April 24, 2007 (Revision 4)

November 15, 2005 (Revision 3)

July 22, 2003 (Revision 2)

July 22, 2002 (original)

CYPRESS LANDING DELINQUENT ACCOUNT POLICY AND PROCEDURES

It is the policy of the Cypress Landing Master Homeowners Association (CLMHOA) that all annual charges or dues and special assessments are payable on the Due Date specified on the invoice submitted to the property owner(s). We are an Association which requires each individual member to fulfill their financial obligations to the membership in a timely fashion. Members are urged to keep their financial accounts current and/or communicate with the CLMHOA Board of Directors (BOD)/CLMHOA Community Association Manager (CAM) to seek alternative payment plans. If payments are not received by the specified Due Date, the account of that property owner will be declared “Delinquent”.

“Delinquent” property owners shall forfeit the right to utilization of the Pedestrian Access System, Tennis Courts, Trailer Parking Facility, Landing (including the Bay Club and pool), Fitness Center and pool, and each and every park or common area in the community (refer to CLMHOA Protective Covenants paragraph 17).

Delinquent Accounts shall be subject to an interest charge at the rate of 18% per annum (1.5% per month) as provided for in the Protective Covenants. In addition, the CLMHOA will pursue any and all amounts available to it under the Protective Covenants and existing North Carolina statutes, including statutory penalties and fines, costs, charges, late fees and reasonable attorney fees. Such action may include the filing of a Claim of Lien against the property in the Office of the Clerk of Superior Court of Beaufort County. Foreclosure upon the real property may be initiated for those delinquent accounts aged over eighteen (18) months and approved for foreclosure by a majority vote of the BOD.

If a billed statement amount is not received by the Due Date, the CAM will transmit an Account Delinquent Notification Letter (Attachment A) within 15 days to the property owner. The letter will enclose a copy of this Delinquent Account Policy and Procedures and will request immediate payment and/or communication with the CAM. The CAM may also initiate email and/or telephone contact with the property owner to facilitate collection/payment.

If the account is not paid within 30 days from the Due Date, interest at the rate of 18% per annum will be added to the account from the Due Date. In addition, a late fee of $10.00 will be added each month that an account remains delinquent. Note: If the account becomes “Delinquent”, complete payment will include all interest and late fee charges; Payment of only the base amount will not satisfy the delinquency.

The CAM will act on any communication received from the property owner and recommend a disposition to the BOD as soon as possible. The property owner will be notified in writing of the decision of the BOD. Only the BOD may waive interest and late fee charges.

When an account remains delinquent, a monthly statement will be sent to the property owner with an annotation that the account is delinquent. Each month the account remains delinquent, additional interest at the rate of 18% per annum will be applied to the outstanding balance and an additional late fee of $10.00 per month will be added to the account.

If the account remains delinquent 3 months from the Due Date, a Final Demand/Warning letter (Attachment B) signed by the CLMHOA Treasurer will be sent within 15 days by certified mail (return receipt requested) to the property owner noting the specific amount owed, interest accrued, and late fees applied, and demand payment within 10 days of the date of the letter. If the property owner refuses receipt of the letter delivered by certified mail, a follow-up final demand letter will be sent by first class mail. Either means of notification will be considered adequate notification to start the process for filing of a lien. The CAM will start the process to file the lien under either of the following circumstances:

1. If payment is not received within ten days of the date of the letter delivered by certified mail; or,

2. If payment is not received within fifteen days of the date the follow-up letter is sent by first class mail because the property owner refused receipt of the original certified letter.

If payment is not received by the above date set, the BOD President will within 10 days send a Notification Letter (Attachment C) by certified mail (return receipt requested) or by first class mail, if the property owner previously refused receipt of the final demand letter sent by certified mail, to the property owner notifying the owner that a Claim of Lien will be filed with the Clerk of the Court. This letter will advise that the Claim of Lien will be filed if full remittance is not received within 10 days of the date of the certified letter or fifteen days after mailing the first class letter.

Further, the BOD directs the CAM to develop and maintain a “Delinquent Property Owners” listing (accounts that are delinquent more than 3 months) which shall be posted at the Bay Club, HOA amenities, and the Web Site (via minutes of the Finance Committee and/or the HOA Board). The Listing shall be dated and be in “Months Delinquent” order and list only the owner’s name(s), lot number(s), and street address. The dollar amount delinquent will not be posted.

The Claim of Lien should be filed shortly after either of the above due dates has passed without remittance of the full amount but in no event later than 8 months after the original Due Date. (The Covenants state the Claim of Lien must be filed within 9 months of the Due Date). The CAM will prepare the Claim of Lien (Attachment D) and the Certificate of Service (Attachment E). The BOD President will sign the Claim of Lien and the CAM will sign the Certificate of Service. Further, the BOD President will send a Lien Transmittal Cover Letter (Attachment F) to add emphasis to the urgency of the situation.

A follow up mechanism will be established to automatically review all Claims of Lien to determine whether the amount of the delinquent account has increased significantly to justify the filing of a new Claim of Lien and/or if 30 months has elapsed since the last filing of a Claim of Lien was made. (NOTE: The original lien is extinguished three years (36 months) from the date the Claim of Lien was docketed with the Clerk of the Court.)

If the lien is satisfied, the BOD President will sign a Release of Claim of Lien (Attachment G) and forward same to the home owner(s) and the Court.

An account that is continuously delinquent for eighteen months and with a balance due that exceeds $1000 may, upon approval by a majority vote of the BOD, be referred to an attorney for foreclosure. Additionally, a Foreclosure Letter (Attachment H) will be sent by first class mail advising the property owner that the delinquent account has been designated for foreclosure in accordance with North Carolina statutes and that the CLMHOA intends to collect all associated expenses, including court costs and reasonable attorney’s fees (including costs and expenses incurred), as an additional assessment.

Attachment A

ACCOUNT DELIQUENT NOTIFICATION LETTER

(Date)

(Full names(s) of Property owner and mailing address.)

Dear ______________,

This Notification Letter is to inform you that you are delinquent in payment of __________________________ to the Cypress Landing Homeowners Association.

As outlined in the attached Cypress Landing Delinquent Account Policy and Procedures document, delinquent property owners shall forfeit the right to utilization of the Pedestrian Access System, Tennis Courts, Trailer Parking Facility, Landing (including the Bay Club and pool), Fitness Center and pool, and each and every park or common area in the community (refer to CLMHOA Protective Covenants paragraph 17).

The Board of Directors (BOD) and the Community Association Manager (CAM) would like to resolve this matter in a timely manner and therefore request immediate payment of your account.

Specific details that may need clarification regarding your account may be discussed during normal business hours with the CAM who may be reached by phone at 252-975-3255, Monday through Friday 9AM-5PM.

We look forward toward to your timely resolution of this matter.

Thank You,

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION

By __________________________________

(Name)

Attachment

COMMUNITY ASSOCIATION MANAGER

100 Marina Drive

Chocowinity, NC 27817

Telephone 252 975 3255

Facsimile 252 975 3845

Attachment B

FINAL DEMAND/WARNING LETTER

{Date}

(Full names(s) of Property owner and mailing address.)

Dear ______________,

Our records indicate that you are currently in arrears in paying your assessments to your homeowners association even though we have sent you previous statements regarding your delinquency.

We have been instructed by the Board of Directors to begin legal action under the provisions of the Protective Covenants and the Delinquent Account Policy and Procedures. This is a Final Warning. We reserve the right to turn your account over to an attorney for collection and/or file a Claim of Lien on your property in 10 days from the date shown above.

The property subject to the assessment which is in arrears is located at:

(Property Address,

Chocowinity, NC 27817)

Our records on your account indicate the following:

Base Charges Due $_____

Administrative Fees through __________ $_____

Interest through _________ $_____

Total Due $_____

If you account is turned over to an attorney, you will be responsible for all costs of collection including reasonable attorney fees, the sum of which will be added to your account.

To avoid the above mentioned action, please bring your account up to date by sending your payment of the total amount due by _______________. If you have any questions, please feel free to contact our Community Association Manager, Tomi Moody at 252-975-3255 9AM-5PM Monday -Friday.

Thank you for your cooperation.

______________________

(Name)

TREASURER

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION

Attachment C

NOTIFICATION LETTER

(Date)

(Full names(s) of Property owner and mailing address.)

Dear ______________,

It is with regret that your Association Board of Directors must send this Notification Letter to you indicating that as a result of your delinquency in payment of _______________________________________________ and accumulated interest and fees to the Association, and your refusal to respond to repeated attempts to warn you of your situation, steps will be taken to place a Claim of Lien on your property in the Beaufort County Court because remittance was not received within the time frames outlined in your warning letter(s).

Please understand that we do not wish to do business in this manner, but your failure, despite repeated reminders, to pay your Association charges while the vast majority of your neighbors pay theirs in a timely fashion requires this action to be taken.

A copy of the “Delinquent Property Owners” listing is attached and will be posted at the Bay Club, HOA amenities, and the Web Site (via minutes of the Finance Committee and/or the HOA Board).

We would encourage you to pay your account in full as soon as possible in order that this action can be precluded. If you should choose not to do so, you should also be aware that we will proceed based on the Protective Covenants of the community, the North Carolina State Statutes, and the policies of the Board of Directors, and further, the potential exists that foreclosure proceedings may be initiated by the Association to recover the money due to it.

In closing your Board would again like to encourage you pay your account as soon as possible. Specific details that may need clarification regarding these issues may be discussed during normal business hours with the CLMHOA Community Association Manager. The manager may be reached by phone at 252-975-3255 on Monday through Friday 9AM-5PM.

We look forward toward your timely resolution of this matter.

Thank You,

______________________

(Name)

PRESIDENT

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION

Attachment D

NORTH CAROLINA

BEAUFORT COUNTY

CLAIM OF LIEN

Name and address of person claiming lien:

Cypress Landing Master Homeowners Association

100 Marina Drive

Chocowinity, NC 27817

2. Name and address of record owner of the real property claimed to be subject to the lien at the time the lien is filed:

(Full names(s) of Property owner and mailing address.)

3. Description of the real property on which the lien is claimed:

[Lot #_______ Cypress Landing on Chocowinity Bay

Chocowinity, NC 27817]

4. Authority for this claim of lien is contained in paragraph 7, page 18 Protective Covenants Cypress Landing, Beaufort County, North Carolina recorded in Book 997, pages 228 through 272, and rerecorded in Book 998, pages 2 through 61, Beaufort County Registry (“Master Covenants”).

5. General description of claim and the amount claimed:

[Claim is for unpaid annual dues and/or assessments and accumulated interest and fees.

The amount claimed is $_____________ ($___________ principal; $_________ interest; and $_________ administrative fees). A filing fee of $6.00 per each filing is also due pursuant of declaration.]

This the _____ day of _______ YYYY

Lien Claimant: _________________________

(Name)

PRESIDENT

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION

100 Marina Drive

Chocowinity, NC 27817

Filed: ______________________________________

Clerk of Beaufort County Superior Court

Attachment E

CERTIFICATE OF SERVICE

This is to certify that the undersigned has this date served this Claim of Lien in the above-captioned action upon all parties to this cause by depositing a copy hereof, postage prepaid, in the United States Mail, properly addressed as follows:

(Full names(s) of Property owner and mailing address.)

This the _____ day of _______ YYYY

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION

By __________________________________

(Name)

COMMUNITY ASSOCIATION MANAGER

100 Marina Drive

Chocowinity, NC 27817

Telephone 252 975 3255

Facsimile 252 975 3845

Attachment F

LIEN TRANSMITTAL COVER LETTER

(Date)

(Full names(s) of Property owner and mailing address.)

Dear ______________,

It is with regret that your Association Board of Directors must send the enclosed notice to you indicating that, as a result of your delinquency in payment of monies due and accumulated interest and fees to the Association, a lien has been placed on your property in the Beaufort County Court.

We would encourage you to pay your account in full as soon as possible in order that this lien can be extinguished. If you should choose not to do so, you should also be aware that, based on the Protective Covenants of the community, the North Carolina State Statutes, and the policies of the Board of Directors the potential exists that foreclosure proceedings can be initiated by the Association to recover the monies due to it.

In addition, pursuant to the Protective Covenants and North Carolina State Statutes, you are reminded that your access to and use of any of the common areas or amenities of the community continue to be suspended until your arrears to the Association are paid in full.

We look forward toward your timely resolution of this matter.

Thank You,

______________________

(Name)

PRESIDENT

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION

Attachment

Attachment G

RELEASE OF CLAIM OF LIEN

The LIEN filed on (date) by the Cypress landing Master Homeowner’s Association against (Full names(s) of Property owner and mailing address.) is hereby RELEASED.

This the _____ day of _______ YYYY

______________________

(Name)

PRESIDENT

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION

Attachment H

FORECLOSURE LETTER

(Date)

(Full names(s) of Property owner and mailing address.)

Dear ______________,

It is with regret that your Association Board of Directors must inform you that, as a result of your delinquency in payment of annual dues and accumulated interest and fees to the Association, FORECLOSURE has been initiated on your property.

Please understand that we do not wish to do business in this manner, but your failure, despite repeated reminders, to pay your accumulated Association charges while the vast majority of your neighbors pay theirs in a timely fashion requires this action to be taken.

The Protective Covenants of the community, the North Carolina State Statutes, and the policies of the Board of Directors require that foreclosure proceedings be initiated by the Association to recover the charges due and all associated expenses, including court costs and reasonable attorney’s fees (including costs and expenses incurred), as an additional assessment..

Further, pursuant to the Protective Covenants and North Carolina State Statutes, I would remind you that access to and use of any of the common areas or amenities of the community continue to be suspended.

In closing, your Board would again like to encourage you resolve this issue as soon as possible.

Thank You,

______________________

(Name)

PRESIDENT

CYPRESS LANDING MASTER HOMEOWNERS ASSOCIATION