This Agreement is made as of ________________, 2003, between Charleston Village Homeowners Association, (hereinafter called the ASSOCIATION, governed by a Board of Directors, hereinafter called the BOARD), located in Apex, North Carolina, and R S Fincher & Co., LLC (hereinafter called MANAGEMENT). In this Agreement, "Property" refers to all the real property described in the Declaration of Covenants, Conditions and Restrictions of Charleston Village Homeowners Association, and such additions thereto as may have been brought within the jurisdiction of the ASSOCIATION.


I. Appointment


The ASSOCIATION hereby appoints MANAGEMENT as the exclusive managing agent of the Property, and MANAGEMENT hereby accepts appointment of the terms and conditions described in this Agreement.


II. Term


Unless it is terminated sooner, this Agreement shall be in effect for sixteen months, beginning on the 1st day of October, 2003, and ending at twelve midnight on the last day of December, 2004. This Agreement shall automatically extend itself for successive annual periods unless it is terminated by either party. Either party may terminate this Agreement at any time, without cause and without penalty, by giving sixty (60) days written notice of termination to the other party.


III. Powers and Duties of Management


MANAGEMENT agrees to and has the authority to provide the following services as a management company to the ASSOCIATION:


A. Administrative Rights and Duties


1.      Right to Confer. MANAGEMENT is authorized to confer freely and fuIly with the BOARD in connection with the performance of its duties during normal business hours, at regular meetings of the BOARD or the ASSOCIATION, or at other times as agreed to by the BOARD and MANAGEMENT.


2.      Communication. MANAGEMENT shall communicate matters of importance to the ASSOCIATION (including copying and distributing appropriate literature to homeowners and the BOARD).


3.      Correspondence. MANAGEMENT shall initiate general correspondence dealing with business matters of the ASSOCIATION between governmental officials, legal, independent contractors, homeowners, and other entities with which the ASSOCIATION has a business relationship. Correspondence will be date stamped upon receipt (includes checks).


4.      Maintaining Files and Records. MANAGEMENT shall maintain the ASSOCIATION's files and corporate records, including:


        Corporate minute book (does not include taking minutes)


        Protective Covenants

        Policies, Rules and Regulations (includes ACC Guidelines and applications)


        Financial records (includes audit)

        Insurance policies

        Registry of homeowners


        Receipted bills

        Work orders

        All other documents and papers pertaining to the management and operation of the ASSOCIATION and the Property.


5.      Accounting. MANAGEMENT shall provide accounting services, including:


        Assisting the BOARD and committees in preparing the ASSOCIATION's operating budget.

        Providing monthly financial statements to the Treasurer. BOARD receives the Budget vs. Actual report in their board package for meetings (only).

        Billing and collecting dues, special assessments, and monies and debts of every nature which may become due the ASSOCATION (includes billing builders monthly through closings).

        Depositing in a North Carolina bank in the name of the ASSOCIATION all assessments and other receipts collected from the individual homeowners or other sources.

        Providing a monthly report of the status of all homeowners' accounts to the BOARD.

        Check all bills and invoices received for services, work, and supplies ordered in connection with maintaining and operating the Property, and paying all such bills from the ASSOCIATION's funds when they become due and payable.

        Maintaining bank accounts, including reserve accounts.

        Reconciling bank statements monthly.

        Invest funds at the direction of the BOARD (e.g., reserve and operating funds).

        Assisting the ASSOCIATION's CPA (usually hired for the Association by Management, with Board approval) in the preparation of tax returns, reviews and/or audits.


6.      Collecting Past-Due Charges. In matters of collecting past-due monthly homeowner dues, fees, or special assessments, MANAGEMENT has the authority to represent the ASSOCIATION in Small Claims Court, if applicable, after other collection methods have been exhausted and the homeowner is more than two months in arrears, or as otherwise directed by the BOARD.


7.      Meetings. MANAGEMENT shall schedule, provide notice to homeowners, organize, administrate and attend one annual meeting per year (includes coordinating election and tallying ballots). MANAGEMENT shall also attend meetings of the BOARD, as requested by the BOARD, not to exceed six BOARD meetings per year and one ANNUAL meeting per year. MANAGEMENT requests July and December to be free of meetings, unless absolutely necessary. Additional meetings may incur a charge of $30.00 per hour. (Example, setting second annual meeting due to lack of quorum.) Board Meeting night to be agreed upon by MANAGEMENT and BOARD. Currently the 4th Monday of each month has been set for the board meetings. MANAGEMENT agrees to monthly meetings for the first six months, if necessary.


8.      Contracts. MANAGEMENT shall enter into contracts as authorized by the BOARD. No such contract shall have a term which extends beyond the term of the Agreement without the approval of the BOARD. Any such contract that requires annual payments in excess of amounts provided in the current operating budget for such services must be approved by the BOARD.


9.      Property Inspection. MANAGEMENT shall inspect the Property at least once a week to ensure compliance with Bylaws, Protective Covenants, Rules and Regulations, ACC Guidelines and to verify contract fulfillment. Provide updated weekly log of covenant violations of lots and include common area issues.


10. Enforcement. MANAGEMENT shall enforce compliance with the Bylaws, Protective Covenants, Rules and Regulations, ACC Guidelines, etc. and shall have the right to enforce the ASSOCIATION's legal rights. ASSOCIATION provides MANAGEMENT with all legal documents of the ASSOCIATION (Covenants, Bylaws, Rules and Regulations, ACC Guidelines, etc.) These documents to include ASSOCIATIONíS procedures and time lines for notification of all infractions, including collections, and enforcement actions.


11. Insurance. MANAGEMENT shall solicit, procure, and maintain insurance coverage as required by the ASSOCIATION's Bylaws and Protective Covenants. Certificate of Insurances shall be kept in the ASSOCIATION records for all contractors, including MANAGEMENT.


12. MANAGEMENT shall handle all claims against insurance of the ASSOCIATION, at the direction of the BOARD.


13. Bonding. At the request of the ASSOCIATION, MANAGEMENT's employees who handle or are responsible for the ASSOCIATION's monies shall be bonded by a third party fidelity bond.


14. Reserve Accounts. MANAGEMENT shall assist the BOARD in the development of a schedule indicating the life expectancy of improvements for which the ASSOCIATION is responsible and in determining the amount of reserve deposits that are needed for each improvement per year.


15. Other Duties. MANAGEMENT shall guide and conduct all other matters of business of the ASSOCIATION under guidelines and policies established by the BOARD, Articles of Incorporation, Bylaws, and Protective Covenants.


16. Committees. MANAGEMENT shall assist in managing the affairs of the ASSOCIATIONís committees.


B. Maintenance/Repairs of Property


1.      Identifying Needs. MANAGEMENT shall assist the BOARD in identifying maintenance needs.


2.      Coordinating Maintenance and Repairs. MANAGEMENT shall coordinate maintenance and repair work as approved by the BOARD and shall make or cause and supervise repairs and alterations to the ASSOCIATION's Property, including:


        Preparing specifications, as directed by the BOARD, for contracts or any maintenance on which bids are taken.

        Soliciting bids and negotiating contracts for maintenance, pool, grounds, landscaping, and service contractors, including inspecting the work of contractors as needed, as well as Special Projects that may come up.

        Verifying that the terms of contracts have been fulfilled, and that Board is satisfied with job, before issuing payment to contractors or vendors.

        MANAGEMENT will provide bid comparisons for projects, when bids are sought.


3.      Limit on Unapproved Expenditures. MANAGEMENT agrees to secure approval of the BOARD for any one maintenance item on expenditures over five hundred dollars ($500.00), except if, in the opinion of MANAGEMENT, such repairs or actions are reasonably necessary to protect the Property from damage. Notice will be given to the board as soon as possible following such action.


4.      Tracking Homeowner Requests and Complaints. MANAGEMENT shall set up a system to receive any complaints, requests, or questions from ASSOCIATION members and, when necessary, shall obtain approval to act on said complaint, request, or question from designated members of the BOARD.


5.      Emergencies. MANAGEMENT shall provide emergency maintenance service and take any action necessary to protect Property in times of emergency.


IV. Compensation


The ASSOCIATION shall pay to MANAGEMENT a management fee of $4.50 per home per month (occupied). The fee shall be paid on the first day of each month for which MANAGEMENT is retained by the ASSOCIATION. The amount of this fee shall be reviewed by the parties at the end of the initial period of this Agreement and thereafter annually, and it may then be adjusted as agreed by both parties. Fee will not increase more than 5% per year, or cost of living rate (whichever is higher), unless deemed necessary by MANAGEMENT and AGREED to by ASSOCIATION.


1.      In the event that the BOARD asks MANAGEMENT to record the minutes of a monthly BOARD meeting, an additional $30.00 will be charged for the month. (This would include taking minutes; making any corrections to the minutes; and transcribing, reproducing, and distributing the minutes.)


2.      The ASSOCIATION shall pay to the MANAGEMENT a fee of $2.00 for each collection letter that MANAGEMENT sends to homeowners, or any other correspondence as it relates to collecting past due accounts.


3.      All postage, photocopies, printing , and general office expenses (such as coupon books, mailing labels, etc.) will be billed to the ASSOCIATION at cost.


4.      MANAGEMENT will advise the BOARD of any service not considered normal (and therefore not included in the management fee, according to the terms of this Agreement) prior to any such service being performed or a supplementary fee being paid.


V. Office Hours


The normal business hours of MANAGEMENT will be from 8:00 a.m. until 5:00 p.m., Monday through Thursday, and from 8:00 a.m. until 12:30 p.m. on Friday. The office will be closed in observance of all state holidays and the weeks containing Christmas Day and New Years Day. MANAGEMENT will provide an emergency telephone number through which MANAGEMENT can be contacted when the office is not open. When the office is closed, regular duties are not being performed (such as inspections), only emergencies are being handled. Notice of office hours are listed on voice mail, including holidays and holiday schedules.


VI. Indemnification


The ASSOCIATION shall defend and support MANAGEMENT except for adjudicated willful misconduct and/or negligence. The ASSOCIATION shall indemnify and save MANAGEMENT harmless from all claims, costs, expenses, demands, attorney fees, suits, liabilities, judgments and damages arising from or connected with the management of the Property by MANAGEMENT or the performance or exercise of any of the duties, obligations, powers or authorities granted to MANAGEMENT. The ASSOCIATION shall reimburse MANAGEMENT on demand for any moneys MANAGEMENT is required to pay out, whatsoever, for items covered in this paragraph. This provision shall survive the termination of this Agreement.


VII. Miscellaneous


Compliance with laws and ordinances. The parties agree that MANAGEMENT shall go about its duties described herein in a lawful manner, abiding by all federal, state, and local laws and ordinances. In particular, but without limiting the above, it is understood that MANAGEMENT will comply with the Fair Housing Act, with local anti-discrimination ordinances, and with rules promulgated thereunder.


Conflict of Interest. MANAGEMENT shall not accept from any party that provides goods and services to the ASSOCIATION, including vendors and independent contractors, any remuneration or consideration in any manner or form, as consideration for or inducement to MANAGEMENT for using the party's goods or retaining their services on behalf of the ASSOCIATION, all such benefits being rightly due the ASSOCIATION.


Affiliated Interest. MANAGEMENT shall not enter into any agreement to provide goods or services to the ASSOCIATION with any party, partnership, corporation, or other entity related to or affiliated with MANAGEMENT, its directors, officers, and employees without written disclosure to the BOARD.


Ownership of Records. All paper records, reports, and documents prepared and/or received pursuant to this Agreement shall be the property of the ASSOCIATION. All magnetic and/or optical media shall be the property of MANAGEMENT, however copies of magnetic and/or optical media will be made available to the ASSOCIATION.


VIII. Procedure for Amendments


This Agreement may not be altered or amended except in writing and when signed by both parties.



IN WITNESS WHEREOF the parties hereto have affixed their hands and seals this, the day of ____________ 2003.






President (on behalf of)



Sheri T. Fincher