, shown in the budget would be adjusted accordingly Recreational Expenses: Bocci/Shuffleboard Repairs & Maintenance- The cost associated with minor repairs to surfaces or equipment. Exercise Equipment Contract / Repairs - Estimated cost to provide quarterly routine inspection, minor periodic maintenance and repairs for the equipment in the clubhouse • exercise room. Based on a verbal estimate from Universal Fitness. . . Pool & Spa Utilities.- Cost to provide gas heating service to the indoor lap pool, and electric service,to the two pool facilities. '. .. . . . ... . .. .. . . Pool & Spa Management - Indoor / Outdoor - Cost to provide, water analysis and chemical application for the indoor lap pool on a year round basis and the outdoor pool on a seasonal basis. Cost estimate provided by Freestyle Pool Management . . Pool '& Spa Supplies / Repairs - COst for miscellaneous supplies such as first aid kits, pool skimmers, etc. Also included is the cost for minor repairs to the coping tiles, pools surfaces, and spot repainting of the pool and/or spa. . .. . .' . . Putting Green Maintenance - Estimated cost to perform ninOr repairs to the putting . . . green artificial surface Recreation Equipment Supplies / Maintenance - Cost to provide miscellaneous recreation: . S supplies as needed such as billiard balls, pool cues, tables, chairs, etc Reserve & Deferred Maintenance Expenses Asphalt 1 '/2 Cap —The annual amount set aside to replace an estimated 5,905SY of 11/2 cap asphalt at a cost of $7.00 per SY over a useful life of 20 years Asphalt Sealcoating - The annual amount set aside to perform a sealcoating of an estimated 5,905SY of roadway.at a cost of $1 .O4SY over a useful life of 5 years. Concrete Driveway Reserves -The annual amount set aside to replace 50% of an. estimated 124,090SF of concrete sidewalk at a cost of $6.758F over a useful life of 30 years. Concrete Service Walk Reserves The annual amount set aside to replace 50% of an estimated 61,425SF of concrete sidewalk at a cost Of $6.75SF over a useful life of 30 years. Concrete Sidewalk Reserves - The annual amount set aside to replace 50% of an estimated 85,245SF of concrete sidewalk at a cost of $6.75SF over a useful life of 30 years. Clubhouse Furnishings - Estimated cost to replace clubhouse furnishings such as tables, S S chairs, fixtures, etc. Clubhouse Reserves - The estimated cost to fund the replacement of the roof, gutters, siding, and other such items in the Association clubhouse Pool Reserves - The cost to perform the replacement of the pool deck after an estimated S 30-year useful life. S Tennis Court Reserves - The cost to resurface and re-stripe the tennis courts every .15 years, along with the costs associated with replacing the fence after a 25-year useful life. Walking Path Reserves - The cost to replace 52 CY of wood chip surface for the walking S path at a cost of $25.00 per CY every other year. Th. AM].., i Revenue: • Association Maintenance Fees - Annual fees assessed to homeowners and paid an a:: .• monthly basis The estimate is based on the full build out of 397 homes Administrative Payroll: Office Payroll - Cost to provide an on-site community association manager, along with an assistant manager/activities director on a 40 hour per week basis Payroll Taxes. & Benefits - Cost to fund the employer's share' of federally mandated taxes, along. -with normal benefit package. The estimated amount is 12% of the total. . •. S ': . . .. . .°.:'. •. • payroll... . ' ' " . .• .... •: . •. Clubhouse Expenses: Clubhouse Electric/Gas - Estimated cost to provide electric and gas service to the : clubhouse. Connectiv provides electric service and SJ Gas provides Gas service:' Clubhouse Exterminating - Cost to provide monthly service to the clubhouse based on an estimate provided, by United Exterminating. S ' S Clubhouse Fire Extinguisher Inspections - Estimated cost to perform annual inspections S ' and maintenance for any necessary hand held fire extinguishers. Clubhouse Fire Sprinkler Systems'— Cost estimate for annual testing and service to the. ôlubhouse fire safety system. '.Clubhouse Garbage RemovalCost estimate from Integraied Waste Systems to provide pickup for one (1) four yard refuse dumpster, twice a week. An additional amount of $400.00 was added for two extra pickups that may be needed for parties, large functions,' 0 etc. • S '' S ' S ' ' S S ' Clubhouse'. EWAC Contract Estimated cost for service and repair to the clubhouse' mechanical system Includes routine service visits for preventative maintenance Clubhouse Internet - Estimated annual cost to Comcast High Speed Cable Internet 5 5 '. • S S service to the clubhouse.. •' : ' '• •bocclfsriuttleDoara Kepairs & Maintenance Minor equipment, surface repairs $250 Exercise Equipment Contract I Repairs Contracted service agreement- Routine maintenance $1500 Pool & Spa Utilities Annual electric, gas and water for two pools $5,000 Pool & Spa Management - Indoor I Outdoor Contracted maintenance seasonal lifeguard service $24,500 Pool & Spa Supplies/ Repairs Chemicals supplies repairs to non capital replacement parts $5,000 Putting Green Maintenance Cost of minor repairs, etc. $250 Recreation Equipment Supplies! Maintenance Pool Cues, cards, games, miscellaneous S $1,200 TOTAL RECREATIONAL EXPENSES $37,700 Asphalt 11/2 Cap Overlay at end of useful life $2,067 Asphalt Sealcoating Cost to seal parking areas -5 yrs schedule $1,228 Concrete Sidewalk Reserves Cost to replace common walks $13,815 Clubhouse Furnishings Cost of replacing furniture, fixtures, etc.. $4,000 Clubhouse Reserves Roofing, siding, gutters, leaders $2,850 Pool Reserves Concrete, Fencing, pumps, heaters, valves, furnishings. $6,300 Tennis Court Reserves Resurfacing restriping $3,000 • Walking Path Reserves Surface Replacement $650 TOTAL RESERVE & DEFERRED MAINTENANCE $33,910 vfIJUE 4 I General assessment billed to all units ociation Maintenance Fees $641,174 MINISTRATJVEPAYROLL Salaries - Manager, Activities Director . ice Payroll .• . . . . S $72,000. roll Taxes & Benefits Taxes paid on behalf of employees, employer at 12% . $8,640 . . .• . TAL ADMINISTRATIVE. PAYROLL . $80,640 bhouse Electric! Gas • Monthly Electric & Gas service for clubhouse $7,300. bhouse Exterminating Monthly service to clubhouse . . . •. . . $900 bhouse Fire Extinguisher. Inspections Annual inspection and recharge servicing . . $500. bhouse Fire Sprinkler Systems. Annual inspection/service contract . . . . . $1,200 bhouse Garbage Removal Contracted dumpster pickup •. . . . . . $2,100 bhoüse HVAC Contract Annual inspection/service contract bhouse Internet Nigh Speed Internet Connection ,. . $1,800 bhouse Maintenance Janitorial Service, Cleaning, Lighting S& Maint.Supplies $12,060 bhouse Security Central Station Dispatch Alarm monitoring contract :$1,540 bhouse Sewer Quarterly sewer service to clubhouse . . $1,000 bhouse Water . . . Quarterly water service to clubhouse and irrigation . .. . . _. $1,600 AL CLUBHOUSE EXPENSES $31,500 nrnon Area Electric Monthly electric service for lighting, signs, fountains $2,390 mon Area Landscaping Contracted landscape maintenance service $252,700 non Area Lighting Maintenance / Supply Interior and exterior parts and supplies $750 mon Area Maintenance Supplies Miscellaneous repairs to common elements $1,000 ...... nmon Area Snow Removal Contract Based on (3)2" to 6' snowfalls . $6b,000 nmon Area Sprinkler /, Irrigation Maintenance Contracted startup/winterization, repairs $9,000 mon Area Subcontractor Maintenance Labor Contracted unscheduled repairs/painting etc $2,000 I IiIILIOtI . . Lawn. irrigation water supply . . . . . . .5. . .. • $23,820 TAL COMMON AREA EXPENSES. .. $351,660. : • ..• .. counting Services /Audit Contracted fee to produce financial statement/tax return . . .$2,500 & Credit Card Fees Lock box fees, check orders, wire transfers . . •... $240 Membership Annual Membership Fee . . S $250 ipon Books Distribution of printed coupons by. outside printer . . $1,100 ieral Income Taxes Taxes due on Reserve interest earned, other income . . . . $0 iirance Property, Liability, Directors & Officers coverage . $35,000 rance - Workers Compensation Coverage for Association employees •: .. . . : $1,200 General counsel fees • . al Counsel Fees $2,500. : : nagement Contract Contracted fee for Management Services . $40,494 Copier toner, consumable supplies : ce Supplies .• . $3,500 rating Contingency Set-aside for unforeseen expenses. • $10,000 ting, Copies & Fax . . Envelopes, stationary, fax costs, etc. . $2,000. • . phone . Cost of monthly usage and alarm lines, pool phones. $3,500 Property tax assessment on Clubhouse facilities l Estate Taxes S $0 • GENERAL & ADMINISTRATIVE EXPENSES ML $105,764 VALLEY FORGE Perxrxylvarrlo SA/RENCF'.ILIE New Jersey Wentworth Property Management Corp 609-895-9636 ': 610-650-0600 .. ,' 610-650-0700 Fox " 609-895-9630 Fox • Wentworth Property Monogernenrof New Jersey, Inc ARPJNGTON. New Jersey WEST LONG BRANCH, New Jersey • Worrhmore Cansmjct,an & Maintenance Company, Irv- • 856-546-7711 732-728-9690 . BUILDING FUTURES . 856-546-2819 Fax 732-728-2290 Fox Wenrwcxtfr Realty; Inc. ACKENSACK, New Jersey • FAIRFAX, Virginia . . . . . . .. . . 0• Worihlngr Insurance Brokerage • 201-525-2601 Fox •. 703-591-5785 Fox W E N T W 0 RI H G R 0 U P 'IIMINGTON, Delaware • PHILADELPHIA, Pennsylvania . SHORE 'REGION Community odokan Furdng Compary (CAFCO) 302-235-1792 215-512-1550 . . . 302-235-1794 Fox . . 215-592-7640 Fax • WtaIlIn Porid-selli Wentworth Realty, LLC • . . . . . . . March 25, 2004 . • Donald M. Pepe, Esq. . . . . . . . .. . : . D.R. Horton, Inc. dbaSGS Communities • . . . S 20 Gibson Place . . •• Freehold, NJ 07728 RE:' VILLAGEGRANDE AT ENGLISH MILL' HOMEOWNERS ASSOCIATION, INC. Dear Don: . We have prepared the estimated budget for The Village Grande at English Mill Homeowners Association, 397 Single Family homes, at 2004 costs, for inclusion in the Public Offering Statement. ' It is our opinion, based on our prior experience in managing similar communities, proposals received from contractors, and information received from the sponsor, that the budgeted operating estimate is reasonable and adequate under existing circumstances and the estimated receipts shown will be sufficient, to meet the normal anticipated operating expenses. The Reserves for Repair and Replacement were based on . information received from the sponsor and its engineer and on our prior experience iii managing similar communities. Because of the possibility of unforeseen changes in the economy or increases or decreases in the expenses of operation, our estimates are not intended, and cannot be taken, as representation, guarantees or ' '.warrantees of any kind 'whatsoever, nor as any assurance that the actual expense or income of the , Association, for any period of operation, may not 'incur additional costs unforeseeable at this time, or that the Board of Directors may not provide for services not reflected in the .esthnate, or that the annual assessments for any period may not vary from the amounts shown here. It may be expected, based upon current trends, that such items as insurance, contracted labor and other 'related expenses will increase or decrease in' the future., Very truly yours,' • WE OR PROPERTY AEMENT OF NEW JERSEY, INC. By Stephen C. Doran, CMCA, AMS, PCAM Regional Director : • ' ' WENTWORTH PROPERTY MANAGEMENT Fl 1102' Broodocres Drive • Gemenron, NJ 08021 • Phone 856-784-1144 • 856-435-5656 • Fax 856-435-4457 Clubhouse Maintenance - Cost to perform routine maintenance tasks in the clubhouse•. such as repairs to the doors, windows or other such items, along with janitorial functions, event setup/breakdown, etc. Estimate is based on'15 hours perweek at a rate of $12.00.. per hour. Also included are costs associated with carpet cleaning, cleaning supplies, lighting and maintenance supplies and sweeping of the clubhouse parking lot. Clubhouse Security - Estimated cost based $45.00 per month on an individual system in each clubhouse building for the monitoring and daily testing of a fire/security alarm system. The prices are based on an verbal estimate from B-Corn Security. Also incorporated are the costs anticipated to provide routine maintenance for a proximity access, control system for the clubhouse, and' other needed common area controls. Clubhouse Sewer - Aiinual cost to the Association for sewer services. Clubhouse Water - Estimated cost for water services provided by the American Water Company. . . . . . . . Common Area Expenses: Common Area Electric - Estimated cost associated with lighting the common area ' fixtures on the clubhouse areas and two entrance signs. Also included is the cost of operating the irrigation system timers, Entry area pond fountains, etc. Connectiv' . . . .. .. provides electric Service. Common Area Landscaping '- Total contract for all property is based on an estimate of $50.00 per unit/month. Also included are the costs associated with seasonal plantings, tree/shrub replacements, maintenance of retention basins, etc. Common Area Lighting Maintenance/Supply - Costs to keep on hand the needed light fixtures, ballasts, bulbs and other supplies to maintain the lights in the common areas. Common Area Maintenance Supplies Costs associated with minor maintenance. supplies such as products for trash collection in the common areas, cleaning and other such items: Common Area Snow Removal Contract - Estimated cost to clear snow from the common area streets, sidewalks and driveways of the housing areas, common areas and clubhouse facilities. Estimate is based on three storms of a 2" to 6" accumulation.' Common Area Sprinkler / Irrigation Maintenance —'Estimated cost to setup, perform routine repairs, inspect monthly and winterize the common area, clubhouse and' ' residential irrigation systems. as Common Area Subcontractor Maintenance Labor - Costs to provide services such minor painting, electrical and maintenance repairs to the Association common elements.,, Common Area Water / Irrigation - Estimated cost associated with providing water service for the irrigation of the common area and unit turf General & Administrative Expenses Accounting Services /.Audit - Estimated cost to retain an independent accountant to audit the Association's financial records and to provide professional investment & tax advice. Bank & Credit Card Fees - Annual bank service fees, based on $20.00 per month. CAI Membership - Annual cost for a professional membership to the Community' Associations Institute. Coupon Books - Cost to provide coupon payment systems for the remittance of the monthly assessment to the Association. . Service provided by Southdata.. . Federal Income Taxes - Taxes paid to the Internal Revenue Service on income gained . '. from earned interest on the Association's reserve investment accounts. Insurance - The cost to provide a broad form insurance policy to cover hazard insurance on the Association owned property, general liability,' directors & officers, umbrella and,. fidelity bond coverage based on an estimate from Richard Hardenbergh Insurance Company. Insurance Workers Compensation - Estimated cost for a policy to cover all Association employees. .. Legal Counsel Fees - The amOunt allocated to provide 15 hours of legal consultation and'. services for minor general issues at a rate of $150.00 per hour Management Contract - The amount allocated to provide financial accounting and general administrative support based on a contract proposal from Wentworth Property Management. • Office Supplies The cost to purchase office supplies, such as copier. paper, toner, pens, envelopes, printer cartridges, etc.' Operating Contingency.- The amount set aside to fund unforeseen operating expenses Postage - Annual cost for Association mail. Including US Postal Service and Overnight delivery services. Also included is the cost to lease a postage meter from' Pitney Bowes based on a 36 month lease. Printing, Copies & Fax - Cost for reproduction of documents. Telephone —'The estimated cost, of operating a two-phone line system, with voice mail. Additional lines are included to service the building alarm system, along with the required pool phones Real Estate Taxes - We are not assuming any taxes to be assessed directly to the Association for the clubhouse or other amenities. ,Should any taxes be assessed by Egg Harbor Township for these amenities, the amount shown m the budget would be adjusted accordmgly. Recreational Expenses Bocci/Shuffleboard Repairs & Maintenance —The cost associated with minor repairs. to surfaces or equipment Exercise Equipment Contract I Repairs - Estimated cost to provide quarterly routine inspection, minor periodic maintenance and repairs for the equipment in the clubhouse exercise room. Based on a verbal estimate from Universal Fitness. Pool & Spa Utilities - Cost to provide gas, heating service to the indoor lap pool, and electric service to the two pool facilities. Pool & Spa Management - Indoor I Outdoor - Cost to provide, water analysis and' chemical application for the indoor lap pool on a year round basis and the outdoor pool on a seasonal basis. Cost estimate provided by Freestyle Pool Management . Pool & Spa Supplies / Repairs - Cost for miscellaneous supplies such as first aid kits, pool skimmers, etc. Also included is the cost for minor repairs to the coping tiles, pools surfaces, and spot repainting of the pool arid/or spa. Putting Green Maintenance - Estimated cost, to perform minor repairs to the putting green artificial surface. ' Recreation Equipment Supplies /Maintenance - Cost to provide miscellaneous recreation supplies as needed such as billiard balls, pool cues, tables, chairs, etc. Reserve & Deferred Maintenance Expenses 1/2 Asphalt 1 Cap - The annual amount set aside tore3lace an estimated 5,905 SY'of 1 '/2 cap asphalt at a cost of $7.00 per SY over a useful life of 20 years. Asphalt .Sealcoating -.The annual amount set aside to perform a sealcoating of an SY of roadway at a cost of $1 .O4SY over a useful life of 5 years. . estimated 5,905 Concrete Sidewalk Reserves - Theannual. amount set aside to replace 50% of an estimated 122,805SF of concrete at a cost of $6.75SF over a useful life of 30 years.- sidewalk Clubhouse Furnishings - Estimated cost to replace clubhouse furnishings, such as tables, chairs, fixtures, etc Clubhouse Reserves - The estimated cost to fund the replacement of the roof, gutters, siding, and other such items in the Association c1ubhouse Pool Reserves - The cost to perform the replacement of the pool deck after an estimated • 30-year useful life. Tennis Court Reserves - The cost to resurface and re-stripe the tennis courts every 15 years, along with the costs associated with replacing the fence after a 25-year useful life: • Walking Path Reserves - The cost to replace' 52 CY of wood chip surface, for the Walking . . path at a cost of $25.00 per CY every other year mpdenbep'gh "INSURANCE GROUP Post Office Box i000 Main Street 'Plaza 1000, Suite 100 •Voorhees, New Jersey 08043. 8564899100 8564899101 Fax www.hardenberghins.com February .18, 2004 . . . . . . Planned Real Estate Development New Jersey Department of Community Affairs CN 805 Trenton, N J 00625 SUBJECT Letter of Adequacy - Village Grande At English Mill Homeowner Association To WhomitMay Concern: In accordance with your request, this letter verifies that we have reviewed the necessary insurance requirements for the above association and believe the following coverages are adequate to properly insure this Association. Property Insurance should be provided in order to cover the Club Houses, Pool House, etc., and its contents for replacement cost in case of destruction by fire, lightning, etc Coverage should be provided on an All Risk Peril basis Comprehensive General Liability coverage should be written for common elements. This coverage will include non-owned and hired automobile coverages with limits of liability suggested to be at $1,000,000.. An Excess Liability coverage should be provided on an Umbrella form with at least a $1,000,000 limit of liability Higher limits of liability should be considered by the Board of Directors upon, placement. . . . . '• Fidelity coverage should he purchased to protect the association from fraudulent and dishonest acts of its employees or board members. ..A minimum policy limitation should be $50,000 The limit obtained should be equal to or greater than three months of the total operating budget plus accumulated reserves. . Workers' compensation coverage will provide coverage for injuries to employees during the course of their Benefits are based on statutory requirements for the employment. State of New Jersey based on a "if any" payroll for the first year of operation. This is an auditable exposure based on payroll of the employees of the association. , CELEBRATING OUR 50TH ANNIVERSARY PROTECTING SOUTH JERSEY SINCE 1954 _yd • HapdenbePgh INSURANCE GROW Post Office Box 1000 Main Street Plaza 1000, Suite IQO Voorhees, New Jersey 08043 856.489.9100 856.489.9101 Fax www.hardenberghins.com February 18, 2004 Planned Real Estate Development New Jersey Department of Community Affairs CN 805 Trenton, N J 00625 SUBJECT: Letter of Adequacy - Village Grande At English Mill Homeowner Association To Whom it May Concern: In accordance with your request, this letter verifies that we have reviewed the necessary insurance requirements for the above association and believe the following coverages are adequate to properly insure this Association. Property Insurance should be provided in order to cover the Club Houses, Pool House, etc, and its contents for replacement cost in case of' destruction by fire, lightning, etc. Coverage should be provided on an All Risk Peril basis. Comprehensive general Liability coverage should be written for common elements. This coverage will include non-owned and hired automobile, coverages with limits, of liability suggested to be at $1,000,000. An Excess Liability coverage should be provided on an Umbrella form with at least a $1,000,000 limit of liability. Higher limits of liability should be considered by the Board of Directors upon placement. . . Fidelity coverage should be purchased to protect the association from fraudulent and dishonest acts of its employees or board members. A minimum policy limitation should be $50,000. The limit obtained should be equal to or greater than three months of,the total operating budget plus accumulated reserves. Workers' compensation coverage will provide coverage for injuries to employees during the course of their employment.' Benefits are based on statutory requirements for the 'State of New Jersey based on a "if any" payroll for the first year of operation. This is an auditable exposure based on payroll of the employees of the association. PROTECTING SOH JERSEY SINCE 1954 CELEBRATING OUR 50TH ANNIVERSARY Planned Real Estate Development February 18, 2004 Page S Directors and Officers coverages should be provided for the officers of the association with limits of at least $1,000,000. This coverage should include past and present members of • the board as well as committee persons. It should insure both the officers and directors of the • corporation and the entity itself. Certainly we recommend that each individual homeowner purchase his own insurance to protect his or her personal liability and property. If the above insurance policies were placed in force, we feel that the association would be adequately insured. The projected cost based on Full occupancy, Phase II fully completed 397 units with amenities is $35,000. • Regards, • )t John McCrudden Vice President JM/lg EXHIBIT 3 SAMPLE CONTRACT FOR SALE OF REAL ESTATE RESCISSION PERIOD NOTICE TO THE PURCHASERS: THE PURCHASER HAS THE RIGHT TO CANCEL THIS CONTRACT OR AGREEMENT BY SENDING OR DELIVERING WRITTEN NOTICE OF CANCELLATION TO, THE DEVELOPER BY MIDNIGHT OF THE SEVENTH CALENDAR DAY FOLLOWING THE, DAY ON WHICH IT IS EXECUTED. SUCH CANCELLATION IS WITHOUT PENALTY AND ALL MONIES PAID BY YOU SHALL BE PROMPTLY REFUNDED IN THEIR. ENTIRETY. NOTICE TO THE PURCHASER AND SELLER: WITHIN THE FIRST THREE BUSINESS DAYS OF THIS SEVEN DAY PERIOD,. EACH PARTY MAY CHOOSE TO CONSULT AN ATTORNEY WHO CAN REVIEW AND CANCEL THE CONTRACT. SEE SECTION 30 ON ATTORNEY REVIEW FOR DETAILS. CONTRACT FOR SALE OF REAL ESTATE THIS CONTRACT, dated 200, is between the SELLER: D.R. HORTON, INC.-NEW JERSEY, a Delaware Corporation, 20 Gibson Place, Freehold, New Jersey 07728; and SS The BUYER(S): SS:# ADDRESS HOME TELEPHONE NO.. WORK TELEPHONE NO. TABLE OF CONTENTS Paragraph # and Heading Page 1. Sale and Purchase ............................................ 3 2. Property ...................................................... 3 3. Purchase Price .............................................. 3 4. Payment of Purchase Price ................................... 3 5. Mortgage Contingency ........................................ 4 6. Deposits ..................................................... 6 7. House to Sell Contingency ................................... 7 8. Exclusions .................................................. 7 9. Closing Charges ............................................. 7 10. Adjustments ................................................ 8 11. Closing of Title ........................................... 8 12. Title ....................................................... 9 13. Possession ................................................. 9 14. Fire and Other Casualty .................................... 9 15. Changes in Construction .................................... 9 1 593772.04 16. Insulation . 10 17. Decorator Selections ......................................10 18. Default of Buyer .............................................10 19. Delay of Seller ..................................................11 20. Warranties .........................................................11 21. Membership in Association ......................................12 22. Common Property ...........................................13 23. Site Visits .........................................................13 24. Preoccupancy Homeowner Orientation ............................14 25. Entire Agreement ..........................................14 26. Assignment, Binding Effect, Recording .......................15 27. Notices ........................................................15 28. Headings .........................................................15 29. Governing Law ...................................................15 30. Attorney Review .............................................15 31. Modifications ..............................................16 32. Real Estate Broker ...............................................16 33. Power of Attorney .........................................16 34. Megan's Law Statement ........................................17 35. Public Offering Statement .................................. 18 '2 593772.04 THE SELLER AND THE BUYER AGREE AS FOLLOWS: 1. Sale and Purchase. The Seller will sell and the Buyer will buy the Property under the terms of this Contract. 2. Property. The word "Property" as used in this Contract includes (a) through below: (c) (a) All of the land, buildings and other improvement on the land, located in the Township of Egg Harbor, County of Atlantic, and State of New Jersey, designated as Lot in Block , as shown and laid down on the map entitled Section filed in the Office of the Clerk of Atlantic County, on 200, as Map No File (b) The house and land known as the Model, with the Elevation, on Job No (c) Street Address: 3 Purchase Price (a) Base Price (b) Optional Extras Total Extras (c) Total Purchase Price 4 Payment of Purchase Price (a) The Purchase Price is to be paid as follows (1) Deposit at signing of this Contract $_________________ (2) Additional Deposit Due 3 593772.04 Mortgage Amount (See Section 5 of this (3) Contract: $__________________ (4) Balance at Closing by certified check, or bank check: 5. Mortgage Contingency. Type of Mortgage: Amount of Loan: Length of Mortgage: Interest Rate: If Paragraph 4(a) (3) above contains a "Mortgage Amount", then this Contract shall be contingent upon Buyer obtaining a mortgage loan; if no amount is shown then this Contract is not contingent upon Buyer securing a mortgage. Buyer agrees to make a written application for a mortgage loan with an institutional lender ("Lender") in the amount set forth in Paragraph 4(a) (3) within 10 days after the date of this Contract and provide Seller with a copy of the written application within 7 days of the expiration of such 10-day period. IF SUCH APPLICATION IS NOT TIMELY SUBMITTED TO LENDER, THE OBLIGATION OF EACH PARTY TO PERFORM SHALL BECOME FIXED AS IF NEVER SUBJECT TO ANY MORTGAGE CONTINGENCY, AND THIS CONTRACT SHALL BECOME BINDING. The terms of the mortgage loan will be those specified above in this Paragraph S. Buyer shall provide Lender with all necessary informatiox and documentation at the time of the application, and shall provide Lender with any additional information or documentation within five days. after Lender requests same. If Buyer fails to provide such information or documentation, then Buyer shall be in default of this Contract. .Buyer shall pay to Lender all applicable fees and charges for the application and/or commitment. This mortgage contingency clause shall be deemed satisfied, and Buyer will be required to go forward with the purchase, upon issuance of a commitment to make a mortgage loan by Lender, regardless of the terms or conditions of the commitment. In particular, and without limitation, this mortgage contingency clause shall be satisfied if the commitment is conditioned on Buyer selling a home, having a job and/or providing additional information or documentation. Once the Buyer receives a commitment, any subsequent change in the Buyer's credit, financial condition, employment or otherwise shall be at Buyer's risk. In addition, if the mortgage commitment must be extended, renewed or reissued, and as a result the interest rate or other terms or conditions or the 4 593772 .04 commitment change, the Buyer agrees to accept and/or fulfill any such new interest rate, terms and/or conditions If the Lender issues a commitment to make a mortgage loan, the Buyer will promptly sign the commitment, provide a copy to Seller and take all actions necessary to satisfy any conditions and contingencies so that closing of title can take place in accordance with Paragraph 11 of this Contract Failure of Buyer to sign the commitment or to satisfy any conditions and contingencies shall be deemed a default of this contract by Buyer. Buyer hereby authorizes the Lender to release to Seller, upon Seller's request, all information contained in and. regarding Buyer's mortgage loan and loan application. If Buyer has not received a mortgage commitment within 30 days after the date of this Contract (the "Mortgage Contingency Date") , or has been denied a mortgage loan prior to the Mortgage Contingency Date, Buyer may (a) elect to waive the mortgage contingency and complete the purchase without a mortgage, or (b) request that Seller extend the Mortgage Contingency Date for up to 30 days, or, or (c) request a cancellation of this Contract and a refund of Buyer's deposit without interest Any request to extend the Mortgage Contingency Date or request to cancel the Contract must be in writing received by Seller before the Mortgage Contingency Date and contain copies of documents proving that Buyer had made timely application for the mortgage and that the application was either denied or is still awaiting determination IF SUCH REQUEST IS NOT TIMELY GIVEN, THE OBLIGATION OF EACH PARTY TO PERFORM SHALL BECOME FIXED AS IF NEVER SUBJECT TO ANY MORTGAGE CONTINGENCY, AND THIS CONTRACT SHALL BECOME BINDING. if Seller elects to extend the Mortgage Contingency Date, Seller shall notify Buyer within 5 days of receipt of the Buyer's request, and if at the end of the commitment extension a mortgage commitment has still not been issued, then Buyer may, (a) elect to waive the mortgage contingency and complete the purchase without a mortgage, or (b) request the cancellation of this Contract and a refund Buyer's deposit without interest If Buyer's mortgage application is denied or if Buyer requests a cancellation of this Contract within the mortgage contingency period or any extension of the mortgage contingency period agreed to by Seller, then Seller shall, at Seller's option elect within ten (10) days either to (1) refund Buyer's deposit without in or (2) direct Buyer to apply for a mortgage commitment consistent with the terms of this Contract to a lending institution 5 593772.04 selected by Seller, and Buyer agrees to timely complete and execute all documents, fully comply with all reasonable requests of such lender, and pay all reasonable fees and costs in connection with such application. Buyer represents that Buyer has sufficient cash available, together with the proceeds of the mortgage loan referred to in Paragraph 4(a) (3), if any, to consummate the acquisition of the Property pursuant to this Contract. Seller makes no representations or warranties about Buyers ability to obtain a mortgage loan or the interest rate or terms of such a loan. 6. Deposits. Subject to the next paragraph, the Seller will hold all money paid by the Buyer under this Agreement prior to closing in escrow. The Seller may not use or keep that money (a) until closing of title, or (b) unless the Buyer breaks a promise made in this Contract, as discussed in Paragraph 18 below. If, under the terms of the Contract, the Buyer has the right to terminate the Contract and elects to exercise that right, Seller will return to Buyer all money paid by Buyer. This money will be held in an escrow account of Grande Title Agency, LLC, ("Escrow Agent"), in Commerce Bank Berlin Office, 247 S. White Horse Pike, Berlin, New Jersey 08009. This means that the Seller receives all deposit monies in trust (in escrow) and will hold same until closing of title or termination of this Contract. The Seller may, in its sole discretion, cause the deposit account to be interest bearing. Any interest earned on the deposit monies intrust will be paid to the Seller. Interest on the deposit monies will 'not be applied as a credit for the benefit ofthe Buyer toward other sums owed by the Buyer, to the Seller under this Contract. The Developer has obtained a "Down Payment Bond" from Fidelity and Deposit Company of Maryland in a form acceptable to the Division of Codes and Standards of the New Jersey Department of Community Affairs so as to permit the Developer to obtain use prior to closing of the deposit monies being held by the Escrow Agent. The Down Payment Bond has been given to the Escrow Agent. The Developer and the Escrow Agent have entered into a formal agreement acceptable to the Division of Codes and Standards of the Department of Community Affairs that allows the Escrow Agent to release the Buyer's deposit monies from escrow to the Developer prior to closings of title but not to exceed, in the aggregate, the face amount of the bond. . Under the agreement, if the closing of title does not take place and the Buyer is legally entitled to a return of all or a portion of the 6 593772 .04 deposit monies and the Developer is unable to return same, the Escrow Agent is empowered to draw against the bond to the extent necessary in order to refund the deposit monies to which the Buyer is legally entitled. A copy of the Agreement is reproduced as Exhibit 9 o f the Public Offering Statement and includes a copy, of th Down Payment Bond. Under no ' circumstances can the Escrow Agent release the Buyer's deposit monies to the Developer before the Buyers seven (7) day right to rescind (cancel) his Contract for Sale of Real Estate has expired without 'the buyer exercising' such right to rescind. 7. House to Sell Contingency. This Contract is [ I or is not [ Y subject to the sale of any other real estate. If this Contract is subject to' the sale of other real estate, then a rider detailing the terms of such subject to sale shall be attached to this Contract. 8. Exclusions. Unless included as extras in Paragraph 3 above, all of the items shown in the model home (s) are excluded from this sale. Such items include, but are not limited to: all furniture; special flooring and carpeting; wallpaper; window treatments; special lighting; outlets, light bulbs and all other electronic devices; decorator floors; decorator built-ins; decorator ceramic and vinyl tile; built-ins and bookcases; shelves and special mirrors; special interior trim; special interior decorator paint colors; painted interior garage walls, ceiling and floors; painted basement floor and walls; upgraded appliances; special exterior, trim and siding materials; special exterior paint; oversized driveways; and fencing, irrigation, landscaping-,and special walkways. All extras or special items displayed in the models or sales exhibition center will be identified as such. 9. Closing Charges. Buyer is responsible for paying all costs relating to recording the deed, a title search, title examination and title insurance policy as well as purchasing a survey through Seller, if requested. If this is a sale containing a mortgage contingency, then Buyer shall also pay all costs relating to the mortgage, including, without limitation, application fee, credit report, appraisal, mortgage title insurance, hazard insurance, recording fees and any fees or costs required by the mortgage lender, such as escrows and prepaid charges. Buyer is also responsible upon the acquisition of title to his Home to pay to the Association a working capital contribution equal to $550.00. This payment is non-refundable and non-transferable and shall be available to the Association, whether under Developer or unit owner control, as the Board 7 593772 .04 shall deem appropriate for (i) the off-set of cash flow or budget deficits, (ii) payment of operating expenses, (iii) operating contingency reserves, (iii) repair and replacement and/or deferred maintenance reserve,: (iv) working capital reserve, and/or (v) any other lawful purpose (s) permitted by the Governing Documents. In addition, Buyer will also pay to the Association in advance his/her pro-rata portion of this monthly maintenance fee due to the Association for the month in which the closing takes place based upon the number of days left in the month as the time of closing as set forth in the Association's budget. Beginning with the first full month of occupancy, the monthly maintenance fee will be paid on monthly basis to the Association as ,,a provided in the Public Offering Statement. Seller shall be responsible for the real estate transfer tax due upon the closing of title. 10. Adjustments. Taxes for the current year, municipal assessments, maintenance fees, utilities, water and sewer charges, and interest, if any, are to be apportioned as of the date of closing. 11. Closing of Title. (a) Seller estimates that construction of the house will be completed on or about 200 (the "Closing Bate"). (b) Closing of title will take place on the Closing Date at the time specified by Seller in a notice by telephone or mail to Buyer or Buyer's attorney. Closing will take place at 700 East Gate Drive, Mt. Laurel, New Jersey 08054 or at such other place as is specified in Seller's notice. The closing of title will occur only after the Seller has received either a temporary or final certificate of occupancy for the Property. If the closing is postponed by the Buyer because of the Buyer's refusal or inability to close on the date and time specified by Seller, then Seller shall have the option, but not the obligation, to postpone the closing date on at least seven (7) days prior written notice to Buyer. I TIME SHALL BE OF THE ESSENCE FOR ANY POSTPONED CLOSING DATE. This means that if Seller postpones the Closing, Buyer must close title on' such postponed closing date or forfeit its deposit as provided in Paragraph 18 of this Contract. Also, Buyer shall pay. to Seller at closing an additional One Hundred Fifty Dollars ($150.00) per day for each day the Closing is delayed by the Buyer, not to exceed 10 of the purchase price, reprssent±ng all carrying 593772.04 charges on the Property, such as taxes, insurance, interest, etc. 12 Title. Seller agrees to deliver a Bargain and Sale Deed with Covenants as to Grantor's Acts, Affidavit of Title and appropriate corporate resolution at closing of title Title shall be good and marketable such as will be insured at regular rates by a reputable title company free and clear of all liens and encumbrances, except the Property shall be subject to ordinances, statutes and regulations of any and all municipal or other governmental authority having jurisdiction, easements, grants, covenants or restrictions, the Declaration of Covenants and Restrictions, street dedications and public utility rights recorded or to be recorded, and such state of facts that an accurate survey may disclose, provided same do not prevent use of the Property for one family dwelling purposes The willingness of Grande Title Agency, L L C , 185 West White Horse Pike, Berlin, New Jersey 08009, to insure title to the Property shall constitute good and marketable title. Buyer is not required to use the services of Grande Title Agency, L L C to obtain title insurance Grande Title Agency, L L C is affiliated with the Seller. If Seller is unable to deliver the status of title set forth in this Paragraph, Buyer's remedy will be in accordance with Paragraph 19 of this Contract 13 Possession Possession will be given by delivery of the Deed upon closing of title and receipt by Seller for the full purchase price and all other monies due it pursuant to this Contract. Buyer agrees not to enter into possession of the Property at any time or for any, reason prior to closing 14 Fire and Other Casualty. The risk of loss or damage to the Property by fire or otherwise until closing of title is on Seller. 15 Changes in Construction Seller shall have the right to make substitution of materials and/or equipment and to make changes to Selections whenever Seller shall find it necessary or expedient in its absolute discretion, provided that such substitutions or changes are of comparable or better quality. Seller also reserves the right to determine the location and physical layout of the house on the lot Seller makes no representations as to the final grade of the lot or the existence of any trees or landscaping on the lot Seller shall not be responsible to remove any debris or trees beyond the area of the lot disturbed by Seller. 9 593772.04 16. Insulation. In compliance with Federal Trade Commission Regulations, the following information concerning insulation in your home is furnished: (a) The developer installs fiberglass batt type of insulation which is manufactured to have an R value of 13 outside walls and R-30 in ceilings below attic space R-30 insulation shall be installed in the floors of living spaces above unconditioned space Certain exterior walls and/or cathedral or volume space may require R-19 insulation, (b) For slab on ground floors, the developer installs 1" rigid foam perimeter insulation, which is manufactured to have an R value of 5, horizontally beneath the slab for a minimum total distance from the exterior walls of 24 inches, (c) The primary entrance door is an insulated steel door and is weather stripped Windows and sliding doors are dual glazed thermo break equipped Anti air infiltration measures taken include the installation of a sill seal (d) The manufactured thickness of the above types of insulation is as follows R-13 is 3-5/8",,R-19 is 5-1/211 , R- 30 is 911 , R-5/rigid foam perimeter foundation insulation is 1" 17 Decorator Selections Buyer agrees to make decorator, appliance, optional extra item selections (collectively, "Selections") within ten days of the Seller's request that they be completed If Buyer fails to make the Selections within this time period, Seller, in its exclusive discretion, shall have the right to make such Selections for Buyer and Buyer agrees to accept and pay for such Selections. Any Selections made by Buyer shall only be made by Seller if Seller agrees to do so in writing 18 Default of Buyer. Should Buyer fail to make payments, or violate any other term, condition or covenant of this Contract or fail, for any reason, to close title (i.e., complete the purchase) according to the terms and conditions of the Contract, the Buyer will be in default (i.e., will have broken Buyer's promises in this Contract) . If the Buyer is in default, the Seller may retain the deposit (but not more than ten (10%) percent, of the purchase price), plus the total of all monies paid by Buyer for options, upgrades, extras and custom changes installed Seller will retain the money either on account of the purchase price or as liquidated damages Liquidated damages are a fixed amount to be paid to Seller which the parties agree will be a reasonable estimate of the damages in the event of Buyer's default, since Seller's actual damages would be difficult to establish If Seller elects to retain the money as liquidated damages, this Contract shall become null and void In the event either party hereto shall institute legal proceedings in connection with, or for the enforcement of this Paragraph 18, the prevailing party 10 593772.04 shall be entitled to recover its costs of suit, including reasonable attorney's fees, at both trial and appellate levels. 19 Delay of Seller. Should Seller be unable to fulfill its obligations under the terms of this Contract for reasons beyond its control, the Seller may postpone the closing for up to six (6) months from the date originally scheduled for closing by notifying the Buyer in writing that the' closing has been postponed. If, after this period has expired, the Seller is still unable to perform its obligations under this Cbntract for reasons beyond its control, the Buyer may terminate this Contract by so notifying the Seller in writing or the Seller may terminate this Contract for circumstances beyond its control In such event, Buyers sole, legal or equitable remedy will be to receive a refund of all deposit monies and all monies paid to Seller for options, upgrades, extras and custom changes, together with the costs of title examination and survey actually incurred The Buyer agrees that if this Contract is postponed and/or terminated under this Paragraph, the Seller will not be responsible for any expenses which the Buyer might incur as a result of the delay or termination Such expenses include, but are not limited to, storage of the Buyer's furniture or other personal property and/or substituted housing as well as mortgage commitment extension fees 20. Warranties. The Seller warrants its construction of the Homes as follows a. In accordance with the provisions of the New Jersey New Home Warranty and Builders' Registration Act (N.J.S.A. 46:3B-1 et seq.), the Seller shall enroll each Home, at or prior to closing, in an approved warranty security plan and shall pay all requisite fees/premiums for such enrollment and coverage, provided, however, any deductibles for such warranty coverage shall be the obligation of the purchaser. b. The Seller warrants that any outbuildings, driveways, walkways, patios, decks, retaining walls and fences shall be free from substantial defects due to material and workmanship for a period of one (1) year from the date of closing or from the date of possession, whichever first occurs. C. The Seller warrants that all drainage is proper and adequate, and all off-site improvements, if any, will be free from defects for a period of one year from the date of construction 11 593772.04 d. The Seller warrants that all Homes offered hereby are fit for their intended use e. The Seller warrants that all the common facilities are fit for their intended use and Seller warrants the construction of same for a period of two (2) years from the date of completion of each facility. The Seller, shall repair or correct any material defect in construction, material or workmanship in the common facilities within a reasonable time after notification of the defect f The Seller also warrants that the residential dwelling shall substantially conform to sales models, descriptions or plans used, if any, to induce the purchaser to enter into this Contract to purchase a Home, unless otherwise noted herein g All landscaping installed by Seller is warranted for one year from the date of installation, however, the Seller does not warrant any trees and natural growth which existed on the Property prior to Seller's construction on the Property. h At the time of closing of title to a Home the Seller will assign to the Purchaser all assignable manufacturers' or suppliers' warranties or guarantees as to materials, appliances, fixtures and equipment The manufacturer or contractor providing any such warranty shall be primarily liable to correct any defect in the warranted item for the duration of the warranty. Seller does not independently warrant any such appliances, equipment or other personal property except to the extent required under this Paragraph 20. SELLER EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY ARISING BY VIRTUE OF LAW OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE WITH RESPECT TO THIS CONTRACT THIS MEANS THAT THE ONLY WARRANTIES WHICH ARE GIVEN BY SELLER TO BUYER ARE THOSE LISTED IN THIS PARAGRAPH 20 BY SIGNING THIS CONTRACT BUYER ACKNOWLEDGES THIS DISCLAIMER BY SELLER. SELLER ALSO EXPRESSLY DISCLAIMS LIABILITY FOR ANY CONSEQUENTIAL DAMAGES ARISING OUT OF ANY BREACH OF ANY WARRANTY THIS MEANS THAT SELLER WILL NOT BE RESPONSIBLE IF ANY PERSONAL PROPERTY IS DAMAGED BECAUSE OF A DEFECT IN ANY WARRANTED ITEM 21. Membership in Association. Upon closing of title, Buyer will automatically become a Member of The Village Grande at English Mill Homeowners Association ("Association") . Buyer will be a Member of said Association for so long as Buyer owns the Property. Buyer agrees to abide by 12 593772.04 the Associations By-Laws and any Rules and Regulations that may, from time to time, be promulgated by the Association and/or Board of Directors. The Association and the Buyer's membership in the Association are subject to all of the terms of the Declaration of Covenants and Restrictions which has been or will be recorded for the Association and the Certificate of Incorporation, By-Laws and Rules and Regulations of the Association, as same may be modified after the date hereof All of the foregoing documents of the Association are referred to collectively in this Agreement as the "Governing Documents" The Governing Documents and their exhibits set forth the rights and obligation of Buyer, the Association and other Dwelling Owners as well as the Budget for the Association The Public Offering Statement which has been prepared for this Community contains copies of the Governing Documents 22 Common Property. Buyer will acquire such beneficial interest in the Common Property of the Community as set forth in the Governing Documents. The Common Property will be managed, operated and maintained by the Association for the benefit of all owners of Property in the Community. The funds necessary to operate and repair the Common Property (as well as other common expenses and the cost of services provided by the Association) are obtained by the Association through the monthly maintenance fees which are allocated among Buyers in accordance with the Governing Documents. Buyer shall consult the Public Offering Statement, or the Governing Documents as applicable, in order to determine the kind, nature, extent, capacity and availability, of the Common Property, including improvements installed or to be installed When Buyer is the owner of the Property, Buyer will be entitled to use the Common Property for the purposes of which intended This right is governed by and subject to the Governing Documents. Buyer should consult the Public Offering Statement and Governing Documents, as applicable, for the Community the for limitations and restrictions which are imposed or exist upon the use and availability of the Common Property. 23 Site Visits Buyer, and its invitees, agents and contractors, shall not do any work whatsoever in the house prior to closing of title. Furthermore, insurance regulations preclude Buyer from entering the Property at any time without being accompanied by Seller's Representative. All visits shall be by appointment and only at the convenience of Seller. It is expressly agreed that a breach of this paragraph shall entitle Seller to exercise all rights and remedies it might have against Buyer. Buyer hereby assumes 13 593772.04 all risks and loss relating to Buyer's entering of the Property prior to closing. 24. Preoccupancy Homeowner Orientation. Seller will specify the time and date for a homeowner orientation and inspection of the Property by Buyer. This orientation and inspection will be conducted within one to three days prior to closing. Those items which may be required to be completed or repaired in order to satisfy building code or Warranty Act standards will be entered on a preoccupancy inspection report. The listed items will be repaired or completed as soon as possible after closing. Defects in painted surfaces, chipped porcelain,. plumbing fixtures, kitchen appliances, countertops, carpeting, flooring, chilled tiles, screens, glass surfaces or similar defects not noted on this walk through or correction are excluded from the Seller's responsibility. It is understood that as long as a certificate of occupancy has been issued, the listed items shall not constitute a bar to closing of title, and that the closing of title will be held in accordance with this Contract. Seller represents that there are no known defects in the construction of the Dwelling that is the subject of this Contract or of the common areas and facilities that the Buyer could not detect with a reasonable inspection under this Paragraph. 25. Entire Agreement. This Contract and the Application for Registration filed with the New Jersey Department of Community Affairs constitute the entire agreement between Seller and Buyer and supersedes all prior agreements between the parties. There are no other agreements, understandings or representations other than those contained in this Contract or in any other written instrument which is made a part of this Contract and signed by Buyer and Seller. No salesperson, broker or other person has any authority to modify the terms of this Contract or to make, any other agreements, representations or promises. Unless expressly referenced in this Contract, the model homes, sale brochures, advertising and other promotional materials are not part of this Contract. This Contract shall not survive closing, of title and delivery of the deed but, instead, shall merge into the deed. 14 593772.04 26.. Assignment, Binding Effect, Recording. Buyers interest and obligations under this Contract cannot be assigned I (i.e. transferred to another party) without Seller's written consent. This Contract will bind and inure to the benefit of Buyer and Seller and their respective permitted successors, assigns, or personal representative. This Contract shall not be recorded in the office for the recording of deeds or in any other office of public record. 27. Notices. Except for the notices described in Paragraphs 11 and 30, all required notices shall be in writing and sent by certified mail, return receipt requested, postage prepaid, to the address shown in this Contract. Notice is deemed given twenty-four (24) hours after mailing. Notice may also be given by personal delivery, overnight courier or facsimile mail. In such event, notice shall be deemed given when received by the recipient. 28. Headings. The headings in this Contract are for convenience only and do not affect the meanings or interpretations of the terms and conditions. 29. Governing Law. This Contract is governed by New Jersey law. If any part of this Contract is deemed illegal or unenforceable, the rest of the Contract will, at Seller's option, remain in full force and effect, or in the alternative, Seller may cancel this Contract and refund all monies paid to Seller by Buyer and Seller and Buyer will have no further rights or liabilities to each other at law or equity. 30. Attorney Review (a) Study by Attorney Buyer and/or Seller may choose to have an attorney study this Contract. If an attorney is consulted, the attorney must complete his or her review of the Contract within three (3) business days (as calculated below). The Contract will be legally binding at the end of this three (3) day period unless an attorney for Buyer or Seller reviews and disapproves of the Contract. (b) Counting the Time. The parties count the three days from the date of delivery of the signed Contract to Buyer and to Seller. You do not count Saturdays, Sundays or legal. holidays. Buyer and Seller may agree in writing to extend the three (3) day period for attorney review. 15 593772.04 Notice of Disapproval (c) If an attorney for Buyer or Seller reviews and disapproves of this Contract, the attorney must notify the Broker(s) and Buyer and Seller within the three (3) day period, otherwise this Contract.will be legally binding as written. The attorney must send a notice of disapproval to the Broker(s) and Buyer and Seller by certified mail, by facsimile, or by delivering it personally. The facsimile or certified letter will be effective upon delivery to the Broker's and Seller's respective offices and to Buyer at his or her address on page 1 of this Contract. The attorney may also, but need not, inform the Broker(s) and the parties of any suggested revisions in the Contract that would make it satisfactory. (d) Other Rights of Cancellation The provisions of subparagraphs a, b and c above are required by law due to the fact that this Contract is being completed by, a real estate broker. These. provisions do not modify or lessen any other rights of cancellation given in this Contract. Buyer should familiarize himself or herself with the other rights of cancellation as they are broader than those discussed above. 31.Modifications. Seller encourages Buyer to have an attorney review this Contract. Seller, however, is not required to accept any modification to this Contract. If Buyer or Buyer's attorney submits any proposed modifications during the attorney review period, Seller will have the right to treat that as a rejection of the Contract and promptly terminate the Contract and return Buyer's deposit. 32. Real Estate Broker. IF BUYER AND SELLER HAVE NOT BOTH SIGNED A COMPLETED REAL ESTATE BROKER, RIDER, THEN BUYER REPRESENTS THAT BUYER WAS NOT INTRODUCED TO THE PROPERTY BY ANY BROKER OR SALESPERSON. SHOULD ANY BROKER, SALESPERSON OR OTHER PERSON ASSERT A CLAIM FOR A COMMISSION OR FEE, BUYER AGREES TO BE RESPONSIBLE FOR THAT COMMISSION OR FEE. BUYER FURTHER AGREES TO PAY SELLER'S ATTORNEY'S FEES IF SELLER IS SUED FOR ANY COMMISSION OR FEE. 33.Power of Attorney. Buyer agrees that at the time of closing, Buyer will execute a power of attorney appointing Seller as Buyer's attorney-in-fact for the purposes of amending the Governing Documents without Buyer's prior consent if required by the title insurance company selected to insure title, a governmental or quasi-governmental agency, or as specifically provided for in the Governing Documents, so long as any such amendment does not reserve any additional special privileges to Seller under the Governing 16 593772.04 Buyer acknowledges that this power of attorney is Documents. coupled with an interest in the subject matter. 34 Age Restrictions The Buyer understands and acknowledges that the permanent residents of each Home within the Community must include at least one person who is at least fifty-five (55) years of age and that no children under 19 years of age shall be permitted to permanently reside in the Home Unless otherwise permitted by applicable laws, neither the Buyer nor any person(s) to whom the Buyer may sell, give or otherwise' transfer the Home may occupy the Home unless and until the Age Restrictions set forth in Article IX of the Declaration of Covenants and Restrictions have been satisfied Buyers hereby warrant and represent that the initial permanent residents of the Home and their dates of birth are as follows:. Name: Date of Birth: Name: Date of Birth: Name: _Date of Birth: 34. Megan's Law Statement. Under New Jersey law, the county prosecutor determines whether and how to provide notice of the presence of convicted sex offenders in an area. In their professional capacity, real estate licensees are not entitled to notification by the county prosecutor under Megan's Law and are unable to obtain such information for you. Upon closing, the county prosecutor may be contacted for such further information as may be disciosable to you. 17 593772.04 35. Public Offering Statement. THE BUYER ACKNOWLEDGES THAT PRIOR TO SIGNING THIS CONTRACT, THE SELLER PROVIDED THE BUYER WITH A COPY OF THE PUBLIC OFFERING STATEMENT FOR THE COMMUNITY AS CURRENTLY REGISTERED WITH THE NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS. The Seller and the Buyer agree to the terms of this Contract by signing below. If a party is a corporation, this Contract is signed by its proper corporate officers and its corporate seal is affixed. NOTICE TO BUYER(S): YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT BY SENDING OR DELIVERING WRITTEN NOTICE OF CANCELLATION TO THE SELLER BY MIDNIGHT OF THE SEVENTH CALENDAR DAY FOLLOWING THE DAY ON WHICH IT IS EXECUTED. SUCH CANCELLATION IS WITHOUT PENALTY, AND ALL MONIES PAID SHALL BE PROMPTLY REFUNDED IN THEIR ENTIRETY. BUYER(S): Buyer Buyer SELLER: D.R. HORTON, INC.-NEW JERSEY By: Authorized Agent of Seller 18 593772.04 Notice of Seller's Business Affiliations To: PROPERTY: [Horn eb uyer(s)] FROM: D.R.H0RT0N, INC. — NEWJERSEY DATE: [Seller] This is to give you notice that D.R. Horton, Inc. - New Jersey has a business relationship with: DHI MORTGAGE COMPANY, LTD. GRANDE TITLE AGENCY L.L.C. 700 East Gate Drive, Suite 115 GRANDE REALTY 185W. White Horse Pike Suite A Mount Laurel, NJ 08054 20 Gibson Place• Berlin, NJ 08009 Freehold, NJ 07728 The nature of this business relationship is that these companies are corporate affiliates,, each being wholly or partially owned by, or by a subsidiary of, the same parent corporation. Because of this relationship, this referral may provide D.R. Horton, Inc. - New Jersey a financial or other benefit. Set forth below is the estimated charge or range of charges by each company for settlement services listed. You are NOT required to use these companies as a condition of your purchase of the Property from D.R. Horton, Inc. - New Jersey or as a condition of your application for, or settlement of, a mortgage loan on the Property in connection with your purchase. THERE ARE FREQUENTLY OTHER SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES. DHI MORTGAGE COMPANY, LTD. Service I Charge or Range Processing Fee: (Conventional Loans Only) $350.00 GRANDE TITLE AGENCY L.L.C. Service Charge or Range Closing/Settlement Fee $300.00-$325.00 Lender's Policy (if simultaneous issue with $25.00 Owner's) Endorsements $25.00 each Examination Fee $90.00 Patriot Name Search $10.00 . $60.00 Notice of Settlement NOTE: A Good Faith Estimate of all settlement charges will be provided to you at or within three business days after loan application. ACKNOWLEDGMENT I/we have read this disclosure form and. understand that D.R. HORTON, INC. - New Jersey referring me/us to purchase the above-described settlement services from DHI MORTGAGE COMPANY, LTD., GRANDE TITLE AGENCY L.L.C. AND GRANDE REALTY and may receive a financial or other benefit as the result of this referral. Homebuyer Homebuyer Homebuyer Homebuyer