ARTICLE II

PROPERTY RIGHTS  

2.1  Right to Use and Enjoy Common Area. Each Resident shall have the non-exclusive right and easement to use and enjoy the Common Area.      Such rights and easements shall run with the land, be appurtenant to and pass with title to every Dwelling Unit, and are subject to and governed by the following:

(a)  The Governing Documents;  

(b)  Any restrictions or limitations contained in any deed conveying Common Area to the Association; 

(c)  Rules and regulations adopted as more fully provided in Section 4.3;

(d)  The right of the Board to suspend the right of an Owner or Resident to use recreational facilities pursuant to Section 4.3;

(e)  The right of the Association, acting through the Board, to dedicate or transfer all or any part of the Common Area;

(f)  The right of the Board to impose reasonable membership requirements and charge reasonable admission or other use fees for the use of any recreational facility situated upon the Common Area;

 (g) The right of the Board to permit use of any Common Area by non-Residents upon payment of use fees established by the Board;

(h)  The right of the Board to create, enter into agreements with, and grant easements to tax-exempt organizations under Section 4.10;

(i)  The right of the Association, acting through the Board, to mortgage, pledge, or hypothecate any or all of its real or personal property as security for Association obligations;

(j)  The right of the Association to rent, lease, or make available, with or without charge, for any purpose, any portion of any clubhouse and other recreational facilities within the Common Area to any Person approved by the Board for such uses as may be approved by the Board, including, without limitation, the leases referred to in Article IV;

(k)  The requirement that access to and use of recreational facilities within the Properties shall be subject to the presentation of an Activity Card issued by the Association for such purpose; and

The initial Common Area as identified in Exhibit A shall be conveyed to the Association free of liens prior to or concurrent with the conveyance of the first Dwelling Unit to a Home Owner.  Any Common Area which is subsequently made part of the Properties shall be conveyed to the Association free of any Mortgage and with prorated real estate taxes paid as required by Virginia Code Section 55-509.1 within ninety (90) days after it is made part of the Properties.

2.2  Activity Cards.

            (a)  Issuance by the Board.  One (1) Activity Card shall be allocated to each Qualified Resident of a Dwelling Unit, up to a maximum of two (2) Activity Cards per Dwelling Unit.  No Activity Cards shall be allocated to any Dwelling Unit which is not occupied by a Qualified Resident.  The Board shall determine entitlement to Activity Cards on an annual basis.  Activity Cards shall be renewed annually without charge, provided, the Dwelling Unit continues to be occupied by a Qualified Resident and all applicable assessments and other charges pertaining to the Dwelling Unit have been paid.  The Board may establish policies, limits, and charges with regard to the issuance of additional cards and guest privilege cards.  The Board may issue Activity Cards to persons who have signed binding contracts to purchase a Dwelling Unit, subject to such policies as the Board may determine from time to time.

(b)  Assignment of Rights.  The right to an Activity Card is based upon occupancy of a Dwelling Unit.  Any Owner who leases or otherwise transfers occupancy of his or her Dwelling Unit shall be deemed to have assigned his or her rights to an Activity Card to the Qualified Residents of such Dwelling Unit.   Any Owner who leases or otherwise transfers the right to occupy his or her Dwelling Unit shall provide the Association with immediate written notice thereof and shall surrender to the Association his or her previously issued Activity Card.  Activity Cards shall be surrendered by any holder who ceases to occupy a Dwelling Unit, or at any time upon written notification from the Association that the holder no longer is entitled to hold an Activity Card.

2.3  Assumption of Risk and Indemnification.  To the fullest extent permitted by law, each Owner, by its participation in events sponsored by the Association and/or use of the Common Areas, assumes all risk for Owner’s health and, on behalf of Owners and Owner’s heirs, beneficiaries, dependents and personal representatives, releases and holds harmless the Association, affiliates, subsidiaries, shareholders, members, directors, officers, employees, agents, and contractors, and all real property inclusive of Common Areas and the Falls Run community from and against any responsibilities, liabilities, damages, or claims related to their participation in the activities.

The Association does not have the resources to review, and is not responsible for reviewing, an Owner’s decision to participate in the activities.  Owner understands and acknowledges that participating in the activities naturally involves risk of injury. 

2.4  No Partition.  Except as permitted in this Declaration, the Common Area shall remain undivided, and no Person shall bring any action for partition of the whole or any part thereof.  This Section shall not prohibit the Association from acquiring and disposing of tangible personal property or from acquiring and disposing of real estate which may or may not be subject to this Declaration.

2.5  Condemnation.   In the case of a taking or condemnation by competent authority of any part of the Common Area, the proceeds awarded in such condemnation shall be paid first to satisfy any indebtedness secured by a Mortgage or other lien encumbering such portion of the Common Area and the balance to the Association.  The proceeds, if any, paid to the Association, together with any reserve being held for such part of the Common Area, shall be used first to restore or replace any improvements taken or condemned, and the balance, if any, shall, in the discretion of the Board, either (i) be distributed to the Owners who have the right to use such Common Area and their respective Mortgagees, as their interests may appear, in equal shares, or (ii) be used for the mutual benefit of such Owners, as determined by the Board in its reasonable discretion.

2.6  Age Restriction.  Falls Run is intended to provide housing primarily for persons 55 years of age or older.  The Properties shall be operated as an age restricted community in compliance with all applicable state and federal laws.  No person under 19 years of age shall stay overnight in any Dwelling Unit for more than ninety (90) days in a consecutive twelve (12) month period. Each Dwelling Unit, if occupied, shall be occupied by at least one (1) individual 55 years of age or older; provided, however, that once a Dwelling Unit is occupied by an Age-Qualified Occupant, other Qualified Residents of that Dwelling Unit may continue to occupy the Dwelling Unit, regardless of the termination of the Age-Qualified Occupant’s occupancy.  Notwithstanding the above, at all times, at least eighty percent (80%) of the Dwelling Units within the Properties shall be occupied by at least one (1) individual 55 years of age or older.  The Board shall establish policies and procedures from time to time as necessary to maintain its status as an age restricted community under state or federal law.  The Association shall provide, or contract for the provision of, those facilities and services designed to meet the physical and social needs of older persons as may be required under such laws.  The provisions of this Section may be enforced by the Association by an action in law or in equity, including, without limitation, an injunction requiring specific performance hereunder.

2.7  Easements, Leases, Licenses and Concessions and Rights:  The Board shall have the right and power from time to time (a) to lease or grant easements, licenses, concessions or other rights with regard to any portions or all of the Common Area for such uses and purposes as the Board deems to be in the best interests of the Owners including, without limitation, the right to grant easements relating to installation and operation of utilities, communication systems, satellite or cable television systems, and similar and related purposes and/or (b) with the agreement of the beneficiary or grantee of the easement, and any Owner whose Dwelling Unit is benefited thereby, cancel, alter or modify any easement which affects any Common Area, as the Board in its discretion shall determine.  Any and all proceeds from leases, easements, licenses, conces­sions or other rights received by the Association with respect to the Common Area shall be used to pay the Common Expenses.  Each Person, by acceptance of a deed, mortgage, trust deed, other evidence of obligation, or other instru­ment relating to a Dwelling Unit, shall be deemed to grant a power coupled with an interest to the Board, as attorney-in-fact, to exercise the powers as provided for in this Section.  Any instrument executed pursuant to the power granted herein shall be executed by the President and attested to by the Secretary of the Association (or other appropriate officer) and duly recorded in the Public Records.