Operating Principles

This document summarizes the plan for High Cove and some of the important provisions of the governing documents. For more complete information, please read the full text of all the documents.

1. Master Plan
2. The Documents
3. Association and Assessments
4. The Institute
5. Architectural Control
6. Use Restrictions

Master Plan

High Cove is comprised of two parts: High Cove Village and the Open Space.

High Cove Village encourages a mixture of uses, both homes and businesses, especially in the Village Center, the area surrounding the green. The Village Association, as discussed below, will maintain common area within High Cove Village.

Clustering homes and businesses in High Cove Village allows the creation of a compact, walkable community while conserving the majority of the land. The area outside of High Cove Village, known as the Open Space, will be owned and managed by a separate entity, the Open Space Manager. While the Open Space may encompass an inn, scattered cottages and educational, cultural and recreational facilities, all uses must be compatible with the goal of conserving the Open Space as a visual amenity, a place for hiking and similar activities, and as ecologically healthy habitat. All owners of property within High Cove Village will have easements for appropriate use of the Open Space and will contribute to its maintenance.

The Documents

High Cove Village is established by a Declaration of Covenants, Conditions and Restrictions, which will be recorded in the public records of Mitchell County, North Carolina, where the property is located. Every deed for property within High Cove Village will be subject to the Declaration, and every owner, in accepting title, is considered to have agreed to its terms.

The main text of the Declaration ties the document to the land and allows for its initial development. The main text of the Declaration also establishes the relationship between High Cove Village and the Open Space, requires architectural review of all improvements and puts a time limit on construction.

The following documents are part of the Declaration and will be recorded as exhibits:

• The Book of Operating Principles (Exhibit A to the Declaration), provides guidance for the ongoing operation of High Cove Village and the Village Association. Although the Book is a legal document, it looks significantly different from most homeowners’ association documents. It is meant to provide the owners with the information they need in order to run their community successfully.

• The Articles of Incorporation (Exhibit B) form the Village Association as a nonprofit corporation under North Carolina law.

• The Bylaws of the Village Association (Exhibit C) provide details about corporate operation, including the election and duties of directors and officers.

The remaining important document is the High Cove Village Design Guidelines, which is not recorded, but is implemented by the Declaration and the Book of Operating Principles. Design review is discussed further in Part 5, below.

Association and Assessments

Owners of lots are mandatory members of the High Cove Village Association, Inc. (the “Village Association”), a nonprofit corporation, and have one vote for each lot. The owners elect a board of directors, which makes most of the decisions about operation of the community. The board of directors may hire a manager to carry out maintenance responsibilities and to manage the association.

The developer of High Cove Village, known as the Founder, is permitted to elect a majority of the board of directors of the Village Association until 90 percent of the lots have been conveyed to members of the association.

To meet the association’s expenses, the board of directors approves a budget and sets the level of assessments. Assessments are the personal obligation of the owners and are also secured by a lien on the lot. If the assessment is not paid, the association may foreclose on the lien in a manner similar to a mortgage. At the closing and transfer of title of each lot to the first owner other than the Founder or builder, the owner also makes an initial contribution in the amount of three months’ assessments.

Instead of paying assessments on lots it owns, the Founder may guarantee that assessments paid by owners will not exceed a certain amount. If the association’s expenses are greater than the amount raised by the assessments and the Founder has offered such a guarantee, then the Founder is required to pay the deficit.

The Institute

The High Cove Institute, Inc., a not-for-profit corporation intended for tax-exempt status under 501(c)(3), will be created to address some of the cultural and social needs of High Cove and to engage in other charitable activities. It may conduct research and sponsor education al events, seminars, concerts and art festivals. On any resale of a lot within High Cove Village after the initial conveyance from the Founder, the buyer will be required to contribute one-half-of one percent of the purchase price to the Institute.

Architectural Control

In High Cove Village, the various building types work together to create a harmonious whole and to enclose the streets. The High Cove Village Design Guidelines establish setbacks or build-to requirements, building sizes and design guidelines for the various lot types. The Design Approval Process booklet, which supplements the High Cove Village Design Guidelines, outlines materials specifications for the buildings and other construction details. The High Cove Village Code is not recorded in the public records and may be amended.

All construction within High Cove Village must be approved by the Founder, and all subsequent modifications after initial construction must be approved by the Design Review Panel. Changes to the yard and other parts of the lot are also subject to architectural review, and owners cannot modify landscaping, fences or add signage or landscape lighting without approval. Satellite dishes and other antennas are also regulated. Among the factors the panel considers is conformance with the High Cove Village Code, harmony with surrounding structures and topography and aesthetic considerations.

To allow for neighborhood development and to discourage speculation resulting in empty lots, most lots are sold with a requirement that a home or business be built within a limited period of time. If the requirement is not satisfied, then the Founder has the right to repurchase the lot. The repurchase price is determined by the purchase and sale agreement, and is usually the original purchase price less a transaction fee.

Use Restrictions

Homes may be rented, subject to the Village Association’s rules and regulations. The Village Association’s board of directors may set a minimum term for leases of up to one week for single-family homes. Inns may allow shorter rentals.

Pets are welcome so long as the pets don’t cause an unsafe condition or unreasonable disturbance or annoyance. Certain types of farm animals, such as goats, may also be permitted.

Some additional use restrictions are set out in the Book of Operating Principles. However, High Cove Village doesn’t have long lists of rules. Instead, High Cove Village operates on the following principle: neighbors shouldn’t create unreasonable disturbances or unsafe conditions—and neighbors should tolerate a certain amount of activity, noise, pets and exuberant children as part of a vibrant community.

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