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PTA - PTHOA Memorandum of Agreement

Committee named on 9-19-09

Members:

. PTA Deena Douglas Noret DovelJim Vasoti Janet White

PTHOA Dan Tully

Objectives of the Committee

• Provide some history: What is the MOA?Why was it created?

• Explain the purpose & terms of the MOA

• Define the source of authority of the PTA Boardof Directors in creating the MOA

• Address the concerns raised regarding the MOA2

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PTA - PTHOA Memorandum of Agreement

What is the MOA

Purpose: Defines the methodology for separating andallocating costs for Port Trinitie between common areasand community facilities when costs cannot beseparated.

The Board adopted the Memorandum of Agreement withthe Port Trinitie Home Owners Association to correct thecondition which existed from 1987 - 2007 wherecommunity maintenance fees were used for the up keepof condominium common elements or areas andcommunity facilities.

PTA - PTHOA Memorandum of Agreement

History LeadinQ.j!P to the MOAExhibit A, Additional Conditions attached to the Deed entitles PTHOA tobe represented by two of its Board members on the PTA Board formatters affecting the administration, management and assessments ofthe Community Facilities.In 2007 the PTHOA named two individuals to formally represent them onthe PTA Board. In the past PTHOA owners met with the PTA Boardinformally - not as elected representatives by their PTHOA Board.Summer 2007 PTHOA reps and the full Board of the PTA met to discussthe fees again. Prior to this meeting the PTA Treasurer and the PTAProperty Manager met and discovered that there were some expensesspecific to the condos that were included in the community maintenancefee.A series of meetin9s ensued and the outcome was approval by the PTABoard of a MOA with PTHOA to define how costs would be allocated.

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Property Designations in Port Trinitie

Condominiums:

Common Elements or Common Property means all that portion of the condominium property that isnot included in the individual condo units and is further defined in NCGS 47 -A-3(2) except as modifiedherein. (Ref: DUO dtd 11/15/2004 Pg 2 Sect 2.E) (Note: Sections 4 & 5 DUO oon/ain more detail on CommonElements and Shared Expenses)

Limited Common Elements are a portion of the common elements reserved for the exclusive use of oneor more, but less than all of the Dwelling units. (Ref: DUO dtd 11/15/04 Pg 3 Sect 2.M.) (Note: Section 6contains more detail on Limited Common Elements)

Community Facilities certain streets and access easement properties and recreational amenities,'

conveyed to the PTA for the benefit of all owners in the Development Area (PTA Deed dtd 4/1611987).

Property Designations in Port Trinitie

Homeowners:'Subdivision" shall mean those building lots numbered 1-29 and shown on the Plat entitled 'Port TrinitieSubdivision: dated 10 March 1987 and recorded in the Dare County Registry, PCC, pg. 20, C&D. Theselots and the improvements thereon are not part of the Condominium and the owners of the lots are notmembers of the Association and have no ownership in Common Elements of the Condominium. Theowners of these lots are charged a monthly fee, equal to the fee assessed to each dwelling unit of theCondominium, for the privilege of using the amenities and infrastructure owned by the Association. (Ref:

DUO dtd 11/15/04 Pg 4 Sect 2.0)

Note: Exhibit A to the Deed Section 1. RepresentationWith regard to all matters dealing with and affecting the assessments conceming the said CommunityFacilities or the use or administration thereof, the Subdivision shall be deemed a separate phase of PortTrinitie Condominium and each lot owner of the Subdivision shall b,e deemed a member of theCondominium Association. In accordance therewith, on such matters affecting the administration,management, and assessments for use, improvements, repairs, and replacements, and the determinationof rules and regulations regarding the Community Facilities, the Port Trinitie Homeowners Association'shall be entitled to elect and be represented by two of its Board members as members of the Board ofDirectors of the Condominium Association ....

For matters affecting the Community Facilities which requires a dwelling owner of the Condominium tovote shall likewise provide for the right of each lot owner in the Subdivision to vote on the same basis.

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What are Community Facilities vsCondominium Common Areas in the MOA?

Community Facilities Condominium Common Areas

• Community Pools• Tennis Courts• Sound side Gazebo• Roadways• Ocean Beach from the top of the

dune to the ocean side property line

• All community easements• .Walkways& walkovers: sound side &

ocean side, including handicap ramp• Top of dune to the Atlantic Ocean

Areas conveyed by theDeclaration of Unit Ownership(DUO) and owned by the PTACondo owners

MOA Cost Allocation Methodology for 2010

• Community Facilities - cost of operating andmaintaining will be divided equally between condo(25) and lot owners (32)(25+32=57 units) Condo share=25/57 or 43.865 Lot Owners = 32/57 or 56.14%

• Condo owners are fully responsible for all costs tooperate and maintain the condominium commonareas.

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MOA Cost Allocation Methodology forFiscal Year 2010

Directly assigned to Condo or Community Facilities

Property LaborProperty MaterialsCommunity Services

MowingOffice Expenses

These expenses were allocated based on the estimatethat 20% of the manager's time was spent on condosonly and 80% on community facilities. so condos pay55.1%and lot owners pay 44.9%

Management FeesManager's Cell Phone

MOA Cost Allocation Methodology forFiscal Year 2010

Example: $100 Bill for Manager's Cell Phone

$20 a. allocated directly to condominiums

$80 to be split 43.86% condo = $35.09 b.

56.14% lots = $44.91

condo share of cost is $20 a + $35.09 b. = $55.09Lot share of cost is $44.91

Total Cost $100.00

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MOA Cost Allocation Methodology (Cont)

These expenses are 100% allocated to the condos

Condo Roof RepairsPressure Clean CondosCondo InsuranceAny other costs associated only with the condos

These expenses apply only to community facilities:

Retile Oceanside PoolSound side Pool CoverPool Labor & MaterialsDirector's InsuranceAssociation InsuranceSound side Office InsurancePool PhonesMiscellaneous Costs

Resurface Tennis CourtsNorth Beach AccessMeetings and Board ExpensesAssociation InsuranceDishonesty BondProfessional FeesUtilities

Define the source of authority of theBoard of Directors (BOD) in creating the

MOA4/16/87 Deed establishes the rules and regulations as to the use of Community Facilities

Page 1 confinms the intent of the developer of Port Trinitie Condominium to create a condominium project; statesthe project was developed to allow all land owners (whether within or without the condominium) in the -Development Area to be entitled to use of all streets and walkways to and from their property to the Atlantic Oceanand Currituck Sound and the beneficial use of the recreational amenities; provided, the right of use to non-condominium owners shall be subject to an assessment by the Port Trinitie Association.

Page 8 The tenm Community Facilities is used for the first time in this document but the definition is not easilyextracted.

Exhibit A Additional Conditions to the Deed This language defines community facilities: Whereas PTA bythis instrument is the owner of certain streets and access easement properties and recreational amenities, allherein referred to as 'Community Facilities: conveyed to the Association for the benefit of all owners in theDevelopment Area.

Exhibit A 1. also grants rights to the Subdivision (homeowners) to representation as to the assessment, and thedetermination thereof, of the expenses for the fees and dues for the use, repairs, improvements, and replacementof the Community Facilities, and shall further have representation as to the administration, management, rules andregulations for and of the use of said Community Facilities.The representation is defined as having two PTHOA Board Members represent their interests on the PTA Board,limited to issues related to Community Facillties.

Page 8 (i) states each lot owner in PT Subdivision shall be assessed the same amount for "foregoing purposes" asis assessed against the owners of a Dwelling Unit in PT Condominium."Foregoing purposes appears to refer to use of community Facilities .•

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Define the source of authority of theBoard of Directors (BOD) in creating the

MOA

11-15-2004 Second Amended and Restated By-Lawsof Port Trinitie Association

Defines the PTA as a non-profit corporation and describes its purpose.Defines condition for membership of PTA & terminating, transferring or suspendingmembershipDefines meetings of members including established Annual Membership Meeting,BOD Special Meetings, issuing meeting notices, voting proceduresDefines BOD function, election, qualifications, term of officeDefines organization of Association BOD including functions of each officeDefines Guidance for the Administration of Assets including Common Assessmentsaccording to the Declaration as determined by the budget.Defines Condominium, Subdivision, Limited Common Elements, Common Elementsor Common PropertyStates each dwelling owner governed by DOU and By-Laws of PTA

Define the source of authority of theBoard of Directors (BOD) in creating the

MOA

11-15-2004 Second Amended and Restated By-Lawsof Port Trinitie Association

Page 12 Article VII Administration of AssetsSection 2. Common Assessments. All Dwelling Unit Owners and Lot owners shallpay their share of the common expenses according to the Declaration as determinedby the budget, which shall be adopted at the Annual Membership Meeting

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PTA - PTHOA Memorandum of Agreement

Basis for the MOADeclaration of Ownership (2nd Amended & Restated) dated 11/15/2004Section 0, Page 4

O. "Subdivision" shall mean those building lots numbered 1-29 and shown on the Platentitled "Port Trinitie Subdivision" dated 10 March 1987 and recorded in the DareCounty Registry, CC, pg. 20, C&D. These lots and the improvements thereon arenot part of the Condominium and the owners of the lots are not members of theAssociation and have no ownership in Common Elements of the Condominium.Theownersof these lots arechargedamonthly fee,equal to the feeassessedto eachdwelling unit of the Condominium,for the privilege ofusing the amenitiesand infrastructureownedby the Association.

Note: It is this amended language that has caused concern to select ownersand led to the questions concerning the MOA.

PTA - PTHOA Memorandum of Agreement

Outstanding Concerns tissues Regarding the MOA:

A more formal & permanent solution would remove future potential .disputes and allow both condo and homeowners to enjoy their goodfortune of owning a piece of Port Trinitie.

The legal documents for the condominiums are somewhat inconsistent.While several documents have been revised in recent years werecommend establishing a committee to review documents, identifyinconsistencies or missing information and suggest changes to theBoard and a methodology (including costs) for legally clarifying thedocuments. These documents are the Deed, By-laws and Declaration ofUnit Ownership.

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PTA - PTHOA Source Documents

All these documents are currently available on our PT Website

http://www.port-trinitie.org

MOA

Amended and Restated Declaration of Unit Ownership of Port Trinitie(Revised dated 11/15/2004)

PTA Deed 4116187

Second Amended and Restated By-Laws for Port Trinitie Association(11/15/2004)

First Amendment of Second Amended and Restated Bylaws of PortTrinitie Association (dated 6/16/08)

Declarations of Covenants

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